In sustainability, Starbucks takes a leading role

It's a tough job, but someone's got to do it. Starbucks CSR chief Ben Packard discusses why sustainability reaches every part of his company, from bean to cup to counter.

The next time you visit your local Starbucks, take a look behind the counter.

What's next to the store's massive espresso machine? If you answered nothing, you're right -- because what used to be there cost the company 150 gallons of water per day for that store alone.

It was called a "dipper well," and it was used by baristas to quick-rinse equipment on-the-fly. But it's no longer there, and is just one of the refinements cafe king Starbucks made across its global portfolio of stores in its latest effort to conserve water.

To learn more, I called up Ben Packard, Starbucks' vice president of global responsibility. A seasoned environmental management pro, Packard explained how sustainability aligns with Starbucks' mission, from coffee bean to recycled cup.

SmartPlanet: Sustainability: how important is it to Starbucks from an operational standpoint, versus a marketing one?

BP: Starbucks' orientation to these issues is not a newfound thing. With 150,000 partners in North America -- and even more so globally -- there is importance in that aligned vision and mission in doing business responsibly.

One of the strengths of the Starbucks culture is treating the people and places where our products come from and are served in a [better] way. Not delivering on that vision and mission would be a problem in the culture of this company. People who come to the company [to work] have come to expect that.

We believe it's actually core to the success of the business, addressing issues of increasing importance to our customers. It's a big deal for us.

SmartPlanet: Sustainability impacts your balance sheet and your reputation. To what end does your company pursue it?

BP: We actually know that our customers care about this issue disproportionately. [For us] it's actually a matter of customer retention.

What used to be considered normal -- unrecyclable, disposable packaging -- we looked at ourselves in the mirror and said, "This is what we need to focus our efforts on: premium products and responsible business practices."

It's hard to believe a publicly-traded company believes in the brand positioning that we have established.

In the fall of 2008, we announced a "Shared Planet" goal for a more recyclable cup. It's a major challenge for this industry.

For Starbucks to develop a recyclable cup, there are lots of actors to motivate to get it done. For example, in 86 stores in Manhattan, cups are collected [for recycling]. That may not sound like much, but in order for that to happen, you have to think about the life of the cup: we have to have a hauler that wants to take it to a paper trader that actually values that cup to put it in a stream that's already highly developed.

SmartPlanet: Waste disposal is a major issue in New York City. Are you working with cities to accomplish this, or setting out on your own?

BP: We took a different approach than a city-by-city approach. We convened an entire paper cup system. Actually convening everybody in the system is not a way that companies typically tackle situations like this. Our first summit that we had was in the spring of '09.

We are solving these problems with enduring solutions. You can't be paralyzed by the enormity of these systems. You actually have to be motivated by the power that's in these systems.

It's about stepping back and looking for not just the barriers, but also the innovation, and inviting new players who want to push the envelope.

SmartPlanet: Does Starbucks' massive global footprint help facilitate this action?

BP: The short answer is yes. We can transfer our learnings to other companies who don't have that intel. It doesn't matter where you are; the same rough framework has to be the same: a willingness, a readiness, the right containers, regardless of whether it's New York or London or Tokyo.

We are starting to, from the learnings we've had in North America, roll this out elsewhere.

For example, our ambition to build stores made of more environmentally-friendly materials. We've put that in the framework, to build only LEED-certified stores. It wasn't about what's wrong with LEED, it was about what's right with LEED, to develop a way for retail locations to apply those principles.

What about a company that has and builds hundreds of stores a year? Where's the value creation in having [the USGBC, arbiter of LEED certification] review the same thing over and over again in a different configuration or deployment?

Other sectors -- campuses and hospitals -- are part of this. They too have facilities with common designs that, for now, must be approved one by one.

SmartPlanet: A main criticism of LEED is that it merely certifies a building's construction, and not its operation over its lifetime. How do you cope with that?

BP: If you get the design right, a high percentage of that doesn't change.

In our headquarters building in Seattle, we have a LEED Gold-certified building that has all kinds of buildings operation protocol. You're not just done when you get that certification.

SmartPlanet: Let's return to the water conservation issue. Water is a topic that gets less attention than energy use and carbon footprints and even your recycled cups. You can't do everything, so in what proportion does Starbucks divide its attention?

BP: You definitely have to prioritize. These "Shared Planet" goals are good to use as a filter on how we spend our time. One goal is LEED, and a related goal is to reduce water consumption in stores by 25 percent. It's also a priority for us to establish water protection guidelines.

We look at water on the supply side of coffee. The resiliency of these farming communities is critical to our long-term health. The issue of climate change -- to figure out how to ensure that coffee farming can be a part of the climate solution.

Do we care, even though they're not Starbucks controlled farms? Yes, we absolutely care.

We also look at it in terms of our retail footprint. The elimination of the dipper well -- the well next to the espresso machine -- has made a pretty significant difference. We've done a full on water footprint and identified other things. That well was responsible for using close to 150 gallons of water per store per day.

SmartPlanet: What's your biggest challenge?

BP: Translating that "systems view" into an easily digestible understood message that isn't just an overly-simplified solution is a real challenge for us.

We've been doing a lot in a leadership role, but translating that for our customers and partners is difficult. They're not going to read the responsibility report all the time. It's not just about putting a recycling bin in a store for someone to pick up. That's not how it works in the commercial industry.

It's toughest to get to our customers. Our partners are eager for this information, and have expectations for the company to deliver this way. To do this, and manage your drink order and move the line, that's asking a lot.

We used to write 60- or 70-page beautiful reports. But not a lot of people were reading them. It's the art and the genius in distilling it. If that's the business we're in, what's the way we can change that framework?

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