Starbucks Commits To “Green Direct” Tariff In Home State Of Washington (MIDTERM Topic - 3)

[Arslan Ijaz]

https://cleantechnica.com/2017/04/24/starbucks-commits-green-direct-tariff-home-state-washington/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+IM-cleantechnica+%28CleanTechnica%29

[Arslan Ijaz]

An excellent and important decision made by Starbucks, Target & REI to go towards renewable energy. Target is able to power 7 of its local stores with 100% renewable energy, on the other hand, Starbucks is aiming to get the power for its 116 stores through Puget sound energy. It is good to see these big names are taking steps forward towards green energy. I am happy that they have realized the importance of renewable energy and the importance of climate crisis. This change of going green will definitely increase their customer count as well. Being a human who wants to save the plant, I would prefer going to a store where I know they are contributing towards saving the planet instead of going to a store where I don't see any such type of effort. 

[Martinez, Alfred S.]

Kudos to a major corporate coffee giant for taking the initiative to buy into renewable sources of energy for ~116 of its stores in Washington State. Target, is also setting the trend with 7 of its stores running on 100% green energy. These companies set a great precedent that we, companies and individuals, must do our part to preserve Mother Earth, rather than just concentrate on profit and wealth. 

Arslan, you bring up an great point - this initiative is also a great marketing point.

[Dobhal, Shivani]

This is a great initiative by industry heavyweights such as Starbucks, REI and Target. What is even more exciting for Starbucks' massive following is that it decided to launch this green energy usage initiative in the state of Washington, its birthplace. Besides helping its own cause of using 100% sustainable energy in its local stores, this initiative will attract more consumers that share similar enthusiasm towards green energy usage. This commitment to green energy also puts considerable pressure on their competitors and other industry bigwigs to follow suit. Also, the fact that Starbucks is a globally recognized franchise, brings much needed limelight to this cause not just in the US, but across the globe. 

[Wojciech Trawinski]

 I think that one of the primary concerns Starbucks has with climate change is the supply of its staple resource, the coffee bean may be significantly crippled in the coming years. Deforestation in South America is driving the prices of coffee beans a small percent higher every year. Coupled with the growing demand and popularity of coffee, Starbucks may in the future be forced to pay higher prices for its supply. This would drive the cost of coffee higher, potentially losing Starbucks some of its clientele. In this case, Starbucks is killing two birds with one stone, helping to stifle climate change and securing future supply chain health. Its a very good decision that combines both self interest and green sustainability. 

[Chun S]

It is good to see that the big organizations are contributing in the green direct project. In the US, the largest source of greenhouse gas emissions from human activities is from burning fossil fuels for electricity, heat, transportation, and industry. From our previous discussion, we have talked about the transportation, and electricity. Even the greenhouse emission from industry is just the 3rd largest source, but it’s only slightly lower than electricity and transportation. About 2.5% of Starbuck’s COGS was for electricity bill (200 millions) in 2016, and I believe it shouldn’t affect the company financially. For the type of business – manufacturers that have a huge portion of its cost coming from electricity consumption, that might be harder for them shifting to use green energy which is still more expensive as of today without government subsidies.

[Arslan Ijaz]

Wojciech, you made an excellent point here. I agree with you and that can definitely be one of the big reasons that Starbucks took initiative towards renewable energy supply. Coffee production definitely get effected by even a half degree increment in the temperature due to climate change. For a past decade, the production of coffee has been decreased in some areas and that has been increasing the coffee price every year. So on one side, Starbucks will save money after switching over to renewable energy supply and use that saving to compensate the increased coffee price. On the other hand, they definitely are putting in their share towards climate crisis. 

[Martinez, Alfred S.]

Wojciech: Interesting insight there. I wonder if Starbucks will take matters into their own hands and invest into producing the coffee beans themselves. Say invest in some R&D for those high tech indoor farms...

All I could find was a Forbes article that they are investing into bonds to support farmers with the challenges of growing coffee beans. See link here: https://www.forbes.com/sites/willyfoote/2016/05/23/to-invest-in-the-future-of-coffee-starbucks-turns-to-the-capital-markets/#4745a57f1174