Starbucks sustainability: Progress, challenges, and lessons for ESG Managers

While Starbucks often portrays itself as a champion of environmental stewardship and corporate responsibility, its sustainability record reveals a more complex narrative. With ambitious goals to reduce carbon emissions, water use, and waste by 50% by 2030, the company positions itself as a leader in sustainable business practices. However, beneath the surface lies a mix of progress and persistent challenges. For ESG managers and sustainability consultants, Starbucks serves as an interesting case study on the delicate balance between corporate responsibility and operational realities. Its successes offer inspiration, but its missteps underscore the importance of transparency, accountability, and action in achieving genuine sustainability.

What’s next? Exploring Starbucks' sustainability goals for 2030

Starbucks has set ambitious sustainability goals to achieve in the next six years, targeting three critical areas:

1. They aim to reduce carbon emissions across its operations and supply chain by 50%. This includes transitioning to renewable energy sources and implementing energy-efficient practices. However, despite these goals, the company’s emissions rose by 14% between 2019 and 2022, highlighting the challenge of decarbonizing a growing global operation.
2. Starbucks plans to conserve water by reducing consumption in stores and across the supply chain. They also want to implement water recycling systems and improve agricultural practices for coffee farming, addressing the high water demands of coffee production.
3. A third ambitious goal is to shift to reusable packaging and reduce overall waste by 50%. Initiatives include trials for reusable cups, the elimination of single-use plastics, and expanding the use of recyclable materials in-store and for takeout packaging. However, challenges persist, such as criticisms that straw-less lids use more plastic than the designs they replaced

These 2030 benchmarks are integral to Starbucks’ sustainability strategy, but the company’s ability to meet these targets remains uncertain given its current trajectory and operational challenges.

What Starbucks is doing comparably well

Greener Stores Initiative

This Initiative demonstrates its commitment to operational sustainability. By working with third-party auditors, the company ensures stores meet stringent standards for energy efficiency, waste reduction, and water conservation. As of 2022, over 3,500 stores had earned the "Greener Store" designation, reducing energy consumption by 30% and water usage by 20% compared to traditional stores. Beyond design, the initiative includes food donation programs, redistributing surplus food to reduce waste and support local communities.

Coffee and Farmer Equity (CAFÉ) practices

CAFÉ is integral to Starbucks’ ethical sourcing strategy. With most of its coffee ethically sourced, the program enforces standards for environmental responsibility, economic fairness, and worker safety. These efforts include investing in farmer training programs and providing access to resources like disease-resistant coffee plant varieties. However, allegations of forced labour and child labour on certified coffee farms in Brazil and Ethiopia challenge the credibility of these claims.

Reusable cup trials

As already stated before, Starbucks is piloting reusable cup programs in key markets, including closed-loop systems where cups are sanitized and reused, aiming to reduce single-use waste. Customers are incentivized to bring their own cups, aligning with Starbucks’ sustainability strategy of reducing packaging waste by 50% by 2030. However, critics argue that these efforts remain limited in scale compared to the massive waste generated by disposable cups.

Net Zero by 2050

Last but not least, Starbucks’ commitment to net-zero emissions by 2050 includes transitioning to renewable energy, improving energy efficiency, and tackling supply chain emissions. While these goals are ambitious, the company faces challenges as its carbon emissions increased by 14% between 2019 and 2023, raising concerns about the feasibility of its targets.

Let’s dive into Starbucks' ESG Challenges: Where the supply chain falls short and how to improve

Starbucks frequently markets itself as a sustainability leader, but persistent issues in key areas reveal significant gaps between its promises and practices. Below, we explore these challenges in greater detail and the opportunities for Starbucks to realign with its ambitious ESG goals.

Environmental impact: Packaging waste, carbon emissions, and deforestation

Starbucks faces mounting environmental challenges, starting with its reliance on disposable packaging. Initiatives such as straw-less lids, intended to reduce plastic waste, have drawn criticism for inadvertently increasing overall plastic use. Packaging waste from mobile orders and drive-thru services has surged, with Starbucks generating over 1 billion paper cups annually—nearly 40% of its waste is tied to packaging. These numbers call for bold, scalable solutions, such as innovative, sustainable materials that reduce both plastic and paper waste.

Another critical area of environmental concern is rising carbon emissions. Despite setting ambitious goals to cut emissions by 50% by 2030 and achieve net-zero by 2050. The expansion of energy-intensive mobile and drive-thru services directly contradicts these sustainability targets. Achieving net-zero will require transformative investments in renewable energy, supply chain decarbonization, and operational efficiencies.

Additionally, deforestation remains a significant issue in Starbucks’ coffee supply chain. Land clearing for coffee farming has disrupted ecosystems and biodiversity in regions like Brazil and Ethiopia, exposing gaps in Starbucks’ oversight mechanisms. With the European Union's new deforestation regulation set to take effect soon, global companies will be under increased pressure to ensure that their supply chains are free from deforestation-linked products. The regulation mandates that companies prove that goods such as coffee, cocoa, and palm oil are not linked to deforestation, requiring full traceability. Failure to adapt to these stringent requirements risks not only regulatory penalties but also reputational damage. Starbucks will need to strengthen its traceability systems and increase transparency in its sourcing practices to meet these upcoming requirements. This presents a challenge not just for Starbucks, but for all global retailers, as the EU regulation sets a precedent for stricter environmental accountability across the board.

Social impact: Labour violations in ethical sourcing

While Starbucks champions ethical sourcing through certifications such as Fair Trade and C.A.F.E. Practices, investigations have revealed troubling labour violations, including forced and child labour on certified coffee farms in Ethiopia and Brazil. Reports from 2023 documented unsafe working conditions and inadequate wages on farms supplying Starbucks, exposing severe flaws in its monitoring processes.

These findings cast doubt on the efficacy of Starbucks’ sustainability programs and ethical sourcing claims. Beyond certifications, Starbucks must implement more robust oversight mechanisms and collaborate closely with local communities to enforce fair labour practices. Transparency and accountability will be essential to rebuilding trust with consumers and stakeholders.

Balancing ambition with execution: greenwashing concerns

Starbucks’ bold marketing often touts its leadership in sustainability, but a lack of measurable progress raises concerns about greenwashing. From labour violations to rising emissions and ongoing deforestation risks, the disconnect between Starbucks’ ESG commitments and on-the-ground realities damages its credibility. Without greater transparency, verifiable progress, and accountability, the company risks alienating customers and drawing further legal scrutiny.

Key takeaways and opportunities for improvement

To bridge the gap between ambition and reality, Starbucks must take decisive action:

• Scale up waste reduction efforts: Develop and expand reusable cup initiatives and sustainable packaging alternatives.
• ‍Accelerate decarbonization: Prioritize renewable energy and supply chain efficiency to reverse rising emissions.
• Enhance real ethical sourcing: Go beyond certifications by implementing stricter oversight and fostering community partnerships.
• Prepare for EU regulations: Strengthen traceability and transparency to ensure compliance with deforestation laws.

By embedding accountability and measurable actions into its supply chain practices, Starbucks has the opportunity to lead by example in tackling ESG challenges.

Lessons for other global retailers

Embed sustainability into product design from the start

Starbucks' challenges with reusable and plastic packaging highlight an important takeaway: sustainability should not be an afterthought. By integrating sustainability into the product development process—whether it’s designing more eco-friendly packaging or choosing materials with a lower environmental footprint—retailers can address potential issues early on. How can you rethink your design processes to ensure your products align with sustainability goals?

Avoid vague claims – transparency is key

In today’s world, consumers are increasingly sceptical of corporate claims, especially those that sound too good to be true. Terms like "carbon-neutral coffee" without solid backing can damage a retailer’s credibility and lead to legal ramifications. Instead, focus on clear, transparent communication with verifiable data. Have you considered how to make your sustainability claims more concrete and backed by data?

Implement robust carbon accounting and ESG tracking systems

Tools like Zuno Carbon are game-changers for large retailers looking to measure their carbon footprint across Scope 1, 2, and 3 emissions. These systems not only help track and report emissions but also assist in setting clear decarbonization targets and ensuring compliance with evolving regulations. Does your company have the right tools in place to measure, report, and reduce your environmental impact effectively?

Foster genuine engagement within your supply chain

It’s no longer enough to simply audit suppliers. To create a truly sustainable and ethical supply chain, retailers must actively collaborate with suppliers to ensure they’re meeting high standards for both ethics and environmental practices. How can you work more closely with your suppliers to promote sustainability and ensure that your supply chain reflects your core values?

Starbucks’ sustainability journey provides a mixed picture - offering both inspiration and cautionary lessons for businesses globally. Initiatives like the Greener Stores Initiative and CAFÉ Practices showcase the company’s potential to innovate and promote ethical practices. However, significant issues remain: increasing emissions, persistent plastic waste, deforestation, and allegations of labour violations undermine its stated sustainability goals.

While Starbucks has made notable strides, its efforts often fall short in execution. Addressing these critical gaps will require a shift from incremental improvements to systemic transformations across its operations and supply chain.Transparency, accountability, and measurable action must take centre stage if Starbucks is to effectively meet its environmental and social commitments, as the company provides a valuable example of the complexity and importance of setting clear, measurable goals.

For ESG managers and sustainability consultants, Starbucks underscores the importance of rigorous sustainability strategies, robust reporting, and the right tools to track progress. By balancing progress with accountability, businesses can transform sustainability aspirations into tangible, impactful results.

If your organisation is ready to take the next step, tools like Zuno Carbon’s advanced sustainability reporting and carbon accounting solutions can help. From identifying emission hotspots to streamlining sustainability reporting, our technology empowers businesses to achieve meaningful decarbonization and meet stakeholder expectations. Contact our team to book a demo and explore how Zuno Carbon can support your journey toward a more sustainable future.

Frequently Asked Questions (FAQs)‍

1. What are the key elements of the Starbucks sustainability strategy?

Starbucks’ sustainability strategy focuses on three primary goals to achieve by 2030:

1. Reduce carbon emissions by 50% across all operations.
2. Minimise water usage in stores and supply chains while promoting conservation efforts.
3. Shift to reusable packaging and reduce waste in operations and supply chains.

The Greener Stores Initiative also plays a critical role in this strategy by implementing energy-efficient designs and enhancing waste management. Additionally, programs like CAFÉ Practices promote sustainable coffee farming and ethical sourcing.‍

2. How does Starbucks take care of the environment?

While Starbucks has made efforts to mitigate its environmental impact, such as sourcing renewable energy and reducing single-use waste with reusable cup trials, its progress has been uneven.

Plastic waste: The introduction of straw-less lids has reduced reliance on straws but paradoxically increased plastic use in the lids themselves, drawing criticism.

Deforestation concerns: While programs like CAFÉ Practices claim to promote sustainable coffee farming, reports reveal ongoing deforestation linked to Starbucks’ coffee bean sourcing.These practices threaten biodiversity and highlight gaps in Starbucks’ supply chain oversight.

Carbon emissions: Despite setting a net-zero target for 2050, Starbucks’ carbon emissions increased between 2019 and 2023, highlighting the challenges of decarbonizing a growing global operation.

While Starbucks markets itself as environmentally conscious, these shortcomings indicate a need for stronger, more accountable environmental practices.

3. How does Starbucks ensure a sustainable supply chain?

Starbucks has implemented measures like CAFÉ Practices, which certify ethical coffee farming and aim to protect ecosystems and support farmers. However, the effectiveness of these measures has come under scrutiny.

• Labour rights violations: Investigations have uncovered forced and child labour on certified coffee farms in Ethiopia and Brazil, undermining Starbucks’ ethical sourcing claims.
• Deforestation and biodiversity loss: Starbucks faces ongoing criticism for deforestation linked to its coffee supply chain, despite its public commitments to sustainability. The new EU deforestation regulations will require the company to increase transparency and address its environmental impact more effectively.
• Transparency challenges: While Starbucks reports progress in ethical sourcing, the lack of detailed supply chain data and reports of poor practices suggest gaps in its sustainability strategy.

Starbucks’ sustainability issues in its supply chain highlight the complexity of achieving meaningful improvements in global operations. Greater transparency, rigorous enforcement, and genuine accountability are necessary to fulfil its sustainability claims.