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Audit for Starbucks Essay

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Updated: Jul 16th, 2021

Introduction

The first Starbucks cafe was founded in Seattle about half a century ago. Currently, this company operates in six continents and has grown to the largest coffeehouse chain in the world. Its core philosophical principles imply that each visitor needs to experience the best service and get a coffee drink of the superior quality. Moreover, the chairman, Howard Schultz, is targeted at making Starbucks accessible to the customers.

That is why Starbucks has become the most recognized coffee brand over the last several decades. The expansion of this coffeehouse chain has significantly increased its brand awareness, but at the same time, it imposed risks on compliance with sustainable business practices because of the mass production, energy and water consumption, waste management, and social responsibility policies. At the turn of the twenty-first century, Starbucks operations resulted in considerable environmental impact.

Therefore, the company decided to launch a range of initiatives and programs aligned with sustainable practices and regulations. Currently, an audit is necessary for Starbucks because it is deeply concerned about reducing the number of non-recyclable materials and restricted use of plastic in favor of paper or other biodegradable components.

Business Greening Program

General tendency promoting development and implementation of corporate social responsibility evolved at the end of the previous century. That was the time when Starbucks launched its first initiatives directed at sustainability and decreased environmental impact. The key idea of sustainable development outlines the linkage between the well-being of present and future generations. The first programs designed by Starbucks concerned ethically sourced coffee. Afterward, the company released information on the amount of waste produced as a result of its operations worldwide and decided to reduce the utilization of paper napkins and garbage bags.

Starbucks was also included in the list of the enterprises that actively used the renewable sources of energy. Currently, the authorities of this coffeehouse chain are deeply concerned about bringing a fully recyclable and compostable hot cup to the market (Rogers). Furthermore, all stores are encouraging people to take their own reusable cups or tumblers in order to minimize the amount of wastes produced daily.

Apart from the environmental responsibility, Starbucks is concerned about its social and economic impact. Nevado-Pena claims that economic growth “has gone from being a destructive factor for the environment to a factor described as sustainable or green growth” (8256).

Indeed, one of the core principles of any business is to gain more profits and increase brand awareness in the market. At the same time, the incremental growth and economic activity lead to the evolvement of various side effects. As most resources of our planet are exhaustive, sustainability is targeted at their adequate utilization and preservation for future generations. Furthermore, Starbucks is socially responsible because it changed the menu according to the customers’ needs. That way, products with corn syrup or other artificial ingredients were excluded from the list and substituted by those that contain only the natural ingredients. The company wanted to attract consumer attention by adopting this initiative in its stores worldwide.

The Necessity of Audit

Many businesses use available resources necessary for their successful operations. However, only some are pondering about the ratio between accessible and utilized resources. Each year this correlation becomes less stable due to unsustainable production and consumption. Currently, the global economy uses natural resources equivalent to over 1.6 times what our planet can produce (Munasinghe 156). That way, the global ecological footprint of humanity is getting more devastating annually. To prevent such undesirable consequences for the earth and its inhabitants, it is necessary to conduct a sustainable audit at small, medium, and large corporations.

Starbucks is known as the coffee giant that involves thousands of daily operations, starting from growing coffee beans on plantations to serving a cup of hot or cold drink in one of its stores. This company owes more than twenty-five thousand of coffeehouses around the globe and is planning to expand further. Based on these facts, the scale of its global business is immense, thus sustainability audit is inevitable. This procedure allows identifying the commitment to sustainable business practices, define environmental, social and economic benefits, and elaborate on comprehensive recommendations.

Conducting Audit on Energy, Water, and Waste

Sustainability is capable of answering multiple questions regarding what resources are used, how much and when they are distributed, and what factors should be considered during analysis. However, there are some difficulties in terms of applying the appropriate benchmarks and measuring the amount of substances used. In some coffeehouse in the airport, the number of visitors can be much higher than in a store in the suburbs of the city. Furthermore, the size of each establishment ranges from small to grand, which leads to the different amount of water and energy used or wastes produced. That is why all the measurements must be first performed according to general standards adopted in the particular country and then aligned with the international norms.

The water audit is probably the most complex stage because this resource is widely used in any production stage starting from coffee manufacturing to cleaning procedures in the coffeehouse. Moreover, each store uses both running and bottled water for washing dishes or making coffee drinks correspondingly. The Sun newspaper has announced that Starbucks wastes around twenty-three thousand liters of water to rinse dishes. While such issues are not correlating with sustainable business practices, health regulations require doing so. In order to make deliberate conclusion, audit implements not only such indices as gallons per month but also gallons per minute in kitchen sinks and gallons per flush in water closets. These indicators allow detecting the amount of irrationally used water.

As for electricity use, Starbucks shows more commitment to sustainable practices by starting to use renewable sources of energy. Currently, about twenty percent of the total electricity consumed by the stores comes from renewable sources, especially in North America. Nevertheless, the company is still far beyond its established target objectives. Even though Starbucks reduced energy consumption by “only seven percent between 2008 and 2013, it was far from its goal of twenty-five percent reduction by 2015” (Lubin). That is why it started to make a thorough analysis of its coffeehouse locations in order to find out which of those are favorable for installing solar panels or windmills that produce energy.

While assessing energy consumption by Starbucks, many factors are taken into consideration. For instance, daily and night sensors switch the light in the front area only when needed. In most Starbucks coffeehouses and stores there are no light and motion detectors, thus more electrical energy is used. Nevertheless, it is difficult to examine whether coffee machines and grinders are switched to the energy saving mode when not active. Interviewing managers in some stores can shed light on the general tendency regarding utilization of technical equipment because Starbucks builds its own stores to adopt universal culture and values of the brand.

The most urgent issue Starbucks is facing now concerns the reduction of non-recyclable cups and components. The end-stage consumers are encouraged to recycle cardboard, pallet wrap plastics, and non-reusable tea pallets (Munasinghe 167).

The company has also designed a plan “to eliminate single-use plastic straws from its stores around the globe by 2020” (Rogers). The data gathered from Starbucks coffeehouses in different countries depicts that some communities willingly recycle paper and plastic cups. As Starbucks operates in seventy-five states on six continents, recycling infrastructure and culture alter because some landlords make final decisions on waste collection programs. Starbucks acknowledges that municipal barriers constitute the main challenge for the company to assure effective waste management and successful recycling.

Audit on Supply Chain and Procurement

Similar to recycling and efficient energy consumption in stores, Starbucks decided to implement the unified system to centralize and simplify its supply chain management. To evaluate its effectiveness, the company uses a comprehensive scorecard system which considers safety in operations, total costs, on-time delivery, and mutual benefits. One of the prominent and efficient projects initiated by Starbucks is the Coffee and Farmer Equity (CAFE) program.

Its basic guidelines provide an insight into the farming practices and explain how coffee should be ethically sourced. This program allows determining which farmers are environmentally and socially responsible so that the most liable ones obtain the highest ratings and prices for their products. CHAI project is similar to the CAFE program, but it concerns the tea plantations of Starbucks’ tea brand. Overall, CHAI promotes sustainability throughout communities by providing many opportunities for economic development at the place.

The Overall Commitment to Sustainable Business Practices

When developing a strategic plan, Starbucks sets the targets not only in terms of reducing energy or water consumption and waste management but it considers other environmental trends. That way, it has been collaborating with Green Building Council since 2001 to help develop the leadership in energy and environmental design (LEED) for the Retail program (Rogers). Its first LEED or green-certified store opened more than a decade ago.

As a rule, location for each coffeehouse is chosen in accordance with its popularity among residents and density of population in the area. While the company usually rents a part of the existing building, in some cases it is necessary to construct coffeehouses from scratch. Within such circumstances, Starbucks’ responsible management authorities rely on its innovative approaches towards green building and utilization of sustainable materials in the construction process.

Starbucks has always been known for its commitment to social responsibility and ongoing transformations in communities. One of its famous programs is named Ethos Water Fund that is aimed at raising awareness about the lack of clean water in some countries, especially the African ones. When one buys a bottle of water, the predefined sum of money is transferred to the fund. Furthermore, Starbucks is socially responsible because its philosophy puts both employees and customers in the first place.

Their three-minute rule guarantees high-quality and immediate service for visitors. However, the company has not yet implemented the occupational health and safety management system. The audit procedure also reveals that its reports are not disclosing the workplace safety records (Lubin). It means that the company has explicit points for further improvement to demonstrate its commitment to social sustainability.

Strategic Recommendations

Based on the results of the audit, it is possible to elaborate on strategic recommendations for Starbucks. The first and the most important piece of advice concerns providing the accurate data on the company’s activity. Previous annual reports on compliance with strategic goals were not explicit because the coffeehouse chain provided wrong results to the publicity. Despite its targeted approach towards sustainable practices and utilization of renewable energy, Starbucks has many points for improvement. Green practices are expected to safe Starbucks about fifty million in utility costs and thirty million in operating costs annually (Rogers). Therefore, managers at each coffeehouse location need to investigate the area and define whether it is possible to use solar or wind energy at the place.

Considering the results of water, energy, and waste audit, the company needs to adopt its daily practices according to sustainable concepts in terms of social and environmental responsibility. Many coffeehouses use much more resources than necessary because of the client-oriented service. However, each Starbucks store needs to reduce the amount of water for rinsing dishes by installing counters with the gallon-per-minute indices. To decrease utilization of electrical energy resources, installing diode light bulbs and applying energy saving mode for coffee machines and other technical appliances is necessary. Nevertheless, the most urgent challenge Starbuck is facing at the moment concerns the waste management.

Every year Starbucks coffeehouses produce the immense amount of coffee and tea drinks. Subsequently, millions of single-use cups and straws, most of which are not recyclable and biodegradable, are thrown away. Starbucks is deeply concerned about the waste management and shows its commitment towards developing a fully recyclable and compostable global cup solution. This initiative is expected to be adopted by 2020 at every store and coffeehouse of the company.

There are several options regarding this project and all of them provide recommendations based on sustainable practices. The first variant implies that plastic straws are substituted by the paper or wooden ones. Another option constitutes using a personal cup when visiting a Starbucks coffeehouse. One more recommendation concerns changing the cup design so that a straw would not be necessary.

Conclusion

The main idea of Howard Schultz is to make Starbucks accessible to its customers. As a result, the company increased its brand awareness and expanded the coffeehouse chain in seventy-five countries around the globe. At the same time, business has faced inconsistency in terms of compliance with sustainability practices. Starbucks started to produce ethically sourced coffee based on the CAFE program that encourages farmers to comply with social and environmental ethics. Starting from the early 2000s, the company also reduced the utilization of paper napkins and garbage bags. Currently, Starbucks authorities and shareholders want to bring a fully recyclable and compostable hot cup to the market.

Apart from this, they want to replace plastic straws in all coffeehouses by 2020. Such concerns are urgent at the present not only because of the principles of environmental sustainability but due to considerable difficulties of waste management in many countries. Some landlords impose municipal barriers by not willing to negotiate and recycle garbage appropriately. Furthermore, Starbucks needs to ensure its compliance with environmental management principles by using water and energy resources more efficiently because the audit results demonstrate that running water is often wasted in coffeehouses.

Works Cited

Lubin, Gus. “Business Insider, 2014. Web.

Munasinghe, Mohan. “Economic, Social and Environmental Impacts and Overall Sustainability of the Tea Sector in Sri Lanka.” Sustainable Production and Consumption, vol. 12, pp. 155-169.

Nevado-Pena, Domingo, et al. “The Effects of Environmental and Social Dimensions of Sustainability in Response to the Economic Crisis of European Cities.” Sustainability, vol. 7, no. 7, 2015, pp. 8255-8269.

Rogers, Kate. “CNBC, 2018. Web.

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