Starbucks Sustainability Report

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They do not mind about using chemical products that destroy the nature or exploiting workers. Thankfully, more and more companies are aware of this kind of situation and try to change. This is especially the case for companies producing and retailing beverages. Coffee beans and tea leafs are mostly produced in Asia, Africa and Latina America. It is difficult for companies which want to be eco-friendly to be sure that important exploitations respect their workers and the environment. That raises some questions: Do coffee companies can manage to know where their raw materials come from?
Is it possible to reduce their impact on the environment on a fair and honest base? To answer these questions our group decided to study the biggest coffee brand of the world: Starbucks Coffee Company. evaluated and commented. present and future eco-friendly operations are analyzed, Starbucks is known as an organic retail store offering a range of coffee, tea and other products. Since a couple of years, Starbucks has cooperated and supported its farmers in a way which does not only benefit the company itself, but also helps farmers and their communities to develop and receive basic services like education or clear water provision.
The coffee company has developed its own sustainability report in 2008 and consistently went for improvement since then. Its detailed report shows its current status and its future goals with exact strategies how to reach them. Based on its experiences, partnerships and commitments, Starbucks was able to create a global network by serving ethical sourced coffee and supporting its communities. Nevertheless, global crisis and the increasing struggle to satisfy basic needs on the on hand but operate a business on the other hand, changed Starbucks perspective on the world and its strategic tools.
The company had to find an honest and sustainable way to protect the environment and be responsible for the society in the long run. 3|P age 2. Company A nalysis 2. 1 Foundation and Development The story begun in 1971 and offered some of 40 years ago. The first Starbucks Coffee opened in -roasted whole bean coffees. In 1982, Howard Schultz, the current chairman, joined the company as the director of retail operations and marketing. In 1983, he travelled in Italy and was impressed by the coffee bar popularity in Milan. Back to USA he wanted to develop the same coffee culture in Seattle.
For him, you can create connection between people with a tasty coffee. Starbucks one person, one cup, and one neighbourhood at a (Our Starbucks Mission Statement, 2012). The company continued to grow and in 1987, II Giornal acquired Starbucks and became Starbucks Corporation. The same year, stores opened in Chicago and Vancouver, Canada. This step stresses the beginning of Starbucks Company. The coffee served in Starbucks using ethical sourcing practices. In 2002, the company made an agreement with F airtrade. 2. 2 Internationalization Starbucks Starbucks stores. n started in 1987 with its first shop in Vancouver. In 1996, the s first store in Europe in 1998. One company opened its first stores in Japan and Singapore. There were a total of 1,015 stores. year later, Starbucks entered the Chinese, Kuwaiti and South Korean markets and owns 2,485 The number of stores more than doubled each year. Nowadays, with more than 17,000 stores in 55 different countries, Starbucks is an interactive and comfortable (Our Heritage, 2012) 2. 3 Products and Services Starbucks Corp. Best Coffee, Tazo Tea and Torrefazione Italia Coffee. Four product categories are offered in
Starbucks stores: Coffee, Handcraft Beverages, Fresh food and Consumers Product (see Figure A). 4|P age 2. 4 Recognition and A wards Thanks to its implication, Starbucks Corp. won unique awards in different business aspects as ethical business, sustainability in business and many others. According to Starbucks its rewards and recognition, the following titles can be attributed to the company: o o o o o o -2011) 1998-2000, 2002-2012) -2012) -2012) 3. E thical Sourcing 5|P age 3. 1 C . A. F. E . Practices In the course of Starbucks Conservation International (CI), the C. A. F. E.
Practices (Coffee and Farmer Equity) have been developed in 2008 and focus on product quality, economic accountability, social responsibility and environmental leadership. In terms of product quality, the coffee must meet standards of high quality; economic accountability includes financial transparency regarding fair payments to farmers; Starbucks social responsibility guidelines include human working conditions, minimum wage, living conditions and labor requirements on third-verified standards; those standards manage water and energy conservation, recycling, the reduction of agrochemical usage and the protection of biodiversity as well.
Generally, C. A. F. E. impacts are evaluated by grouping its guidelines. The classified indicators include social (people), environmental (planet) and economic (product) factors. For example, the results of the C. A. F. E. Practices are measured in Guatemala and Colombia where annual results assessments concerning farmers, workers and conservation take place. So far, higher income and sales, higher health rates due to fewer pesticides and herbicides, better education systems and a valid biodiversity have been observed (Starbucks, 2012). C. A. F. E. erified producers exist in 20 countries with cultivating their coffee on 102,000 hectares each year; for instance in Papua New Guinea, Zambia, Panama and China. In 2011, 86% (367 million pounds) of its total coffee purchased has been C. A. F. E. verified coffee (Starbucks, 2012). 3. 2 Coffee Purchasing By 2015, Starbucks aims to purchase 100% ethical sourced coffee (Starbucks, 2012). That means, the coffee must be verified by either Starbucks C. A. F. E. Practices, F airtrade or another third-party program. For C. A. F. E. Practices 3. 1 C. A. F. E. Practices. Starbucks has offered F airtrade coffee since 12 years.
Lately, it purchased 34. 3 million pounds F airtrade coffee which presents 8% of its coffee amount bought in 2011 (Starbucks, 2012). By that, Starbucks contributed $26 million to the F airtrade program comprehending environmental protection, fair treatment of farmers and F airtrade awareness building. In 2011, the company purchased 9. 6 million pounds of organic coffee accounting for 2. 2% of its overall coffee purchases (Starbucks, 2011). Organic grown coffee beans can be found in Organic Yukon Blend and other local special reserve coffees, for instance. Organic cultivation maintains the 6|P age iodiversity by protecting the soil health, abstaining from admixtures and using agriculture methods which have a low impact on the nature. Starbucks uses the Green Coffee Pricing Model . This involves purchasing coffee at premium prices in order to foster price stability and support relationships with suppliers. Starbucks paid $2. 38 per pound of unroasted coffee in 2011 (Starbucks, 2011). 3. 3 F armer Support Starbucks supports its farmers by providing access to credits at reasonable terms and helping them in their risk management. In 2011, Starbucks invested $14. 7 million in famer loans to Root Capital ,
Verde Ventures and the Calvert Foundation famers in seven countries (Starbucks, 2012). non-profit social investments funds. By 2015, this amount shall be increased by 26. 5% (Starbucks, 2011). Currently, Starbucks supports 45,000 Starbucks F armer Support Center opened in San Jose, Costa Rica, in 2004. Those F armer Support Centers help agronomists and quality experts to improve the coffee quality and simultaneously to find sustainable cultivation practices needed for the long-run. Today, you can find F armer Support Centers in Kigali, Rwanda (opened in 2009), Mbeya, Tanzania (opened in 2011) and Guatemala (Starbucks, 2012).
In 2012, Starbucks is expanding to China to serve the Asian communities. 3. 4 Forest C arbon Programs Due to the climate change and the decreasing biodiversity in regions like Mexico and Indonesia, Starbucks started to launch its Forest Carbon Programs to decrease the polluting impacts, improve facilitate farmer access to forest carbon markets in coffee2011, p. 8). The pilot was implemented in North Sumatra and Aceh Tengah, Indonesia and focused on trainings on composting and pruning and simultaneously, motivated 14 communities to sign conservation coffee agreements.
The first program was set up in Chiapas, Mexico, in 2010. Forest fire management and reforestation plans have been established. Furthermore, 13 communities are now trained on strategies regarding the mitigation of the climate change. In 2011, 3 nurseries have been built which then supplied about 92,500 seedlings for the reforestation activities (CI, 2011). As the carbon credits are sold on voluntary markets, Starbucks was able to sell 5,042 tons of CO2 at $9 per ton (CI, 2011). The Forest Carbon Programs are conducted by CI with whom Starbucks is planning to launch its third program in Brazil in 2012. |P age 4. G reen Store Design 4. 1 E nergy Conservation Most of the greenhouse gas (GHG) emissions can be traced back to Starbucks -store energy usage. In 2011, 23. 3% of 979,963 metric tons of CO2 presents direct emissions from store operations and assets (see Figure B). The rest (76. 7%) is attributed to the electricity usage (Tackling Climate Change, 2012). Although, GHG emissions have been reduced by 2. 7%, Starbucks focuses on energy conservation and renewable energy usage (please refer to 4. 2 Renewable Energy for renewable energy usage).
The areas of lightening, operational equipment, heating and cooling are aimed to be efficiently reduced to conserve energy. Despite the fact that Light Emitting Diode (LED) light bulbs are dim and expensive and burn out quickly, Starbucks replaced its incandescent and halogen lightening with those LED bulbs. Installing the new lightening systems in more than 7,000 stores worldwide, its overall electricity consumption decreased by 7% in 2011 (Starbucks, 2011). Furthermore, it is aimed to replace existing machines like ice makers, ovens or blenders with high-efficient alternatives as soon as they reach the end of their useful life.
In order to reduce heating and cooling consumption, Starbucks tested the new established EMS (Energy Management Systems) and by that, decreased its HVAC (heating, ventilation and air conditioning) intensity by 20% (Starbucks, 2012). Starbucks was able to reduce its total energy consumption by 7. 5% from 2008 on. To reach its goal of a 25% decrease by 2015, it works with companies to find sustainable energy alternatives. 4. 2 Renewable E nergy Starbucks aims to purchase 100% of renewable energy by 2015 (Starbucks 2011); In 2008, it has been 20%; in 2011, Starbucks was able to increase that amount by 30. %, so that the current energy consists of more than a half of renewable energy sources (Starbucks, 2011). As Starbucks is based on the use of energy, the company decided to support the generation of renewable energy by purchasing Renewable Energy Credits (REC) currently coming from wind farms in the United States. Each REC encourages the development of renewable energy sources and increases the revenue of wind farm owners, so that they stay competitive with the providers using fossil fuels. In 2011, Starbucks entire Conservation, 2012).
By 2015, Starbucks wants to purchase RECs equivalent to 100% of its energy used and support solar energy and offsite renewable energy sources additionally (Starbucks, 2011). 8|P age 4. 3 W ater Conservation Water is an essential key ingredient for Starbucks needed for coffee, tea and to run machines like the dishwasher. 1,000 new filtration systems provide high water quality, save water and have decreased Starbucks waste water by 50% in 2011 (Water Conservation, 2012). Starbucks Energy and Resource Management commissioned analytics to find out in-store leaks.
By that, leaks in toilets, floors and sprinkler systems have been detected. Millions of gallons have already been saved since a couple years. One of the main environmental-friendly replaces is presented by the low-use water faucets. The latter replaced Starbucks dipper wells used for cleaning spoons, but wasted 15% more water. The faucets have been mainly responsible that the water consumption decreased by 17. 6% (76. 2 liters) in 2011 (Starbucks, 2011). By 2015, Starbucks aims to present a 25% decrease in water intensity on a 2008 baseline (Starbucks, 2011).
Through C. A. F. E. Practices and CI, Starbucks encourages its famers to conserve water for coffee processing, to protect the rivers and lakes in coffee-growing communities, so that they have access to clean drinking water continuously. 4. 4 L E E D® C ertification and G reen Building Together with the U. S. Green Building Council (USGBC), Starbucks has established certification systems for retail projects. One of them is called Leadership in Energy and Environmental Design (LEED®) and has been developed in 2008 (Starbucks, 2011).
Starbucks is now building its new company-owned stores according to LE E D ® standards to achieve the LE E D ® certification. The first LE E D ® certified store opened in 2005 and more followed. All stores show environmental improvements: Firstly, energy consumption decreased through LED lightening and energy saving heating and cooling solutions by 30% (Starbucks, 2011). Plus, less-toxic materials are used to improve the indoor air quality. Water has been saved by 60% due to conserving fixtures and waste could be reduced, because milk cartons and cardboard are recycled (Starbucks, 2011).
Furthermore, all stores are built from only ecological-friendly materials sourced regionally and resulted in 60% less waste and consequently a lower carbon footprint (Starbucks, 2011). Lastly, Starbucks makes customers aware of the environment and informs about green alternatives in stores. In 2011, Starbucks built 75% (121 of 161 new stores) of its new company-owned stores LE E D ® certified; the goal is to build all new company-owned stores to achieve LE E D ® certification (Starbucks, 2011). Global Green U SA awarded Starbucks for its green building efforts with the Sustainable Design Award (Starbucks, 2011). |P age 5. Recycling 5. 1 Reusable C ups Starbucks is worldwide known for the great amount of take-away products which are served in their famous white cups. The struggle consists of the problem that the company produces a lot of paper and plastic cups which have a huge impact on the environment. In order to reduce this negative influence, Starbucks is working on solutions to reduce the waste they produce and sets a goal to make 100% of their cups reusable, so recyclable by 2015 (Starbucks, 2011). In order to create long-term recycling strategies, together with Peter Senge from the Massachusetts
Institute of Technology and the Society for Organizational Learning, Starbucks established the Three Cup Summits in 2008, 2010 and 2011 (Starbucks, 2011). The F irst Cup Summit examines that the cup material presents an enormous key contributor to recyclability. The Second Cup Summit resulted in a pilot project with International Paper and Mississippi River Pulp which came up with comprehensive reusing strategies of used cups. With the Third Cup Summit, in 2011, Starbucks started a partnership with the Foodservice Packaging Institute and formed the Paper Recovery
Alliance (PRA) (Starbucks, 2011). This coalition develops and promotes recyclable solutions for single-used cups and other packaging. Starbucks also encourages its customers to use their own tumblers for the beverages they buy at the stores. To meet the goal of serving 5% in personal tumblers, the company offers a 10% discount in the U. S. and Canadian stores and creates campaigns like the ones in 2010 and 2011 in which customers bringing their own cups get a free brewed coffee (Starbucks, 2011). In 2011, Starbucks served coffee in personal tumblers more than 34 million times which shows a 1. % amount of all beverages served (Starbucks, 2011). The modified goal of 5% has to be reached by 2015 (Starbucks, 2011). Due to their constant effort to use reusable cups, Starbucks was able to save 1. 5 million pounds of paper in 2011 (Recycling & Reducing Waste, 2012). 5. 2 Store Recycling Another main challenge involves the front-of-store recycling systems. As they differ from city to city, it is rather challenging to implement efficient recycling solutions. However, 18% of the Starbucks stores in the U. S. and Canada have now front-of-store recycling bins (Starbucks, 2011).
It is the goal to install front-of-store recycling in all locations by 2015 (Recycling & Reducing Waste, 2012). 10 | P a g e Due to the fact that the majority of the waste is produced behind the counter in their stores, Starbucks emphasizes its development of back-of-store recycling systems more and more. In 2011, more than 2,400 company-owned stores in the U. S. and Canada had recycled cardboard boxes and other back-of-store items for example. But Starbucks still experiences a lot of barriers such as limited space in the stores or a lack of strategic recycling services in some municipalities. 11 | P a g e . Corporate Social Responsibility 6. 1 Community Initiatives In every neighborhood in which Starbucks is present, it takes upon itself and does not only serve top quality coffee, but also contribute to the communities well-being. It helps the area to strive and progress. Both the staff, so called partners, and the community work together and dedicate extra time to create a change in that area. There are a couple of initiatives Starbucks participates in to implement this idea. For instance, they created the Global Month of Service in which volunteers help certain communities on satisfying basic needs.
In April 2011, almost 60,000 volunteers coming from 30 countries contributed more than 150,000 hours of services in gardening and painting to refurbishing schools and parks (Starbucks, 2011). In water-stressed countries, the Starbucks generates $0. 05 with each bottle of Ethos® water purchased. In 2005, 420,000 people benefited from a total grant of $6 million (Starbucks, 2011). Starbucks has even created a community service website to connect partners and to invite customers to join events organized throughout the country. Events range from free thanksgiving meal for the poor to assistance to abandoned dogs.
However, projects with the tea and coffee growing communities are mainly emphasized. Starbucks wants to encourage the economic and social development in those areas. In Guatemala in 2005 for example, the Guatemala Education Initiative supported educational programs for all villages in the highlands of that country. The investment of $1 million shall help children of farmers who consistently suffer from marginalized economy and from poverty (Starbucks, 2011). The sanitation (Starbucks, 2011). In 2011, Starbucks was able to mobilize partners and customers to contribute 442,353 hours of community service.
This is more than double the amount of what the company has reached in 2010. Hence, the goal for 2015 is to engage people to participate in projects accounting for 1 million hours of service (Starbucks, 2011). According to Starbucks, Service, 2012). 6. 2 Youth G rant Actions The Starbucks Corporation strongly believes that the youth can influence and lead innovative and positive solutions for local needs and future ecological improvements. In order to support this 12 | P a g e (CHAI) supports tea-growing regions like India for instance, in order to increase the level of education and ese achievements are a powerful (Community development, the company created the Youth Action Grants in 2008. In 2012, this project supported peace programs in northwest Pakistan, microcredit poor entrepreneurs in Brazil and provided livelihood skills training in Uganda (Starbucks, 2011). In 2011, Starbucks awarded over 100 grants accounting $2. 6 million (Engaging Young People, 2012). Furthermore, Starbucks set the goal to mobilize at least 50,000 young people to support their communities through innovative projects by 2015 (Starbucks, 2011).
The company has exceeded that goal in 2010 and again in 2011: 53, 000 young people took action in their communities in 2010 and 50,050 in 2011 and generated more than 2 million hours of community service (Starbucks, 2011). 13 | P a g e 7. Conclusion At the beginning, our group was interested in how coffee companies can improve their impact on the environment. Thanks to our studies on Starbucks we are now able to figure out strategies to preserve the nature and help communities, but also their environmental impacts.
The importance of sustainable reports has been established while researching for and writing on our report. In order to serve ethical sourced coffee beans, Starbucks has established its own C. A. F. E. Practices and produced under F airtrade and organic standards. These latter organizations limit the sourcing, production and selling process to not only have good quality products which processes respected the environment, but also to protect labor ri and the necessity of environmental protection. Reducing energy and water consumption is also extremely important for Starbucks.
The company developed LE E D ® certified stores that use renewable energy, LED light bulbs and others alternative systems mentioned in the report in order to save water and energy. Starbucks fixed longterms goals and used accreditation as a proof. Recycling and reusing is an essential action to preserve the environment and energy consumption. Starbucks was able to reduce its wastes through recycling or reusing mugs. It could further mobilize customers to bring their own tumblers which did not only result in a lower water and energy areness of adequate recycling.
Furthermore, Starbucks is enrolled in many programs and social project to help communities to improve their living situations. This part can be considered as a basic CSR activity, because Starbucks purchases and works with farmers and people in developing countries like Guatemala where their rights are trembled and basic needs not yet fully satisfied. Concluding Starbucks ethical sourcing and water and energy saving solutions, it can therefore be observed, that the company has a distinctive and well established sustainable report including strategic future toolkits.
Nevertheless, Starbucks has created a strong global network consisting of farmers, communities and customers. It depends on its consumers loyalty and farmers growing experiences. Especially Starbucks farmer relation is rather controversial as the farmers are now dependent on Starbucks high farmer loans in order to keep their living standards. Nonetheless, Starbucks ecological footprints are steadily decreasing and the company has exemplary strategies for operating its business in a sustainable way in the long-term. 14 | P a g e 8.
A ppendix Figure A: Coffee 30 blends and singleorigin premium Arabica coffees H andcraft Beverages fresh brewed coffee, hot and iced espresso beverages, coffee and non coffee blended beverages Merchandise coffee and tea brewing equipment mugs and accessories, packaged goods, music, books, gift items Consumer Product (only available in 13 countries) Coffee & T ea whole bean and ground (Starbucks tea filter bags, tea latte concentrates Ready-to-D rink bottled Frappuccino, coffee drinks, chilled cup coffees, Iced Lattes, bottled iced and juiced teas Ice C ream super premium coffee and coffee free flavors F resh Food baked pastries, sandwiches salads, oatmeal, yogurt parfaits, fruit cups Starbucks, 2012
References:
Ballou, Brian, et al. “The future of corporate sustainability reporting.” Journal of Accountancy 202.6 (2006): 65. Argenti, Paul A. “Collaborating with activists: How Starbucks works with NGOs.” California Management Review 47.1 (2004): 91-116. Kiron, David, et al. “Sustainability nears a tipping point.” MIT Sloan Management Review 53.2 (2012): 69. Dauvergne, Peter, and Jane Lister. “Big brand sustainability: Governance prospects and environmental limits.” Global Environmental Change 22.1 (2012): 36-45. Bridges, Claudia M., and Wendy Bryce Wilhelm. “Going beyond green: The “why and how” of integrating sustainability into the marketing curriculum.” Journal of Marketing Education 30.1 (2008): 33-46. Peloza, John, et al. “Sustainability.” California Management Review 55.1 (2012): 74-97.

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