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Starbucks Corporation is the largest international coffeehouse company in the world, with 16,635 stores in 49 countries. The first Starbucks shop opened in Seattle on March 30, 1971. By 1984 the owners of Starbucks took the opportunity to purchase their coffee supplier’s business; Peet’s Coffee & Tea. Starbucks sells brewed coffee; espresso based hot drinks, cold drinks, hot and cold sandwiches, salads and also items such as mugs and tumblers. Despite the fact that Starbucks have only been around for 59 years they have managed to succeed immensely at their business area. In order to succeed in the future they need to care about their role in the world. I will be talking about their policies concerning business ethics and corporate social responsibility.
Business ethics is an internal examination of problems that can arise from the business environment, and how the corporation, employees and management can tackle them ethically. These problems such as corporate social responsibility, bribery and discrimination are examined in business ethics. Starbucks is firmly against improper use of authority and discrimination. They are very bold about the workplace environment and they ensure that all Starbucks employees are entitled to work in an environment that is free of harassment, bullying and discrimination. Starbucks is also strongly against bribery even if it’s a simple gift. They explain that a gift or favour should not be accepted or given if it might create any sense of obligation which clouds professional judgement. They make it very clear that money should never be accepted or given as a gift. However simple gifts such as coffee samples, coffee cups or pens are acceptable.
Starbucks is the largest coffeehouse chain to take a big interest in business ethics. In 2008 Starbucks bought 385 million pounds of coffee and seventy seven percent of that (295 million pounds) was ethically traded, meeting Starbucks “Shared Planet” ethical sourcing principles for coffee. With the help of Conservation International, Starbucks developed ethical sourcing guidelines which they follow when purchasing responsibly grown and ethically traded coffee. Starbucks opened their first ‘Farmer Support Centre’ In Costa Rica in 2004. This centre allows Starbucks team of agronomists and quality experts to be out in the field, working directly with farmers to develop and use responsible methods to grow better crops.
Starbucks states “We’ve always believed that businesses can – and should – have a positive impact on the communities they serve.” (www.starbucks.com/responsibility) This quote explains how Starbucks respects the environment and makes environmentally friendly decisions when running the business. The Starbucks Foundation supports many organizations to help the community; one of these is Ethos Water fund, whom children around the world get clean water and raise the awareness of the world water crisis. The Starbucks foundation states that they have committed a total of more than $6.2 million dollars in grants from the Ethos Water Fund to help support water, hygiene education programs and sanitation benefitting more than 420,000 people in coffee and tea growing communities in East Africa and India. In the UK Starbucks is working with the National Literacy Trust helping thousands of children and families to change their lives through literacy and through working with The Prince’s Trust Starbucks is helping thousands of young people to gain the skills, experience and confidence they need to get on in life.
Starbucks states that their biggest challenge and goal is recycling and reducing waste. By 2015 Starbucks plan to have recycling available in all of their stores and serve %25 of beverages in reusable cups. In 2008 they changed their original plastic cups with a more environmentally friendly cup which has less of an impact on the environment. In 2009 Starbucks hosted a Cup Summit in Seattle, bringing together all facets of their paper and plastic cup value chain to come up with an agreement for a comprehensive recyclable cup solution. In 2010 Starbucks participated in the United States Conference of mayor to find support for increased or improved commercial recycling opportunities across the country.
The Corporate Social Responsibility is about businesses giving back to society. Starbucks needs to answer to two aspects of their operations; the quality of their management in terms of people and the nature of their impact on society in various areas. Starbucks believe that to accomplish at their CSR goals they have to look after their biggest stakeholders; farmers. They explain that their long term success is linked to the success of the thousands of farmers who grow their coffee. They believe that it’s not just the right thing to do, but it is the right thing to do for their business; by helping to sustain coffee farmers and strengthen their communities they ensure that they get a healthy supply of high quality coffee. Starbucks provides funding to organisations that make loans to coffee farmers, which will help them sell their crops at the best time to get the best price. Currently Starbucks committed over $15 million to a variety of farmer loan funds.
According to the environmental factors; there has been a ‘1.7% decrease in electricity usage in company owned stores and also 25% of the electricity is purchased from renewable sources in 2009’ (Starbucks/Energy) Starbucks Espresso is 100% fair-trade certified in the UK and Ireland. This means that coffee farmers in less developed countries can earn more and therefore plant more crops; keeping the environment drought free. In relation to Fair-trade Starbucks states they are ‘proud to support fair-trade’ and it’s not just about feeling good about buying their coffee in an ethical way but also ‘supporting a system where farmers and workers are rewarded for caring about their craft and their community’
Starbucks also contributes to medicine for less fortunate coffee growing communities. They have already generated contributions equalling more than 14,000,000 days of medicine to fight HIV in Africa. Every time a customer purchases a Starbucks (red) product or uses their Starbucks (red) card, Starbucks make a contribution to the Global fund.
The Starbucks Company has proved that they do take CSR very seriously and always have been since the 1970s. This has been proven throughout my essay regarding the research I have put together. The environmental factors that Starbucks have taken into account have illustrated their appreciation to the environment and the world as they have become more eco-friendly in regard to their operations and their products. For Example there was a 1.7% decrease in electricity usage in company owned stores in 2009. Another example is that 25% of the electricity purchased in 2009 was from renewable sources which help fighting pollution. Starbucks donated $6.2 million dollars to Ethos Water fund for clean water in less developed countries, so far and this money has helped over 420,000 people in East Africa and India. Also 14,000,000 days worth of HIV medicine was purchased to fight aids in Africa. These examples show that Starbucks isn’t just interested in making profit but also interested in welfare of their employees and the less fortunate communities. The Opening of ‘Farmers Support Centre’ in Costa Rica and working with the National Literacy Trust in the UK shows that Starbucks Company cares about the community as a whole. In conclusion after researching about their business ethics and CSR policy, I believe that Starbucks does take CSR seriously.
One recommendation in regard to their community involvement would be for them to make more advertisements about what they do for the community. I never knew about Ethos Water or Starbucks helping to fight aids in Africa until I researched about their CSR policy. Increasing advertisement would bring more people and businesses together and allow them to help less fortunate countries even more and bring the world up on its feet as a whole. This will give Starbucks a better image and allow the company to distribute its products much more efficiently.
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