Starbucks Corporation

RATING

SECTOR

Restaurants

WEBSITE

CONTACT

2401 Utah Avenue, South Suite 800 Seattle, WA 98134 USA

STOCK EXCHANGE

LISTING

  • Starbucks is part of the U.S. Environmental Protection Agency’s (EPA) updated list of the Top 50 Green Power Partnership organizations voluntarily using clean, renewable electricity from resources such as solar, wind and low-impact hydropower.

EMPLOYEES

346,000

CHIEF SUSTAINABILITY OFFICER

Michael Kobori

AWARDS

N/A

CONTENT SOURCE

FURTHER READING

Report created by Kavita Kripalani

Starbucks Corporation

SECTIONS :  Sustainability    Evaluation  •  Progress  •  Watch  •  Overview

Company Activity

Starbucks Corporation is an American multinational chain of coffeehouses and roaster reserves headquartered in Seattle, Washington.

As the largest coffeehouse in the world, Starbucks is seen to be the main representation of the United States’ second wave of coffee culture.

Since the 2000s, third wave coffee makers have targeted quality-minded coffee drinkers with hand-made coffee based on lighter roasts, while Starbucks nowadays uses automatic espresso machines for efficiency.

The company operates 30,000 locations worldwide in over 77 countries, as of early 2020.

Starbucks locations serve hot and cold drinks, whole-bean coffee, microground instant coffee known as VIA, espresso, caffe latte, full- and loose-leaf teas including Teavana tea products, Evolution Fresh juices, Frappuccino beverages, La Boulange pastries, and snacks including items such as chips and crackers; some offerings (including their annual fall launch of the Pumpkin Spice Latte) are seasonal or specific to the locality of the store.

Headquartered in the Starbucks Center, the company was founded in 1971 by Jerry Baldwin, Zev Siegl, and Gordon Bowker in the Pike Place Market.

During the early 1980s, they sold the company to Howard Schultz who – after a business trip to Milan, Italy – decided to make the coffee bean store a coffee shop serving espresso-based drinks.

Schultz first tenure as chief executive, from 1986 to 2000, led to an aggressive expansion of the franchise, first in Seattle, then across the West Coast.

Despite an initial economic downturn with its expansion into the Midwest and British Columbia, the company experienced revitalized prosperity with its entry into California in the early 1990s through a series of highly-publicized coffee wars.

Schultz was succeeded by Orin Smith who ran the company for five years, positioning Starbucks as a large player in fair trade coffee and grew sales to $5 billion.

Jim Donald, served as chief executive from 2005 to 2008, orchestrating a large-scale earnings expansion.

Schultz returned as CEO in the middle of the 2008 financial crisis and spent the succeeding decade growing its market share, expanding its offerings, and reorienting itself around corporate social responsibility.

Kevin Johnson took over from Schultz in 2017, and continues to serve as the firm’s chief executive.

Company Sustainability Activity

Starbucks’ vision is to produce sustainable coffee, served sustainably.

For more than two decades, Starbucks has partnered with Conservation International on C.A.F.E. Practices, an ethical coffee sourcing program.

The company now sources 99% of their coffee this way, promoting quality, economic transparency and social and environmental impact with a vision to make coffee the world’s first sustainable agricultural product in the world.

Climate change represents significant immediate and long-term risks to coffee farmers around the world, and Starbucks are taking steps to help ensure the supply of high-quality coffee for future generations. Core to ensuring the long term sustainability of coffee is also ensuring the economic profitability for farmers.

They are investing in innovation to offer farmers new climate-resilient coffee tree varieties and support coffee farming communities through their Global Farmer Fund to make sure farmers have access to low-interest financing that will help them reinvest in their farms. 

Highlights

  • Starbucks cups are currently accepted for recycling in Amsterdam; Boston; Chattanooga; Dallas; Denver; London; Louisville; New York; San Francisco; Seattle; Vancouver; Washington, DC; and many smaller cities.
  • Greener stores:  Starbucks operate more than 1,600 LEED-certified stores around the world, making them the world’s largest green retailer. They are building on that legacy by developing a new Greener Store framework for 10,000 stores globally by 2025, which could save $50 million in utilities costs over the next 10 years, and  empowering their partners to help us in that effort by offering sustainability certification through their Greener Apron program.
  • Greener power: Starbucks purchases enough renewable energy to power 100% of its company-operated stores in the U.S., Canada and the UK. Worldwide in FY19, 72% of Starbucks operations were powered by renewables. This is down from 77% in FY18, driven in part by a transition away from company-owned renewable energy powered markets in EMEA, as well as an increase in stores in markets where Starbucks is still building a path toward renewable energy, such as China and Japan.
  • Greener cups and packaging: In 2016, 24% of Starbucks stores in the U.S. and Canada accepted their hot cups for recycling; in 2019, this number increased to 25%.

Targets

10% post-consumer fibers

  • Double the recycled content of cups by 2022.
  • Starbucks hot cups currently contain 10% post consumer fiber (PCF) and they are working to double the recycled content.

Ethically sourced coffee and tea

  • Starbucks has a goal of sourcing 100% of its coffee and tea ethically, and that number is at 99% and 99% respectively (FY19). 

Sustainable farming

  • Starbucks has a goal to provide 100 million trees to farmers by 2025.
  • The company is also working toward a goal of 100% ethically sourced tea and cocoa for beverages by 2020.
  • They are investing in sustainability, issuing their third sustainability bond in May 2019 for investors to participate in socially and environmentally focused projects and leveraging new technology to bring real-time digital traceability to their coffee supply chain.

Progress

There are some progress and goals Starbucks set out in their 2018 Global and Social Impact into 2020 that they have not yet reached:

  • 100% ethically sourced tea and cocoa for beverages by 2020: this number is at currently at 99%
  • Locally source more than 50% of their renewable energy in the U.S by 2020: that number is at currently 15%
  • Invest $50 million in farmer loans by 2020: Starbucks has reached this goal
  • In 2019 Starbucks continued the expansion of lightweight straw-less lids for cold beverages, as well as rollout of alternative material straws. By the end of calendar year 2020, they anticipate that all company-owned stores and the majority of licensees will have eliminated single-use plastic straws

Certificates

  • 100% manufacturing facilities certified ISO 14001
  • LEED certified stores
  • C.A.F.E practices standard

UN Sustainable Development Goals

UN SDGs Compliance

The following section aligns current company-wide sustainability initiatives with the UN Sustainable Development Goals. 

SDG 1 and SDG 2 

  • Starbucks FoodShare program donates meals to local, community food banks and services to reach those experiencing food insecurity
  • Starbucks Foundation has awarded grants reaching approximately 47,000 direct and indirect beneficiaries since 2014. Starbucks Foundation grants are focused on poverty eradication in communities around the world.
  • Starbucks Reserve Grants, offered at Origin, invest in projects such as access to water, health clinics, and more 
  • Starbucks Foundation and Reserve Grants invest in WASH programs domestically and internationally. 

SDG 1 and SDG 4 

  • Starbucks College Achievement Program offers online 4- year education through Arizona State University for partners (employees) 
  • Global partners have access to online educational tools and courses through Starbucks Global Academy
  • Starbucks is creating opportunities through commitments to hire Opportunity Youth, Refugees, and Veterans and Military Spouse. 
  • Starbucks Opportunity Youth, Veterans, and Refugee hiring commitments are designed to provide global opportunities for all 
  • Starbucks is working with 50+ companies to advance the 100K Opportunities Initiative

SDG 7

  • Starbucks Green Retail Strategy commits to 100% renewable energy use 
  • Starbucks invests in renewable energy to minimize negative environmental impacts 
  • Starbucks joins others in RE100 to commit to renewable energy use 
  • Starbucks investment in and to renewable energy use leads to sustainable consumption. 

SDG 12 

  • Starbucks aims to double the recycled content in the hot cup. 
  • Starbucks remains committed to recycling and will work to double the number of stores and communities with access to cup recycling. 
  • Starbucks will promote and incentivize the use of reusable cups.

SDG 13

  • Starbucks’ One Tree for Every Bag program invests in tree renovation at Origin to increase productivity and maintain coffee quality Working with others to make all coffee 100% sustainable 
  • Starbucks is committed to the Sustainable Coffee Challenge to make coffee the world’s first sustainably produced agricultural product
  • For over 17 years, Starbucks has partnered with Conservation International to sustainably source its products 
  • Through the Sustainable Coffee Challenge, Starbucks is partnering with the industry to commit to 1 billion trees, to go beyond its own commitment of 100 million trees, while developing shared principles for responsible renovation.

SDG 5 and SDG 10

  • Among Starbucks senior leaders (senior vice presidents and above) 42% are women, an increase of 13% since 2015, and 19% are people of color, which is the same percentage as 2015. They have seen an increase in representation for people of color at the vice president and director levels since 2015. 
  • Starbucks has reached 100% pay equity for partners of all genders and races performing similar work across the United States from 2017-2019. In March 2019, they announced that they have achieved gender pay equity in Canada and China. They have also joined with other U.S. companies to help eliminate the gender pay gap nationwide.
  • Starbucks has welcomed and hired 1,672 refugees in the United States, Canada and Europe. They rely on partners to self-identify, which leads us to believe the total number of refugees hired is actually much higher.

Starbucks is dedicated to sustainability. This is seen throughout their initiatives to source their coffee from sustainable sources and through their targets for recycling and sustainable farming.

The company holds some certificates, such as ISO 14001, LEED, and C.A.F.E. standard. Starbucks is listed on the EPA’s Top 50 Green Power Partnership list. Starbucks has received no awards. Starbucks does comply with six of the seventeen UN SDGs.

Starbucks has invested into its sustainability practices. Starbucks has been rated a C. 

Analyst Outlook: Positive 

Starbucks clearly has invested effort and currency into its sustainability practices. They go above and beyond their own products and work to create a more sustainable future. Despite not reaching some of its goals, the company is working on many sectors and consequently covering many SDGs.

Key Points

  • Starbucks efforts on ethically sourcing their coffee and tea – C.A.F.E standards
  • Starbucks progress on use of green energy in their operations and operating LEED certified stores
  • Clear targets and agenda

 

 

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