CORPORATE SOCIAL RESPONSIBILITY

Starbucks - CSR
Submitted by: Sania Kiran; SP18-RBA-004
SUBMITTED TO: SIR JAWAD SABOOR
5/23/2019
 STARBUCKS
Corporate Social Responsibility:
Corporate social responsibility (CSR) is a self-regulating business model that helps a company be socially
accountable — to itself, its stakeholders, and the public. By practicing corporate social responsibility,
also called corporate citizenship, companies can be conscious of the kind of impact they are having on
all aspects of society including economic, social, and environmental. To engage in CSR means that, in the
normal course of business, a company is operating in ways that enhances society and the environment,
instead of contributing negatively to them.

Published Standards for CSR

In 2010, the International Organization for Standardization (ISO) released a set of voluntary
standards meant to help companies implement corporate social responsibility. Unlike other ISO
standards, ISO 26000 provides guidance rather than requirements because the nature of CSR is
more qualitative than quantitative, and its standards cannot be certified. Instead, ISO 26000
clarifies what social responsibility is and helps organizations translate CSR principles into
effective actions. The standard is aimed at all types of organizations regardless of their activity,
size, or location. And, because many key stakeholders from around the world contributed to
developing ISO 26000, this standard represents an international consensus.

STARBUCKS

Starbucks Corporation is an American coffee company and coffee house chain. Starbucks was founded
in Seattle, Washington in 1971. As of early 2019, the company operates over 30,000 locations
worldwide.

Starbucks is considered the main representative of "second wave coffee", initially distinguishing itself
from other coffee-serving venues in the US by taste, quality, and customer experience while
popularizing darkly roasted coffee. 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
automated espresso machines for efficiency and safety reasons.

Starbucks first became profitable in Seattle in the early 1980s. Despite an initial economic downturn
with its expansion into the Midwest and British Columbia in the late 1980s, the company experienced
revitalized prosperity with its entry into California in the early 1990s.

The Starbucks Story

You could not buy a cup of coffee at the first Starbucks store that opened in 1971. Starbucks
originally only sold coffee beans and equipment. CEO Howard Schultz began working for
Starbucks in 1982 and came to the realization it should be selling freshly brewed coffee instead
of just machines and beans. The owners of Starbucks at the time tried the idea in downtown
Seattle serving the very first Starbucks caffè latte. Due to a different vision for success Schultz
left the company in 1985 and began his own chain, Il Giornale. In 1987, Schultz returned to
purchase Starbucks with the help of investors. His goal was to bring the Italian coffee shop back
to America. Schultz envisioned a place for conversation and a sense of community.

Growth of the Brand

In 1987, when Schultz merged the Il Giornale and Starbucks locations, the company owned 17
stores. When it went public in 1992, Starbucks had 165 total locations. In 1996, with 1,015 total
stores, Starbucks opened its first international location in Japan. As of 2015, Starbucks operates
over 22,500 stores, under several brands, around the globe. Store growth on an annualized
basis since its IPO has been close to 24%.

Starbucks has transformed its offerings since the first caffè latte. In 1996, the company began
bottling and selling its Frappuccino. It has acquired brands such as Seattle’s Best Coffee,
Teavana, La Boulange, Evolution Fresh and Tazo Tea. Starbucks customers can choose from
bakery items, sandwiches, teas, juices, coffees and coffee accessories in the store. Through
grocers, consumers not willing to pay the cafe price can purchase products, such as ground
coffee, to enjoy at home. Within a short period of time, Starbucks has entered and captured a
significant share of the at-home coffee market.

CSR ACTIVITIES — Starbucks

Long before its initial public offerings (IPO) in 1992, Starbucks was known for its keen sense of
corporate social responsibility, and commitment to sustainability and community welfare.
Starbucks has achieved CSR milestones such as reaching 99 percent ethically sourced coffee;
creating a global network of farmers; pioneering green building throughout its stores;
contributing millions of hours of community service; and creating a groundbreaking college
program for its employees. Going forward, Starbucks’ goals include hiring 10,000 refugees
across 75 countries; reducing the environmental impact of its cups; and engaging its employees
in environmental leadership.

 Here is a list of some of the sustainability initiatives undertaken by Starbucks

Corporation.

1) Recycling and Waste Reduction. In many Starbucks stores across the globe, if
commercial recycling for items like milk jugs and cardboard is available, the café will do
it. Starbucks works with local communities to make recycling easier. Starting in 2009,
Starbucks began providing recycling in the front of the house in a number of key
markets in the United States in Canada. Starbucks has also launched a number of
initiatives to reduce the overall environmental impact of disposable cups. For example,
Starbucks hosted a Cup Summit, where representatives of the plastic and paper cup
value chain come together to find criteria for a good recycle solution for cups. Starbucks
 also offers a ten cent reduction on cost to those who bring in their own reusable cups
rather than needing one of the paper ones.
2) Energy Conservation. Starbucks understands that the stores create 80 percent of the
carbon footprint of the company, and therefore it is important to conserve energy and
boost energy efficiency to reduce this contribution to climate change. Currently, 20
percent of total electricity used in the stores throughout the United States and Canada
comes from renewable sources. Starbucks has also made a number of investments into
new, energy efficient lighting and HVAC systems in stores.
3) Water Conservation. Water is used a lot in Starbucks stores to brew coffee and tea
beverages, as well as a number of back of the house operations, such as ice machines
and dishwashers. Starbucks wants to reduce water consumption by 25 percent by the
year 2015. So far, the company is on track with a 22 percent reduction by the end of
2010. To do this, one of the things Starbucks has had to do is implement a number of
new technologies. For instance, for stores in the United States, all mechanical
dishwashers utilize less than a single gallon of water during the cycle.
4) Green Building. Starbucks is always looking for new ways to design, build, and operate
their stores to reduce their environmental impact. Starbucks is utilizing responsible
building materials and a number of water and energy efficient technologies. Starbucks is
utilizing the LEED Certification program created by the United States Green Building
Council as a benchmark for all the changes. Some of the efforts to green stores include
installation of low-flow valves, improving lighting efficiency, utilizing recycled flooring
tiles, using paints with low VOC, and installation of cabinetry that is made from 90
percent postindustrial material.
5) Climate Change. Climate change has always been of primary importance to Starbucks.
Since 2004, Starbucks has focused on energy conservation, renewable energy, as well as
advocacy and collaboration. For instance, Starbucks partnered with Conservation
International to create a series of pilot projects to improve coffee production, restore
and conserve natural habitats, and look into various opportunities to increase farmer
access to forest carbon markets. Because of the amount of energy used in stores, when
it comes to climate change, Starbucks is mainly focusing a majority of their energy on
purchasing renewable energy and energy conservation measures.
6) Responsibly Grown Coffee. Starbucks’ partnership with Conservation International has
also assisted in developing purchasing guidelines to address ethical sourcing of coffee.
Known as Coffee and Farmer Equity (CAFÉ) Practices, these sets of guidelines help
Starbucks farmers grow coffee in a way that is not only good for the people, but also
good for the planet. For example, there needs to be a number of measures in place to
manage the amount of waste created, as well as protect the quality of water, conserve
energy, and preserve biodiversity.
7) Ethically Sourced Tea. Starbucks is a member of the Ethical Tea Partnership, and
therefore is looking for ways for buyers to improve industry conditions throughout the
entire tea industry. The ingredients in Starbucks’ tea brand, Tazo, are received via the
Community Health and Advancement Initiative Project, or CHAI project for short. This
project aids in increasing sustainability throughout communities by providing economic
development and health services.
 8) Ethically Sourced Cocoa. Much like Starbucks’ approach to coffee, the approach to
purchasing cocoa is created to guarantee a long-term supply of ethically sourced and
high quality cocoa while still contributing in a positive way to the environment as well as
all the cocoa-farming communities. The Cocoa Practices program is much like the CAFÉ
program for coffee in ensuring that cocoa is grown in such a way that is beneficial to the
people and the environment. For example, Starbucks has been collaborating with the
Bill and Melinda Gates Foundation and the World Cocoa Foundation to aid in supporting
the Cocoa Livelihoods Program throughout West Africa.
9) Showing Support for Farmers and the Community. Long term success for Starbucks
really depends on all the farmers who are growing the coffee. Starbucks works on the
ground with the farmers to improve quality of coffee and the communities. By assisting
in strengthening their communities and sustaining the farmers, Starbucks can ensure
the healthy supply of top quality coffee. For example, Starbucks created Farmer Support
Centers throughout Costa Rica and Rwanda to offer local farmers expertise and
resources to lower the total cost of production but increase the production and quality.
10) Ethos Water Fund. Starbucks created the Ethos Water Fund to aid in raising awareness
about the fact that over one billion people around the world do not have access to clean
water for drinking. The fund helps to provide children with clean drinking water. When a
consumer purchases a bottle of Ethos Water from any store, a portion of the proceeds
go to the fund. Over $6 million has so far been granted to support water, hygiene, and
sanitation education programs in countries that are water stressed.

Other than that,

Starbucks also supporting the local communities;

 Starbucks employees and customers have contributed more than 3 million hours of
community service over the past seven years.
 Within the scope of Global Month of Service 1,163 employee-led projects in April 2015
alone.
 Starbucks Community Store program aims to assist local non-profit organizations in their
efforts to provide education and training to achieve poverty eradication for the young
segment of population. The company has risen more than USD 900,000 since its launch
in 2011.
 Starbucks has cooperated with non-profit organizations, community leaders and
organizational stakeholders to provide more than 520,000 hours of volunteering service
around the globe.

Starbucks Educating and Empowering Workers;

 Almost half of Starbucks employees are younger than 24 years old

 Starbucks College Achievement Plan is an education program that allows employees to
obtain online degrees from Arizona State University.
  The company aims to hire 10,000 veterans and military spouses by 2018 and 2000 new
employees from this segment of population was hired in 2014.
 It has been noted that “at the height of the global financial crisis, when other companies
were cutting HR costs wherever they could, Starbucks invested in staff training,
including coffee tastings and courses that ultimately qualified for credit at higher
education institutions”

Starbucks and Gender Equality and Minorities

 At present about 40% of Starbucks US employees are minorities and 65% are women.
 Among vice presidents, 48% are women and 15% are minorities.
 Within the top leadership team, comprising senior vice presidents and higher executives
18% are minorities and 29% are women.

Energy Consumption by Starbucks

 Starbucks has more than 800 LEED® certified store, including the LEED® Platinum
Starbucks® Reserve Roastery and Tasting Room in Seattle.
 The company increased its purchases of renewable energy from 20% in 2008 to 100%
for global company operates stores in 2015
 Despite significant increase in the size and mix of the business since the base year 2008,
the company achieved a net energy reduction of 25% from 6,8 kwH to 5,10 kwH per
square foot a month in company-operated stores in the US and Canada
 Starbucks opened its 500th LEED-certified store in 2014, more than any other retailer in
the world. LEED has been implemented in 19 counties and 98% of new company-
operated stores in Americas are built according to LEED standards.
 New Energy Management System is installed in about 4000 stores to optimize heating
and cooling. In 2014, energy performance improved only 4.6% compared to the baseline
levels.

Water Consumption by Starbucks

 In 2015 Starbucks exceeded its water conservation goal, reducing consumption more
than 26% over 2008 – from 24 gallons of water per square foot of retail space to fewer
than 18 gallons
 As it is illustrated in figure below, the company has been gradually decreasing its water
consumption in company-operated stores and in 2015 it achieved 26.5% reduction in
water consumption compared to base year 2008
 Average water use per square foot/store/month U.S. and Canada company-operated stores

 In 2014, Starbucks achieved water savings of more than 23% compared to baseline
levels set in 2008. LEED certified stores made immense contribution to water saving
initiatives

Waste Reduction and Recycling by Starbucks

 During the past five years Starbucks Japan has turned tons of spent coffee grounds into
compost and feed for cows
 Front-of-store recycling has been implemented in 59% of company-operated stores in
the USA and Canada
 In 2014, customer-facing recycling was added to more than 760 stores. In total
customer-faced recycling is integrated in 3849 or 47% of all company-operated stores in
the US and Canada
 Starbucks encourages and rewards customers to bring their own tumblers and mugs to
stores. In 2014, customers did that 47.6 million times, up from 46.9 million in 2013.

Starbucks and Sustainable Sourcing

 In 2015, 99% of coffee sourced by Starbucks was certified as ethically sourced by A.F.E.
Practices, Fair-trade, or another externally audited system
 The company has 8 Farmer Support Centers in Latin America, Asia and Africa
 Starbucks purchase of coffee from the Eastern Democratic Republic of Congo helped
more than 4,500 small-holder farmers to more than triple their incomes.
 6% of coffees purchased are Fair-trade and 1% is organic.
 Starbucks investment in farmer loans with Root Capital has grown from USD150000 in
2000 to USD12 million today, including a USD3 million investment in 2014
WHY IS IT WORKING?

First and foremost, Starbucks decided to invest in its people and the communities they work
with. When a company puts people first, and focuses on making positive changes for the
communities they work with and serve, consumers notice. In fact, studies show that when
companies support social or environmental issues, 93% of the consumers have a more positive
image of that company. Starbucks’ strategy and resultant outcomes are proof positive of that
study. Plus, when companies like invest in their people, they see less turnover, and employees
become advocates of the company as well.

What’s more, each year, Starbucks publishes a Global Responsibility Report (in 9 different
languages!), that shares data highlighting the impact they’ve had over the past year. They use
this data to inform the coming year’s strategy, so as to ensure their programs are as effective as
possible. Rather than simply coming up with a CSR strategy and blindly sticking to it, Starbucks
takes the time to measure and evaluate its programs.

We’re not suggesting that your business’s social responsibility strategy should be on Starbucks’
level – not right off the bat, at least. But it’s not enough for businesses to do "just enough to
check off the box". Thoughtful CSR programs aren’t just PR stunts or a show for investors, and
the companies that are really succeeding are proof that these programs can be hugely impactful if
implemented well.

Starbucks CSR ranking:

For the 12th consecutive year, Starbucks has been named one of the World’s Most Ethical
Companies by the Ethisphere Institute.

Since 2007, Ethisphere has recognized companies who demonstrate achievements in

transparency, integrity, business ethics and compliance, and act as drivers to influence positive
change in the business community and societies around the world. Companies are evaluated in
several categories: reputation, leadership and innovation; ethics and compliance program;
governance; corporate citizenship and responsibility; and culture of ethics.

In 2018, only 135 companies were recognized, spanning 23 countries and 57 industries
worldwide. Starbucks is one of only 12 companies to have earned the honor all 12 years that
Ethisphere has published its rankings. The company is the only honoree in the Specialty Eateries
category for 2018, underscoring their commitment to leading ethical business standards and
practices.

Moreover, Starbucks has been named the fifth most admired company in the world by Fortune
magazine, which on Friday released its annual rankings. Starbucks was also ranked number one
in the food and beverage industry. This is the 16th year in a row that Starbucks has appeared on
the global list.
The Future of Starbucks:

Starbucks continues to open thousands of new stores each year, mainly outside of the North
American market. The company has a five-year plan with several goals to continue driving
growth. Starbucks wants to be the employer of choice and invest in those employees who
continue to deliver superior customer service. Starbucks has always been on the forefront of
valuing employees, especially its part-time staff. The company has stated it will grow to 30,000
locations globally and work on creating new reasons for customers to visit its stores throughout
the day. From breakfast to lunch, and also snack and evening offerings, the goal is to entice
customers to come back a second time in one day or make additional trips per week. Starbucks
wants to become a major player in the global tea market. Following the acquisition of Teavana,
the company will incorporate this brand into its stores and grocery supply chain.

The expansion of digital engagement allows Starbucks to drive participation in programs such
as mobile ordering and My Starbucks Rewards. The company has begun testing delivery using
the mobile app platform and is partnering with the delivery startup Postmates. With the mobile
app, customers can order ahead, save their favorite drink, add funds to a Starbucks card send
gift cards and track their rewards. It is now easier than ever to get your hands on Starbucks'
products.