CHIPOTLE MEXICAN GRILL, INC. | Report on adoption of automation at CHIPOTLE MEXICAN GRILL, INC.

Status
18.65% votes in favour
AGM date
Previous AGM date
Proposal number
8
Resolution details
Company ticker
CMG
Resolution ask
Report on or disclose
ESG theme
  • Social
ESG sub-theme
  • Just Transition
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Consumer Discretionary
Company HQ country
United States
Resolved clause
RESOLVED: Shareholders request the Chipotle Mexican Grill, Inc.’s (“Chipotle” or the “Company”) Board of Directors prepare a report on the principles by which the company seeks to address and measure the social implications on its workforce of the growing adoption of advanced technologies, including artificial intelligence and automation. The report should be prepared at reasonable cost, omit proprietary information, and be available to investors.
Supporting statement
SUPPORTING STATEMENT: We live in a time of major change. The climate crisis has prompted significant changes in many aspects of human behavior, along with a recognition corporations should consider the social costs of this change. For example, the International Labor Organization (ILO) emphasizes the need to commit to “decent work” as society addresses the climate challenge. The four pillars are “social dialogue, social protection, rights at work and employment.” (https://www.ilo.org/wcmsp5/ groups/public/@ed_emp/@emp_ent/documents/publication/wcms_432859.pdf)
The looming changes from artificial intelligence and automation – which risk significant changes in the economy and everyday life – present similar concerns about how to protect decent work, especially if the social costs of these changes are ignored.
A recent report by the McKinsey Global Institute finds “Generative AI is both accelerating automation and extending it to an entirely new set of occupations,” warning that “almost 12 million occupational changes will need to take place …[before] 2030. Over 80% of those jobs fall into four occupations, including food service. McKinsey notes “[m]ost of these workers are lower paid, and disproportionately composed of less educated workers, women, and Black and Latino Americans.” (https://www.mckinsey.com/mgi/our-research/generative-ai-and-the-future-of-work-in-america) Goldman Sachs estimated roughly two-thirds of current jobs in the US and Europe are exposed to “some degree of AI automation.” (https://www.gspublishing.com/content/research/en/reports/2023/03/27/d64e052b-0f6e-45d7-967b-d7be35fabd16.html)
The ILO warns “those who lose their jobs … may be the least equipped to seize the new job opportunities,” and calls for “harnessing and managing technology for decent work.” (https://www.studocu.com/row/document/arab-academy-for-science-technology-maritime- transport/human-resource-management/ilo-2019-international-labor-organization-with-highlighted-important-topics/47547465) McKinsey emphasizes advances in technology must be “well managed,” by employers and policy makers, with “clear guidelines and guardrails” so workers “see these tools not as job destroyers but as work enhancers.”
The risk is particularly great in the restaurant sector. The investment bank TD Cowen says automation and AI are “nearing a tipping point” in the industry with “increased momentum” catalyzed by a “tight labor market…emerging risks from unionization,” and the “longer-term potential to reduce labor costs.” (https://www.cowen.com/insights/revolution-in-restaurant-automation/) One consulting firm estimates “[u]p to 82% of restaurant positions could, to some extent, be replaced with robots.” (https://aaronallen.com/blog/restaurant-robotics) The Washington Post notes, “th[is] shift comes as concern is rising over the effect of automation on job security, and as fast-food workers nationally demand higher wages and better working conditions.” (https://www.washingtonpost.com/business/2023/10/03/chipotle-robots-bowls-salads/)
Chipotle touts new technologies as central to its future, but apart from generalities – such as claiming new technologies will “unlock the human potential” of employees – Chipotle fails to disclose the principles that will guide Chipotle’s efforts to ensure these transformations to the workplace are just and equitable.

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