Corporate Social Responsibility and International Development – How are companies such as Starbucks assisting development.
What is Corporate Social Responsibility
Corporate Social Responsibility is a concept with a longer history than many might know. In 1953, the American economist Howard Bowen, who is considered by many to be the ‘father of Corporate Social Responsibility’, published his ground-breaking book ‘Social Responsibilities of the Businessman’. His book overtly connected businesses to society through his concept of a ‘social contract’ setting the groundwork for further scholarship into how businesses should contribute to society. Since then, the concept of Corporate Social Responsibility (CSR) has morphed and deepened alongside the societal progressions in racial and gender equality as well as a growing awareness of environmental issues. Today there is a foundational understanding that enacting CSR policies is not only a nicety aimed to present an attractive brand to the consumer, but it also has the potential to contribute alongside governments and NGOs to address long-standing global issues.
A choice between a positive of detrimental impact – Multinationals and their influence on the community
Although many multinational businesses with good CSR reputations do not use the term ‘international development’, their CSR policies can actively support the local communities in which they are involved in. The fact is that a multinationals sheer size has an impact on the local communities regardless of whether they adhere to the CSR policies or not. Therefore, their potential to become a positive resource for local development is significant, as is their potential to be detrimental. Yet if and when companies do harness their substantial influence for social benefit, the results can be impressive.
Starbucks and its International Development Projects
One of the many ways in which multinational businesses are having a positive impact on the local community can be found in the example of Starbucks. Starbucks has been building itself up as a brand synonymous with social responsibility since 1988 where it became one of the first companies in the US to offer full medical insurance to both full and part-time staff. Although not unfamiliar with manoeuvring through controversy or two, it has still managed to maintain its socially responsible image, balancing financial performance with social impact.
In 2019 alone Starbucks trained over 88,000 farmers at its Farmer Support Centres, invested $46 million in farmers loans via their Global Farmer Fund program and gave $5 million in grants to support women in the coffee and tea growing communities around the world. The grants for women fund a variety of projects that empower women and girls in terms of education, starting businesses, childcare and leadership to name but a few.
Profit and CSR go hand in hand – Protecting coffee and its farmers
Balancing business and CSR centred policies is demonstrated in how Starbucks is paying particular attention to the quality and sustainability of coffee farming. As a brand whose business relies on coffee, it has a vested interest in ensuring a continued supply. As such it’s CSR politics towards local coffee farmers make business sense as well as social sense.
Coffee is one of the most demanding crops to grow. Coffee trees not only take years to cultivate, but farmers receive a low price for their coffee berries whilst also being responsible for the cost of production. On top of this farmers are facing adverse agricultural conditions such as climate change and pests. Making a living off growing coffee is a constant and sometimes impossible challenge.
To assist its farmers, Starbucks pays above-market rates for the coffee it sources from its farmers, although it is also worth noting that Starbucks doesn’t officially publish the numbers for this. Additionally, it has established several research centres to develop solutions to agricultural challenges such as creating disease-resistant trees and training farmers to improve techniques to increase productivity.
The cynical may call out Starbucks as being just one of many multinational companies using CSR as a marketing tool and nothing more. Yet the notion that social responsibility stands directly opposed to making a profit is no longer viable. It makes increasingly good business sense to protect communities and the environment on which a business’s production relies upon.
Association of Corporate Citizenship Professionals, (2021), Corporate Social Responsibility: A Brief History. https://www.accprof.org/ACCP/ACCP/About_the_Field/Blogs/Blog_Pages/Corporate-Social-Responsibility-Brief-History.aspx
Kennedy School of Government, Business and International Development Opportunities, Responsibilities and Expectations. https://www.hks.harvard.edu/sites/default/files/centers/mrcbg/programs/cri/files/report_5_edelman_survey.pdf
Starbucks, (2019), Global Social Impact Report. https://stories.starbucks.com/uploads/2020/06/2019-Starbucks-Global-Social-Impact-Report.pdf
Splitter, J (31st July 2019) Coffee Farmers are in crises. Starbucks wants to help. https://www.forbes.com/sites/jennysplitter/2019/07/31/coffee-farmers-are-in-crisis-starbucks-wants-to-help/?sh=652cbe01c716