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Farmer leaders are being trained on the program so they can educate fellow farmers, jointly develop farm management plans and track progress using tablet computers. Creating Impact through Farmer Loans and Community InvestmentsCoffee is grown primarily in countries with developing economies, and Starbucks green coffee pricing model aims to foster price stability and mutually beneficial relationships with suppliers, while paying the prices premium quality coffee commands.1 Providing access to credit at reasonable terms is another important component of our farmer support model. By investing in farmer loans, we are helping cooperatives manage risk and strengthen their businesses.Starbucks investment in farmer loans with Root Capital has grown from $150,000 in 2000 to $12 million today, including a $3 million investment in 2014. Our contributions through Root Capital and other loan partners grew to $16.3 million in 2014, and we are optimistic we will reach our goal of $20 million in total investment in 2015.The health and stability of coffee communities impacts farmers and their ability to both be productive and raise sustainable crops. In 2014, Starbucks made a series of origin community grants, funded by sales of our Ethos® Water brand, to support critical infrastructure improvements and agricultural diversification projects. For example, in Tanzania, we’re working with Heifer International to help smallholder coffee farmers by introducing dairy cattle, and improving access to clean water, sanitation facilities, and renewable energy.1Starbucks paid an average price of $1.72 per pound in 2014. This does not represent the coffee impact in the fiscal 2014 consolidated statement of earnings due to timing of when coffee is purchased (amount referenced above) versus when it is used (amount reflected in the consolidated statement of earnings).  ENVIRONMENTLeading in Green Retail"Every time you order a Starbucks, you cast a vote for the powerful impact the retail environment can have on our efforts to mitigate climate change and improve the quality of life for all of us."Rick Fedrizzi,CEO and Founding Chairman,U.S. Green Building CouncilAs a company that relies on agricultural products, Starbucks has long been aware that the planet is our most important business partner.We are committed to addressing climate change by minimizing our environmental footprint and creating meaningful and sustained change. This work includes our approach to green retail: building more energy efficient stores and facilities; conserving energy and water; investing in renewable energy; and exploring new solutions for recycling and making our cups sustainable. While some of the ambitious environmental goals Starbucks set in 2008 are within reach, we have discovered unexpected challenges with others. This doesn’t mean we should aim lower. We believe in the importance of setting aspirational targets rather than settling for less ambitious targets, as well as learning from our experience to inform next steps.Surpassing 500 LEED®-Certified Stores Starbucks has been an industry leader in green building for more than a decade, opening its first LEED®-certified store in Hillsboro, Oregon in 2005. Today, we continue to incorporate environmental building strategies across our store portfolio. Since 2008, Starbucks has worked to build all new company-operated stores globally to LEED standards. In 2014, Starbucks opened our 500th LEED-certified store – more than any other retailer in the world. LEED has been successfully implemented in many markets where we operate, including 19 different countries. In the Americas, 98% of company-operated new stores were built to LEED standards in 2014. Globally, the percentage stands at 64%. Starbucks has experienced some technical challenges in international markets where the U.S.-based LEED certification program is still gaining traction. We are working with the U.S. Green Building Council to increase adoption of these standards. Nearing Our Water Conservation GoalIn 2008 Starbucks set a goal to reduce our water use in company-operated stores 25% by 2015. We approached that goal in 2014 with a savings of more than 23% over baseline levels. We are continuing to make strides in water conservation by implementing water-saving solutions in new stores and water filtration retrofits in existing ones. LEED-certified stores have contributed to this progress by saving an average of 25,000 more gallons of water annually. Starbucks is actively collaborating with municipalities in water-stressed areas around the world to find additional ways to help reduce water consumption.Recognizing the Energy Impacts of our Evolving Business When Starbucks set an energy conservation goal of 25% in 2008, we knew it was ambitious. Over the past six years, we have incorporated energy conservation measures into our green construction strategy, such as using natural lighting where possible and installing energy-efficient light fixtures and appliances in both new and existing stores. The company recently completed the installation of new Energy Management Systems in approximately 4,000 stores to optimize heating and cooling and enable us to identify additional opportunities in the future.Despite these efforts, energy performance has only improved a net total of 4.6% over our baseline levels, as energy requirements to support our expanded food platform offset gains from ongoing conservation measures. Even with the significant change in our business and associated increase in energy needs, we still project a net energy reduction by the end of 2015 versus our baseline and will continue to explore ways to reduce energy use going forward.Investing in Renewable EnergyIn addition to reducing water and energy consumption, Starbucks is focused on advancing renewable energy sources through purchasing practices. For almost a decade, Starbucks has been one of the U.S. Environmental Protection Agency’s top purchasers of renewable energy in the United States, buying more than half a billion kilowatt hours of wind energy over the past year alone. In 2014, Starbucks purchased renewable energy equivalent to more than 59% of the electricity used in our global company-operated stores. Although we have applied renewable energy purchases to our total global energy footprint, the renewable energy credits purchased were primarily designed to spur development of the U.S. renewable energy market. We are working with our international partners to identify regionally relevant solutions. Currently, we are on track to purchase renewable energy equivalent to 100% of the energy used in our U.S. and Canadian company-operated stores by the end of 2015.Breaking Down Barriers to RecyclingProviding front-of-store recycling is an important part of Starbucks effort to develop comprehensive recycling solutions. In 2014 we added customer-facing recycling to more than 760 stores, bringing our total to 3,849, or 47% of our company-operated locations in the U.S. and Canada. By the end of 2015 we expect to complete the rollout of our recycling program across the U.S. and Canada. Unfortunately, this does not mean we can provide recycling in every store. We continue to face challenges with stores located in municipalities that don’t provide commercial recycling and with landlords who do not provide access to recycling services. We will continue to work across the industry to find innovative ways to reduce landfill waste and explore alternative solutions.Raising Awareness of Reusable CupsReusable cups are an important component of Starbucks overall waste reduction strategy. For 30 years, we’ve rewarded customers with a discount when they bring in a personal tumbler. It is our goal to serve 5% of the beverages made in stores in tumblers and mugs brought in by our customers, and in 2014 our customers did that 47.6 million times, up from 46.9 million in 2013.We have found that bringing a mug or tumbler to a Starbucks store requires a change in personal behavior, and have seen only gradual improvements in tumbler use year-over-year. Customer tumbler use briefly spiked up to 2.5% for a short time during the launch of the $1 reusable cup (£1 in the UK) and other special promotions such as the White Cup Contest, but consumer adoption remained flat to 2013’s overall level at 1.8%. We will continue to look for ways to encourage our customers to make the switch to reusable cups.Looking Beyond our StoresWhile our store operations account for the majority of our direct environmental footprint, we are also working to incorporate environmental design into our manufacturing facilities. This includes roasting plants, coffee processing facilities, and our Evolution Fresh juicery. We are excited that in 2014 Starbucks Roasting Plant and Distribution Center in York, Pennsylvania was certified for 100% Landfill Diversion by Underwriters Laboratories.   COMMUNITYCreating Pathways to Opportunity"The partnership with Starbucks has been so much more than we imagined. They go way beyond; they roll up their sleeves and get the work done with us."Beatrice Garza,President & CEO, AAMAStarbucks has always been a place that has brought people together. Our mission: to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.As a major employer - with 150,000 partners (employees) in the U.S. and more than 300,000 worldwide who wear the green apron - attracting and retaining the best people is critical to our business. Almost 73 million youth worldwide are looking for work, yet employers struggle to fill jobs due to a lack of qualified candidates. Something is broken. There’s clearly more need than any one company or industry can address, but Starbucks is increasingly focused on how we can leverage our business and our scale to start to respond to the crisis – one young person at a time.Building the Workforce of the FutureOur efforts to help build the workforce of the future start with our own people. In 2014 we introduced the Starbucks College Achievement Plan - an innovative education benefit to help Starbucks partners complete their degrees online through Arizona State University. We have also hired nearly 2,000 new partners over the past year as a direct result of Starbucks multi-year strategy to hire 10,000 veterans and military spouses by 2018. We view both initiatives as key components of our strategy to attract partners who share Starbucks mission and values. Investing in Lifelong OpportunityToo many young people face systemic barriers to opportunity due to lack of education and/or skills needed to enter the workforce. This group is often referred to as "opportunity youth." In 2014 we awarded more than 100 grants through the Starbucks Youth Leadership program to local organizations in 14 countries. Although the programs and organizations vary around the world, the impact for youth is significant.In the United States, Starbucks and the Schultz Family Foundation have supported a barista training program in Seattle for opportunity youth through YouthCare and FareStart for the past decade. In 2014 we expanded the program nationally, working with YouthBuild USA to create the Customer Service Retail Excellence Training Program, which helps students develop customer service skills based on the training Starbucks store partners receive. In Canada, Starbucks supports workplace programs in Calgary, Toronto, and Vancouver, that combine in-class core life skills and employability training with real-life on-the-job work placement experience. And in China, Starbucks is furthering our relationship with China’s Soong Ching Ling Foundation with a youth leadership development program to help students build their skills and access mentorships with Starbucks senior leaders. As Starbucks continues to refine its focus on supporting lifelong opportunity, our grants program will shift to programs supporting opportunity youth to help address needs in their communities. For more information, please visit the Opportunity for Youth page on our website.Collaborating through Community Stores Starbucks Community Stores program supports local non-profit organizations in their efforts to provide the training and education that can eradicate the cycle of poverty for this generation of young people. Since opening our first Community Store in 2011, Starbucks has opened eight stores and raised over $900,000 toward local non-profits focused on providing opportunities to young people in those communities. The Community Stores model creates a reliable stream of resources for the non-profit organization, raises awareness of their work, and creates a space for community dialogue and engagement. In 2014, Starbucks added its second international location, in Seoul, Korea as well as two Military Community Stores to support transitioning veterans in the United States in Lakewood, Washington and San Antonio, Texas. Promoting Global Service with ImpactComing together in service represents a fundamental act of citizenship. In 2014, Starbucks worked with nonprofit organizations to bring our partners, customers, and community leaders together to contribute more than 520,000 hours of volunteer service around the world. During Starbucks fourth annual Global Month of Service in April, nearly 60,000 volunteers contributed over 232,000 hours in more than 30 countries. Altogether, the projects benefitted an estimated 1.4 million people with a value of $5.2 million for our communities. Although the total number of hours in 2014 decreased slightly over the previous year, we’ve also seen some encouraging trends. For every one hour contributed by a Starbucks partner, nearly two hours came from a customer. Our partners’ ability to bring their customers along on the journey to improve communities is one way we believe we are able to have a bigger impact. Starbucks Foundation and Corporate GivingThe Starbucks Foundation is a separate 501(c)(3) charitable organization that receives funding primarily from Starbucks Corporation and private donations. The Starbucks Foundation gave $13.1 million in 2014, making 144 grants to nonprofit organizations. Grants included $3.37 million for Starbucks Youth Leadership Grants and $4.2 million in social development grants in coffee-growing communities. In 2014 Starbucks Corporation gave $11.4 million in cash, including $1.9 million to the Starbucks Foundation, and $38.8 million in in-kind contributions. Corporate giving included funding for community-building programs – including a $2 million donation from the sales of Teavana® Oprah Chai Tea to the Oprah Winfrey Leadership Academy Foundation, and our partnership with (RED)™ through which Starbucks and our customers have generated more than $12 million since 2008 for the Global Fund to help eradicate HIV/AIDS in Africa.Diversity and InclusionAs a global company with a diverse customer base and an ever-changing workforce, diversity and inclusion is not just a business priority, it’s a necessity. A key element of our long-term growth strategy is creating a workforce that reflects the communities we serve around the world. To achieve this, we are working to create opportunities to attract, develop, retain and engage our future workforce. We are focused on how we continue to evolve our diversity and inclusion strategy, to meet the challenges of our increasingly global business. From providing a platform for open conversation about inclusion, race, and other differences, to offering training focused on unconscious bias and elevating our partner networks, we not only want, we need partners to be actively engaged in our efforts.Currently, about 40% of our U.S. partners are minorities; 65% are women. Of our vice presidents, 48% are women and 15% are minorities. Among our top leaders – defined as senior vice president or higher – 18% are minorities and 29% are women. We know there are tremendous opportunities to engage diverse job candidates and partners, particularly through key company initiatives such as the Starbucks College Achievement Plan and the UK Apprenticeship Program. As part of this work, we are continuing to build and foster partnerships with diverse professional organizations, nonprofit organizations, businesses, civic leaders and individuals as key resources and connections to talent and the communities we serve.As we continue to build our global footprint in the marketplace, diversity and inclusion will continue to be our strength, and a critical component of how we do business.WHAT’S NEXT It’s clear to us that Starbucks has its greatest potential for impact when the company works with farmers, partners, customers, and like-minded organizations to move our industry forward. Looking ahead to where Starbucks wants to be in five years, we believe we can continue to move our sourcing model toward greater sustainability, find new ways to minimize our environmental footprint, and create new opportunities for young people as we build our workforce of the future.Building a Future with FarmersAs Starbucks continues its journey to 100% ethically sourced coffee, we believe it is possible to make coffee the world’s first sustainable commodity. We are also applying what we have learned to other areas of Starbucks business such as tea, cocoa, and manufactured goods. Pioneering Sustainable SolutionsUsing our scale to innovate and test green practices, we are now challenging ourselves to harness what we’ve learned to continue to drive positive change both within our own stores and across the entire industry. We will also continue to mitigate the risks to economic, social and environmental stability and advocate for climate legislation through Business for Innovative Climate and Energy Policy (BICEP) and others.Creating Pathways to OpportunityWe believe taking a comprehensive approach to creating pathways to opportunity offers Starbucks a way to contribute to the neighborhoods in which we do business, while supporting the young people who will be our future workforce. As a key next step, we have committed to hire 10,000 opportunity youth by 2018. By collaborating with passionate and knowledgeable organizations across every sector, we will identify and implement innovative solutions to challenges at local, national, and international levels.As we near the end of our 2015 objectives, Starbucks looks ahead to a new chapter setting goals for 2020. Over the next year, Starbucks looks forward to engaging stakeholders around the world as we determine how best to deliver on our responsibility as a for-profit, public company.APPENDIX 4Un-branding the Starbucks Brandhttp://nowiknow.com/the-secret-starbucks/It takes years of brilliant business strategy to build a global brand. And love it or hate it, Starbucks is one of the most recognizable coffee products around. So why would the Seattle-based behemoth want to un-brand its powerhouse name, logo and taste?That's exactly what it's trying, in what some call a brazen attempt at "stealth retail," when a corporate giant tries to sneak a sip of home grown neighborhood familiarity with the consumer never knowing the difference. A Seattle outlet of the Starbucks chain has been rebranded as15th Avenue Coffee and Tea. And there's nothing Café Misto about it. Most certainly, your java and milk in this corner café will be called, quite simply, Café au Lait, as the rest of the un-Starbucked world knows it.Starbucks sent out its own sleuths to study local coffee shops observing everything from the décor, to the music, to the cups. The company already has opened two of its uniquely named remodeled coffeehouses in Seattle as an experiment that could be extended to more of its 16,000 stores.Seattle bloggers are frothing at their Frappuccinos over the news. Just a quick sampling below will give you a sense of the local flavor:"In desperation, Starbuck's is now throwing Hail Mary passes. It's likely going to backfire in a big way.""Starbucks can do whatever they want to do with their business. If you don't like their stores, go somewhere else, but stop whining!""What's wrong with taking fashion tips from the most fashionable girl in school?""I hate Starbucks. OMG the most pathetic people go there."Well, what can you say? In a retail age in which growing numbers of consumers want to know exactly where their carrots come from, what philanthropic causes a CEO supports, and whether child labor was used to pick the cocoa beans in their favorite snack, "stealth retail" could become a lightning rod.Take the UK's "Innocent" story. A completely non-corporate maker of smoothies and juices recently sold a stake to Coca-Cola, of all companies, for a reportedly sweet-and-substantial 30 million pounds. "Innocent" built its brand as eco-friendly, sporting cute cow-like vans and is just one in a lineup of local success stories to sell to a corporate fat cat. "Innocent" wanted to raise funds to expand in Europe, and of course growing the brand often means giving away the hand. It's business, isn't it?While different from "stealth retail," the "Innocent's" loss of innocence is another example of how wary consumers need to scratch more than just the surface.Consumers who are conscious about what they buy can become confused, even outraged when they discover they're not getting quite the thing they thought they were. Or that after years of patronage, a trusted company changes direction, and nobody bothered to let the public know. As a conscious consumer, you might be shocked. You might be appalled. People seem to take this stuff rather personally- as if your long haired peacenik husband came home one night with a buzz cut and a rocket propelled grenade launcher on his shoulder. You might run the other way, but even if you just shrug your shoulders and get on with your evening, chances are, you at the very least- notice!So what will the consumers' verdict be on this kind of stealth, corporate tactic? Is there anything wrong with taking fashion advice from the most fashionable girl in school? What if her outfit turns out to be a fraud? I honestly don't know, but in today's market, the consumer will most certainly decide.Join me on World Business Today for an examination of "stealth retail" and other trends.Posted by: Colleen McEdwards, World Business Today AnchorAPPENDIX 5Tax avoidance (transcript from CNN Money Program)The US multinationals Starbucks, Google, and Amazon have been accused of not paying enough corporate tax in the UK. International companies are able to exploit national and international tax structures to minimize corporate tax. The outcome – they don’t pay their fair share. This happened after the executives had been heard by the parliamentary committee last month to face questions about their tax structures. They are accused of using loopholes to avoid paying their fair share. They are not accused of being illegal, they are accused of being immoral. Journalists were trying to reach out to them to ask questions but they all insist they pay enough taxes in the UK and around Europe. What’s changed in part is pressure from consumers.But Starbucks says it has listened to customer feedback and the feedback from employees. When you walk inside a Starbucks café you can see a board saying this is our community activity, showing pictures of people picking coffee beans in the rain forest.But you are struck by the contradiction – these people aren’t willing to pay their taxes in the UK.APPENDIX 6Starbucks tax schemes (transcript from CNN Money Program)The report says Starbuck has avoided paying tax for one key reason – it has reported a loss for every single year it has arrived in the UK. That’s despite having opened 735 outlets. Take the last three years for example. During this period Starbucks racked up almost $2bn in sales. It said it made no profit so it paid no tax. In comparison McDonalds’ sales were $ 5.8bn and it paid $100mln in tax. The books confirmed that Starbucks hadn’t been profitable for ten years meaning it’s not liable for corporation tax. But investors said repeatedly that the UK business was profitable. This is how Starbucks have structured its profit. It buys coffee for Europe from Jamaica, Panama and Costa Rica. The beans, however are not bought in the UK but from a firm based in Switzerland.After this the beans are shipped to Amsterdam where they are roasted; and then they finally reached the UK.It’s a complicated maneuver, but this supply chain is the way of pushing profits around the world and reducing the tax bill in a particular country. And all the practices applied by Starbucks are indeed legal. And in their statement in the UK it is written: “We will continue to pay our fair share of taxes to the letter of the law in the UK as we always have. This is in keeping with our values in business holding ourselves to the highest ethical standards, be it in the way we source our coffee or pay out taxes.”