To what extent did Starbucks’ 2019 – 2022 CSR efforts affect its stakeholders?

Word Count: 1498

Introduction: 4

Methodology: 4

Ethical considerations: 4

Economy: 4

Society: 5

Environment: 5

Profitability ratios: 5

Evaluation: 5

Shareholder Theory: 6

Customers: 6

Suppliers: 6

Employees: 6

Local Communities: 7

Conclusion 7

Appendices: 10
Introduction:
Starbucks is a multinational company that is publicly traded and has operations in
more than 80 countries. Starbucks is a coffee shop that provides its customers with
high-quality coffee which is its specialty product and its core competency with other
coffee shops, it also provides its customers with a range of other products such as cold
beverages, food items and desserts. Starbucks has committed itself to the
implementation of Corporate Social Responsibility efforts towards all its stakeholders.
In these efforts, they set several different strategic plans that cater for the needs of
society, the economy and the environment. An example of their implementation of the
sustainability model as previously stated is their plan to eliminate more than 50% of
their plastic use in their products by the year 2030, which in fact is being implemented
and is clear in its product offerings when visiting any of Starbucks branches. Other
efforts were also made towards Starbucks employees, with the provisions of safe work
environments, job enrichment opportunities and fringe benefits, all of which
contributes to Starbucks’ brand loyalty, partner and employee motivation and overall
productivity. Programs supporting food insecurities by people were combated using
the Hunger Relief program, as well as the Create Jobs for USA initiatives were made
to enhance the US economy by supporting the unemployed to find jobs. Each of these
efforts had distinctive conditions that contributed to Starbucks’s aim of CSR, which
led to the question: To what extent did Starbucks’ 2019 to 2022 CSR efforts affect
its stakeholders?

Methodology:
This commentary will disclose the various CSR efforts that Starbucks has
implemented and how these actions have affected their stakeholders, through the use
of profitability ratios, to deduce the change in the profitability of Starbucks in the past
two years. Ethical considerations and the Stakeholder theory will be used to analyze
Starbucks and how its CSR efforts affect its stakeholders.

Ethical considerations:

Economy:
Through Starbucks’ investment of $10million, $8million of them were committed to the Community
Development Financial Institutions, which funded the Green Era project that raised funds to create
countless construction jobs and other employment opportunities for certain communities as stated in
Starbucks’ Global Environmental and Social Impact Report. These actions and financial actions show
Starbucks’ awareness of economic imbalance in job opportunities in some communities and proves
the positive impact of their CSR efforts.

Society:
Starbucks additionally, focused on some of the social aspects of their CSR efforts, which
included “giving an additional $1 million to invest in mobile food pantry programs for 13
Feeding America member food banks across the country” (Ko 2020). Starbucks’ efforts of
reducing food waste and responsibly distributing food to food banks across the nation prove
their determination and ethical consideration of indulging in CSR efforts.

Environment:
Alongside the economic and social considerations, the environment is Starbucks’ most valued
aspect and their CSR efforts have contributed to that. Starbucks Stories and News states that
“It has also spent two decades […] to achieve the milestone of sourcing 99% of coffee
ethically through C.A.F.E. (Coffee and Farmer Equity) practices. Research shows that
implementing C.A.F.E. practices over the years has more than halved what the company’s
carbon footprint would have otherwise been.” (Warnick, 2021) Starbucks halving their
carbon footprint due to their association with the C.A.F.E program clearly shows the positive
impact of their CSR efforts on the environment and on their own brand image.

Profitability ratios:

2021 2020
Gross Profit Margin 20,321,900 15,823,100
x 100 = 69.93% x 100 = 67.28%
29,060,600 23,518,000

Net Profit Margin 5,826,700 1,601,400

x 100 ¿ 20.05 % x 100 = 6.809%
29,060,600 23,518,000

Evaluation:
According to the calculations, both the net profit margin and the gross profit margin of
Starbucks in the years of 2020 and 2021 have increased in percentage. Starbucks’
GPM increased from 67.28% in 2020 to 69.93% in 2021, while their NPM increased
from 6.809% in 2020 to 20.05 % in 2021. The increase in GPM indicates that
Starbuck’s main business transactions have increased its profitability by 2.65%
between 2020-2021. The production and selling of beverages and other products have
generated a sustainable income for Starbucks. The increased profitability leads to
higher employee satisfaction and raises shareholder dividends due to the possibility of
earnings per share (EPS). Customers and suppliers may even benefit as the increase of
profitability may encourage Starbucks to invest in more supplies and products so that
they may produce more beverages and possibly bring back customer favorites.
Additionally, Starbucks’ partnership with various “hunger-relief organizations” such
as the Feeding America food bank (Ko, 2020), its contribution through its FoodShare
foundation, and its recent $1million dollar donation to “13 Feeding America member
food banks” across the country, (Ko, 2020) have collectively altered Starbucks’
profitability as seen that in addition to the increase of their GPM, Starbucks’ NPM has
also increased. As per the calculations, Starbucks’ profitability has increased since its
involvement with the Feeding America foundation and its CSR efforts to appear
ethical and economically conscience.

Shareholder Theory:
The shareholder theory regards a company or brand’s approach to CSR and how they
prioritize the effect of their actions on certain parties or groups. The theory persuades
companies to determine which parties have been affected through their CSR efforts
and how they have either benefited or negatively affected them. (2019)

Customers:
Due to the pandemic, Starbucks has prioritized customer health and safety and they have
done so by changing their “store layouts and customer interactions” Starbucks’ devotion and
care towards their customer’s safety show their social and ethical perspectives as well as
implements more CSR efforts. (Starbucks, 2020)

Suppliers:
Starbucks understand that their own productivity would be nonexistent if not for the
compliance and support of their farmers. “As a company that buys approximately three
percent of the world’s coffee, sourced from more than 400,000 farmers in 30 countries,
Starbucks understands our future is inextricably tied to the future of farmers and their
families.” (Starbucks) Starbucks uses the C.A.F.E practices of sourcing as one of its ethical
methods as it supports its suppliers and their families and ultimately enhances Starbucks’
image as it utilizes CSR efforts.

Employees:
Starbucks shows its compassion and care for its employees and this is seen through their
contingencies and actions made when the pandemic began. Starbucks offered various offers
such as conditional pay and health support in all aspects of their employees’ lives (Starbucks,
2020). Their priority to their employees’ safety and satisfaction shows how the brand does
prioritizes their workers’ wellbeing and understands the social and external factors that would
affect their productivity. This attention would increase the workforce’s morale and increase
motivation and the relationship between employers and employees, ultimately increasing the
worker’s effectiveness and productivity.

Local Communities:
A major aspect of CSR is how Starbucks focuses on the social aspect of the world and
what communities and minority groups are going through, and how Starbucks can
offer their own contribution to change society for the better. Starbucks launched a
mentoring program for all communities of color and intend on researching and
partnering with other corporations to give these communities opportunities for
employment and new livelihoods. Launching a mentorship program connecting
BIPOC (Black, Indigenous and People of Color) partners to senior leaders and
investing in strategic partnerships with professional organizations that focus on the
development of BIPOC talent. (Starbucks Corporation, 2020)

Conclusion
In conclusion, Starbucks' actions to commit to CSR strategies have had a positive
impact on its stakeholders in a variety of ways. Starbucks has been able to implement
numerous socially responsible efforts into their transactions over the last few years
due to their ethical, social, economic, and environmental considerations. These actions
include collaborating with FeedingAmerica to fund dozens of food banks across the
country, donating millions of dollars to foundations such as Green Era to implement
employment opportunities in communities, and even taking precautionary measures at
the start of the pandemic to ensure the safety and health of Starbucks' customers,
partners, suppliers, and other shareholders. All of these actions are just a few of the
many ways Starbucks incorporates CSR efforts into their transactions and identity. As
a result of such efforts, the brand's overall profitability has increased, which is
consistent with previously calculated profitability ratios that indicated an increase in
Starbucks' GPM and NPM, ultimately portraying their increased profitability as a
result of their CSR efforts. The most likely reason for such an increase is that
Starbucks' brand image in the world has greatly improved as customers realize how
"green" the brand is and how the company has an incredibly low carbon footprint in
the world, as well as how their products are made from high-quality products supplied
by their farmers and workers. Starbucks' dedication and care for its suppliers, as well
as their contributions to the company, enable Starbucks to demonstrate its healthy
work environment in all aspects to its partners and competitors.
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Appendices:
Appendix 1:

Food banks, Starbucks rethink solutions to

address root causes of hunger
By Michael Ko • August 06, 2020 • 8 min read

The Arkansas Delta – which runs along the western edge of the mighty Mississippi River – is
one of the poorest areas in the country. But it’s not just the statistics about the median
income level or the annual food insecurity rankings that makes poverty there so
discouraging, says Rhonda Sanders, Chief Executive Officer of the Arkansas Foodbank.

It’s also the younger generations who are leaving for college or for opportunities in bigger
cities like Dallas, Atlanta and Little Rock. It’s the steady hammering of boarded-up windows
signaling the demise of another local small business. It’s the rural hospitals that are shutting
down during COVID-19, maybe never to come back.

“So what you have left is those who can’t move, who can’t go anywhere else, often the very
elderly, those with disabilities that make it difficult to hold a job,” Sanders says. “So how do
you stop that cycle when you have devolved to a certain point of need? That’s the struggle
you have in the Delta.

“It is very, very difficult and it’s hard to watch and it’s hard to figure out what to do. At the
Arkansas Foodbank, we’ve had to look at our role in the Delta very differently.”

Food banks across the country are facing surging need. Feeding America®, the nation’s
largest domestic hunger-relief organization, based in Chicago, estimates that 54 million
Americans could go hungry in 2020, including potentially 18 million children, in large part due
to the economic insecurity caused by COVID-19. That’s up from an estimated 37 million in
previous years.
But some food banks across the country also see COVID-19 as an opportunity, not only to
figure out new ways to ramp up distribution, but to reimagine and rethink some of the
fundamentals of their business: how do you actually solve hunger, once and for all?

“It’s easy to look at food banking in a supply and demand kind of way, and we’ve built a
relatively efficient system to get food to people who need it,” says Jessica Jelinski, Vice
President of Equitable Access at Feeding America. “But just getting food to people doesn’t
address why people need the food in the first place. Food insecurity exists because there
are deep systemic issues that have prevented people in this country from opportunities to
succeed.”

Starbucks, which has a global social impact team focused on helping fight hunger, is
committed to partnering with and working alongside hunger-relief organizations to find
solutions. The company invests heavily in the Starbucks FoodShare program, which
currently rescues food from more than 6,200 U.S. stores to donate to food banks across the
country, and is also doubling down on investments into successful long-term strategies like
mobile pantries, which help overcome transportation and access barriers by bringing food to
families where they are.

This month, Starbucks is giving an additional $1 million to invest in mobile food pantry
programs for 13 Feeding America member food banks across the country, including the
Arkansas Foodbank, part of an ongoing three-year financial commitment to hunger-relief
organizations showing impact and innovation.

“How do we get closer to the root problems that cause hunger? The solve isn’t that we just
keep feeding people,” says Jane Maly, Starbucks director, Global Social Impact, who
oversees the company’s work around hunger. “We’re really in it to address hunger in a much
bigger way. The word I come back to is ‘disruption.’ The old way of doing things is not going
to cut it anymore.”

One of the ways food banks have shifted focus is to turn their attention to nutrition.

“Are we genuinely nourishing people or are we contributing to bigger public health issues?”
asks Emily De Maria, Chief Program Officer at the Central Texas Food Bank in Austin, a
Feeding America member food bank and Starbucks mobile food pantry grant recipient.
“We’ve always asked people to donate healthy food, but now we’re putting a stake in the
ground, reframing hunger as a health issue.”
That means establishing a formal nutrition policy and setting strict goals around collecting
and distributing produce, while limiting high-sodium, high-sugar products like canned goods,
soda or candy that might only exacerbate pre-existing health conditions in certain
communities, like diabetes, asthma or hypertension.

It means more classes teaching people how to cook nutritiously, and programs, for example,
where food pantries have been built onsite at local medical facilities and clinics, so doctors
can write prescriptions for fruits and vegetables that can be filled immediately, or medically
tailored food boxes can be built specifically for diabetic clients.

Mobile pantries, essentially refrigerated vehicles that deliver food directly to neighborhood
distribution sites, can help. They bring fresh, refrigerated or frozen healthy items like fruits,
vegetables, dairy, meats and other proteins to areas that don’t have grocery stores or food
pantries. For some people in impoverished rural areas, the drive to a food pantry is more
than an hour away. Even in urban areas, traditional grocery stores don’t operate in some
low-income neighborhoods.

Appendix 2:

Starbucks announces new commitments to

advance racial and social equity
October 14, 2020 • 1 min read

Today Starbucks shared next steps it’s taking to advance racial and social equity as part of
its ongoing journey to create a welcoming and inclusive Third Place.

In letter to partners, ceo Kevin Johnson outlined new commitments the company will make to
elevate inclusion, diversity, and equity on behalf of partners (employees) and the
communities it serves – rooted in intentionality, transparency and accountability.

“As we discuss inclusion, diversity and equity, we discover time and again that these topics
are foundational to our Starbucks Mission and Values,” Johnson said. “Of course, they are.
The very concept of the Third Place embodies inclusion – creating a place of warmth and
belonging, where everyone is welcome.”

The full list of those commitments is available here with key highlights including:

● Launching a mentorship program connecting BIPOC (Black, Indigenous and People

of Color) partners to senior leaders and investing in strategic partnerships with
professional organizations that focus on the development of BIPOC talent.
● Disclosing data reflecting the diversity of our current workforce.
● Setting and tracking annual inclusion and diversity goals of achieving BIPOC
representation of at least 30 percent at all corporate levels and at least 40 percent of
all retail and manufacturing roles by 2025.
● Connecting the building of inclusive and diverse teams to our executive
compensation program.
● Establishing Inclusion and Diversity Executive Council to provide internal governance
to integrate inclusion and diversity throughout the organization.

In addition, the company announced the rollout of $1.5 million in Neighborhood Grants from
The Starbucks Foundation prioritizing grassroots and community-based nonprofit
organizations focused on local impact. These grants aim to uplift organizations led by and
that serve Black communities and will support more than 400 local nonprofit organizations
across the country. The Foundation will also invest $5 million to launch a two-year
initiative focused on supporting nonprofits that serve BIPOC youth.
Appendix 3:

Starbucks Fiscal 2021 Annual Report

Appendix 4:

Global Environmental & Social Impact Report