Starbucks Corporation

How ethical is Starbucks?

Our research highlights several ethical issues with Starbucks, including its approach to Supply Chain Management, Workers’ Rights, Human rights, Political Activities, Anti-Social Finance,Tax Conduct, Palm Oil Sourcing, Factory Farming and Animal Rights.

Below we outline some of these issues. To see the full detailed stories, and Starbucks’ overall ethical rating, please sign in or subscribe.
 

People

Operations in oppressive regimes

The company has operations in countries run by regimes that are known to have poor practices when it comes to human rights including China, Mexico, the Philippines and Turkey. 

Supply Chain Management

Starbucks scores a worst Ethical Consumer rating for its supply chain management.

Starbucks doesn’t pay supply chain workers a living wage. Although it refers to its employees as “partners”, the coffee chain’s social responsibility reporting contains adequate clauses on discrimination, freedom of association and forced labour but its clause on wages is poor as it only calls for minimum wages to be paid rather than a living wage.

Workers’ rights violations in developing countries

Children working as much as 40 hours a week were found by Channel 4’s Dispatches investigations on Guatemalan farms that supplied Starbucks. When confronted, the company says it launched a “full investigation into the claims” and said that it had not purchased coffee from the farms in question during its most recent harvest season.

Labourers from one of the poorest areas of Brazil had their wages slashed illegally by a company that supplies beans to Starbucks. The workers saw their pay cut by nearly a third to cover the cost of the portable coffee harvesters they used, as well as the fuel needed to run the machines. Deductions like this are prohibited under Brazilian law.

Union busting

A number of stories can be found about Starbucks’ attempts to prevent unionisation in its US stores. One article accused Starbucks of intimidating workers ahead of union voting. Another that workers were being sacked when found involved in unionisation efforts. Starbucks denied the accusations and said that the workers violated company safety and security policies by conducting media interviews on the store’s premises without wearing masks.

Politics

Tax conduct

Barbados, the Bahamas and the Cayman Islands aren't just holiday destinations, they're also tax havens which Starbucks operates in. The company has been criticised for years for its tax avoidance practices which these tropical islands are often used for.

“Starbucks paid just £5.4m in UK corporation tax last year despite making a gross profit of £95m” claimed the Guardian in a 2022 article. Its global CEO, Kevin Johnson, reportedly earned over £16 million in 2020.

Lobbying

Starbucks spends millions in the US on political donations every year. In 2020, 10% of its donations went to the Republicans and 90% to the Democrats. It is also a member of the Business Roundtable, a lobbying organisation that puts undue pressure on decision makers and has lost a whole mark in our Lobbying category.

Boycott call over deal with Nestlé

Starbucks struck a multi-billion dollar partnership with Nestlé in 2018. In this lucrative deal Nestlé has been selling and distributing Starbucks’ ready-to-go coffee that brought the giant $3 billion in 2020 alone.

The Lakota People's Law Project Action Center is calling for a boycott of Starbucks due to its relationship with Nestle.

It states "coffee empire Starbucks has struck a multibillion dollar deal with Nestle. We ask you to join the movement to #BoycottStarbucks, #BoycottNestle, and boycott all of their products."

It claims that Nestle profits from water theft, habitat destruction, child slavery and plastic pollution, saying the coffee brand should be boycotted because "Nestle and Starbucks have a global marketing alliance, in which Nestle has distribution rights outside Starbucks stores".

Environment

The company appears to have a good understanding of its main environmental impacts. It received our middle rating for Environmental Reporting. In its annual Environmental and Social Impact report it includes meaningful discussions about packaging, recycling, waste, agriculture, water, reforestation and forest conservation, coffee sourcing and plant-based options. It has a goal of reducing its water usage and waste by 50% by 2030.

It received our best rating for Carbon Management and Reporting. Starbucks uses 100% renewable energy for company-operated retail operations and renewable energy powers 72% of company-operated facilities globally. It has a commitment to half its greenhouse gas emissions by 2030. In 2022 it invested in 20 new community solar projects in New York, which are now supplying solar energy to more than 24,000 households.

It has partnered with global conservation NGOs, such as Conservation International and WWF.

Palm oil sourcing

The company received our worst rating in this category. While Starbucks is a member of the Roundtable of Sustainable Palm Oil, only about 60% of the palm oil it uses is certified. Furthermore, less than 50% of its total palm ingredients originate from a physically certified supply chain which is the highest and best certification achievable.

It also doesn't publish a list of its palm mills. This is problematic because transparency around palm sourcing is key to improving practices in the industry. This includes being transparent around whether a company works with mills associated with issues like human and workers rights abuses, or deforestation.

Animals

Starbucks sells factory farmed animal products and uncertified dairy. It also doesn’t have a sustainable fish sourcing policy and it has received a boycott call for not using organic milk. As a result it lost three whole marks for animal related issues.

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The text above was written in November 2023, based on research predominantly collected in February 2022.