Starbucks is a renowned global coffeehouse chain and one of the most recognizable brands in the world. As prominently displayed in stores and on packaging, Starbucks has made it clear that it has a commitment to ethical sourcing and sustainable practices. In this blog, we’ll look at what Starbucks has done so far and what sustainability opportunities lay in front of them.
According to its 2022 ESG report, Starbucks has set a 2030 target of a 50% absolute reduction in scope 1, 2, and 3 GHG emissions representing all of its direct operations and value chain. Starbucks has been tackling the issue from both the store and farm level, with a strategy that is twofold: reduce the environmental footprint from retail and supply chain operations, and engage in climate-smart agricultural practices as part of their ethical coffee sourcing process.
Some of the sustainability efforts that Starbucks has implemented include:
Reducing energy consumption by investing in the measurement and reduction of carbon emissions, as well as innovative technologies that allow its supply chain to tap into renewable energy sources.
Launching a carbon management program to reduce its carbon emissions and setting goals focused on farm practices and land usage to become carbon neutral for green coffee by 2030.
Certifying over 3,500 Greener Stores globally across 20 markets to date, which aim to reduce carbon emissions, water usage, and landfill waste.
Promoting ethical and sustainable coffee growing practices by sourcing and verifying 98.2% of its coffee through C.A.F.E Practices.
Empowering 250,000 women and girls in coffee, tea, and cocoa-growing communities.
Advancing inclusion, diversity, and equity at Starbucks.
Furthermore, Starbucks' Greener Stores program is designed to reduce carbon emissions, water usage, and waste to landfills. Starbucks’ Greener Stores feature solar panels, water recycling tanks, high-efficiency appliances, low-emitting paint and sealants to improve indoor air quality, and recycled and lower-impact building materials. Each Greener Store has a unique combination of sustainable features that qualify for third-party verification on a quarterly basis. Starbucks has certified over 3,500 Greener Stores globally across 20 markets, which will contribute to its target of halving carbon emissions, water usage, and landfill waste from its operations by 2030. The Greener Store program has helped Starbucks save almost $60 million in annual operating costs, including 30% water. Starbucks plans to certify 10,000 Greener Stores globally by 2025.
Michael Kobori, Chief Sustainability Officer at Starbucks, has expressed his excitement about the company's continued worldwide expansion of its Greener Store portfolio, which is a key step towards reaching its resource-positive goals. He adds, “With a company of Starbucks scale – any one action, no matter how small, has the potential for massive impact. We are heartened by our partners around the world who are stepping up to adopt our Greener Store standards. This is a testament of their energy and passion for sustainability that continues to drive our innovation”.
Former Starbucks CEO, Kevin Johnson, stated in a 2020 message that Starbucks’ “aspiration is to become resource positive – storing more carbon than we emit, eliminating waste, and providing more clean freshwater than we use. This aspiration is grounded in Starbucks mission. By embracing a longer-term economic, equitable and planetary value proposition for our company, we will create greater value for all stakeholders”.
A Hurdle When It Comes to Renewable Energy
Unfortunately, like most retailers, Starbucks faces the challenge that it cannot control the buildings in which tens of thousands of its stores are located. Without owning the buildings, Starbucks is limited in the application of solar panels.
So what other solutions can Starbucks employ??
The Opportunity of Using Additionality RECs
According to their 2022 ESG Starbucks remains committed to expanding renewable energy projects and continues to support the growth of green energy through long-term electricity contracts, direct ownership and by contracting for renewable energy certificates from new projects. However, with a whopping 2.6 million MWh of consumed electricity in 2022, part of Starbucks’ strategy includes procurement of traditional unbundled Renewable Energy Certificates (RECs) for almost 25% of that in the US according to their reporting with the EPAs Green Power Partnership.
Knowing that by 2030, the company aspires to lead the retail industry in decarbonization solutions, Starbucks could speed its sustainability journey with the inclusion of renewable energy certificates (RECs) from net NEW projects - otherwise known as Additionality RECs or ARECs. Additionality RECs serve as a means to promote and incentivize the development of net NEW renewable energy projects - advancing the development of new renewable power beyond what would have been built without the financial support provided by the certificates. ARECs offer several advantages over rooftop solar, VPPAs, and traditional RECs, including:
Expediting the addition of renewable energy on the grid;
Alleviating long-term expenses from installing and maintaining solar panels;
Reducing the financial complexity and risk created by (virtual) Power Plant Agreements (PPAs);
Enhancing sustainability claims by directly supporting new projects; and
Creating a scalable sustainability strategy that can work across geographies.
In conclusion, Starbucks' use of ARECs would present a diverse array of benefits while allowing them to reach their goal of being a retail industry in decarbonization solution.