Despite the costs, Starbucks pushes forward with program to make stores more environmentally friendly

By Danielle Douglas
Monday, October 11, 2010

Walking into the Starbucks on Capitol Hill, customers might notice the new LED track lighting, muted autumn-toned decor or plaques touting the mega-chain's commitment to the environment. On its face, the recent changes to the store, located at 237 Pennsylvania Ave. SE, may seem cosmetic at best. But in actuality, they are a part of a larger eco-conscious retrofit, involving reused, recycled and locally sourced materials as well as other waste-reduction measures.

Starbucks is part of a growing movement of retailers working to reduce their impact on the environment. Change, however, comes at a premium. And as recession-weary retailers start to regain their footing, shelling out more money for low-flow faucets or dual-flush toilets may seem impractical.

Many, though, are betting the payoff will come down the road in lower energy costs, and their numbers are increasing. Some 1,300 retail locations have enrolled in the U.S. Green Buildings Council's certification program through September, compared with 900 for all of last year, making it the fastest-growing segment of green buildings. On the whole, retail properties represent roughly 8 percent of all 6,000 buildings certified to meet the council's Leadership in Energy and Environmental Design, or LEED, standards.

Starbucks was an early adopter, having achieved LEED certification for a store in Hillsborough, Ore., 10 years ago. Starting this year, the coffee chain plans to "green" all of its newly built and renovated company-owned stores, with features similar to the Capitol Hill site. The plans affect roughly 100 company-owned stores inside the Beltway. Franchisees, though offered guidance on sustainable practices, are not required to undergo the retrofit.

"Around 75 percent of the our total environmental footprint comes from our retail operations," said Jim Hanna, Starbucks's director of environmental impact and global responsibility. "For us to have any credibility as a responsible company in this arena, we had to tackle our stores first."

Along with its design strategy, Starbucks aims to derive 50 percent of its energy from renewable sources and achieve LEED certification for all of its ground-up sites worldwide. The company is one of several working with the building council on a new certification program that offers operators, such as retailers, the option of pursuing the designation for multiple properties at once. Under the pilot program, Starbucks will build or renovate some 10 test stores around the world that are to be audited by the council for quality assurance.

Executing a project of this magnitude is no cheap undertaking. Starbucks would not divulge the cost of any of its green retrofits, but acknowledged that it has been pricey. In the midst of developing and implementing its green strategy, the company closed 400 stores nationwide in response to the recession -- yet the program charged ahead.

"We did not take our foot off the gas when the recession hit because we knew that in the long term, it made good business sense," said Hanna, noting that Starbucks anticipates a 25 percent reduction in energy costs at its new stores. The company has recorded some marginal, immediate savings related to lighting and HVAC changes. Starbucks, however, estimates that the full return on investment for these projects may be a few years out.

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