Rivian Automotive Inc: Respect for Freedom of Association and Collective Bargaining

January 2, 2024 As You Sow

BE IT RESOLVED: Shareholders request the Board of Directors adopt a Human Rights Policy which states the company’s commitment to respect human rights as outlined in the United Nations Guiding Principles (“Guiding Principles”) and the International Labour Organization Declaration on Fundamental Principles (“Fundamental Principles”) within its direct operations, and describing steps to identify, assess, prevent, reduce, and, where appropriate, remedy adverse human rights impacts connected to its business.

SUPPORTING STATEMENT: Rivian appears to lacks an overarching policy that upholds international human rights standards.

The Guiding Principles provide companies an authoritative standard for preventing and mitigating human rights abuses. The Fundamental Principles include the widely held American values of freedom of association and collective bargaining rights; the abolition of forced and child labor; the elimination of workplace discrimination; and a safe and healthy working environment.[1]

Rivian’s Supplier Code of Conduct calls on its suppliers to uphold these Principles, but the company has not committed to these same standards within its own operations.[2]

The majority of Rivian’s peers have human rights policies based on the Guiding Principles and the Fundamental Principles. These peers include Ford, General Motors, Honda, Daimler (Mercedes Benz), BMW, Stellantis (Chrysler), Volvo, Nissan, Toyota, Volkswagen, Mitsubishi, and Subaru.

Allegations of poor working conditions have increased concerns with Rivian’s practices. This includes an investigation by the National Labor Relations Board that Rivian threatened and retaliated against workers attempting to unionize[3] and complaints filed by Rivian workers with federal regulators about safety violations.[4]

Rivian’s lack of an effective, overarching human rights policy risks legal, regulatory, and reputational harm. Its flagship factory in Illinois is subject toa 2022 state constitutional amendment guaranteeing workers the right to organize and collectively bargain.[5] The European Union’s Draft Corporate Sustainability Due Diligence Directive will soon require implementation of the due diligence requirements of the Guiding Principles.[6]

Rivian itself admits that “foreign labor laws, regulations, and restrictions, including in the areas of supply chain, labor, environmental, health and safety and related compliance costs” as risks that, if unsuccessfully managed, might materially and adversely affect “business, prospects, financial condition, results of operations, and cash flows.”[7]

Multiple studies have indicated that healthy workplace conditions are associated with improved stock performance.[8] Freedom of association and collective bargaining have been associated with strengthened shareholder value through improved health and safety; [9] increased productivity; [10] lowered turnover, improved diversity, and lower levels of legal and regulatory violations.[11]

More than a decade after its founding, Rivian has not set in place operational policies and practices necessary to protect human rights and differentiate and protect its brand.

[1] https://www.ilo.org/dyn/normlex/en/f?p=1000:62:0::NO:62:P62_LIST_ENTRIE_ID:2453911:NO

[2] https://assets.rivian.com/2md5qhoeajym/5PEdyH1PnC3iEllseM49oY/060ec197886709bad62557bda70a618e/Rivian_-_Supplier_Code_of_Conduct.pdf

[3] https://www.nlrb.gov/case/25-CA-305293

[4] https://www.yahoo.com/video/rivian-under-scrutiny-employees-allege-184027923.html

[5] https://chicagopolicyreview.org/2023/03/01/illinois-voters-approve-a-constitutional-right-to-organize/

[6] https://commission.europa.eu/publications/proposal-directive-corporate-sustainability-due-diligence-and-annex_en

[7] https://www.sec.gov/ix?doc=/Archives/edgar/data/1874178/000187417823000029/rivn-20230331.htm, p. 43

[8] https://ehsdailyadvisor.blr.com/2016/04/stocks-up-on-strong-health-and-safety-programs/; https://www.sciencedaily.com/releases/2016/01/160106092020.htm; https://ideas.repec.org/a/eee/riibaf/v52y2020ics0275531919301448.html; https://journals.lww.com/joem/fulltext/2021/06000/companies_that_promote_a_culture_of_health,.2.aspx; https://acoem.org/acoem/media/PDF-Library/About_ACOEM/Link_Between_Workforce_Health_and_Safety.pdf

[9] http://oem.bmj.com/content/early/2018/06/13/oemed-2017-104747

[10] https://doi.org/10.1093/ej/ueaa048; https://www.ipa-involve.com/involvement-and-productivity-the-missing-piece-of-the-puzzle

[11] https://www.blackrock.com/corporate/literature/whitepaper/the-making-of-long-term-capitalism.pdf; Severinovsky,The Value of Human Capital for Investors, Schroders, December 2022, p. 14-15; https://www.piie.com/blogs/realtime-economic-issues-watch/higher-wages-low-income-workers-lead-higher-productivity; https://www.trilliuminvest.com/news-views/the-investor-case-for-supporting-worker-organizing-rights; https://www.workerscapital.org/our-resources/shared-prosperity-the-investor-case-for-freedom-of-association-and-collective-bargaining/; https://hummedia.manchester.ac.uk/institutes/code/research/projects/racism-at-work/tuc-report-executive-summary.pdf; https://www.epi.org/publication/unions-help-reduce-disparities-and-strengthen-our-democracy/.

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