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2005 Jury Citation

WEC Gold Medal for International Corporate Achievement in Sustainable Development

The Jury is pleased to award the 2005 WEC Gold Medal for International Corporate Achievement in Sustainable Development to Starbucks Coffee Company for its international leadership in sustainable development. This leadership is clearly demonstrated in the company’s development of a management framework, which integrates all aspects of sustainable development into the business practices of the organization. Although Starbucks only purchases two percent of the world’s coffee crop, it has used its leadership role in the global marketplace to begin to change the way coffee is grown, harvested, and brought to market. This influence, in turn, has begun to benefit growers and communities along the supplier chain, offering the promise of greater economic benefits to growers, particularly in the developing world.

The Signature Contribution upon which the jury based its award is the“Coffee and Farmer Equity Practices” (C.A.F.E.) program. This initiative highlights Starbuck’s concern for farming communities by assisting farmer cooperatives to receive above average premium price and long-term contracts while maintaining environmental integrity. This creative new way of doing business by combining market forces and business interests has the potential to improve the lives of rural people and the global environment.

Protecting the land and its inhabitants poses a challenge to farmers trying to produce high yields while combating plant disease and pests. Starbucks is working diligently with farmers and other organizations to increase conservation efforts and to minimize dependence on chemicals. The establishment of the Farmer Support Center and the Coffee Agronomy Company has been instrumental in educating small-scale farmers of the technological advances available and in providing accessible financing to support enhanced methods, infrastructure, and quality improvement.


POLICY

Starbucks’ practice of sustainable development is conveyed, encouraged, and compliance-measured by a comprehensive array of policy and principle instruments. Among these are the Mission Statement, Six Guiding Principles, and the Environmental Mission Statement. The Standards of Business Conduct serves as a guideline for sustainability principles all partners are expected to meet.

A large commitment of resources is devoted to sustainability efforts and is monitored by the Office of Corporate Social Responsibility (CSR) reporting directly to the CEO. Annual CSR reports, provided since 2001, are fully and independently verified and admirably transparent. A strict Supplier Code of Conduct governs purchasing policies, while performance metrics related to sourcing, transportation, and retail outlet design are monitored by an Environmental Footprint Team and a Green Team.


IMPLEMENTATION

Starbucks has employed a wide variety of innovative practices to reduce waste, conserve energy, and limit emissions. Partners and small-scale farmers are supported in accordance with the mission of integrating sustainable development and business practices.

As a means of combating weakness in its supply chain practices, Starbucks launched an imaginative social compliance program that requires suppliers to meet basic labor practice standards. The program, Preferred Supplier Program, was instituted in 2001 in partnership with Conservation International (CI). Its purpose is to promote the supply of high-quality coffee while protecting and improving the environment and rewarding farmers for sustainable coffee production.

Starbucks has established long-term relationships with farmers in developing nations in order to provide them affordable credit, loan guarantees, and long-term contracts to strengthen the viability of their farms and, in turn, the local economies. Socially responsible investment funds such as Dow Jones Sustainability Index (DJSI), Calvert Social Index, KLD Domini Social Index, and FTSE4Good Index, have recognized Starbucks for its efforts. Additionally, Starbucks has been recognized as one of Fortune’s 10 Most Admired Companies and 100 Best Companies to Work For. State of the art environmental store design is accomplished by using sustainably harvested products and utilizing the USGBC scoreboard and LEED Standards to reduce consumption of natural gas, electricity, and water.


LEADERSHIP

Through its well-established policies and practices, Starbucks has demonstrated its leadership in social responsibility and sustainable development. Starbucks has worked consistently to improve the social, economic, and environmental conditions in regions where coffee is grown and harvested. In fiscal 2003, Starbucks invested more than U.S. $1 million in social programs emphasizing health and education.

The Signature Project “Coffee and Farmer Equity Practices” (C.A.F.E.) is a refinement of the successful Preferred Suppliers Program. A wide range of representatives with sustainability interests provided input into the development of C.A.F.E. Farmers in the program earn points for meeting specific and comprehensive criteria as verified by an independent certifier – rewards increase with earned points. C.A.F.E. criteria are: coffee quality, economic accountability, environmental impacts, and social conditions. By June 2004, Starbucks had received more than 250 applications to the program – by 2007, Starbucks’ goal is to purchase 50% of its coffee from suppliers who use C.A.F.E. practices.

Starbucks’ commitment to social responsibility and meeting customer expectation has led to growth and financial success for partners and stockholders. Productive new partnerships with governments and the NGO community use a field-to-cup approach to community level conservation by providing technical assistance. Incentivizing growers with low cost loans, long-term contracts and guaranteed prices is a pioneering new route to agricultural production. Starbucks, with its large work force and customer base, has enormous potential to cause profound change in agri-economy. The Jury is honored to designate Starbucks Coffee Company for the 2005 WEC Gold Medal for International Corporate Achievement in Sustainable Development.

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