John Harrington, a longtime advocate for responsible investing, has put a proposal before Starbucks shareholders that would force the company to adopt a recycling strategy that would consider aggressive recycled content goals and container recovery goals for plastic, glass, paper and metal containers.

"Starbucks lags behind competitors who sell bottled beverages," according to the proposal, which is at the bottom of this post. "Coca-Cola has set a goal to recover 50 percent of all plastic and aluminum containers it sells annually by 2015. Nestle Waters has pledged to recover 60 percent of the plastic bottles it sells by 2018. Starbucks has made no such commitment."

It would protect Starbucks' brands and boost the company's reputation, it says.

Starbucks' board of directors recommends voting against the proposal, saying the company already has a comprehensive recycling strategy, which is detailed in its global responsibility report.

It has reduced the carbon footprint of its cold cups by 45 percent through materials changes and cup weight reduction, the board said in a statement that's at the bottom of this post. It introduced a recycled-content cup sleeve to reduce "double cupping," and has an average of 65 percent recycled fibers in non-cup paper goods.

Goals include having 100 percent recyclable or compostable cups by 2012, in-store recycling for customers in all the stores where Starbucks controls waste management by 2015, and a quarter of its beverages served in reusable containers by 2015.

Starbucks ready-to-drink beverages (like bottled Frappuccino) represent less than 4 percent of its total retail beverage sales, the board said. "Consequently, Starbucks believes it is most appropriate to focus primarily on sustainable packaging for paper and plastic cups, where we have the largest market share in the specialty coffee industry and the greatest potential to achieve success in changing the entire business sector for the better."

Results of the vote could be available as early as Starbucks' shareholder meeting on March 24.

Both sides of the discussion follow:

Shareholder proposal from John Harrington:

WHEREAS Starbucks Corp. has repeatedly emphasized its commitment to environmental leadership, yet has no comprehensive recycled content or container recovery strategy for the plastic, glass, paper and metal containers its beverages are sold in.

Society has been inundated with recyclable materials that are not being recycled. Two-thirds of beverage containers in the U.S. are not recycled but discarded in landfills, incinerated or littered, and thereby diverted from recycling streams. The U.S. recycling rate for beverage containers declined from 53 percent in 1992 to 34 percent in 2006, while sales continued to grow.

We congratulate the company for using 10% recycled paper fiber in its hot coffee cups. But 3 billion Starbucks coffee cups end up in landfills annually because they can't be composted or recycled due to their plastic coating. (Greenbiz.com, Sept. 15, 2009)

Starbucks received failing grades for its performance on beverage container recycled content and recycling policies in a 2008 scorecard and report published by As You Sow Foundation.

The company has made no commitment to use recycled content in its Ethos brand water bottles or to specific measures designed to increase rates of bottle recovery. Starbucks lags behind competitors who sell bottled beverages, including Coca-Cola Co. and PepsiCo which both use a significant percentage of recycled polyethylene terephthalate (PET) resin in plastic bottles sold in the U.S. Nestle Waters North America has introduced re-source, a brand of bottled water with 25% recycled PET content. Pepsi's Naked Juice brand will use 100% recycled PET plastic in its bottles in 2010.

Significant container recovery rates are possible. In U.S. states with container deposit laws, and countries like Germany and Sweden, beverage container recovery rates of 70 to 80 percent have been achieved. Coca-Cola has set a goal to recover 50% of all plastic and aluminum containers it sells annually by 2015. Nestle Waters has pledged to recover 60% of the plastic bottles it sells by 2018. Starbucks has made no such commitment. Increased recovery can reduce reliance on virgin resins and metals and make more materials available to provide recycled content in new containers.

Increased recycling of containers can also reduce carbon footprint. If all U.S. beverage containers sold in 2005 had been recovered, an estimated 15.6 million metric tons of greenhouse gases could have been avoided. (Waste & Opportunity, As You Sow, 2008)

BE IT RESOLVED THAT Shareowners of Starbucks request that the board of directors adopt a comprehensive recycling strategy for beverage containers sold by the company. The strategy should include consideration of aggressive recycled content goals, and container recovery goals for plastic, glass, paper and metal containers. The board shall prepare a report by October 1, 2010 on the company's efforts to achieve this strategy. The report to be prepared at reasonable cost, may omit confidential information.

SUPPORTING STATEMENT

We believe the requested report is in the best interest of Starbucks and its shareholders. Leadership in this area will protect our brands and enhance the company's reputation.

Starbucks' board of directors recommends shareholders vote against the proposal:

Starbucks believes in the importance of caring for our planet and has a longstanding commitment to environmental stewardship. Our focus on recycling is an essential part of this commitment. To that end, Starbucks has developed a comprehensive recycling strategy to minimize the environmental impacts of the Company's products. Information on our recycling strategy, as well as other aspects of the Starbucks Shared Planet initiative, is publicly available at www.starbucks.com/sharedplanet.

Starbucks continuously evaluates the environmental footprint of our beverage containers and has taken definitive actions to mitigate the environmental impacts of the Company's single-use packaging. For example, Starbucks has worked with supply chain partners who manufacture our packaging and disposable products to maximize post consumer recycled content in our paper goods, minimized the number of different resins in our plastic products to enhance recycling and even reduced the carbon footprint of our cold cups by 45% through materials changes and cup weight reduction. Starbucks has also established significant, relevant, quantitative forward looking goals to further mitigate the impact of the Company's packaging through increased recycling and a reduction in the overall quantity of packaging by increasing the number of beverages served in reusable cups and mugs.

A sampling of Starbucks current initiatives includes:

• Packaging innovation: Introduction of the recycled-content cup sleeve as a way to reduce "double cupping"; launch of the industry's first paper beverage cup containing post-consumer recycled fiber (PCF); maximizing post-consumer recycled content in the Company's non-cup paper goods, with an average of 65% recycled fibers in 2008; and encouraging customers to choose reusable cup options by rewarding those who bring in their own travel tumblers with a $0.10 discount off the price of their beverages.


• Industry Leadership: Starbucks is active in the Sustainable Packaging Coalition, an industry collaborative effort to drive innovation in packaging design across all materials; Starbucks is also a founding member of the Paper Working Group, contributing to the development of the Environmental Paper Assessment Tool. We hosted a cup summit in May 2009, bringing stakeholders from the entire value chain together for the first time to develop systems-based solutions to increase cup recycling globally.


• Quantitative Targets Moving Forward: Starbucks has implemented specific goals to reduce the environmental impact of serving our beverages, including 100% recyclable or compostable cups by 2012, in-store recycling for customers in 100% of the stores where Starbucks controls waste management by 2015, and 25% of the Company's beverages served in reusable containers by 2015, which would decrease Starbucks paper cup usage by approximately one billion cups annually using current sales data.

This resolution asks Starbucks to develop comprehensive plans for recycling and the use of recycled content materials in our packaging. We have already done this and have publicly stated aggressive targets to demonstrate a commitment to lead the specialty coffee and retail industry in ensuring that comprehensive recycling opportunities for single use paper and plastic cups come about over the next three years.

Although Starbucks also sells a number of ready to drink ("RTD") beverages in glass, aluminum and plastic containers, and is consistently working with our suppliers to mitigate the environmental impact of those bottles and cans, these RTDs represent less than 4% of Starbucks total retail beverage sales. Consequently, Starbucks believes it is most appropriate to focus primarily on sustainable packaging for paper and plastic cups, where we have the largest market share in the specialty coffee industry and the greatest potential to achieve success in changing the entire business sector for the better.

This resolution also asks Starbucks to set quantitative goals for the diversion of single use packaging from landfill disposal to recycling. Starbucks believes it is appropriate for the Company to set targets for customer access to recycling in Starbucks stores. We have also committed to work with local regulators and recycling companies to increase access in homes, offices and public spaces. However, actual rates at which Starbucks customers choose to recycle their products are highly dependent upon the shared actions of other stakeholders outside Starbucks influence. We therefore believe that measuring against these rates, as the proposal requests, would provide a poor indicator of our performance.

Sustainable packaging is an explicit priority for Starbucks and is incorporated into the everyday packaging design and purchasing decisions of the Company. We have set specific targets that maintain Starbucks leadership role as an industry innovator in minimizing the environmental footprint of our most important and greatest volume packaging -- our paper hot cups and plastic cold cups.