MCD - ESG Investing: Is Starbucks a Responsible Investment?
We are leading [Starbucks] to try to redefine the role and responsibility of a public company.
-- Howard Schultz, former Starbucks Chairman and CEO
The Seattle-based coffeehouse chain single-handedly changed the way North Americans think about a great cup of coffee -- but Starbucks (NASDAQ: SBUX) has never been simply another place to get great coffee. From the outset, visionary leader Howard Schultz wanted to create an atmosphere for people to meet -- a third place other than home and work. Schultz emphasized employees' (now called partners) welfare, training, and benefits, as he considered them to be ambassadors for the company. Starbucks is committed to fair trade and is widely considered an ESG (environmental, social, and governance) investment.
Schultz first joined the company in 1982 and while traveling in Italy was struck by the numbers of coffee bars and how people would meet and socialize in them. He persuaded the directors to open a coffeehouse in Seattle, which became wildly successful. Starbucks was a roastery that sold packaged coffee before Schultz persuaded the directors to open a coffee shop. But in 1985, he left to form his own coffee chain, Il Giornale. Just two years later, he purchased Starbucks and merged the two companies.