Last summer, on the day that Ashley Ford was invited by Starbucks to visit its new solar farm in North Carolina that spans the equivalent of 285 football fields, “the sky was really blue, the grass was really green.” The fields of shimmering solar panels were also mesmerizing, their purpose equally so.
The farm, acre upon acre of 140,000 glittering solar panels, delivers enough clean energy to power the equivalent of the energy consumed by 600 Starbucks stores in North Carolina, Virginia, Delaware, Kentucky, Maryland, West Virginia and Washington, D.C.
“It warms my heart,” said Ford, a shift supervisor at a store in Raleigh, N.C., where a poster just inside the front door proclaims: “This store is powered by sunshine.” The poster features an artsy rendition of solar panels and encourages customers to learn more at starbucks.com/responsibility/environment.
“Our passion for coffee is matched by our passion for the planet,” states the poster, tacked to a cork and steel wall. The poster is a conversation starter, giving Ford an excuse to chat with customers about Starbucks’ commitment to sourcing renewable energy.
The commitment is long-standing and growing, as evidenced by two recent investments in addition to the solar farm. Closer to headquarters, Starbucks plans to harness wind energy from turbines that will be built near Olympia, Wash., to power 116 Seattle-area stores and the Kent Roasting Plant. That project is scheduled to begin in 2019, the same year that a new wind farm in Illinois will start powering 360 stores in that state, including the future Chicago Roastery.
A $140 million investment in renewable energy
Over the past two years, Starbucks has invested more than $140 million in renewable energy. Starbucks purchases enough renewable energy to power 100 percent of its more than 9,000 company-operated stores in the U.S. and Canada with clean energy, an achievement it first notched in 2015. Globally, 62% of Starbucks operations are powered by renewables.
The company is the top purchaser of renewable electricity in the retail sector on the Environmental Protection Agency’s Green Power Partnership Retail Top 30. It ranks 10th among all companies on the list.
Starbucks’ commitment to renewable energy has increased since 2005, a year after the company undertook its first-ever inventory of its own greenhouse gas emissions. That analysis revealed that 70 percent of emissions came from the purchase of electricity to power stores. “Starbucks takes its role as a responsible corporation seriously,” said Rebecca Zimmer, the company’s director of global environmental impact. “We understand one of the largest areas of responsibility involves the emissions from electricity generation, which contribute to climate change that puts our business and the communities in which we operate at risk.”
Following the inventory, Starbucks decided to develop a strategy to reduce its emissions. Renewable energy is at the heart of that strategy because it doesn’t generate greenhouse gases, which come from the burning of fossil fuels.
Starbucks began by purchasing 5 percent renewable energy in 2005; within a decade, it was purchasing a kilowatt of renewable “green” energy for every kilowatt of “brown” electricity used — traditional fossil fuel-based energy such as coal and natural gas.
Starbucks has been rapidly expanding its roster of renewable energy projects in the United States, supporting the growth of green energy onto the grid through long-term electricity contracts, direct ownership and by contracting for renewable energy certificates from new projects.
The solar farm in Robeson County, N.C., was Starbucks’ first direct investment in a facility that produces renewable energy for its stores. Building off that initial investment, the first of eight solar farms that Starbucks is bankrolling in Texas is due to start churning out power this fall. By the end of 2018 — once all eight are online — more than 350 Starbucks stores in the Lone Star state will be solar-powered.
How businesses purchase renewable energy has evolved considerably over the years. Originally, environmentally minded companies would buy energy offsets, or certificates, a one-to-one supply of renewable energy on par with the amount of traditionally sourced energy that they consume. The renewable energy would be loaded onto the power grid, where it would be available but wouldn’t be earmarked for a particular use. More recently, there has been a shift toward funneling renewable energy to power a specific site, a strategy known as “direct generation” that Starbucks is increasingly incorporating in its U.S. and Canada stores.
Starbucks locally sources 15 percent of its renewable energy purchases in the U.S. and Canada, partnering with developers to bring new projects online and then buying green power close to its stores. The remaining 85 percent takes the form of renewable energy certificates.
Locally sourced green power helps partners — for whom Starbucks’ environmental efforts are a point of pride — connect with the company’s renewable energy strategy. Starbucks’ goal in the United States and Canada is to bring new renewable energy onto the grid close to the stores that use the energy. Locating the projects closer to stores lets partners see first-hand how Starbucks is incorporating renewable energy into its long-term sustainability goals. “Renewable energy can be kind of an abstract concept,” said Patrick Leonard, who helps oversee energy and resource management for Starbucks. “We are trying to humanize the way we source power and use it in our stores. When we locally source renewable energy, partners can point to something and say, ‘This is powering our stores.’”
Additionally, directly sourcing green power means that the benefits of the projects, such as job creation and financial investments, stay in the local communities where Starbucks’ customers and partners live.
Buying renewable energy is ‘the right thing to do’
When Starbucks began purchasing renewable energy, it was more expensive than its traditional counterpart, which dissuaded many companies from incorporating its use. Starbucks forged ahead, however, willing to pay more of a premium to reduce greenhouse gas emissions because “it was the right thing to do,” said Daniel Althouse, a Starbucks senior treasury analyst who helps the company craft financial models for investment in renewable energy.
In the past 10 years, prices have dropped due to rapidly falling equipment costs and federal tax credits that encourage companies to “dip a toe” into renewable energy, said Althouse, who said that wind and solar power are now less expensive than traditional energy sources. “Instead of dipping in a toe, what Starbucks has done is wade in as deep as we can.”
Part of the company’s embrace of green power involves its multi-disciplinary approach to financing renewable energy and what Leonard calls a “dream team of partners” from departments including tax, treasury, accounting, legal, global social impact and facilities and environmental performance.
Investing in renewable energy also helps Starbucks stand out to customers who care about sustainability. Many of the other large companies that are heavily involved in sourcing renewable energy are tech companies that tend to cluster their energy use in a few large buildings. Starbucks, of course, has thousands of geographically dispersed stores, which makes locally sourcing green power more complicated. “It’s quite an endeavor,” said Althouse.
Microsoft has been operating 100 percent carbon-neutral since 2012 through a combination of directly purchased renewable energy and renewable energy certificates. In 2016, the company announced that it would increase its reliance on directly purchased renewable energy. Like Starbucks, Microsoft feels a responsibility to support renewable energy in its business operations. “We look at buying more renewable energy as something we should do,” said Michelle Lancaster, a director of public relations who oversees Microsoft’s sustainability communications. “We are using a lot of energy to make the cloud run, which gives us a lot of responsibility to think about how we are consuming it.”
To cement its commitment to renewable energy, Starbucks joined the RE100, a group of 140 companies worth more than $2.75 trillion in revenue that have pledged to fully transition to renewable energy. Starbucks is one of 25 participants that have already achieved this milestone, along with Microsoft, Clif Bar & Company and SAP.
Being part of the RE100 shows that a company is serious about greening its energy use, says Kyle Harrison, an analyst with Bloomberg NEF who tracks corporate energy strategy. “A lot of companies have made carbon reduction commitments, but offsetting 100 percent of electricity demand with 100 percent renewable energy is not something every company is doing,” said Harrison.
Beyond being good for the earth, buying renewable energy is good for business, said Sam Kimmins, who leads the RE100. Doing so bolsters competitiveness in the marketplace and meets consumer expectations, along with safeguarding businesses from price volatility. (Renewable energy costs are typically locked in for several years.) “We’re delighted to see Starbucks making good on their commitment with tangible investments in renewables,” said Kimmins.
It shows that Starbucks walks the walk, sayid Jesse Freedman, Ashley Ford’s store manager. Freedman joined Ford on the tour of the solar farm last year. Seeing the shiny panels arrayed across a field that people once used as a dumping ground for junk made him proud to be a partner.
“There is this underlying suspicion that big corporations like Starbucks don’t care about these things and if they do, it’s lip service,” said Freedman. “But this isn’t lip service for us. This elevates the way that people view our brand.”