Starbucks

The timing is right. If you think about it, would you rather shop at a company that's socially responsible or one that doesn’t care about these things?
Arnie Alger
Director, Strategy and Planning
Sustainability Partners and Starbucks partnership in sustainble business development

Services

  • We conducted a global environmental footprint analysis and a benchmarking study on best practices in corporate environmental sustainability for Starbucks.
  • We designed and led an internal cross-functional process to both develop company-wide sustainability focus areas and metrics and to establish an internal cross-functional environmental footprint team.
  • We provide on-going advice, assessments and consultations on program progress and further program development, including periodic program reviews, internal workshops, and one-on-one coaching.

Reports from the field

Of all the corporations that we have worked with as advisors in the field of corporate responsibility and sustainable development in the United States and Canada, Starbucks is in that special circle of companies that has come the farthest in truly embodying an understanding of the direct and immediate importance of sustainability to the business strategy and profitability of the corporation—of seeing the direct connection between its business well-being and the well-being of the natural environment from which it sources its products, and of seeing the direct connection between its business well-being and the well-being of the communities in which it both sources its supply and to whom it purveys the delicious refreshments for which it is so famous. In speaking extensively with members of the Starbucks executive team, it is clear that as much as the average businessperson sees the immediate connection between his or her customer and profitability, Starbucks sees the clear and direct connection between its financial, community and environmental well-being.

In fact, Starbucks has every practical reason to be working toward the triple bottom line of sustainability—an integrated system of people, planet, and profit. Its primary product is agricultural and therefore depends directly on the health of the natural environment. Furthermore, its industry is inextricably intertwined with the dynamics of global economic and resource inequities and the consequent social disparities and dilemmas. Finally, Starbucks financial health and future depends on continued access to high quality coffee, which in turn depends upon finding resolution to these ecological and social challenges. In our experience with Starbucks, it is clear that the company is well aware of the reasons why sustainability is a fundamental business strategy.

Starbucks relies upon securing a growing supply of consistently high-quality coffee beans in a complex industry that has evolved over hundreds of years, an industry that affects the economies and politics of entire countries and the well-being of millions of people around the world, many of them small farmers who have very little land, very little collateral and very little access to credit. Starbucks buys this coffee at a substantial premium above commodity prices, at least a dollar a pound or more, and tends to buy from the same people year after year.

Starbucks is engaged in several initiatives related to better corporate social responsibility and sustainability, including:

New Coffee Sourcing Guidelines

In November of 2001, Starbucks announced new coffee purchasing guidelines developed in partnership with The Center for Environmental Leadership in Business, a division of Conservation International. By adopting these guidelines, Starbucks hopes to encourage the production of coffee that meets important environmental, social, economic, and quality standards. The guidelines are based on the Conservation Principles for Coffee Production developed jointly by the Consumers Choice Council, Conservation International, the Rainforest Alliance, and the Smithsonian Migratory Bird Center. Mecklenburg comments, "We are working to create a system that promotes sustainability for the people and places that produce coffee. We want a system that recognizes regional differences, provides incentives for improvement, and is flexible and workable. There are many questions we can’t answer and problems we can’t foresee, so we decided to launch these guidelines as a pilot program for two crop years. During that time, we hope to work with producers and others in the supply chain to modify this system as necessary to meet their needs and our goal of increasing the sustainability of the coffee industry." Glenn Prickett, executive director of The Center for Environmental Leadership in Business remarks, "With these guidelines, Starbucks is taking a leadership role in addressing the environmental and social issues surrounding the global coffee industry. We hope that the success of this program demonstrates to the rest of the coffee industry that they can benefit by producing coffee in a way that protects global biodiversity and improves the livelihoods of coffee farmers."

Organic Composting

Organic residue from Starbucks’ coffee roasting and extract operations is processed along with other organic material and made into a commercially viable soil amendment.

Burlap Bag Recycling

Starbucks sorts and ships its burlap coffee bags to a processor that shreds and reuses the material in other products. In 1997 alone, Starbucks recycled more than 320,000 pounds of burlap bags.

New Hot Cup and Reusable Mugs

In a 1996 to 2000 partnership with the Alliance for Environmental Innovation, a project of the Environmental Defense Fund and the Pew Charitable Trusts, Starbucks conducted research on the development of a more environmentally friendly disposable hot cup and increasing the use of reusable mugs and commuter tumblers by Starbucks customers.

Coffee as Compost

Retail locations recycle coffee grounds when possible, package them, and encourage customers to use the spent grounds at home in their gardens and compost piles.

Retail Store Recycling Services

To help stores address individual recycling challenges, Starbucks has contracted with a national consulting service to work with store partners to establish recycling services for their stores.

The Green Team

Store managers representing each region of North America serve on the Starbucks Green Team to develop and implement strategic environmental initiatives.

Earth Day Activities

Starbucks partners across North America participate in more than 100 environmental cleanups annually in celebration of Earth Day, including beach and park cleanups, tree plantings and Adopt-a-Highway projects.

Store Design

A particularly exciting area that Starbucks has just launched is a program to develop a more sustainable store design that will include environmentally friendly construction materials.

Eric Ramsing, Starbucks’ corporate architect, is a proponent of sustainable building design and construction, and is working with a team to figure out how to apply these principles to new store construction and renovation. Starbucks is starting by taking one of their store designs and bidding it to confirm the cost. They are then having an independent third party conduct a U.S. Green Building Council LEED appraisal on the store design to see how the current design compares to the LEED scorecard. Ramsing explains, "We don’t know where we stand at this point. This benchmarking effort will find out where we stand so that we can take the appropriate action. It may be that we are in the silver range right now, which is our initial goal. If we find that we are at the silver level, then that’s just great. If we’re not there, then we go back through the design stage and look at what we need to change. Following the redesign, we will redraw and reengineer the store, bid it, and find out what the store would cost. At that point we can compare the two designs side by side and figure out what it’s going to cost to do what we propose. Given the clear definition of cost and potential payback, it becomes a business decision whether or not to proceed with building the store." Once the store is built, Starbucks will monitor it for a designated period to see how it performs in comparison to their normal program. They will then use their findings to project what the ultimate savings would be over the course of operating at the LEED standard.

The project that Ramsing spoke about was for new construction projects. Starbucks would also like to do something similar for renovations. He comments further, "We do more tenant improvement work than anything else. Tenant improvement work is where we go into an existing mall and take out whatever was there from the previous tenant and then put in our material." New construction gives Starbucks the opportunity to insert something into the building package that they are less able to do with tenant improvement work. At this point, LEED doesn’t have a program for assessing tenant improvement projects. Ramsing reports, "The U.S. Green Building Council recognizes this and they project that they will have a new section of LEED ready for release in 2005 or 2006." *

Starbucks has produced two innovative corporate social responsibility reports, in 2001 and 2002, that are available on its website.


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