Responsible International Business: A CSR Evaluation of Starbucks

This report provides a comprehensive analysis of Starbucks' Corporate Social Responsibility (CSR) initiatives within its international business operations. It begins with an overview of Starbucks, highlighting its global presence and brand image. The report then evaluates Starbucks' CSR work, focusing on stakeholder engagement, ethical sourcing through Coffee and Farmer Equity (CAFE) Practices, and environmental sustainability efforts, including waste reduction and energy efficiency. The analysis also incorporates core characteristics of CSR, such as voluntary initiatives and managing both internal and external environments. The report further explores how Starbucks utilizes a stakeholder approach to balance the needs of employees, business partners, customers, and the environment. Key initiatives like the Ethos Water Fund and investments in green retail stores are discussed, showcasing Starbucks' commitment to social and environmental responsibility. The report concludes by assessing the company's progress in reducing greenhouse gas emissions and promoting sustainable practices throughout its global operations.

MANAGING INTERNATIONAL
BUSINESS RESPONSIBLY

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Contents
Introduction................................................................................................................................2
Overview of your chosen company............................................................................................2
Analysis and evaluation of the CSR work of Starbucks............................................................3
Evaluating the Starbuck`s through core characteristics of CSR and stakeholder approach......4

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Introduction
This report brings out the discussion of CSR (corporate social responsibility) of a company
named Starbucks. Companies have the responsibility and obligation to practise CSR
(corporate social responsibility) to make their operations sound by working for business and
social environment. In this report, Starbucks has become successful in the corporate world of
with its effective CSR Activities. Corporate social responsibility involves a code of conduct,
which is defined to be achieved in the mission statement of the company to become profitable
and obedience to the law, follow ethics and support the environment and society by
contributing money. In recent era, the competition has no longer only limited to high
financial performance but also extends to company`s CSR activity performance (Starbucks,
2010).
Employees and consumers are satisfied with well performing CSR of Starbucks. The annual
reports of the company shows how actively the company has linked its combination of
activities to the social, economic, and environmental perspective. Apart from identifying the
CSR activities of the Starbucks, the report has also evaluated the CSR activities of the
company through the core characteristics of CSR. The company has strategized the usage of
innovative technology to reduce the cost without harming the environment. The report
intends to find out how Starbucks deals with social responsibilities both in internal as well as
external business environment. Mainly the company focuses on five principle areas based on
value based services and core characteristics of the CSR (Spence, 2016).
Overview of your chosen company
Starbucks Company is an American coffee organisation and chain of coffeehouses. Starbucks
was founded in Settle, Washington in 1971 and is well known premier roaster, retailer, and
marketer of special coffee all around the world. That time, the company was also the

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merchant of whole bean, ground coffee, spices, and tea. As of now, it operates 28218 retail
cafes worldwide. After 2008, Starbucks continues to expand in Argentina, Brazil, Belgium,
Portugal, Europe, Poland, Sweden, Netherlands, Bulgaria, and South Africa. It is also
considered as “second wave coffee” which distinguishes it from other coffee servers due to
its taste, customer experiences, and tastes (QSR, 2008).
The Company provides high quality coffee to the customers and focuses on product
innovation, expansion of its retail stores to provide best quality service to customers.
Starbucks has created its successful brand image by providing soothing and comfortable
environment with high quality coffee to the customers. Currently, Starbucks is able to
position its fame and has a leading position among all the brands of coffee (Fediuk, 2012).
The company has wide variety of offerings such as beverages, fruit, breakfast, snacks plate,
nutrition and bakery food but most importantly it offers brewed coffee. The company has
three major operating segments and each segment indicates and generates a considerable
percentage of revenue each year such as United States, International and global consumer
product group. The long-term objective of Starbucks is to maintain a standing and most
respected image of the brand. To maintain the brand image, Starbucks planned to continue
disciplined global expansion of its stores and introduce relevant product in all the distribution
channels (Nollet, Filis, and Mitrokostas, 2016).
Analysis and evaluation of the CSR work of Starbucks.
Starbucks shows strong commitment towards fulfilling its corporate social responsibilities
with an aim to create a positive image in the society. Starbucks has transparency especially
while dealing with consumers and media through events. The company is well known for its
well conduct of corporate social responsibilities, good governance, and ethical conduct.

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Starbucks has strived to form strategies which could increase the shareholder`s value.
Starbucks focuses on maintaining the connection between stakeholders and the company
(Wofford, MacDonald, and Rodehau, 2016). Starbucks made committable approach to its
CSR activities, which enables it to create a differential image of Starbucks. As far as the
stakeholders are concerned, the company pays the salary or the compensation to its
employees based on the hours laws and regulations that means Starbucks take care of the
other benefits fairly (Wang, 2012).
Starbucks strongly believes that all the partners should be treated as well as possible as every
person has its self-esteem and honour without irritating, any biasness, and insulting.
Moreover, Starbucks ensures that partners work in a friendly environment. The top-level
management and the employees (partners) have cooperated and coordinated to each other to
follow the safety regulations, training and practises to prevent and provide a safe environment
for employees from accidents (Sethi, and Schepers, 2014).
The company has a list of sustainability initiatives, which Starbucks adopted-
Many Starbucks retail stores across the world undertook commercial recycling of waste such
as milk jugs and cardboard. Starbucks promoted by taking initiatives towards local
communities to make the recycling process easier. In 2009, the company provided recycling
training to nearby homes in the key market in U.S (Ross, Pandey, and Ross, 2015). Starbucks
has undertaken a number of initiatives to prevent the environment from the adverse effect of
disposable cups. The company has also hosted a cup summit in which manager of value chain
of paper cup strived to find a good recycling solution for cups. Starbucks has also offered a
10% cost reduction to people who brings back their used cups (Harbi et al., 2015).
Starbucks know that that the retail stores of the Starbucks in different countries constitute and
create 80% of the carbon footprint. However, it is important to save the energy and increase

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the energy efficiency of these retail stores to reduce their contribution to climate changes. In
2012, around 20% of the total electrical energy is derived from renewable sources for the
retailer stores in US and Canada. Starbucks has invested in various plants to make new,
energy efficient lights and HVAC (heating, ventilation, and air conditioning) systems in retail
stores (Nikolova, and Arsić, 2017).
(Source: Starbucks Corporations, 2018)
The above statistics reveals that GHG emissions of 1006954 metric tons in 2010 which
reduced to 979963 metric tons in 2011. The company succeeded to reduce its GHG emissions
by 2.7% in overall basis.
While understanding the social responsibilities, Starbucks has partnership with conservation
International association to provide developing proper guidelines to address the ethical
sourcing of coffee. These practises and set of guidelines through Coffee and Farmer Equity
(CAFE) Practises have allowed the farmers to grow coffee beans in such a way that it is not
only beneficial for the people around but also good for the planet. For example- there is an
immense need to understand the importance of conserving the energy and maintain the

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quality of water to conserve the biodiversity (Katamba, and Akora, 2017). Starbucks found
and discovered another way to improve the environment through their retail stores directly by
“going green.” Starbucks took its first step in Manhattan to produce a green store. The
company plans to renovate the retail store “Manhattan” which lead to replace the old
equipment with more efficient ones. To educate the people about plaques, the store explains it
the new green elements and their working. The new retail store conserves energy, material,
water at Manhattan and undertakes to understand the importance of water. This time
Starbucks decided to buy 100 percent responsible grown and traded coffee. The responsibly
grown coffee plants will not only benefit the environment but also benefit the farmers as well.
The main goal of the company is to engage in fair trade. Although, it results in more costly to
the company but the environmental improvement is more important. Responsibly grown
coffee plant can save energy and water in the farms (Hamidu, Haron, and Amran, 2018).
The company created Ethos Water fund to help the people in raising awareness among people
of the fact that more than one billion people in the world do not have access to clean water to
drink. This fund known as “Ethos Water Fund” helped the children to access clean drinking
water. Whenever, a person purchases a water bottle of Ethos Water from the store, a portion
of purchase price goes into the account of the fund. Ethos water fund was able to collect more
than $6 million dollars and helped 42000 people all around the world (Glowik, 2017).
Evaluating the Starbuck`s through core characteristics of CSR and stakeholder approach
While studying the global interest in the CSR standard, some important global CSR
initiatives such as UNGC (United Nations Global Compact) and GRI (Global Reporting
Initiative) were discovered and unveiled in 2000 (Ortas, Álvarez, and Garayar, 2015). The
UN Global Compact is both a practical framework as well as policy platform for the
companies that lead to sustainable commitment and responsible practises of business. GRI

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(Global Reporting Initiative) is another network-based organisation that released its set of
CSR guidelines in 2000 (Camilleri, 2015).
GRI invited the corporations to describe and elaborate how certain companies fulfilled
shareholders expectation in form of a report. After the popularity, which the concept of CSR
has received, GRI newly released news, reports motived the organisation to perform their
CSR activities well. The increasing interest about the concept CSR is seen in the special issue
of Time magazines. Whether the company started focusing on which incorporating ethical
practises into their operations (Wen, and Song, 2017). In 2009, the report revealed that
Starbucks has strived to purchase its coffee through fir trade coffee by 2015. Moreover, the
company was able to manage and control its carbon emission by 20% from 2003-2008
(Fassin, 2009).
The core characteristics of CSR are the important features, which tend to be visible in CSR
practises. The major characteristics are-
Voluntary- CSR includes all the related set of corporate initiatives, which extends beyond
what is prescribed in the law. Many companies in developing countries have become familiar
and more willing to accomplish the social obligations, which are beyond legal minimum.
Moreover, development of self-regulatory CSR initiatives on the behalf of the corporate
houses is seen as a way to avoid additional rules and regulations by the law compliance
(Hawkins and Emel, 2014). While associating this core characteristic with Starbucks, the
company is concerned with committing improvement in environment. Starbucks planned to
renovate its twelve retail stores to make each store a Leader in Energy and Environmental
Design (LEED). LEED improves the performance by saving energy, increasing the water
efficiency, and reducing the carbon emission. As per the Starbucks, going green may
overweighs the upfront cost (Azar, Schmalz, and Tecu, 2018).

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(Source: Dudovskiy, 2017)
The above diagram reveals that the average water usage per square foot and month has
reduced in operated stores in US and Canada. During 2014, the company managed to save
23% to the baseline levels set in 2008. LEED stores contributed a lot to take saving water
initiatives.
Managing both internal and external environment- External environment in CSR refers to all
those factors, which has direct effect on the stakeholder rights. Environmental degradation is
regarded as an external because production process may negatively affect the public. CSR
and legal regulation can lead to internalise the cost of externalities by imposing pollution
fines on corporates. Moreover, CSR has always remain a viable discretionary approach to
manage the externality by taking safety measures and reducing the pollution by going green
(Boone, 2017). Many CSR activities deals with workers’ rights and managing good
stakeholder relationship. Associating Starbucks CSR activities indicates that it has used
Stakeholder approach defines that the company is not only responsible to its owners but also
has the obligation to fulfil its responsibility towards various stakeholders such as employees,
business partners, customers, and government (Aqueveque, Rodrigo, and Duran, 2018).

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Maximisation of shareholder`s value is the supreme deed which helps the organisation to
make decision-making. A decision making process to increase the shareholder`s value should
be within the limitation of law. The central aim of stakeholder management is to identify the
orientation of which is based on three attributes defining power, urgency, and legitimacy of
the claim. Starbucks has committed to shareholder needs by giving them large portion of
earning as dividends. Stakeholders are always very concerned about the dividends, which
they will receive from the company. Starbucks pay higher dividends, which ascertains about
the financial well-being of the company. Moreover, Starbucks plan to purchase 15 million
more of shares of stock that will attract investors. Stakeholders also includes business
partners or employees (Aminu, Harashid, and Azlan, 2015).
Starbucks proved its commitment by taking care of its employees and workers. The company
undertook health care policy, compensation and stock options as an important part of
people`s life. Starbucks introduced policy that states that once an employee work for 20 hours
a week they get benefits and incentives including health insurance benefits on the behalf of
the company. The company do not exclude benefits for its part-time workers. They treat their
all the workers equally. Starbucks does not have typical working hours as office job. Along
with this, the part time workers may also work in odd shifts. Starbucks also showed that
treating its employees well is important part to maintain dignity of the individuals (Petrenko
et al., 2016). The CEO keeps humanity and compassion at its superior. While analysing
Starbucks corporate website, it can be determined that Starbucks differentiates CSR
communication and adapts it to address the decision of diverse stakeholders. The CSR
mission statement of the company targets ethical sourcing, environmental stewardship
targeting at suppliers, investors, relators, NGOs, regulators (Wofford, MacDonald, and
Rodehau, 2016).

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Recommendation
Although, the company engages and maintains its business ethics very well but there is still a
possibility that Starbucks work with the law to operate its business. CSR can lead to
increased sales volume and improved financial performance. The recommendation calls for
future research on Perception of customers towards fulfilling CSR, whether the suppliers are
interested to operate with a company who bears cost just to fulfil CSR activities and finding
the setbacks of the companies in which the company has not participated till now.
Usually Starbucks provides high priced premium coffee, although it considers good
environmental concerns, facilities, and a good image. Moreover, the competitors are not far
behind in the execution of CSR activities. For example- Dunkin donuts and Mc Donald
provides the same facilities, which Starbucks do. Starbucks has the advantage of performing
well among its competitors. Raising the cost of the coffee is no way solution to solve
environmental issues. Other companies have the price strategy to attract customers. Starbucks
even do not provide discount policies. Therefore, this point of policymaking demands
flexibility in business strategy.
Conclusion
The main objective of this report is to analysis and investigate how Starbucks succeeds in its
business by performing its CSR obligations. Especially, while going through mission
statement of the company, the statement talks about the business, which uses several
components to build a good relationship with its partners, employees, stakeholders, suppliers.
The other interesting step to improve its CSR activities is its interesting code of conduct. The
code shows how Starbucks collaborated with farmers to gain high quality coffee beans, which
can improve farmer’s life as well as the environment. Moreover, Starbucks regulates and run

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its business by using CSR (corporate social responsibility) tool, which includes every sector
of the business. Starbucks is really very much concerned about the environmental protection.
The company introduced new technology and equipment in the retail store of Manhattan to
improve the effectiveness of its operations and reduce cost and at the same time preserving
environment was equally considered. The company has efficient social strategies to bind and
cooperate with its employees, suppliers and stakeholders. The company has also undertaken a
number of activities to encourage society and create long-term relationships with
stakeholders. Starbucks not only perform its business activities but also strive to keep its
stakeholders happy.