Starbucks plans to finance $500m of sustainability projects around its coffee supply chain through a bond issue.
Cash raised from the 10-year bonds, the first sustainability bonds in the US, will be used on projects including the verification of coffee suppliers through a third-party auditor to ensure compliance with Starbucks’ Coffee and Farmer Equity (C.A.F.E.) ethical sourcing verification programme. C.A.F.E. covers areas including pay, working conditions and environmental issues.
Farmer support centres in coffee growing regions will also be established and loans will be made available through Starbucks Global Farmer Fund.
“Coffee is at the core of our business and we intend to continue to finance initiatives that will make a positive social and environmental impact in our coffee supply chain as well as other areas across our business,” said Scott Maw, chief financial officer at Starbucks.
So far Starbucks operates a network of eight farmer support centres around the world, in Rwanda, Tanzania, Colombia, China, Costa Rica, Indonesia, Guatemala and Ethiopia. It also turned its own coffee farm in Costa Rica into a global agronomy centre.
The company has pledged to provide $50m in farmer financing in the form of short and long-term loans.
Starbucks said that in 2015 99% of its coffee purchases were verified as ethically sourced.
“The longevity of the coffee industry is directly linked to the social, economic and environmental conditions of coffee communities around the world,” said Craig Russell, executive vice president of Starbucks Global Coffee.
“This new sustainability bond offers a way for investors to better understand the work we are doing to help ensure that there is a future for farmers and our industry.”