Starbucks has now issued three green bonds in as many years
Proceeds from the Bond will be used to support ethical coffee farming in its supply chain and green energy measures at 10,000 of its global stores
Starbucks has issued a new $1bn ‘Sustainability Bond’ aimed at supporting the development of ethically sourced coffee and farming R&D in its supply chain, and underpinning plans to boost energy efficiency, renewables use, and water and waste reduction efforts across 10,000 of its outlets globally.
It marks the multinational coffee chain’s largest sustainability bond to date, after two similar green issuances in 2016 and 2017.
Patrick Grismer, chief financial officer at Starbucks, announced the firm had completed issuance of the $1m Sustainability Bond on Monday, confirming it attracted “significant interest and was oversubscribed”.
“Our intent is that, by issuing a Sustainability Bond, we’re providing investors an opportunity to participate in our sustainability efforts, and our hope is that this inspires others to pursue more sustainability-related investing opportunities,” he said. “It also illustrates a trend toward heavier interest from investors in our socially and environmentally focused projects – in this case supporting coffee farmers and leading in green retail.”
The Bond will help fund the company’s Greener Retail commitments, including its initiative to design, build, and operate 10,000 ‘Greener Stores’ globally by 2025 through improved energy efficiency, renewable energy deployment, enhanced water stewardship, waste reduction, and other measures.
It will also help support investments in greener cups and packaging at Starbucks stores, such as its rollout of strawless lids and the next generation of compostable cups, the company explained.
In addition, supply chain initiatives being supported by the Bond include purchasing coffee verified by Coffee and Farmer Equity (CAFE) Practices and continued development of farmer support centres and agronomy research and development programmes in coffee growing regions around the world.
Eligible projects in the Bond, the transaction for which was managed by Morgan Stanley, have also been aligned with the goals of the UN Sustainable Development Goals (SDGs).
As part of its adherence to Green Bond Principles, Starbucks must report on how the funds are spent and the impact they make. It will also publish annual updates on the allocation of proceeds throughout the term of the Sustainability Bond.
“The bond demonstrates Starbucks commitment to meaningful, continual progress toward our aspiration of sustainable coffee, served sustainably,” said Grismer.