Starbucks Corporation Operational Sustainability Research Paper

Introduction

Starbucks Corporation was established in 1971 and it is headquartered in Seattle, Washington. The company specializes in roasting, marketing, and retailing specialty coffee all over the world and accounts for about 3% of coffee sourcing globally. Serving 78 unique markets, the company is one of the biggest coffee roasters in the world and serves millions of patrons every day from its 30,000 plus stores around the globe. This article looks at how Starbucks has approached and operationalized the concept of sustainability.

Social Sustainability

In 2016, Starbucks floated a sustainability bond with the goal of financing coffee growing projects in various regions so as to promote environmental sustainability and socio-economic growth. Starbucks Corporation followed the guidelines presented by the Green Bond Principles 2016 in issuing its Starbucks Corporation Sustainability Bond Framework - also referred to simply as the “Framework”. The proceeds of the bond were directed at financing and refinancing existing and future projects put together to promote the advancement of coffee-growing communities socioeconomically and also promote environmental sustainability in the coffee-growing areas as well as the communities around the world that consume Starbucks coffee (Steven Li, 2019).

Given the volume of coffee that Starbucks sources from coffee growers, the company has a lot of pull with farmers. This influence puts the company in a unique position to build a lasting relationship with farmers and build frameworks that can help the industry well into the future. Such frameworks have traditionally focused on ensuring sustainability by discouraging exploitative labor practices such as the use of child labor, promoting good health and safety practices, increasing water efficiencies, reducing deforestation and encouraging agroforestry, and also fighting against soil degradation. Starbucks is aiming to get up to 10,000 farmers compliant with its sustainability provisions and requirements. This push for sustainability does not just apply to farmers only; it applies to the stores as well. Under the Green Stores Framework, the company has put forth six important standards covering design upgrades to waste management practices. To inspire the entire coffee industry, Starbucks has open-sourced this framework and made it available to other industry players (Khalamayzer, 2017).

One of the goals of the Starbucks Corporation is to positively impact the communities it operates in. Towards this end, the corporation has partnered with local nonprofits that work to address the needs of the communities. For every transaction at a Starbucks store, $0.05 to $0.15 goes towards supporting local communities. Further, Starbucks is committed to hiring veterans and has made the pledge to employ at least 10,000 of them. Through the Starbucks Foundation, the corporation provides the youth with opportunities to train to earn various skills that increase their employability in the marketplace (Harnrungchalotorn & Phayonlerd, 2016).

Outside of the United States, Starbucks supports various nonprofits in the communities it operates in by donating funds and opening its doors to host community events. Most of the international philanthropy engagements are done with the help of various partners and often put the interests of these partners first. Nonetheless, the company has been putting more effort into impacting the lives of children through water-related and education-focused initiatives (Juneja, 2018).

Economic Sustainability

There is an increasing number of coffee retailers entering into the markets Starbucks Corporation operates in and this is giving consumers more options and Starbucks more competitors to fend off. Increased competition is pushing prices downward in some markets as coffee retailers strive to compete. The Starbucks Corporation has been able to leverage its consumer’s buying power to offer a more affordable and better product than its competitors while doing so at large volumes globally that have allowed it to benefit from economies of scale. To ensure sustainability as the average consumer goes digital and embraces various technological products, the corporation has partnered with Apple to offer coupons that can be redeemed using iPhones. The company is positioning itself to reap from the benefits of cross-selling and co-branding that are increasingly becoming popular as Smartphone technology advances…

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…more productive coffee farming and supply chain solutions. Starbucks has established Farmer Support Centers in various communities to offer financial support to its suppliers. Such investments in farmers and supply chains are in line with Starbucks’ goal of building a sustainable agricultural product (Sustainalytics, 2019).

The Green Stores Framework has been a big driver of Starbucks’ environmental and energy sustainability objectives. Looking into the future, the company has open-sourced the framework to allow other organizations to take advantage of the green solutions it has developed and continues to develop. The resultant developments made by other companies because of this will be good for both the environment and Starbucks as a major company operating within this environment. Further, the company is looking to increase its investments in solar energy to make all their stores green. Other plans the company has developed include reducing waste, having a sustainable supply chain, and increasing community engagement. The company has a goal of ensuring that 100% of the coffee it sells is sourced ethically. To help farmers share in this path to sustainability, Starbucks has plans to provide farmers with 100 million coffee trees by 2025 (Sustainalytics, 2019).

Conclusion

Starbucks’ efforts so far show that it is committed to building a sustainable organization. Its written mission and vision should change to reflect this reality. As a recommendation, Starbucks’ mission and vision should communicate its commitment to ensuring economic, environmental, and social sustainability by caring for the local communities it operates in, the general environment, its shareholders, and the suppliers who include more than one million coffee farmers.

The corporation has been pretty successful in operationalizing its sustainability programs. Nonetheless, improvements can still be made by increasing engagement from community members and leaders who are impacted by these programs. The resulting goodwill can go a long way in shortening execution timelines and allowing various stakeholders to better understand the objectives the company is aiming to achieve. Further, the HR department should get all employees invested in these…