We’re currently facing a climate emergency. Rapid sea level rise, extreme weather events, and forest fires are only a few aspects of a crisis that will only get worse without immediate, universal action. But climate change is often seen as an issue for governments and nonprofits to tackle alone, while the private sector has to be cajoled into protecting the environment. In this podcast, I’ll explore how some of the world’s largest corporations are flipping that narrative on its head by becoming more sustainable from the inside out. I’ll walk you through two major problems facing multinational businesses as they reduce their environmental impact: first, ensuring that every step of their supply chain is sustainable, and second, the difficulty of communicating that their actions are genuinely good for the environment. Throughout this series, I’ll dive into these issues and more to give you a greater understanding of how companies are joining a united front of actors working to stop climate change. 

Picture yourself as the average American college student. You overslept and you’re running a little late for class, but you grab a coldbrew from the campus Starbucks before your seminar. 

You like to think of yourself as fairly environmentally conscious, but the drink in your hand tells a different story. 

The coffee used to make your coldbrew was grown at a large plantation in Peru, where vast native forests were chopped down to meet a growing demand for Starbucks coffee beans (Panhuysen and Pierrot, 2020). You asked for whole milk in your coffee, contributing to Starbucks’s support of one of the biggest greenhouse-gas-producing sectors––the dairy industry (Haas et al., 2019). Even the plastic cup you’re holding is part of the problem––Starbucks disseminates over 6 billion disposable cups each year, most of which end up in landfills (Le Rouzic & Yum, 2021).

But you didn’t mean to contribute to Starbucks’s environmental degradation, and it’s unfair to expect anyone to spend hours researching the impact of their every purchase.  

Starbucks is a gargantuan corporation, with over 33,000 storefronts around the world and profits that dwarf the GDP of most countries (Eira, 2020; Kareiva et al., 2015). Compared to its customers, Starbucks has a far greater potential impact on global sustainability efforts.  

But it’s often the combined action of consumers that spurs change. A 2018 Accenture Strategy survey found that nearly two thirds of consumers prefer companies they view as being genuinely good for the environment––as opposed to corporations that merely claim they’re eco-friendly (Parletta, 2019). But consumers need trustworthy information about companies’ sustainability in order to discern between the two, and to push corporations to do more. 

How can you, as a consumer and a perpetually busy and sleep-deprived student, know that the companies you buy from are sustainable? 

One potential solution would be standardized corporate sustainability reporting. In our next episode, we’ll explore how increased public scrutiny is driving many companies to disclose their sustainability efforts (Kareiva et al., 2015). Corporations have a lot to gain from sustainability disclosures: an improved image, which makes them more attractive to high-quality employees, and greater worker satisfaction and productivity (Kareiva et al., 2015). But in order to be effective, corporate sustainability reports have to be standardized and based in science. That’s easier said than done. Companies can easily claim products are “sustainable or “all-natural”, but consumers often have no idea what these terms mean. Standards for reporting could solve this problem. However, reporting frameworks would need to be collaboratively developed by business leaders and policymakers in order to see widespread uptake. 

Another aspect of the problem is the difficulty of making supply chains sustainable from the top down. Large corporations like Starbucks buy their final products––such as coffee cups––from first-tier suppliers. These suppliers make their products with raw goods they purchase from other companies, in turn. Starbucks can try to create a cascade effect of sustainable practices throughout their supply chain by asking their direct suppliers to meet certain environmental standards, and requesting that those businesses hold the companies they buy from to the same standards. But the cascade effect often doesn’t reach the suppliers who deal directly with raw materials, who are also most likely to cause severe environmental damage. 

How can businesses increase sustainability throughout their supply chain? How can customers quickly and effortlessly know that their purchases aren’t harming the planet? Rigorous environmental standards designed by and for businesses, industry-wide collaboration, and uniform sustainability reporting can all help alleviate these problems––but none of these solutions is perfect. Keep listening for a deeper look at how we can inspire collaborative climate action across sectors and industries, as we learn from corporations working not just for themselves, but for the planet.

References

Eira, A. (2020). Number of Starbucks Worldwide 2022/2023: Facts, Statistics, and Trends. Finances Online. https://financesonline.com/number-of-starbucks-worldwide/. 

Haas, R., Schnepps, A., Pichler, A., and Meixner, O. (2019). Cow Milk versus Plant-Based Milk Substitutes: A Comparison of Product Image and Motivational Structure of Consumption. Sustainability, 11(18), 5046. https://doi.org/10.3390/su11185046. 

Le Rouzic, A., and J. Yum. (2021). Plastic pollution is a global problem – Starbucks needs to take global action. Greenpeace. https://www.greenpeace.org/international/story/47470/korea-plastic-pollution-starbucks-reusables-global-action/#:~:text=The%20billions%20of%20throwaway%20cups,landfills%20or%20in%20the%20environment.

Kareiva, P., McNally, B., McCormick, S., et al. (2015). Improving global environmental management with standard corporate reporting. Proceedings of the National Academy of Sciences of the United States of America, 112(24), 7375-7382. https://doi.org/10.1073/pnas.1408120111. 

Panhuysen, S., and Pierrot, J. (2020). Coffee Barometer. Ethos Agriculture. https://coffeebarometer.org/. 

Parletta, N. (2019). Consumers Choose Brands that Support the Earth. Forbes. https://www.forbes.com/sites/natalieparletta/2019/04/22/consumers-are-choosing-brands-that-support-the-earth/?sh=709d73d5bf29. 
Villena, V., and Gioia, D. (2020). A More Sustainable Supply Chain. Harvard Business Review. https://hbr.org/2020/03/a-more-sustainable-supply-chain.