SRI: the double-sword for Starbucks

SRI (the socially responsible investment) attracted more attention in each industry. And socially responsible investing, also known as sustainable, socially conscious, green or ethical investing, is any investment strategy which seeks to consider both financial return and social good. In general, socially responsible investors encourage corporate practices that promote environmental stewardship, consumer protection, human rights, and diversity, and/ or the military. Normally, because of SRI, companies could obtain good reputation on their business. Customer in the market would take companies’ imagine in account to encourage their purchase or build the brand trust, and in this way, companies could be benefit from their SRI spending. However, because of the regulation and culture, companies would suffer from the SRI judgment in different area.

The Settle Times, 20^th March 2012, has published that Starbucks was in trouble of blame for SRI. On Starbuck’s Wednesday’s annual shareholders meeting, Mr. Howard Schultz, the CEO of Starbucks, was expected more on the both profitability and socially responsibility. Starbucks has taken care their social imagine for a long time, and they received the benefits from their socially responsible investment. For example, the company promised to buy the coffee beans from importers who pay above-market prices to small farmers, for this reason, their customers accepted the higher selling price of Starbucks. However, because their socially responsible behaviours, the market required more about their investment or attention on the social benefits, like environment. An activist shareholder, John Harrington, encouraged the company to create a committee on environmental sustainability. The committee will burden more on the company’s operation. Moreover, sometimes, Starbucks has no choice. Another nonprofit organization, the National Gun Victims Action, called for a boycott of Starbucks for allowing people to carry guns in stores. Actually, because the differences in each state of USA, the regulations for guns are different, thus, how to deal with the guns could not be so easy to the company. Therefore, this brings the trouble to the company, that the good imagine brought profit, and as the same time, they also made troubles to the company.

In my opinion, the company should not be so flexible. SRI is a wonderful sense for companies, but it also works within limits. Because companies all have their limits on ability, the company could should be their strategy and plan for their SRI, and do what they plan to do and explain the rest. And if companies, like Starbucks, Nike, Levis’, have enough ability both on financial and social area, they could burden more responsibility but limited. The smaller or weaker companies could not perform so much, for the most important thing is to survive from the competition. On contrary, the market or society should think rationally that there is no company can do any things to meet any one in the society, and actually, some of the requirement could go against each other. Just like what I believe, to do what they should and could do is more appropriate.