SUPPORTING STATEMENT:
Biodiversity and ecosystems touch every element of human life. From the food we eat to the medicine we need – humans, and economies, are heavily reliant on functioning ecosystems. We depend on nature to exist, thrive, and stay healthy – 70% of medicines used to treat cancer are natural or synthetic products made possible because of nature and more than 75% of global food crops rely on animal pollination.1 Annually, the global economy derives roughly $125 trillion of value from natural ecosystems and according to the Convention on Biodiversity 40% of the world’s economy relies on biodiversity. 2 3
Because of these critical dependencies, the rate at which biodiversity is being destroyed is particularly concerning - one quarter of the world’s plants and animals, meaning roughly 1 million species, are at risk of extinction.4 Land-use and sea change, overexploitation of resources, climate change, pollution, pesticides, and invasive species present a constant risk for biodiversity and the trillions of dollars in value it creates.5 The already present decline in ecosystem health costs the global economy $5 trillion annually.5 Furthermore, food, energy, infrastructure, and fashion, are driving 90% of human caused pressure on biodiversity.5
Investors are increasingly examining the financial risks associated with biodiversity loss. The Taskforce for Nature Related Financial Disclosures (TNFD) launched the final framework to evaluate these financial risks in September 2023.
Starbucks is particularly dependent on Arabica coffee beans, which are at risk of becoming a scarce, highly expensive commodity as habitat loss and climate change impacts increase. 6 The Arabica bean is a very sensitive plant with an optimal growing temperature range between 64-70⁰.6 Studies have found that 60% of the 124 wild coffee species are at risk of extinction due to climate change and deforestation, including the Arabica bean which is projected to decrease by 50% by 2088.7 This highlights the urgent need to examine and address biodiversity risks in coffee production.
Starbucks acknowledges that potential increases in cost and decreases in availability of high-quality Arabica beans present a business risk.8 While this is an important first step, we urge the company to assess nature-related risks facing its business and outline how identifying, assessing, and managing nature-related risks is integrated into the organization’s overall risk management. By doing this Starbucks can gain a better understanding of where the company’s supply chain is most vulnerable and assure investors that the company is prepared to manage these potential impacts on their operations.
1 https://www.weforum.org/agenda/2020/05/5-reasons-why-biodiversity-matters-human-health-economies-business-wellbeing-coronavirus- covid19-animals-nature-ecosystems/#:~:text=Biodiversity%20provides%20livelihoods,of%20the%20world's%20working%20poor
2 https://www.oecd.org/environment/resources/biodiversity/Executive-Summary-and-Synthesis-Biodiversity-Finance-and-the-Economic-and- Business-Case-for-Action.pdf
3 https://www.nytimes.com/2010/02/01/business/global/01green.html
4 https://zenodo.org/record/3553579#.YuGyOnbMKUl
5 https://www.bcg.com/publications/2021/biodiversity-loss-business-implications-responses
6 https://www.climate.gov/news-features/climate-and/climate-coffee
7 https://www.smithsonianmag.com/smart-news/more-half-all-coffee-species-are-risk-extinction- 180971289/#:~:text=The%20Arabica%20bean%2C%20a%20native,around%2050%20percent%20by%202088. 8 https://s22.q4cdn.com/869488222/files/doc_financials/2023/ar/Starbucks-FY22-Annual-Report.pdf