Starbucks needs to meet the new benchmark for responsible production: No Deforestation, No Peat, and No Exploitation across all global commodities.
Starbucks knows its customers care about sustainability and corporate social responsibility. Though its stores span across the globe, the Seattle-based company has preserved its core demographic—the affluent, educated, and socially conscientious consumers known as LOHAS (Lifestyle of Health And Sustainability). These customers are willing to pay a higher price for higher standards, and have demanded that the company improve its performance on a number of key goals ranging from fair trade coffee to waste reduction. These values are also reflected in Starbuck’s political leadership on issues ranging from climate change to gay marriage.
Today, at its annual shareholders meeting, investors should call upon Starbucks to take the next big leadership opportunity: being among the first wave of major consumer brands to adopt a global forest conservation and human rights policy that requires suppliers of agricultural commodities like coffee, sugar, and palm oil to agree not to cut down forests, destroy carbon-rich peatlands, or harm workers or local communities.
While this may have sounded ambitious at last year’s shareholders meeting, the agricultural landscape has undergone a radical transformation over the past several months, with some of the world’s largest agribusiness companies like Wilmar and Cargill adopting global “No Deforestation, No Peat, and No Exploitation” policies for all their operations everywhere. Investors like New York State and Green Century Capital Management are demanding similar action this shareholders season from agricultural traders like Archer Daniels-Midland and Bunge. These companies in turn are responding to a wave of over two-dozen major brand name companies who have set zero-deforestation and zero-exploitation requirements for suppliers of palm oil and other commodities.
The lesson for consumer companies regarding supply chain management is increasingly: “If you demand it, they will come.”
Consumers want assurance that what they’re eating and drinking didn’t come from forest destruction or harm endangered species, wasn’t produced by slave labor and didn’t come with an enormous carbon footprint. This is especially true of Starbucks customers. And Starbucks is well positioned to lead on responsible coffee sourcing, clearly the largest commodity in its supply chain, having worked over a decade now with Conservation International to develop and comply with its CAFÉ standards. This means that Starbucks already understands and regularly assesses its coffee supply chain against dozens of criteria—putting it far ahead of other companies who would just be beginning the mapping process. But the criteria, developed years ago, need to be updated to meet the new benchmark for responsible production: no deforestation, no peat, and no exploitation. Furthermore, these principles need to apply not just to coffee, but to all commodities in Starbucks’ giant supply chain.
Thousands of consumers, including zoo-goers in Starbucks’ home region of the Pacific Northwest, have already written Starbucks about this issue. But instead of acknowledging its consumers concerns and realizing the potential for leadership, Starbucks has responded with radio silence. Starbucks is asleep at the wheel right when it should be driving this second agricultural revolution. We hope that investors today call for Starbucks to take leadership on forest conservation that’s as bold as its dark roast.