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What is the Role and Responsibility of a For-Profit Public Company?

2016 Global Social Impact Report

Good things are happening.

Our 2016 Global Social Impact Performance report marks our progress as a company, one that’s performance-driven, through the lens of humanity. In a year of tumultuous changes around the world, we’ve exceeded most of our goals to help our people and the communities we serve, while achieving another year of record financial performance.

We’ve reached this milestone by being purposeful in our decisions and our actions—and it’s how we will move forward in the years to come.

The way forward.

We will focus in four areas where our commitment and scale can make the biggest impact:

  • Making coffee the world’s first sustainable product by doing our part to improve the lives of at least One Million people in coffee communities around the world
  • building and operating the world’s largest green retail business
  • creating pathways to employment for 1 million people
  • strengthening communities by welcoming all and creating impact on issues that matter

OUR FUTURE IN SUSTAINABLE COFFEE

Starbucks is proud to have reached the milestone of 99% ethically sourced coffee.

However, we are not done yet. We will continue to work with that last 1% to bring producers along on this journey with us. Such as the Starbucks Reserve Eastern DR Congo Lake Kivu coffee, where we are working with producers to expand our ethical sourcing effort. Moving beyond our 100% ethically sourced commitment, we are joining with others to make coffee the world’s first sustainable agricultural product.

Starbucks believes we can increase the prosperity and resiliency of one million farmers and workers who grow our coffee in coffee communities around the world. We will do this by investing in coffee communities, sharing our technical coffee knowledge, and innovating with new approaches.

Investing in Farmers 

Thanks to our partners and customers, more than 25 million trees have been donated to coffee farmers. This effort began In September 2015, when Starbucks launched the One Tree for Every Bag Commitment to help ensure the long-term supply of coffee and the economic future of coffee farmers. Its goal—to raise enough funds by the end of 2016 to plant 20 million coffee seedlings to replace trees that are declining in productivity due to age and disease, such as coffee leaf rust. With the help of our customers, we exceeded this goal in just over a year.

To build on that success, Starbucks will quadruple its commitment by providing 100 million healthy coffee trees to farmers by 2025 by leveraging our green coffee purchases in coffee growing communities most impacted by climate change. We will work in collaboration with Conservation International (CI) and our partners on the ground and will share what we learn across the industry, to ensure that other farming communities looking to replace their trees can benefit from this program.

The Starbucks Global Farmer Fund is a $50M commitment to provide financing to coffee farmers. Through these loans, farmers have the ability to support agronomy, restoration and infrastructure improvements. This work directly influences coffee quality, sustainability and overall profitability for the entire specialty coffee industry.

To support critical issues coffee communities are facing, the Starbucks Foundation partners with organizations with local expertise to build sustainable solutions. Since 2014, the Starbucks Foundation has awarded origin grants to support smallholder farming families in coffee and tea-growing communities, reaching approximately 47,000 direct and indirect beneficiaries. By 2020 we plan to reach 250,000 people.

In 2016, Starbucks began funding a new project in Oaxaca, Mexico with Conservation International focused on delivering a net positive model to reestablish coffee as a livelihood. Oaxaca was once a globally important origin for high-quality specialty coffee, but productivity has declined significantly due to climate change, lack of market access, poverty, migration, and other challenges. CI will work with local partners to improve farmers’ shade management systems and increase alternative income streams – ultimately stabilizing farming communities in Oaxaca and enabling farmers to continue growing coffee. CI will also train producers in water conservation to protect freshwater resources, and will follow a human rights-based approach, recognizing the importance of gender and ethnic traditions to ensure the active participation of women, indigenous farmers and their families.

Sharing Coffee Knowledge

Starbucks currently operates eight Farmer Support Centers in key coffee producing countries around the world, from Indonesia to Rwanda. There, with our open-source agronomy approach, farmers get free access to the latest findings of our top agronomists, including new varietals of disease-resistant trees, and advanced soil management techniques. Building on traditional growing methods will help farmers continue to improve both the quality and yield of their crops, and their profitability, ensuring the future of high quality coffees for everyone. In 2016 we expanded this network to include a Farmer Support Center in Mexico. With this global network, we aim to train 200,000 coffee farmers by 2020.

How we are working with others to make all coffee 100% sustainable

We know that greatest challenges in coffee can be solved faster if we collaborate and share solutions. Therefore, Starbucks is one of the founding members of The Sustainable Coffee Challenge, a diverse industry coalition led by Conservation International with the call to action of making coffee the world’s first sustainable agricultural product. The Challenge began in 2015 at the United Nations climate talks in Paris and has grown to more than 60 members across the industry, including other roasters, NGOs, and the governments of Mexico and Rwanda. The Challenge is now pulling together the industry pre-competitively to develop innovative solutions to ensure the prosperity and well-being of farmers, workers and communities, sustained supply of coffee, and conservation of nature. Specifically for Starbucks, we have an opportunity to partner with others and go beyond our own commitment of 100M trees. Through the Sustainable Coffee Challenge, the industry is coming together to commit to one billion trees, while developing shared principles for responsible renovation. Going forward, we invite our partners and customers to share the journey with us and to follow the Challenge at www.sustaincoffee.org

Issuing our First Sustainability Bond

In May 2016, we issued our first U.S. Corporate Sustainability Bond. The company will use the net proceeds from the offering of $500 million to enhance its sustainability programs around coffee supply chain management through Eligible Sustainability Projects.

Beyond Coffee

We are committed to 100% ethically sourced tea and cocoa visit Starbucks.com/responsiblity to learn more about our commitment and progress.

SUSTAINABLE COFFEE 2020 GOALS

Sourcing Commitment
100% Ethically-sourced coffee

Open-source agronomy
Train 200,000 coffee farmers by 2020

Planting Trees
Provide 100M trees to farmers by 2025

Global Farmer Fund
$50M invested in funding for farmers by 2020

LEADING THE WAY IN GREENER RETAIL

Celebrating a 30-year legacy of environmental leadership we have long understood the planet is our most important partner. Our approach toward green retail continues with ambitious goals for 2020 and beyond.

Greener Stores

Starbucks is proud to have built over 1,200 LEED® (Leadership in Energy and Environmental Design) certified stores in 20 countries. Starbucks is the largest builder of green stores in our sector and our stores accounts for 20% of the LEED-certified retail projects globally. Now, Starbucks will deepen its commitment to environmentally friendly retail by developing a store verification program known as Greener Retail. Greener Retail will drive sustainable innovation and efficiencies throughout the store portfolio, not just limiting verification to new stores. Our goal of achieving 10,000 Greener Retail stores by 2025 will encompass new and existing stores by evaluating building standards, utility efficiency targets, and Partner engagement. This new program positions Starbucks to truly leverage its scale for good and become the world’s greenest retailer.

Innovating a Greener Cup

Starbucks has made significant progress to green up the cup and recognize that there is still a long way to go. We were the first company to offer a discount for bringing a reusable cup, the first to include 10% post-consumer fiber (PCF) in our hot cups and we have led the industry in advocating for increased recycling infrastructure. While we can recycle the cup in many communities today, we will continue to collaborate with local governments and stakeholders to increase recycling in all of our company-owned markets. Our goals for 2022 are designed to accelerate progress to achieve a greener cup. 1) we aim to double the recycled content in the hot cup, and explore alternative materials for cold cups. 2) We remain committed to recycling and will work to double the number of stores and communities with access to cup recycling. 3) We will promote and incent the use of “for here” and reusable cups.

Greener Power

Since 2005, Starbucks has invested in renewable energy, and achieved a milestone last year by purchasing the equivalent of 100% of global company-operated stores electricity consumption, primarily utilizing renewable energy certificates (RECs) from the US and Canada and through green electricity supply contracts across Europe. Starbucks is the number one purchaser of renewable electricity in its sector on the EPA’s Green Power Partnership National Top 100 list.  Last year, Starbucks joined The Climate Group RE100, a coalition of some of the world’s largest businesses committed to using renewable electricity.  As we look to the future, Starbucks will focus on identifying new, geographically relevant ways to buy renewable energy and bring new renewable projects onto the grids of the countries where we operate around the world.

Greener Partners

We are focused on galvanizing our partners (employees)who are passionate about sustainability to inspire, teach and learn from them. In 2016, we piloted the Greener Apron program with both retail and non-retail partners—a voluntary certification program that helps partners learn about environmental sustainability through three short modules co-created with Arizona State University’s School of Sustainability. More than 1,100 partners participated when we launched the pilot. In the spring of 2017, we will expand the program to be available to partners in the U.S., Canada, the U.K. and the Netherlands. Our goal is to engage 10,000 partners globally by 2020 and create a network of sustainability champions.

GREENER RETAIL 2020 GOALS

Greener Stores
10,000 Greener Stores globally by 2025

Greener Cup
Double the recycled content, the recyclability, and the reusability of our cup by 2022.

Greener Power
Invest in 100% renewable energy to power operations globally by 2020

Greener Aprons
Empower 10,000 partners worldwide to be sustainability champions by 2020

 

CREATING OPPORTUNITIES

HELPING PEOPLE ACHIEVE THEIR DREAMS.

As a leader in hiring great talent, Starbucks has and will always look to create opportunities for our partners (employees) and customers in the communities we serve.

Hiring Veterans and Military Spouses

Hiring and honoring veterans and military spouses allows us all to benefit from their leadership, experience and sense of service. In 2013 Starbucks committed to hiring at least 10,000 veterans and military spouses by 2018. In March 2017, we announced that we met our goal 18 months early and have expanded our goal to 25,000 by 2025. Our commitment extends beyond hiring. It includes expanded benefits, establishing places for our veteran and military family communities to connect with one another, creating volunteer opportunities and leveraging their unique leadership experience to positively shape our company and our world.

Hiring Opportunity Youth

Starbucks is embracing and employing tens of thousands of youth, ages 16-24, who are disconnected from work and school, to help them achieve their dream and our shared future. Starbucks led the launch of the 100,000 Opportunities Initiative with 50 other employers in 2015. The country’s largest employer-led coalition committed to creating pathways to meaningful employment for young people, the coalition has reached its goal of hiring 100,000 Opportunity Youth—two years ahead of schedule.

Starbucks is committed to hiring 100,000 opportunity youth by 2020 and the Coalition is now aligning with the cross-sector goal of creating one million opportunities by 2021. The group will continue to capture and share new recruiting and human resources practices tailored to hiring, retaining and advancing Opportunity Youth.

In the U.S., Starbucks is also opening stores in low-to-medium income communities that are equipped with training centers where we work with local nonprofits to provide job-skills training to young people. Around the world, we provide training and support to young people in ways relevant to their needs and opportunities.

Welcoming and Hiring Refugees

Refugees represent a population who seek a chance to rebuild their lives and have a fresh start in the face of extraordinarily difficult circumstances. In keeping with our long-standing history to create opportunity for all and to invest in the people who are a part of the communities where we do business, Starbucks is leading a global effort over the next five years to welcome and employ 10,000 refugees whose talent, experience and resilience will enrich the communities we serve around the world.

Expanding Starbucks College Achievement Plan

By the end of 2016, we had over 6,000 partners participating in the Starbucks College Achievement program with 227 graduates. In March 2017, we announced the Pathways to Admission, a program that provides partners the ability to work toward admission tuition free.

CREATING OPPORTUNITIES 2020 GOALS

Veterans and Military Spouses
Hire and honor 25,000 veterans and military spouses by 2025

Starbucks College Achievement Plan
Graduate 25,000 partners by 2025 and increase accessibility and performance

Opportunity Youth
Embrace and employ 100,000 by 2020

Refugees
Welcome and employ 10,000 refugees globally by 2022

STRENGTHENING COMMUNITIES THE WORLD IS OUR NEIGHBORHOOD.

Every Starbucks store is a part of a community, and we’re committed to strengthening neighborhoods wherever we do business.

Donating Ready-to-Eat Meals

In the spirit of Our Mission and Values, partners across the country advocated for a solution to donate unsold food to the communities we serve. Through a new and unique strategic partnership with Feeding America, we will rescue 100% of food available to donate from all of our U.S., company-owned stores by 2020, positioning Starbucks as the sector leader in food rescue.

By partnering with Feeding America, we are leveraging the largest domestic hunger-relief and food-rescue nonprofit network in the U.S.—to redistribute unsold food to families and individuals struggling with food insecurity. As of March 2017, we have donated 1 million meals, and we expect to increase our donations exponentially to 50 million meals annually at scale.

To enable food donation, Starbucks is providing financial support to food banks to invest in program infrastructure, which includes refrigerated vehicles that can safely transport rescued food. Our hope is to see others leverage this infrastructure which would further increase the program’s impact in terms of meals donated as well as a reduction in the food waste footprint, which is estimated to be 70 billion pounds each year, according to Feeding America.

The FoodShare program not only donates meals, it also connects our partners with their local food banks to donate their time through service projects. In addition, the partnership with Feeding America not only invests in the food bank network, but also allows Starbucks the opportunity to lend support to advocacy efforts around hunger relief programs at the national and local levels. Through food donation, community service, financial investment and advocacy efforts, the FoodShare program is working to help end hunger from all sides.

Community Service

We have always believed Starbucks can – and should – have a positive impact on the communities we serve. Community Service reflects Our Mission and Values, who we are as a company and one of the single biggest ways we individually and collectively come together to help fill a need in the communities where Starbucks operates. We launched Global Month of Service in 2011 to honor our 40th anniversary with a month-long dedication to service, and in April 2016 alone, more than 50,000 partners and partners served together in their local communities. April is only the beginning of our commitment to service. We are excited to launch our year-round commitment and announce our new community service goal to have 100% of Starbucks stores across the globe participate in service annually by 2020. We aspire to have every participating store around the world engaged in community service by encouraging partners to lead and participate in projects that link to our global social impact efforts in sustainability, hunger, youth, veterans, and refugees.

The Starbucks Foundation

The Starbucks Foundation supports communities around the globe in areas aligned with our social impact priorities:

Opportunity for Youth

In 2016, 63 partnerships in 10 countries directly supported over 20,000 young people in developing job and leadership skills and connecting them to employment.

Supporting Coffee, Tea and Cocoa Communities

Our commitment to communities extends beyond our stores to include the regions that supply our coffee, tea and cocoa. Starbucks invests in programs designed to strengthen local economic and social development. We work collaboratively with non-governmental organizations that have experience and expertise in working with farming communities in the countries where coffee, and other agricultural products are raised. Projects include improving access to education and agricultural training, microfinance and microcredit services, improving biodiversity conservation, and increasing levels of health, nutrition and water sanitation.

Diversity & Inclusion

The success of our business relies on the innovation that results from bringing together the diverse experiences, perspectives, and backgrounds of the people who work with us. To further those efforts, we created the Starbucks Inclusion Council, comprised of executives from key areas of our enterprise, who set the strategic vision for Starbucks inclusion and diversity efforts. That vision includes creating opportunities for historically underrepresented populations both in our hiring and in our supply chain. It includes a tenacious focus on pay equity, to ensure all our partners (employees) are paid fairly for the work they do. On top of this, it includes accountability to ensure our most senior leaders represent the diversity of our partners and customers. Whether we are looking to enter new markets, grow in existing ones, or continue to drive innovation across our business, focusing on diversity and inclusion is a business imperative.

INCLUSIVE WORKPLACE

There is no higher priority for our business than to attract, develop, and retain talented partners. To accomplish this, we need to treat each other with respect and dignity, and create a culture of belonging where everyone is welcome. Those are two of our highest values. When our partners can come to work, be fully themselves, and do their best work, we consider that success. Our nine Partner Networks, each highlighting an area of diversity, represent the broad spectrum of our partner backgrounds and provide an opportunity for our partners at all levels to connect, speak up, and take on leadership roles.

Additionally, we offer the opportunity to build a career and support our partners’ personal goals through comprehensive benefits for both our full and part-time partners ranging from healthcare, parental leave, stock, to the chance to earn a tuition free college degree. Through community outreach as well as by partnering with non-profits, civic leaders, and diverse professional associations, at the local and national level, we are working to make sure a diverse pool of talent has access to the opportunities we offer.

Our board of directors is now one of the most diverse corporate boards in the country. At the end of 2016, 43% of our U.S. partners were minorities; 66% were women. Of our U.S. vice presidents, 19% were minorities and 48% were women. Among our top 60 leaders in the U.S., defined as senior vice president or higher, 18% were minorities and 32% were women. We continue to strive to do more to increase our diversity. That is why we have established goals to increase the number of women and minorities at the most senior levels of the company and continue to evaluate our efforts in this regard. In addition, we will continue to engage and welcome diverse job candidates and partners from all backgrounds to ensure we have a workforce that furthers our success.

DIVERSE SUPPLY CHAIN

Starbucks supplier diversity program strengthens our supply chain and serves as a critical component of our commitment to ethically source our products. Our program focuses on developing business relationships with companies that are at least 51-percent owned and operated by a minority, a woman, someone who is LGBT, a veteran, or a person with a disability. By actively seeking diverse suppliers, we both support our business and invest in the communities in which we do business. This not only helps us identify and deliver high-quality, innovative products and services across all business channels, but also drive value and economic development. Since first reporting our spend with diverse suppliers in 2000 – then totaling $38 million – our program has grown to almost $700 million annually. This accounts for approximately 10% of our total spend in the U.S. and Canada. We have set year-over-year growth targets with an ultimate goal of achieving 15% of spend with diverse suppliers. Our comprehensive approach to supplier diversity ensures our program and goals are part of the foundation of our strategic sourcing process. In addition to setting purchasing targets reflected in our supply chain partners’ goals, our sourcing team proactively supports diverse supplier development. Beyond simply identifying strong candidates, we actively coach and develop high potential suppliers.

STRENGTHENING COMMUNITIES 2020 GOALS

FoodShare
Rescue 100% of food available to donate by 2020 in U.S. company-owned stores

Community Service
Have 100% of our stores globally participating in community service annually by 2020