NGO National Consumers League recently filed a lawsuit against Starbucks alleging that the company’s marketing touting the ethical sourcing of its coffee and tea is false and misleading. Starbucks backs its ethical sourcing claims through its C.A.F.E. program and third-party verification such as the Rainforest Alliance. However, the lawsuit cites multiple journalistic and regulatory reports alleging that human rights abuses are still occurring at Starbucks’s supplier farms including child labor, forced labor, and sexual abuse. The complaint argues that the stamps and seals provided by verification systems cannot justify ethical sourcing claims, stating that:
“Even if Starbucks purchases 100% of its coffee products from C.A.F.E. Practices-certified coffee farms and 100% of its tea products from tea farms certified by the Rainforest Alliance, this does not render its representations that it is committed to 100% ethical sourcing truthful or non-misleading to consumers.”
While the lawsuit is in its initial stages, some lessons can be drawn from the complaint. For one, it shows the difficulty of identifying and rooting out human rights abuses in a company supply chain which we’ve highlighted for instance in a guest blog here. It is also a warning against making absolute claims about something of which you cannot be absolutely certain.
Starbucks’ labels appear on their products stating “Commitment to 100% Ethical Sourcing.” It’s fair to argue that a reasonable consumer could interpret that as meaning that all Starbucks products are ethically sourced. Supply chain tracing and human rights audits are inherently imperfect; therefore claiming 100% ethical sourcing may be unwise. Instead, companies should only market what they can guarantee. A company can tout its commitment and efforts to improve human rights, without making statements that it cannot guarantee are true.
If you aren’t already subscribed to our complimentary ESG blog, sign up here: https://practicalesg.com/subscribe/ for daily updates delivered right to you.
Photo credit: Sundry Photography – stock.adobe.com