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Starbucks launches $1B bond offering for sustainability efforts

May 14, 2019

Starbucks Corporation announced that it is raising $1 billion via a sustainability bond to support farmers who ethically source coffee. It's the company's largest Bond to date and follows two previously issued sustainability bonds in 2016 and 2017.

The money will go toward purchasing coffee that is verified by Coffee and Farmer Equity (C.A.F.E.) Practices; the continued development of Farmer Support Centers and agronomy research and development centers in coffee-growing regions around the world. It will also provide for new and refinanced loans to coffee farmers made through Starbucks $50 million Global Farmer Fund.

"We are very pleased to see that our new sustainability bond attracted significant investor interest and was oversubscribed," Starbucks CFO Patrick Grismer, said in a press release. “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."

Greener retail
The 30-year-bond will also help fund the company's Greener Retail commitments, which calls for the chain to design, build and operate 10,000 greener stores globally by 2025. Developed in partnership with World Wildlife Fund and SCS Global Services, it focuses on energy efficiency, renewable energy, water stewardship and waste reduction. In addition to Greener Stores, funds will also support investments in greener cups and packaging.

As with any sustainability bond and outlined in theGreen Bond Principles, voluntary guidelines that recommend transparency and disclosure, Starbucks must report on how the funds are spent and the impact they have made against the initiatives.