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Case Study: How Starbucks Reduced Its Energy Usage

In 2008, Starbucks made a fantastic goal to decrease their consumption of energy by 25% in company-owned stores. In their report, they stated that 80% of their carbon footprint comes from this form of consumption. Since then, they have been working in many different aspects of saving energy. In a 2013 update, Starbucks had a little over 50% of their goal reached. Since then, they have challenged themselves to reach a full 100% and reduce their energy consumption by the full 25%. What has Starbucks done already and what will they do to reduce their energy consumption even further still?

Changing the Lights

Similar to IKEA, the first step in their plan was lighting. Starbucks previously had incandescent and halogen lighting which was replaced with LED lights. These lights were targeted to get rid of 80% of their energy consumption. This was deployed in more than 7,000 stores across the United States, Canada, Europe, and Asia. The impact of the LED lights did not stop there as this plan also saved them a large amount of money. Claudia Girrbach did some rough calculations and found that each LED could save around $30 annually in energy costs and eliminated the equivalent CO2 as half a barrel of oil. Each 1,000 square foot store can save, on average, around $600 annually and eliminate the equivalent CO2 of 10 barrels of oil. These numbers are significant as this entails millions of dollars in savings across their stores. Starbucks energy conservation did not stop there.

Starbucks is making strides toward uptake of recyclable materials

A New Energy Management System

Starbucks in 2016 rolled out an Energy Management System. This essentially optimized heating and cooling in 6,000 stores. The system is also supposed to identify additional savings opportunities for the company as they move forward in their energy initiative. Additionally, Starbucks was driving suppliers to provide efficient energy saving equipment. They will work with suppliers and change out existing equipment as they reach the end of their lifespan. Of course, this did not completely work out the way Starbucks expected. Even with the initiative to replace equipment, in their 2016 report, they stated that these savings have been offset by changes in their menu. For example, having heated food now has required ovens and increased refrigeration. These types of offsets have made Starbucks evaluate their next steps in their plan.

Renewable Energy

Even with setbacks, Starbucks has many plans to continue with energy usage reduction in the future. The first step is a plan to invest in renewable energy. Starbucks is currently the world's lead purchaser of renewably sourced electricity in the entire coffee sector (source: EPA’s Green Power List) according to their responsibility global report. They aim to continue this by purchasing Green-E certified Renewable Energy Certificates (RECs). These develop sources of cleaner energy by providing renewable companies with additional revenue. This can help those renewable energy companies sell at competitive prices with oil companies.

A New and Unique Program

The second plan for Starbucks moving forward is to create a verification program called Greener Retail. This plan will be implemented in business portfolios for new Starbucks and aims to drive energy sustainability. This new verification program will entail building standards, utility efficiency, and partnering with greener suppliers. This initiative is to be implemented in 10,000 new stores by 2025.

Onward Towards Sustainability

Lastly, Starbucks is working to make coffee 100% sustainable. Starbucks is the founding member of The Sustainable Coffee Challenge, which is a group that aims to partner with other corporations to make coffee sustainable. They plan to do this with three major goals:

  • Ensure coffee can be profitable and improve their income for producers, workers, and their families.
  • Implement sustainable agricultural practices. This initiative is said to triple productivity in around 10 million hectares of coffee.
  • Prevent clearing of forests through agricultural practices and the donations of trees.

Starbucks has already made a commitment to donate 100 million trees for the last initiative. If you want to learn more about the coffee sustainability, you can go to www.sustaincoffee.org.

Conclusion

These conservation methods have put Starbucks well ahead of other companies in their sector for energy conservation. Starbucks has always prided themselves on their pursuit of sustainability. With all of these programs in place, any business minded person can ask: How is Starbucks paying for all of this? In May of 2016, Starbucks issued a U.S. Corporate Sustainability Bond. Since then, Starbucks has issued a global sustainability bond in the Japanese market (March, 2017). This will be paid out in 2024. Starbucks has focused on both reducing energies in stores and leading suppliers and producers towards greener energy. With funding in place and plans implemented, Starbucks is well on their way to becoming a leading company in energy conservation.

Is your business or organization seeking to reduce energy consumption? Find out more about boosting profits while cutting greenhouse gas emissions in the Cool Companies book.

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