Starbucks Corporate Social Responsibility

Starbucks Corporate Social Responsibility

Starbucks is the largest coffee company in the world that owns around 20000 coffee shops in 60 countries. Its annual turnover is equal to more than 13 billion U.S. dollars. Taking into account the size of the company, it is obvious that it invests money not only in its own business.

  1. There are many areas, which Starbucks is invested in. However, the biggest and the most prioritized investments for the company are environmental ones. It is a great challenge for the company, as it puts difficult goals and tries hard to achieve them. Starbucks works towards reducing the climate change as well as dealing with other important areas. Today, the company remains focused on green building initiatives (Starbucks Coffee Company 11). In 2001 Starbucks joined the U.S. Green Building Council, and together they developed the LEED (Leadership in Energy and Environmental Design) for Retail program. In 2005, the first store in accordance with LEED Commercial Interior standards was built (Starbucks Coffee Company 56). The standards included the cabinetry that was made from 90 percent post-industrial material, efficient lights that use less energy, paints with lower amounts of violate organic chemicals and other innovations.

Today, the company builds more than a half of its stores in accordance with high environmental standards. Another important investment area is renewable energy. It is a difficult task, as in some countries like Russia, Guatemala, Peru, Salvador, where Starbucks operates, renewable energy is almost absent. Thus, the company has to invest much money in order to purchase renewable energy equivalent to 100% of the electricity used by 2015, as stated in one of the short-term Starbucks’s goals (Starbucks Coffee Company 17). The company also works towards improving the recycling process and reducing waste with reusable cups. Moreover, it is involved in such expensive and important projects as forest conservation that helps to reduce the negaive effects of climate change.

Community is another place where the company invests money. For example, Starbucks invests in skills training and educational opportunities through the Youth Leadership Grants (Starbucks Coffee Company 21). In general, environmental investments are the most significant ones for the company, as it strives to improve the production process, reduce its negative effects and contribute to the saving of the nature.

  1. Starbucks does not only maximize the profit of stakeholders, but also solves many societal and environmental problems. The company spends much money on different non-profit projects that aim to improve various areas. Sometimes, those projects, in addition to company’s goals and restrictions, reduce the profit. For example, one of the goals is to completely switch to the usage of renewable energy, which requires additional spending and is unprofitable. However, Starbucks is growing every year and has shown good performance even during the global financial crisis, so the weakest stakeholder areas are, at the same time, the strongest ones, as they allow increasing the overall value of the company.
  2. Starbucks, definitely, implements shared value policies, as it combines the social responsibility with a competitive advantage. The operating income of the company increases every year as well as the implementation of environmental-friendly technologies, community services, and different social projects. Starbucks widely cooperates with non-profit organizations, which helps to increase its influence on the problematic issues.

One of the CSR initiatives was promoted by Starbucks to secure coffee from Ethiopia and, at the same time, to gain competitive advantage. The economy of Ethiopia is highly dependent on the trade of coffee. It accounts around 60% of total export. The industry employs around 15 million people. The best coffees in the world, such as Harrar®, Sidamo® and Yirgacheffee®, originate in Ethiopia (WIPO). These kinds of coffee have a high price in the international market, however, only from 5 to 10 percent of the retail price goes back to Ethiopia (WIPO). Starbucks decided to cooperate with coffee farmers in Ethiopia. Starbucks offered the government of Ethiopia to help them with the national system of certification in order to protect farmers. As a result, the harvest of coffee increased, they received a fair share of income and their standard of living increased. In addition, Starbucks maintained long-run relationship with suppliers of premium coffee.

Another shared value policy of Starbucks relates to India. It was necessary to enter the market of India because the population of the country even in 2008 was more than 1 billion people (World Bank) and the coffee consumption was around 100000 metric tons per year (The Coffee Board of India). In order to enter the Indian market, Starbucks decided to support Indian coffee industry. They raised the domestic coffee industry to the standards of Starbucks and thus received the approval of the government to enter the market of India (Pradilla et al.). They worked with Conservation International and the Coffee Board to raise coffee farmers to C.A.F.E. and Fair Trade standards (Pradilla et al.). As a result, farmers benefited and the company got constant reliable suppliers.

Moreover, Starbucks has the goal to recycle 100% of cups reusable or recyclable by 2015. Currently, they are trying to develop the initiatives and looking for the stakeholders to have a progress in this area. Starbucks is even willing to attract more competitors to this initiative. It will help to achieve higher rates of recycling and reduce the bad impact of plastic packages of fast food on the environment. 

To sum up, Starbucks, being the leading coffee company in the world, is responsible for its stakeholders. It performs the business to produce social, environmental and economic benefits.

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