Starbucks Shared Planet - Our Responsibility

MY CUSTOMIZED REPORTCREATED AT WWW.STARBUCKS.COM/SHAREDPLANET©2009 Starbucks Coffee Company. All rights
reserved.

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Starbucks Shared Planet - Our Responsibility

Mission Statement

Our Starbucks Mission
To inspire and nurture the human spirit – one person, one cup, and one
neighborhood at a time.

Here are the principles of how we live that every day
Our Coffee
It has always been, and will always be, about quality. We’re passionate about
ethically sourcing the finest coffee beans, roasting them with great care, andimproving the lives of people who grow them. We care deeply about all of this; ourwork is never done.

Our Partners
We’re called partners, because it’s not just a job, it’s our passion. Together, weembrace diversity to create a place where each of us can be ourselves. We
always treat each other with respect and dignity. And we hold each other to thatstandard.

Our Customers
When we are fully engaged, we connect with, laugh with, and uplift the lives of ourcustomers— even if just for a few moments. Sure, it starts with the promise of aperfectly made beverage, but our work goes far beyond that. It’s really abouthuman connection.

Our Stores
When our customers feel this sense of belonging, our stores become a haven, a
break from the worries outside, a place where you can meet with friends. It’s
about enjoyment at the speed of life—sometimes slow and savored, sometimes
faster. Always full of humanity.

Our Neighborhood
Every store is part of a community, and we take our responsibility to be goodneighbors seriously. We want to be invited in wherever we do business. We canbe a force for positive action— bringing together our partners, customers, and thecommunity to contribute every day. Now we see that our responsibility—and our
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Starbucks Shared Planet - Our Responsibility

potential for good—is even larger. The world is looking to Starbucks to set the
new standard, yet again. We will lead.

Our Shareholders
We know that as we deliver in each of these areas, we enjoy the kind of successthat rewards our shareholders. We are fully accountable to get each of theseelements right so that Starbucks—and everyone it touches—can endure andthrive.

Environmental Mission Statement
Starbucks is committed to a role of environmental leadership in all facets of ourbusiness.

We fulfill this mission by a commitment to●Understanding of environmental issues and sharing information with our partners.

●

Developing innovative and flexible solutions to bring about change.

●

Striving to buy, sell and use environmentally friendly products.

●

Recognizing that fiscal responsibility is essential to our environmental future.

●

Instilling environmental responsibility as a corporate value.

●

Measuring and monitoring our progress for each project.

●

Encouraging all partners to share in our mission.

Message From Howard

Starbucks has always stood not only for exceptional coffee – but for something bigger.

Starbucks Coffee Company began as a single store in Seattle's Pike Place Market, founded in 1971 during the height of a deep local recession.

But Starbucks founders had a vision. That vision was to find some of the world's best coffee and share their passion and knowledge with their customers. The experience they created represented hope, inspiration, moments tosavor and appreciate.
Howard Schultz (left) is joined by Bono to

Today, what we stand for is more important than ever. It is our mission and principles that will help carry us through short-term challenges and make our company an enduring one.
announce Starbucks partnership with

(PRODUCT) RED™ – part of the Starbucks™

Now is the time to embrace what makes us Starbucks. Now is a time to be bold.

Shared Planet™ commitment to communities.
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Starbucks Shared Planet - Our Responsibility

We've staked out some bold goals as part of Starbucks™ Shared Planet™ in the way we work to buy our coffee responsibly, help our communities and care for the environment. We feel now is the time to invest – truly andauthentically – in ways to help create a better future for the world we share.

What began nearly 40 years ago continues on today.

We are on a journey. Thank you for joining us.

Howard Schultz
Starbucks is committed to
upholding the principles of the UN
Global Compact

Our Collaborations

Extending our reach – one partnership at a time.
Starbucks™ Shared Planet™ is our commitment to doing business responsibly. And
while our vision is big, we’re doing things to extend our reach at the same time. We’reworking to promote a better way of helping each other and the planet – by inspiring ourcustomers and partners to take action and by joining forces with a cross-section of nongovernmental organizations (NGOs). Our NGO partners bring specialized expertise andexperience to the table, and they work with us to create solutions that support ourcommitments to ethical sourcing, environmental stewardship and community
involvement.

Starbucks partners with organizations like Conservation International, Fairtrade Labelling
Organizations International (FLO), Earthwatch Institute, Save the Children, Youth
Venture and the International Youth Foundation. We’re also members of industry
organizations that help us further define our strategy and meet our goals. Every one ofthem plays a part in our success, and they’re crucial to helping us reach our goals.

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chairman, president and chief executive officer

Starbucks Shared Planet - Our Responsibility

Our Goals and Progress

During the last year we stepped back, reflected and imagined how much more impact we could haveon our partners (employees), customers, communities, the environment and our business if we set
our sights high enough. We identified three areas of focus where we believe our impact could be thegreatest: Ethical Sourcing, Environmental Stewardship and Community Involvement. In each area,
we set longer range goals to help us stay on track, measure results and share our progress withyou. These goals have been integrated with our other Key Performance Indicators (KPIs) that wehave reported for several years, and they provide the direction for Starbucks™ Shared Planet™, ourcommitment to doing business responsibly.

Categories

Keys to Symbols

Click on a category below to learn more.
Ethical sourcing
Environmental stewardshipCommunity investment
Other

SUPPORTING GOALS
Increase annual purchases ofcoffee purchased through C.A.
F.E. Practices1

65% of Starbucks totalcoffee purchases (228
million pounds)(goal: 225 million
pounds)77% of Starbucks totalcoffee purchases (295
million pounds)(goal: 65%2)

Double our purchases of Fair
Trade Certified™ coffee to 40
million pounds in 2009

20 million pounds
6% of Starbucks totalcoffee purchases

19 million pounds
5% of Starbucks totalcoffee purchases

Invest in farmers and theircommunities by nearly
doubling farmers loans to $20
million by 2015

$10.5 million in loans$12.5 million in loans(loans are cumulative
year over year)

Pro-actively affect climatechange by offering farmers
incentives to prevent
deforestation

Announced a renewed
5-year partnership with
Conservation
International with athree-year commitment
for $7.5 million.

1C.A.F.E. Practices and Fair Trade purchases are not mutually exclusive.
2Beginning in 2008, Starbucks set goals as a percentage of total purchases rather than absolute volume.

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SUPPORTING GOALS
Develop and launch
recyclable cup by 2012

Began exploring
additional opportunities
to make our cups morerecyclable which will beformalized into a plan
this year.

25% of our cups will be
reusable by 2015

Customers in the U.S.
and Canada increased
their use of commutermugs for their
beverages to nearly 22
million times
representing 1.3
percent of thetransactions in thesestores.

SUPPORTING GOALS
Recycling available in all of
our company-owned stores
where we control waste
collection by 2015

73%

70%
(goal: 76%)

50% of the energy used inour company-owned stores
will come from renewablesources by 2010

20% renewable energy

20% renewable energy

Completed acomprehensive energy
audit that will help
focus our immediate
investments in newlighting, and improving
the efficiency of HVAC
(heating, ventilationand cooling systems
and other equipment.

Reduce our greenhouse gas
emissions by making ourcompany-owned stores 25%
more energy efficient by 2010

Significantly reduce water
usage in our companyoperated stores25
gallons of water used
per square foot of retail
per month

All new company-owned
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24
gallons of water used
per square foot of retail
per month
As of the end of 2008,
we had one LEED
certified store. Our
prototype certification isregistered with the US
Green Building Council.

Starbucks Shared Planet - Our Responsibility

Community service hours

320,000 hours(goal: 375,000)

246,000 hours(goal: 421,000)

SUPPORTING GOALS
Made 64 grants totaling$2.1 million toorganizations
supporting young social
entrepreneurs.

Engage 50,000 young people
to innovate and take action
through the youth action
grantsCHARITABLE CONTRIBUTIONS
Total cash and in-kind
contributions$18 million$14 million

Percentage of pretax
earnings

1.7%

3%Partner satisfaction

86%1

80%

Partner engagement

69%1

64%

Women - U.S. executives(vice presidents and above)

34%

33%

Women - U.S. workforce

66%

67%

People of color - U.S.
executives (vice presidents
and above)

14%

14%

People of color - U.S.
workforce

31%

32%

Suppliers - amount spent withcertified minority and womenowned businesses in U.S$350 million (goal:$206 million)$331 million (goal:$375 million)

WORKPLACE

DIVERSITY

unchanged

1We did not conduct a survey in 2007. This data is from 2006 for comparison.

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Reporting On 2008

Our commitment to being a responsible
company includes our efforts to be open andhonest about the successes and challenges weface pursuing that commitment – with ourcustomers, our partners (employees) and thecommunities where we do business. Each year
since 2001, our reports on our corporate social
responsibility efforts – which we now call global
responsibility – have told the story of ourjourney and progress related to Starbuckssocial, environmental and economic impacts.

This year we're creating a better experience for you by incorporating our fiscal 2008
report throughout the Starbucks™ Shared Planet™ website. You can also customize areport printout based on your interests with the build-your-own report feature.

Thank you for taking the time to check in on what we're doing. We invite you to shareyour thoughts with us with our survey so we can continue to improve our approach.

About our report.
Scope
The report for fiscal 2008 focuses on our three Starbucks™ Shared Planet™
commitments: ethical sourcing (buying), environmental stewardship andcommunity involvement. We have also included helpful links to information
and resources found on Starbucks.com and in past reports regarding ourfinancial, corporate governance, workplace and diversity policies andperformance.

In developing this report, we've covered topics and issues that we believe
are important to Starbucks and our stakeholders. We either share
information about those topics in the body of the report or direct readers toother resources.

What we report has also been informed by the Global Reporting Initiative G3
Guidelines, a set of internationally recognized sustainability reporting
standards. These key criteria are outlined in our GRI Index.

A high-level summary of our progress on Starbucks™ Shared Planet™
commitments is contained in our Starbucks™ Shared Planet™ scorecard.

Boundaries
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The report content is focused largely on Starbucks U.S. and Canada
company-operated retail stores and global supply chain operations – areasthat represent the majority of Starbucks social, environmental and economic
impacts. Our system for reliably collecting and reporting related data does
not currently encompass all of our operations. For now, anecdotal
information is included for international operations, licensed store operations
and joint ventures, where available and relevant. A notable exception to thisis information on total coffee purchases, which is for all Starbucks brands
and retail stores, including Starbucks Coffee, Seattle's Best Coffee andTorrefazione Italia.

Reporting Year
Starbucks fiscal year 2008 (October 1, 2007 – September 28, 2008), unlessotherwise noted.

Currency
All references to currency are in U.S. dollars, unless otherwise noted.

Previous Reports
http://www.starbucks.com/aboutus/csr.asp

Information Integrity
Starbucks management is responsible for the preparation and integrity of
the information being reported for fiscal 2008. Through a system of internal
controls, including a comprehensive verification process involving internal
subject matter experts, we believe this information fairly represents ourglobal responsibility activities and performance results for the fiscal year
2008. External verification is provided by Moss Adams LLP. Read the Moss
Adams Independent Assurance Report.

Forward-Looking Statements
Our reporting on global responsibility for fiscal 2008 includes forward-looking
statements about the company's business and the company's futurebusiness plans, initiatives and objectives. These forward-looking statements
are based on currently available operating, financial and competitive
information and are subject to a number of significant risks anduncertainties. Actual future results may differ materially depending on avariety of factors including, but not limited to, coffee, dairy and other raw
material prices and availability; successful execution of the company's
transformation strategy, restructuring, cost reduction and other initiatives;
fluctuations in U.S. and international economies and currencies; the impact
of competition; the effect of legal proceedings; and other risks detailed in thecompany's filings with the Securities and Exchange Commission, including
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the "Risk Factors" section of Starbucks Annual Report on Form 10-K for the
fiscal year ended September 28, 2008. The company assumes no obligation
to update any of these forward-looking statements.

Being a responsible business is acommitment that is embedded in our
culture and reflects the core values
expressed in our Mission Statement"We feel now is the time to invest – truly
and authentically – in ways to help create
a better future for the world we share."Materiality

Materiality – what matters most.
Since 2001, Starbucks has reported on our social, environmental and economic impacts.
We consider a number of factors in deciding which data and stories are most important
to share and report. One determining factor is the materiality – or the importance anissue or performance metric has both to our business and our key stakeholders. This
framework helps us assess what matters most to our audiences both inside and outside
the company.

Our Global Responsibility Report for fiscal year 2008, a key component of the
Starbucks™ Shared Planet™ website, focuses on the work we are doing in our threemain Starbucks™ Shared Planet™ commitments: ethical sourcing, community
involvement and environmental stewardship. These are the areas of greatest importanceto Starbucks, our customers and partners (employees), as well as non-governmentalorganizations and investors. We also know health and wellness and workplace practices
are of considerable interest to our stakeholders. Information about these key topics canbe found on Starbucks.com.

How we determine materiality.
Our process for determining materiality for our Global Responsibility Report involves
assessing Starbucks significant economic, environmental and social impacts, and thenfactoring in how these impacts substantively affect or influence our stakeholders. We
included a variety of inputs – both internal and external – to ensure we are aligned withthe materiality principle of the Global Reporting Initiative regarding content. These inputs
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include:●Customer feedback.

●Company objectives, strategies, policies, programs and risk factors.

●

Partner (employee) surveys and other input.

●

Shareholder resolutions and anecdotal feedback.

●Input gathered through stakeholder dialogues.

●

Informal input from coffee suppliers.

●

Media coverage and blog discussions of issues.

●

Stakeholder feedback from previous reports.

●

Global Reporting Initiative (GRI) recommended topics and data for inclusion.

After reviewing these inputs, we compiled a list of issues, and prioritized each one basedon the following criteria:

●

●

●

The importance of the issue to – and potential impact on – Starbucks.
The importance of the issue to – and potential impact on – customers,
partners and other stakeholders.
The amount of reasonable control Starbucks has over an issue.

The result is a comprehensive report that we hope addresses the issues most critical to
our social, environmental and economic impacts. As always, we’d appreciate yourfeedback on how we’re doing.

Global Reporting Initiative

Global Reporting Initiative Performance Indicators
Starbucks Fiscal 2008
Starbucks self declares this report to GRI application level B+ as evidenced in the tablebelow.

Categories

Keys to Symbols

Strategy and analysis
Organizational profile
Report parameters
Governance, commitments, andengagement

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Economic performance indicators

included in the "explanation" column or isEnvironmental performance indicators

available on another website rather thanLabor practices and decent work performancewithin our report.

indicators
Human rights performance indicators
Society performance indicators
Product responsibility performanceindicators

Strategy and Analysis
Information
Reported

Location within
Starbucks Fiscal
2008 Report

1.1

Statement fromthe seniordecision-makerof theorganization (e.
g. CEO, chair or
equivalentsenior position)
about therelevance ofsustainability tothe organizationand its strategy

Message fromHoward

1.2

Statement fromthe seniordecision-makerof theorganization (e.
g. CEO, chair or
equivalentsenior position)
about therelevance ofsustainability tothe organizationand its strategy

Our Responsibility

Explanation/Additional
Information

Organizational Profile
Information
Reported

Location
withinStarbucks
Fiscal 2008
ReportExplanation/Additional
Information

2.1

Name of theorganization

Starbucks Fiscal 2008 Form
10-K

2.2

Primary brands,
products and/or
services

Starbucks Fiscal 2008 Form
10-K

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2.3

Operational
structure of theorganization,
including main
divisions,operatingcompanies,
subsidiaries
and joint
ventures

Starbucks Fiscal 2008 Form
10-K

2.4

Location of theorganization's
headquarters

Starbucks Fiscal 2008 Form
10-K

2.5

Number ofcountries where
the organization
operates, andnames ofcountries witheither major
operations orthat arespecifically
relevant to thesustainability
issues coveredin the report

Starbucks Fiscal 2008 Form
10-K

2.6

Nature ofownership andlegal form

Starbucks Fiscal 2008 Form
10-K

2.7

Markets served(including
geographic
breakdown,
sectors served,
and types ofcustomers/
beneficiaries)

Starbucks Fiscal 2008 Form
10-K

2.8

Scale of thereportingorganization
including:number of
employees, net
sales, total
capitalization
broken down interms of debt
and equity,
quantity of
products orservices
provided

Starbucks Fiscal 2008 Form
10-K

2.9

Significant
changes during
the reporting
periodregarding size,
structure orownership

Starbucks Fiscal 2008 Form
10-K

2.10

Awardsreceived in thereporting period

No significant related(awards) were received
during the reporting period.

Report Parameters

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Information
Reported

Location within
Starbucks
Fiscal 2008
ReportExplanation/Additional
Information

3.1

Reportingperiod (e.g.
fiscal/calendar
year) forinformation
provided

Reporting on
2008

3.2

Date of mostrecent report (ifany)

Reporting on
2008

3.3

Reporting cycle(annual,biannual etc.)

Reporting on
2008

3.4

Contact point
for questions
regarding thereport or its
contents

Contact Us

3.5

Process fordefining reportcontent
including:materiality,
prioritizing
topics within
the report andidentifying
stakeholders
theorganization
expects to use
the report

Materiality

3.6

Boundary of
the report (e.g.
countries,
subsidiaries,
leasedfacilities, joint
ventures,suppliers)

Reporting on
2008

3.7

State any
specific
limitations on
the scope orboundary of thereportReporting on
2008

Starbucks Fiscal 2008 Form
10-K

3.8

Basis forreporting on
joint ventures,subsidiaries,
leasedfacilities,
outsourced
operations, andother entities
that cansignificantly
affectcomparability
from period toperiod and/or
betweenorganizations

Reporting on
2008

Starbucks Fiscal 2008 Form
10-K

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3.9

Data
measurement
techniques andthe bases ofcalculations,
includingassumptions
and techniques
underlying
estimations
applied to thecompilation of
the indicatorsand other
information in
the report

Standard and generally
accepted definitions are
employed.

3.10

Explanation of
the effect ofany restatements of
information
provided inearlier reports,
and thereasons forsuchrestatement (e.
g. mergers/
acquisitions,change of baseyears/periods,
nature ofbusiness,measurement
methods)

Not applicable for reporting
period.

3.11

Significant
changes fromprevious
reportingperiods in thescope,
boundary, or
measurement
methods
applied in thereport3.12

Table
identifying thelocation of theStandard
Disclosures in
the report

3.13

Policy andcurrent practicewith regard toseekingexternal
assurance forthe report. If
not included in
the assurance
reportaccompanying
thesustainability
report, explain
the scope andbasis of any
external
assurance
provided. Also
explain therelationship

Reporting on
2008

No significant changes weremade during the reporting
period.

This GRI index contains thelocations of our standard
disclosures.

External
Assurance
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between thereportingorganizationand theassurance
provider(s)Governance, Commitments, and Engagement
Information
Reported

Location
withinStarbucks
Fiscal 2008
ReportExplanation/Additional
Information

4.1

Governancestructure of theorganization
includingcommittees under
the highest
governing body
responsible for
specific tasks,
such as setting
strategy ororganizationaloversight.

Starbucks Corporate
Governance

4.2

Indicate whether
the chair of thehighestgovernance bodyis also an
executive officer(and, if so, theirfunction within theorganization's
management andthe reasons forthis arrangement)

Starbucks 2008 Proxy

4.3

For organizations
that have aunitary board
structure, state
the number ofmembers of thehighestgovernance bodythat areindependent and/or non-executive
members.

Not applicable. Starbucks
does not have a unitaryboard structure.

4.4

Mechanisms forshareholders andemployees toproviderecommendations
or direction to thehighestgovernance body

Starbucks 2008 Proxy

4.5

Linkage between
compensation formembers of thehighestgovernance body,senior managers,
and executives(including
departurearrangements),
and theStarbucks 2008 Proxy

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organization's
performance(including social
andenvironmental
performance).
4.6

Processes inplace for thehighestgovernance bodyto ensure conflictsof interest are
avoided.

Starbucks Business Ethics
and Compliance

4.7

Processes fordetermining
qualifications andexpertise of themembers of thehighestgovernance bodyfor guiding theorganization's
strategy on
economic,
environmental,
and social
performance andthe status of theirimplementation.

Excecutive Committee
appointed to determine
strategy andimplementation on ethicalsourcing, environmental
and social development
objectives. Selection isbased on member's ability
to provide expertise andmake decisions to deliver
publicly-stated objectives

4.8

Internallydeveloped
statements ofmission andvalues, codes ofconduct, andprinciples relevant
to economic,
environmental
and social topics

4.9

Procedures of thehighestgovernance bodyfor overseeing theorganization's
identifications andmanagement of
economic,
environmental,
and social
performance,
including relevantrisks andopportunities andadherence orcompliance withinternationallyagreed standards,
codes of conduct
and principles.

Starbucks Fiscal 2008
Form 10-K

4.10

Processes forevaluating thehighestgovernancebody's own
performance,
particularly withrespect toeconomic,
environmental
and social
performance.

Starbucks 2008 Proxy

MissionStatement,
Ethical
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4.11

Explanation ofwhether and how
the precautionary
approach or
principle isaddressed by theorganization.

Environmental
Stewardship

4.12

Externallydeveloped
economic,
environmental,
and social
charters,
principles, orother initiatives towhich theorganization
subscribes orendorses.

Throughout
report4.13

Memberships inassociations(such as industry
associations) and/or national/
international
advocacy
organizations.

Our
Collaborations,Throughout
report4.14

List thestakeholder
groups engaged
by theorganization.

Our
Collaborations,Throughout
report4.15

Basis foridentification andselection of
stakeholders withwhom to engage.

Our
Collaborations,Throughout
report4.16

Approaches tostakeholder
engagement,
includingfrequency ofengagement by
type and by
stakeholder group

Our
Collaborations,Throughout
report

4.17

Key topics andconcerns thathave been raised
throughstakeholder
engagement, andhow theorganization has
responded tothose key topics
and concerns,
including throughits reporting.

Our
Collaborations,
Materiality,
Throughout
reportEconomic Performance Indicators
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Proactively engaged andgarnered feedback fromkey stakeholders onpriority CSR and businessissues including coffee
sourcing, water,
packaging materials andcommunity development.
Through regular dialogue
with industry experts, key
stakeholder groups,
NGO's and civic leaders
we were able to better
understand thier concernsand gain input on topics ofmutual importance.

Starbucks Shared Planet - Our Responsibility

Information
Reported

Location within
Starbucks
Fiscal 2008
ReportManagement
approachdisclosures

Explanation/Additional
Information

Starbucks Fiscal 2008 Form
10-K

EC1

Directeconomic value
generated anddistributed,
includingrevenues,
operating costs,
employeecompensation,
donations andothercommunity
investments,
retainedearnings, andpayments tocapitalproviders andgovernments.

EC2

Financial
implications
and other risks
andopportunities
for theorganization's
activities due toclimate change

Climate Change Strategy

EC3

Coverage of
theorganization's
defined benefit
plan
obligations.

Starbucks Benefits Plan

EC4

Significant
financialassistancereceived fromgovernment

Not applicable. Starbucks
does not receive significant
financial assistance fromthe government.

EC5

Range of ratiosof standard
entry levelwage
compared to
local minimum
wage atsignificant
locations ofoperation.

Starbucks considers thisproprietary information.

EC6

Policy,practices, andproportion of
spending on
locally-based
suppliers at
significant
locations ofoperation.

Starbucks stores makesubstantial efforts to buy
products and services, suchas baked goods, from local
vendors. Local sourcing
amplifies the positive
economic impact of eachstore, resulting in theindirect benefits of creating
new jobs, generating
additional income for thecommunity and providing
increased tax revenue.

A Closer Look at
Our Giving

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Total wages and benefits
paid to U.S. and Canada
partners in fiscal 2008: $3.3
billion. Includes salaries,
bonuses, vacation, payroll
taxes, healthcare benefits,workers' compensation and
410 (k) matches.

Starbucks Shared Planet - Our Responsibility

EC7Procedures for
local hiring andproportion ofseniormanagement
hired from the
localcommunity at
locations ofsignificant
operation

Starbucks Fiscal 2008 Form
10-K

EC8

Development
and impact of
infrastructure
investments
and services
providedprimarily for
public benefit
throughcommercial, inkind, or pro
bono
engagement.

SocialInvestments in
CoffeeCommunities, A
Closer Look at
our Giving

EC9Understanding
and describing
significant
indirect
economic
impacts,
including theextent ofimpacts.

Ethical
Sourcing,
Community
Involvement

Environmental Performance Indicators
Information
Reported

Location
withinStarbucks
Fiscal 2008
ReportManagement
approachdisclosures

Ethical
Sourcing,
Environmental
Stewardship

EN1

Materials usedby weight orvolume.

Ethical
Sourcing,
Environmental
Stewardship

EN2

Percentage ofmaterials usedthat arerecycled input
materials.

Environmental
Stewardship

EN3

Direct energy
consumption
by primaryenergy source.

EnergyEN4

Indirect energy
consumption
by primarysource.

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Explanation/Additional
Information

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EN5

Energy saved
due toconservationand efficiency
improvements.

EnergyEN6

Initiatives toprovide energyefficient or
renewableenergy basedon products
and services,and reductions
in energy
requirements
as a result of
these
initiatives.

Energy, Climate
ChangeStrategy

EN7

Initiatives toreduce indirectenergyconsumption
and reductions
achieved.

Energy, Climate
ChangeStrategy

EN8

Total water
withdrawal bysource.

Starbucks does not
currently track thisinformation.

EN9

Water sources
significantly
affected bywithdrawal ofwater.

Starbucks does not
currently track thisinformation.

EN10

Percentage
and totalvolume ofwater recycled
and reused.

Starbucks does not
currently track thisinformation.

EN11

Location andsize of land
owned, leased,managed in, or
adjacent to,protected areas
and areas ofhighbiodiversity
value outside
protected
areas.

Starbucks does not
currently track thisinformation.

EN12

Description ofsignificant
impacts ofactivities,
products, andservices on
biodiversity inprotected areas
and areas ofhighbiodiversity
value outside
protected
areas.

Ethical
Sourcing,
Environmental
Stewardship

EN13

Habitats
protected or
restored.

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Starbucks Fiscal 2008
Form 10-K

Starbucks Shared Planet - Our Responsibility

EN14Strategies,
current actions,and futureplans formanaging
impacts on
biodiversity.

Ethical
Sourcing,
Environmental
Stewardship

EN15

Number of
IUCN Red List
species andnational
conservation
list species with
habitats inareas affectedby operations,by level ofextinction risk.

EN16

Total direct andindirectgreenhousegas emissions
by weight.

EN17

Other relevant
indirectgreenhousegas emissions
by weight.

EN18

Initiatives toreducegreenhousegas emissions
and reductions
achieved.

EN19

Emissions ofozonedepleting
substances byweight.

Starbucks does not
currently track thisinformation.

EN20

NO, SO, andothersignificant air
emissions bytype andweight.

Not applicable.

EN21

Total water
discharge by
qualitydestination.

Not applicable.

EN22

Total weight ofwaste by typeand disposal
method.

Starbucks does not
currently track thisinformation.

EN23

Total number
and volume ofsignificant
spills.

Not applicable.

Starbucks does not
currently track thisinformation.

Climate Change
Strategy

Starbucks does not
currently track thisinformation.

Climate Change
Strategy

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EN24

Weight oftransported,
imported,
exported, or
treated waste
deemedhazardous
under theterms of theBasel
Convention
Annex I, II, III,and VIII, andpercentage oftransported
waste shippedinternationally.

Not applicable.

EN25

Identity, size,
protected
status, andbiodiversity
value of water
bodies andrelated habitats
significantly
affected by thereportingorganization's
discharges ofwater andrunoff.

Starbucks does not track
this information.

EN26

Initiatives tomitigate
environmental
impacts ofproducts andservices, andextent ofimpactmitigation.

Ethical
Sourcing,
Environmental
Stewardship

EN27

Percentage of
products soldand their
packagingmaterials thatare reclaimed
by category.

Environmental
Stewardship

EN28

Monetary valueof significant
fines and total
number of nonmonetary
sanctions fornoncompliancewithenvironmental
laws andregulations.

No fines were paid in fiscal
2008.

EN29

Significant
environmental
impacts oftransporting
products andother goods
and materials
used for theorganization's
operations, andtransporting
members of theworkforce.

Starbucks does not
currently track thisinformation.

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Starbucks Shared Planet - Our Responsibility

EN30

Total
environmental
protection
expendituresandinvestments bytype.

Starbucks does not
currently track thisinformation.

Labor Practices and Decent Work Performance Indicators
Information
Reported

Location
withinStarbucks
Fiscal 2008
ReportExplanation/Additional
Information

LA1

Total workforce
by employment
type,
employment
contract, andregion.

LA1

Total workforce
by employment
type,
employment
contract, andregion.

Total partners (employees)
globally: 176,000; U.S.
partners - retail: 136,000; U.
S. partners - nonretail:7,000; international partners- retail: 32,000; international
partners - nonretail: 1,000

LA2Total number
and rate of
employeeturnover by
age group,
gender, andregion.

Starbucks considers thisproprietary information.

LA3

Benefits
provided to fulltime
employees thatare not
provided totemporary or
part-time
employees, by
major
operations.

Starbucks Benefits Plan

LA4

Percentage of
employees
covered bycollective
bargaining
agreements.

24 partners wererepresented by a trade union
during the reporting period.

LA5

Minimum
notice period(s) regarding
operationalchanges,
includingwhether it isspecified incollective
agreements.

Not applicable.

Ethical
Sourcing

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LA6

Percentage of
total workforce
represented informal joint
managementworker healthand safetycommittees
that help
monitor andadvise on
occupational
health andsafetyprograms.

Starbucks does not report
this information.

LA7

Rates of injury,
occupational
diseases, lostdays, andabsenteeism,and number ofwork-related
fatalities byregion.

Hours of Exposure-RetailStores: 144 million;
Occupational Injury-Related
Fatalities-All Locations: 0;
Rate of Injury Per 200,000
Hours Worked-Retail Stores;
5.21; Time Loss Claims-NonRetail Locations: 17; Time
Loss Claims-Retail Stores:
920; Total Time Loss ClaimsAll Locations: 937; Total
Workers' Compensation
Claims-All Locations: 3840;
Worker's Compensation
Claims-Retail Stores: 3748;
Workers' Compensation
Claims-Non-Retail
Locations: 92.

LA8

Education,
training,
counseling,
prevention,and risk-control
programs inplace to assist
workforcemembers, theirfamilies, orcommunity
members
regardingseriousdiseases.

Starbucks Benefits Plan

LA9

Health andsafety topics
covered informalagreementswith tradeunions.

Not applicable.

LA10

Average hoursof training peryear peremployee by
employee
category.

Average amount of training
per assistant store manager:
8 months; Average amountof training per barista: 2
weeks; Average amount oftraining per district manager
trainee: 15 weeks; Averageamount of training per store
manager: additional 8
weeks; Average amount oftraining per store shift
supervisor: 4 weeks; Total
hours of partner training
annually: 6 million hours.

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LA11

Programs forskillsmanagement
and lifelong
learning that
support thecontinued
employabilityof employees
and assist
them inmanaging
careerendings.

LA12

Percentage of
employees
receiving
regularperformanceand careerdevelopment
reviews.

Starbucks does not currently
report this information. The
company's policy is all
partners (employees) should
receive annual performance
reviews.

LA13

Composition of
governancebodies andbreakdown of
employees per
category
according togender, agegroup, minority
group
membership,
and otherindicators ofdiversity.

Diversity at Starbucks

LA14

Ratio of basic
salary of men
to women by
employee
category.

Starbucks does not report
this information.

Human Rights Performance Indicators
Information
ReportedManagement
approachdisclosures

Location
withinStarbucks
Fiscal 2008
ReportEthical
Sourcing

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Explanation/Additional
Information

Starbucks is committed torespecting the rights of ourpartners (employees),customers and suppliers.
Whether it is the respect wedemonstrate for our partners
or through our commitment
to the people andcommunities with whom we
do business, Starbucks
believes the vitality of ourpeople and theircommunities is critical to our
success. Starbucks supports
internationally accepted
principles and standards
regarding human rights andis a signatory to the United
Nations Global Compact. We
seek to operate our businessin a manner consistent withthese international standards

Starbucks Shared Planet - Our Responsibility

and with business partners
who share our commitments,
as well as to meet or exceed
national and local laws in the
countries in which we
operate. We have thefollowing policies andprograms in place to ensure
we uphold thesecommitments:
Standards of BusinessConduct
Supplier Code of Conduct
C.A.F.E. Practices
Cocoa Practices
HR1

Percentage
and total
number ofsignificant
investment
agreementsthat include
human rights
clauses or thathave
undergone
human rights
screening.

Ethical
Sourcing

HR2

Percentage ofsignificant
suppliers andcontractors thathave
undergonescreening on
human rights
and actions
taken.

Ethical
Sourcing

HR3

Total hours of
employeetraining on
policies andprocedures
concerning
aspects ofhuman rightsthat arerelevant tooperations,
including thepercentage of
employees
trained.

Starbucks has not instituted
formal human rights training
but all partners (employees)
are expected to adhere to
the company's Standards ofBusiness Conduct.

HR4

Total numberof incidents of
discrimination
and actions
taken.

Starbucks does not report
this information.

HR5

Operations
identified inwhich the rightto exercise
freedom of
association andcollective
bargaining may
be at significant
risk, andactions taken
to support
these rights.

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Starbucks business partners
are expected to adhere to
the company's Code of
Conduct, which includes
human rights clauses.

Starbucks Shared Planet - Our Responsibility

HR6

Operations
identified ashavingsignificant risk
for incidents ofchild labor, andmeasurestaken tocontribute to
the eliminationof child labor.

Ethical
Sourcing

HR7

Operations
identified ashavingsignificant risk
for incidents offorced orcompulsory
labor, andmeasures tocontribute to
the eliminationof forced orcompulsory
labor.

Ethical
Sourcing

HR8

Percentage of
security
personnel
trained in theorganization's
policies orprocedures
concerning
aspects ofhuman rightsthat arerelevant tooperations.

Not applicable

HR9

Total numberof incidents ofviolations
involving rights
of indigenous
people andactions taken.

Not applicable

Society Performance Indicators
Information
Reported

SO1

Location within
Starbucks
Fiscal 2008
ReportExplanation/Additional
Information

Management
approachdisclosures.

Community
Involvement

Starbucks Public Policy

Nature, scope,andeffectivenessof anyprograms andpractices thatassess andmanage theimpacts ofoperations oncommunities,
includingentering,
operating, andOur
Responsibility,
Community
Involvement

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Starbucks Shared Planet - Our Responsibility

exiting.
SO2

Percentage
and total
number ofbusiness units
analyzed forrisks related tocorruption.

Starbucks does not report
this information.

SO3

Percentage of
employees
trained inorganization's
anti-corruption
policies andprocedures.

Starbucks does not report
this information.

SO4

Actions taken
in response toincidents ofcorruption.

Starbucks Standards ofBusiness Conduct

SO5

Public policy
positions andparticipation in
public policy
development
and lobbying.

Starbucks Public Policy

SO6

Total value offinancial and inkind
contributions
to politicalparties,
politicians, andrelatedinstitutions bycountry.

Starbucks did not make any
political contributions infiscal 2008. See Starbucks
Public Policy for more
information.

SO7

Total numberof legal actions
for anticompetitive
behavior, antitrust, andmonopolypractices andtheiroutcomes.

Starbucks does not report
this information.

SO8

Monetaryvalue ofsignificant
fines and total
number of nonmonetary
sanctions fornoncompliancewith laws andregulations.

Starbucks does not report
this information.

Product Responsibility Performance Indicators
Information
Reported

Location
withinStarbucks
Fiscal 2008
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Explanation/Additional
Information

Starbucks Shared Planet - Our Responsibility

Management
approachdisclosures
PR1

Life cycle stages
in which healthand safetyassessed for
improvement,
and percentage
of significant
products andservices
categories
subject to suchprocedures.

PR2

Total number ofincidents of noncompliance withregulations andvoluntary codes
concerning healthand safety
impacts ofproducts andservices during
their life cycle, by
type of outcomes.

Ethical
Sourcing

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Quality Assurance andProduct Recalls: Starbucks
places the highest priority
on the safety and wellbeing of our customers andpartners. Our quality
assurance (QA) process isextremely rigorous andextends from coffee, dairy
and other agricultural
products to manufactured
goods, such as brewers,
mugs and gift items. Ourcommitment to productsafety means that we not
only comply withgovernment regulations,but strive to openly
communicate with ourcustomers when we have
an issue, explaining thesituation and describing
the corrective action weare taking. Several years
ago we formed an internal
Product Incident Team,
comprised ofrepresentatives from QA,
Legal, Operations andCommunications in orderto provide additional
monitoring of productquality. The team is tasked
with weekly review of
product performance
information, customer andpartner (employee)
feedback, and otherproduct usage informationin order to proactively
assess any potential
issues. Should an issue
relating to product quality,
failure or safety arise, an
extensive response
system, including
communications andoperational components, israpidly implemented.
Despite having extensive
QA controls, certain
unforeseen situations canarise, making a productrecall necessary in order tobring a product into
government complianceand/or to ensure the healthand safety of partners andcustomers. In Starbucks
history, we’ve had very few

Starbucks Shared Planet - Our Responsibility

incidents that warranted a
product recall, and in eachsituation we took aproactive and universal
approach to rectifying thesituation and maintaining
customer trust and loyalty.
While we did notexperience a recall for
products sold in 2008, we
did proactively issue a'stop sell' in two separate
incidents on products that
contained peanut butter
and tomotoes until wewere able to determine our
products did not come froman affected supplier.
PR3

Type of productand service
information
required byprocedures, andpercentage ofsignificant
products andservices subject
to suchinformation
requirements.

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Quality Assurance andProduct Recalls: Starbucks
places the highest priority
on the safety and wellbeing of our customers andpartners. Our quality
assurance (QA) process isextremely rigorous andextends from coffee, dairy
and other agricultural
products to manufactured
goods, such as brewers,
mugs and gift items. Ourcommitment to productsafety means that we not
only comply withgovernment regulations,but strive to openly
communicate with ourcustomers when we have
an issue, explaining thesituation and describing
the corrective action weare taking. Several years
ago we formed an internal
Product Incident Team,
comprised ofrepresentatives from QA,
Legal, Operations andCommunications in orderto provide additional
monitoring of productquality. The team is tasked
with weekly review of
product performance
information, customer andpartner (employee)
feedback, and otherproduct usage informationin order to proactively
assess any potential
issues. Should an issue
relating to product quality,
failure or safety arise, an
extensive response
system, including
communications andoperational components, israpidly implemented.
Despite having extensive
QA controls, certain
unforeseen situations canarise, making a productrecall necessary in order tobring a product into
government complianceand/or to ensure the healthand safety of partners andcustomers. In Starbucks

Starbucks Shared Planet - Our Responsibility

history, we’ve had very few
incidents that warranted a
product recall, and in eachsituation we took aproactive and universal
approach to rectifying thesituation and maintaining
customer trust and loyalty.
While we did notexperience a recall for
products sold in 2008, we
did proactively issue a'stop sell' in two separate
incidents on products that
contained peanut butter
and tomotoes until wewere able to determine our
products did not come froman affected supplier.
PR4

Total number ofincidents of noncompliance withregulations andvoluntary codes
concerning
product andservice
information andlabeling, by typeof outcomes.

Starbucks does not report
this information.

PR5

Practices related
to customer
satisfaction,
including resultsof surveys
measuringcustomersatisfaction.

Starbucks does not report
this information.

PR6

Programs foradherence tolaws, standards,
and voluntary
codes related tomarketingcommunications,
includingadvertising,promotion andsponsorship.

Starbucks does not report
this information.

PR7

Total number ofincidents of noncompliance withregulations andvoluntary codes
concerningmarketingcommunications,
includingadvertising,promotion andsponsorship bytype of outcomes.

Not applicable during
reporting period.

PR8

Total number ofsubstantiatedcomplaints
regardingbreaches ofcustomer privacy
and losses ofcustomer data.

Not applicable during
reporting period.

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PR9

Not applicable during
reporting period.

Monetary valueof significant
fines for noncompliance withlaws andregulations
concerning theprovision and useof products andservices.

Un Global Compact

Starbucks Commitment to the UN Global Compact
In June 2004, Starbucks joined the UN Global Compact, a voluntary international
network of corporations, UN agencies, trade unions and non-governmentalorganizations that support 10 universal principles. These principles are based on the UN
Universal Declaration of Human Rights, the International Labour Organisation’s
Declaration of the Fundamental Principles and Rights at Work, and UNEP’s Rio
Declaration on Environment and Development. We consider these principles to be anatural extension of Starbucks Mission Statement, which underscore the company’scommitment to doing business responsibly.

U.N. Global Compact “Communications on Progress” Report for Fiscal 2008

Principles

Section

HUMAN RIGHTS
Business should support and respect theprotection of internationally proclaimed
human rights.

Coffee, Cocoa, Tea, Products for Our
Stores, Business Ethics and ComplianceBusiness should ensure that they are notcomplicit in human rights abuses.

Coffee, Cocoa, Tea, Products for Our
Stores, Business Ethics and Compliance

LABOR STANDARDSBusiness should uphold the freedom of
association and the effective recognition of
the right to collective bargaining.

GRI Index

Business should support the elimination of
all forms of forced and compulsory labor.

Coffee, Cocoa, Products for Our Stores

Business should support the effective
abolition of child labor.

Coffee, Cocoa, Products for Our Stores

Business should support the elimination of
discrimination of employment andoccupation.

Employment Policy

ENVIRONMENTBusiness should support a precautionary
approach to environmental challenges.

Environment, Coffee, Cocoa, Tea

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Business should undertake initiatives topromote greater environmental
responsibility.

Environment, Coffee, Cocoa, Tea

Business should encourage thedevelopment and diffusion ofenvironmentally friendly technologies.

Environment, Climate Change Strategy,
Green Store Design, Cups

CORRUPTION
Business should work against corruption in
all its forms, including extortion andbribery.

Business Ethics and ComplianceIndependent Assurance Letter

To the Stakeholders of Starbucks Coffee Company:

We have examined the Data identified below contained within the Starbucks Coffee
Company's Global Responsibility Annual Report (the Report) for the year ended
September 28, 2008. Starbucks Coffee Company's management is responsible for theData. Our responsibility is to express an opinion on the Data listed below based on our
examination.

We have performed evidence-gathering procedures on the following subject matter:●

Fiscal Year 2008 performance data contained in the Starbucks™ Shared Planet™
Scorecard, and is evaluated against the following Criteria:
C.A.F.E Practices coffee purchases contained in the Ethical Sourcing – C.A.
F.E Practices section❍ Fair Trade coffee purchases contained in the Ethical Sourcing – Fair Tradesection❍ Reusable mug usage contained in the Environment – Cups section❍ Percentage of stores recycling contained in the Environment – Recycling
section❍ Renewable energy purchases contained in the Environment – Energy
Conservation section❍●

Key Performance Indicators (KPIs) contained in the Starbucks™ Shared Planet™
Scorecard●

Total coffee purchases data contained in the Sustainable Prices section●

Organic coffee purchases data contained in the Certified Organic Coffee section●

Cocoa purchases data contained in the Cocoa section●

Electricity and gas usage data contained in the Energy Conservation section●

Greenhouse gas inventory – Scope 1 and Scope 2 emissions contained in the
Climate Change Strategy section

The Criteria used to evaluate the Data are contained in the sections of the Report
indicated above.
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Our examination was conducted in accordance with attestation standards established by
the American Institute of Certified Public Accountants, and accordingly, included
examining, on a test basis, evidence supporting the Data and performing such otherprocedures as we considered necessary in the circumstances. Those procedures aredescribed in more detail in the paragraph below. We believe that our examination
provides a reasonable basis for our opinion.

Our evidence-gathering procedures included, among other activities, the following:

●

●

●

●

●

●

Testing the effectiveness of the internal reporting system used to collect andcompile information on the Data identified above which is included in the Report;
Performing specific procedures, on a sample basis, to validate the Data identified
above, on site at Starbucks Coffee Trading Company buying operations in
Lausanne, Switzerland and Corporate headquarters in Seattle, Washington;
Interviewing partners (employees) responsible for data collection and reporting;and partners at retail store locations;
Reviewing relevant documentation, including corporate policies, management andreporting structures;
Performing tests, on a sample basis, of documentation and systems used tocollect, analyze and compile the Data identified above that is included in theReport, andConfirming certain of the Data identified above to third party reports.

In our opinion, the Data for the fiscal year ended September 28, 2008 is fairly presented,
in all material respects, based on the Criteria indicated above.

Seattle, Washington
March 19, 2009www.mossadams.com

Green Stores

Building greener stores.

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Starbucks Shared Planet - Our Responsibility

This video highlights the collaboration between Starbucks design team and local artists and craftsmen

We're always looking for ways to improve the environmental performance of our stores.
It’s a big part of our commitment to environmental stewardship – it’s also one way we’re
working to significantly reduce our environmental footprint by 2015, a Starbucks™
Shared Planet™ goal.

For us, 'greening' our stores means designing, building and operating them in ways that
reduce our impact on the planet. We're incorporating everything from sustainablebuilding materials and furnishings to energy- and water-efficient measures into our store
designs.

What we've been doing.
One big first step toward our goal is to have all new company-owned stores worldwide
be third-party certified green, using the LEED® green building program, beginning in late
2010. LEED – which was developed by and is overseen by The U.S. Green Building
Council (USGBC) – is short for Leadership in Energy and Environmental Design.

LEED was originally established to green-certify individual office buildings, but it needed
to be adapted for retailers – especially for retailers like Starbucks that build multiple,
similarly designed buildings.

Since 2001, we've helped lead the work with other retailers and the USGBC to create asystem to certify retail stores and store prototypes. This volume-certification process will
pre-certify our green stores at the design, construction and operational strategy level.
This will permit efficient and effective expansion of our green store program to multiple
locations. We'll then be held accountable through spot checks and continued review toensure we are meeting the high standards we’ve set for ourselves. This process will
increase our certification speed and help us reach our goal by 2010. We also believethat green stores will substantially reduce operating costs.

Hurdles.
Our ongoing efforts to green our stores include a mix of design
elements:
Conserving energy by allowing air-conditioned stores to reach 75 degrees
Fahrenheit instead of 72 on warm days
● Saving water by using high-blast nozzles to clean pitchers instead of runningwater● Installing low-flow valves throughout the store● Installing cabinetry made from 90 percent post-industrial material (whereavailable), with no added formaldehyde● Improving lighting efficiency● Using recycled flooring tiles● Using wood products that are Forest Stewardship Council–certified (whereavailable)● Using paints with lower amounts of volatile organic chemicals●

We’re excited about our ambitious goal to certify all our new company-owned stores
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green beginning in late 2010. However, the journey is not without its challenges.

For example, in China where we plan to build green certified stores, Forest StewardshipCouncil–certified lumber is not readily available without shipping it from overseas. That
comes with a large carbon footprint. So in this case, we’re choosing to go with productsthat can be sourced regionally to lower our carbon impact, knowing we’ll have to lookelsewhere for additional LEED credits.

We acknowledge there are tradeoffs with every decision, and we feel that ultimately thisis the right decision. We’ll continue to work with the U.S. Green Building Council as they
address these same challenges to come up with the most sustainable building solutions
for our business.

We’ve heard from thousands of our customers that having recycling available in ourstores should be a top priority. We agree it’s important – and that’s why one of our
Starbucks™ Shared Planet™ goals is to have recycling available in all our stores by
2015. But we also understand that the energy our stores use to operate the heating andair conditioning units, store lighting and coffee-brewing equipment has a far greater
impact on our total environmental footprint than our cups and packaging. We’re looking
into ways to help our customers and partners (employees) understand that addressing
recycling is really just the first small step in minimizing our stores’ environmental
impacts.

What we’re working on.
We’re working to ensure all of our new company-owned stores worldwide will be
LEED certified beginning in late 2010. Initially, we are piloting specific strategies inseveral new stores that are registered to be LEED certified.

In spring 2010 we’re planning to open 10 pilot stores that will be registered LEED
certified in six different bio-regions. These pilots will test a variety of strategies toreduce energy and water use without adding significant additional store
construction costs.

A few of these specific strategies within the environments we control include:●

Adjustable low-energy lighting systems●

Continuing to use green materials and finishes●

Recycled construction, finish and casework materials●

Dual-flush toilets and low-use water faucets●

Drought-resistant native landscaping that may remove the need for irrigation
after the first 12 months

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Tackling Climate Change

Addressing climate change is a big priority for Starbucks. Coffee farmers are reporting
shifts in rainfall and harvest patterns that are hurting their communities and shrinking theavailable usable land in coffee regions around the world. We believe now is the time toincrease our investments in solutions and strategies that address this crisis.

The steps we're taking not only address climate change for future generations – they help
ensure the supply of high-quality coffee that our customers expect from us into the future.

We're working to significantly shrink our environmental footprint by conserving energy andwater, reducing the waste associated with our cups, increasing recycling and incorporating
green design into our stores. We're also working with Conservation International to address
climate change on coffee farms.

Starbucks total scope 1 and 2 greenhouse gas emissions from roasting plant operations, store operations and company-owned
jets and vehicles in fiscal 2007 were 913,000 metric tons of carbon dioxide equivalents. Because 75 percent of our greenhousegas emissions come from the electricity used in our stores, offices and roasting plants, we are focusing our efforts on energy
conservation.
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What we've been doing.
Starbucks has been implementing a climate change strategy since 2004, focusing on
renewable energy, energy conservation, and collaboration and advocacy. In fiscal 2008, we
conducted our second carbon footprint study to see if our biggest impacts, as measured in
2003, remained the same – and indeed they have. So we'll continue to focus our efforts inthese three areas.

Some steps we took in fiscal 2008 include:

1. Renewable energy: We purchased renewable energy credits equal to 20 percent of
the electricity for company-operated stores in the U.S. and Canada. This is theequivalent of the electricity used by more than 18,000 homes each year in the U.S.
Learn more about our efforts to use renewable energy.
2. Energy conservation: Our stores used slightly more energy per square foot in fiscal
2008 than the previous year. We are optimistic, however, that we'll see significant
improvements in this trend starting next year, as a result of the opportunities we
identified in our recent energy audit. Learn more about our efforts to conserve energy.
3. Collaboration and advocacy: We recognize that we aren't alone in our work toaddress climate change. In 2008, we announced a renewed multi-year partnershipwith the nonprofit Conservation International to help coffee farmers protect standing
forests and restore degraded landscapes surrounding their farms. It's an important
step, because 20 percent of the world's carbon dioxide emissions come from burningand clearing forests – more than is released by all cars, trucks, planes, trains andships, combined.
We have also joined with Nike, Timberland and other U.S. businesses in calling forstrong U.S. climate change and renewable energy legislation. As charter members of
BICEP (Business for Innovative Climate and Energy Policy), we believe climatechange will impact all sectors of the economy and that various business perspectives
are needed to provide a full spectrum of viewpoints for solving the climate and energy
challenges facing America.

Hurdles.
The electricity we purchase for our stores is still our biggest contributor to climate change.
We are investing in new lighting, HVAC (heating, ventilating and air conditioning) and otherequipment to address this area in the way we design our stores.

What we're working on.
Addressing climate change will not be easy, but it is a big priority for us. We
believe that governments, businesses, non-governmental organizations andindividuals all can take action to have an impact. Starbucks is committed to thefollowing goals to make a meaningful reduction in our greenhouse gas emissions:

●

●

●

●

Making our company-owned stores 25 percent more energy efficient by 2010
and upgrading our existing stores to use less energy as we renovate themOpening our newest coffee roasting plant in South Carolina with the latest
emissions control technologies on our roasters
Continuing to focus on the aspects of our store operations that impact our
carbon footprint, such as refrigerants in our coolers and ice machines andnitrous oxide in our whip cream dispensers
Championing tropical rainforest protection in coffee-growing regions as a way
to mitigate climate change and support coffee farming communities

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About the numbers.
For fiscal 2007 we conducted an inventory of our greenhouse gas emissions based on theGreenhouse Gas Protocol developed by the World Resources Institute. We expanded thescope of our 2007 carbon footprint study to include international company-owned and jointventure stores, using the criteria established in the 2006 Intergovernmental Panel on
Climate Change Guidelines for National Greenhouse Gas Inventories to define thematerials measured in our footprint. Sources included company-operated and joint-venture
U.S. and international retail stores, coffee roasting and administrative operations. Our 2003
inventory did not include international stores or emissions from store operations.

Energy Conservation

Reducing our energy use.
Energy use makes up roughly 80 percent of our entire carbon footprint. That makes it oursingle biggest impact on the climate – and our single biggest opportunity to make significant
improvements. Conserving energy and increasing efficiency are two important measures we
can take to reduce our contribution to climate change.

What we've been doing.

●

●

●

We learned more about how we use energy.
We completed a comprehensive energy audit – monitoring all aspects of energy
usage around the clock among a representative sample of 19 Starbucks stores in the
U.S. over a six-month period. As a result of what we learned, we’re investing in newlighting and improving the efficiency of HVAC (heating, ventilation and cooling)systems and other equipment.
We purchased renewable energy.
During fiscal 2008, we continued to purchase renewable energy in the amount that
represents 20 percent of the total electricity used in our company-operated stores in
the U.S. and Canada. We worked with 3Degrees to buy wind renewable energy
certificates for more than 211 million kilowatt hours, equivalent to the electricity usedby more than 18,000 U.S. homes.
We supported green power.
Starbucks is a member of the World Resources Institute Green Power Market
Development Group and the U.S. Environmental Protection Agency’s (EPA) GreenPower Partnership. This voluntary program supports the organizational procurementof green power by offering expert advice, technical support, tools and resources.

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We advocated for climate and energy legislation.
Starbucks is a charter member of BICEP (Business for Innovative Climate and Energy
Policy). Working with other leading U.S. businesses, we hope to help spur the clean
energy economy and reduce global warming pollution.

Hurdles.
In spite of our efforts to conserve energy, our store energy use increased in fiscal 2008 as
we added energy-consuming equipment to accommodate new products. We are optimistic,
however, that we’ll see significant improvements in this trend starting next year as a resultof several opportunities we identified in our recent energy audit.

What we’re working on.
We are working to improve our environmental footprint through minimizing ourenergy use and utilizing renewable sources of energy.

Our goals include:●

Fifty percent of the energy used in our company-owned stores will come from renewable

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sources by 2010
Reducing our greenhouse gas emissions by making our company-owned stores 25 percent
more energy efficient by 2010

Reducing Water Use

Water is a precious natural resource. It is also a key ingredient in most of our beverages,
so it’s necessary for operating our stores. We’re working to better understand how we use
water, and how we can use it more responsibly.

What we’ve been doing.
A great deal of the water we use in our stores is to make coffee and tea beverages and for“back of the house” operations, such as running dishwashers and ice machines.

We work to include water-saving technology in our equipment specifications. In our U.S.
company-owned stores, our mechanical dishwashers use less than one gallon of water per
cycle through high pressure spray arms. And we train our partners (employees) to keep the
refrigeration coils on ice machines clean to reduce the amount of latent heat from themachines and minimize ice melt.

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In many markets, we use a blast of higher-pressure water to clean blender pitchers insteadof an open tap. We’ve also programmed our espresso machines to dispense less water
when rinsing espresso shot glasses.

Hurdles.
We balance water conservation with the need for customer and partner health and safety.
For many years, we’ve been using dipper wells (or sanitizing sinks) to store the spoons we
use to prepare beverages. Dipper wells use a continuous stream of potable running water
to rinse away food residue, helping keep utensils clean and preventing bacterial growth.
Our effort was focused on ensuring that we would meet or exceed regulatory requirements
and internal food safety standards.

We recognize that the amount of water used by the dipper well system is unacceptable.
We’ve been working since 2007 to find a solution that balances the need for water
conservation and customer safety. In 2008, we intensified our search for alternative
methods that can achieve both objectives.

In 2009, we started implementing new operational alternatives to the dipper well systemthat we believe will significantly reduce our water usage across the globe. We plan to begin
installing hand meter systems in U.S. stores starting in spring 2009 that will use less water
than the dipper well system. In locations where the hand meter system is not available,
alternatives have been made available, including the new “single spoon, single pitcher”
procedure. Both solutions reduce water consumption while still protecting customer safety.

What we’re working on.
We’re committed to significantly reducing our water usage. In addition to finding analternative to dipper wells, in 2009 we’ll conduct a comprehensive water footprint
audit to evaluate our store design, equipment and operations. We’ll use thesefindings to better understand our water usage, identify opportunities to reduce ouroverall water consumption and set measurable goals.

Recycling

More recycling. Less waste.

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Starbucks is committed to significantly reducing the waste our stores generate –especially when it comes to recycling. We know this is important to our customers, to us
and to our planet. That's why we've set a goal of having recycling available in 100 percent
of our stores where we control waste pick-up by 2015.

Last year, 70 percent of our stores recycled at least one type of waste where commercial
recycling is available – but it's often happening behind the counter, out of sight tocustomers. Recycling is dependent on the availability of commercial recycling services
where our stores are located. Unfortunately, some local communities that offer
comprehensive residential recycling may provide minimal or no commercial recycling.

Our customers are also concerned with the waste generated from our paper and plastic
cups, which are not currently recyclable in many communities. We're concerned too, andwe're committed to coming up with innovative solutions that will make our cups universally
recyclable or compostable.

In 2008, Starbucks (and not the landlord) was responsible for providing waste removal services at 3,194 stores in North
America. Of these stores, 70 percent (or 2,222 stores) are recycling at least one commodity, mainly cardboard. This is a three
percent decrease from fiscal 2007.

Of the 972 stores that do not recycle, 57 percent do not have the interior/exterior space needed for bins and dumpsters, andeight percent do not have commercial recycling available in their area. Other reasons include the lack of landlord permission
and service termination by the recycler due to continual contamination (most likely done by unauthorized users). In a few
instances services were cancelled by store partners (employees).
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What we've been doing.
One way we reduce the amount of waste our stores add to landfills is by composting usedcoffee grounds. At a typical Starbucks store, coffee grounds make up more than one-thirdof the waste stream by weight (see Starbucks Waste Audit table below).

We introduced Grounds for Your Garden in 1995, which offers customers complimentaryfive-pound (2.27-kilogram) bags of used coffee grounds to enrich garden soil. And wherecommercial composting is available, many stores are able to divert other food waste andcoffee grounds from the landfill as well.

Hurdles.
Starbucks 2005 Waste Audit – take a closer look at what makes up
a typical Starbucks store's waste.

BY VOLUME

BY WEIGHT

30% cardboard

34% coffee grounds

14% milk jugs & syrup bottles

12% cardboard

14% paper waste

12% food waste

8% paper cups

7% paper waste

5% other dairy containers

6% newspaper

29% other waste

29% other waste

The world of garbage and recycling is complicated. We'd like the solution to be as simple
as putting recycling bins in all of our stores. Unfortunately, residential garbage collection
and recycling is usually controlled by city or county governments who either manage it
directly or contract it out to private haulers. These local authorities can provide subsidies
and sometimes mandate whether or not the haulers have to collect paper, glass, plastics
or compostable waste.

For commercial recycling (such as at a Starbucks store), the items that get collected arealmost always driven by the open market. This means that if the haulers can get a goodprice for recyclable materials (cardboard, glass, plastic, food-contaminated paper
products), they'll collect it from local businesses. But if they can't get a good price – orwhen there's not a critical mass of materials to collect – they may not collect thembecause there's no financial benefit for them.

One other significant challenge is the fact that half of our stores are located in leased
spaces where we don't control waste collection and recycling. Our landlords often
determine whether tenants can recycle based on space availability and commercial
recycling services.

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What we're working on.
We're committed to finding innovative solutions to overcome these challenges. In
fact, by 2015 we'll have recycling available in all of our stores where we control
waste collection. As a first step, we are testing front-of-house recycling in several
markets in 2009.

In the meantime, here are a few things you can do to help.
1. Learn more. Ask your store manager if their store recycles – you may beable to recycle through a back-of-house recycling program.
2. Hold your local government accountable. If commercial recycling services
are not available in your community, encourage local government officials to
address the issue. Often the same haulers who pick up residential recycling
can provide commercial services too – if the right incentives are provided.
3. Bring your own mug. Bring your reusable commuter mug to Starbucks to
get 10 cents off the price of your drink at our company-operated stores in the
U.S. and Canada. Or if you are planning to enjoy your beverage in our store,
ask for your drink in a "for-here" mug.

Greener Cups

The quest for the 100% recyclable cup.

The Starbucks cup is a widely recognized symbol of our company. The environmental
impact of our disposable paper and plastic cups is a big area of concern to our customers
and we are committed to significantly reducing this impact by 2015.

What we’ve been doing.
Starbucks has spent more than ten years looking for ways to decrease the environmental
impact of our disposable cups. In 1997 we developed our recycled-content cup sleeve as away to curb the use of “double cupping” to protect customers from hot beverages and also
to reduce our environment impact.

In 2006 we launched the industry’s first hot beverage paper cup with post-consumer
recycled fiber. And in 2008, with the launch of our Vivanno™ beverages, we rolled out a
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new plastic cup that has less of an environmental impact than our original plastic cups.

We know we can do more, and we want to make thoughtful choices about our disposable
cups and other packaging. This means not simply buying an “off the shelf” solution, but
assessing the true environmental impacts our packaging has throughout its lifecycle anddeveloping innovative solutions.

Reusable mugs and cups.
A lot of our customers are also working to reduce their own environmental impact even as
we are. To help them help us, we offer a 10-cent discount in the U.S. and Canada toencourage customers to use their own reusable mugs for their beverages. Customers
staying in a store can also request that their beverages be served in a ceramic mug.

Our U.S. and Canadian customers increased their use of reusable mugs to nearly 22 million
times during fiscal 2008 – representing nearly one million pounds (454,000 kilograms) of
paper saved. The percentage of total transactions where reusable mugs were usedremained constant at 1.3 percent.

We think good habits should start with us. So we’ve challenged our U.S. partners(employees) to use only for-here cups for their own beverages – which would save morethan 39 million cups per year. We’ve also asked them to encourage for-here customers touse ceramic cups and commuter mugs when they are taking their beverage to go.

Hurdles.
Reducing the environmental impact of our cups depends on the success of two interrelated
efforts: developing recyclable cups and dramatically increasing our customers’ use of
reusable mugs.

Increasing the use of reusable mugs has been a challenge in recent years. Part of this issimply a lack of awareness of this choice. We can change that. Our goal is that 25 percent
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spread the news to our customers. We also intend to re-establish ceramic mugs as theglobal standard for our in-store beverages.

What we’re working on.
Our goal is that by 2015 100 percent of our cups will be reusable or recyclable. To
help achieve this goal, we’ve made the following commitments:

●

●

●

●

●

Developing and launching recyclable hot and cold cups by 2012
Reducing paper and plastic cup usage in our stores by 25 percent by using
reusable mugs instead
Having recycling available in our storesRe-establishing glassware or ceramic mugs as our global standard for ourcustomers who enjoy their beverages in our stores
Converting all of our plastic cups to polypropylene in our stores in North
America and Latin America, and Foodservice accounts by 2009

Paper Cups

Innovating for a new paper cup.
Our paper cups represent
more than half of all thepaper Starbucks buys, andwe’ve spent more than ten
years looking foropportunities to decrease
their environmental impact.
For example, we spent
several years working with
our suppliers to pioneer theindustry’s first hot beverage cup with 10 percent post-consumer fiber (PCF). Since adding
the new PCF cups to stores in the U.S. and Canada in 2006, we’ve saved more than 44,000
tons of virgin wood fiber, the equivalent of more than 300,000 trees.

Resource savings from post-consumer fiber cup
FISCAL YEARRESOURCE SAVINGS

EQUIVALENCY

2008

17,153 fewer tons of virgin wood fiber

118,754 trees

2007

15,966 fewer tons of virgin wood fiber

110,000 trees

2006

11,300 fewer tons of virgin wood fiber

78,000 trees

Source: Environmental Defense Fund calculation by www.papercalculator.org
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We're proud of the trees saved through the PCF cup. But these cups cannot be recycled inmany paper recycling systems because of their plastic liner, which provides rigidity andprotects the paper from the hot beverage.

As a result, we’re now working toward a goal of 100 percent of our cups being reusable orrecyclable.

What we’ve been doing.
100% reusable or recyclable cups
We are working to develop a recyclable paper cup that minimizes its environmental
impact over its entire lifespan – the materials used to make it, the impact of the way
it’s manufactured, and the way it is disposed of after use. Our first step will be toengage key stakeholders (manufacturers, non-governmental organizations andgovernment officials) to get their feedback on potential solutions.

Other paper products
Starbucks considers environmental impacts when we purchase paper, and we’ve
tracked the recycled and unbleached fiber content of our paper purchases for sevenyears. Along with paper cups, our paper uses includes pastry bags, napkins,
packaging and office paper (see charts above). As members of the Sustainable
Packaging Coalition we’re actively exploring more sustainable alternatives toconventional packaging and evaluating ways to analyze material choices.

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Hurdles.
In fiscal 2008, Starbucks purchased 2.7 billion paper cups. The move to a recyclable cup will
be groundbreaking – but the scale and complexity of the effort is a significant challenge. We
must be sure that the cups can be ethically sourced and responsibly manufactured. We’realso working to make sure we consider how the cups are disposed after they are used. And
we must ensure that recycling is available in our stores. Finally, that means we must also
work with communities to make sure our cups can be recycled or composted.

What we’re working on.
Our goal is that by 2015, 100 percent of our cups will be reusable or recyclable. To
help achieve this goal, we’ve made the following commitments:

●

●

●

●

Supporting the development of and launching a recyclable cup by 2012
Reducing cup usage in our stores by 25 percent by using reusable mugs
insteadHaving recycling available in our stores where commercial recycling isavailable
Re-establishing ceramic mugs as our global standard for our customers who
enjoy their beverages in our stores

Plastic Cups

The search for a new plastic cup.
The environmental impact of our plastic cups
and other packaging is definitely something
we’re concerned about. Starbucks sells morethan one billion cold beverages every year, so
any improvement we can make in reducing thegreenhouse gas emissions caused fromproducing our cups has a big impact.

Our cold cups have traditionally been madefrom the industry-standard polyethylene
terephthalate (PET or PETE) plastic – identified by the No. 1 symbol on the bottom of
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the cup. Although it’s the same PET used for most beverage bottles, the different
manufacturing processes between cups and bottles makes PET cups difficult to recycle
in most communities. Unfortunately, this means most recyclers won’t accept any PET
cups for recycling, as they have little value in the commercial recycling market.

What we’ve been doing.
In 2008, we asked an outside group of external lifecycle scientists to produce a peerreviewed study evaluating the entire environmental impact lifecycle of our cups – fromextracting the raw materials, converting the plastic resins into cups, transporting them,using them and finally disposing of them. They discovered that polypropylene (PP) cups
use 15 percent less plastic than PET cups and emit 45 percent less greenhouse gasses
during their production. Unlike PET cups, PP cups (identified with the No. 5 symbol) can
also be co-mingled with other PP containers, such as margarine tubs and yogurt
containers without impacting their ability to be recycled.

This information encouraged us to switch our plastic cups. In 2008, Starbucks began thechangeover to polypropylene (PP) cups with the launch of our new plastic cups forVivanno™ nourishing blends. We are now transitioning our standard plastic cups,
straws, lids and cutlery to the new PP, reducing the number of different plastic types
coming out of our stores.

Hurdles.
The reduced impact of switching to PP cups is a good step, but we recognize that they
are still a petroleum-based product. We also explored using the polylactide (PLA) plastic
resin, an alternative material made from corn, for our new cold cups as part of ourlifecycle impact assessment. Although PLA cups are accepted for composting in morecommercial facilities than plastic-lined cups, we are not rolling out the cup broadly
because it produces a slightly higher carbon footprint than its PP counterpart in the
manufacturing process.

Additionally, studies by organizations such as the World Bank, International Monetary
Fund and Oxfam have indicated that they believe the diversion of food corn to non-foodapplications (such as fuel and bioplastics) has been a primary factor behind the recent
spikes in global food prices. We believe that weighing these lifecycle impacts andbenefits of compostability versus the costs of carbon footprint and impact on the global
food supply are all important factors in deciding which materials we choose for our cups.

What we’re working on.
Our goal is that by 2015, 100 percent of our cups will be reusable or recyclable. To
help achieve this goal, we have made the following commitments:●

Developing and launching a recyclable cup by 2012●

Having recycling available in our stores●

Reestablishing ceramic mugs as our global standard for our customers who
enjoy their beverages in our stores

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Converting all of our plastic cups to polypropylene in our stores in North
America and Latin America, and Foodservice accounts by 2009

Starbucks and Fair Trade

Fair prices, a better quality of life.

We have purchased and sold Fair Trade Certified™ coffee for nearly 10 years. The goalof Fair Trade certification is to empower small-scale farmers organized in cooperatives
to invest in their farms and communities, protect the environment, and develop thebusiness skills necessary to compete in the global marketplace.

Starbucks began purchasing Fair Trade Certified coffee in 2000. And we have beenrecognized for helping grow the market for Fair Trade Certified coffee in the U.S. andbringing it to consumers.

In 2008, we announced that we're expanding our work with Fair Trade to support smallscale farmers. As part of this effort, Starbucks will increase our purchases in 2009 toreach 40 million pounds (18 million kilograms). This will make us the largest purchaserof Fair Trade Certified coffee in the world.

What we've been doing.
Starbucks, TransFair USA and the Fairtrade Labelling Organizations International (FLO)
announced a groundbreaking initiative in late 2008 to be launched in fiscal 2009 thatbuilds upon our shared history of support for small-scale coffee farmers, theircommunities and the environment.

We're working to leverage the strengths of our respective coffee-buying programs tobenefit even more farmers. This includes exploring ways to integrate the inspection andauditing processes for Fair Trade certification and C.A.F.E Practices; increasing
efficiencies in training farmers on sustainable coffee production and implementing our
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respective programs; and buying more coffee from suppliers participating in bothprograms.

With joint announcements in October 2008, TransFair USA and FLO join Conservation
International as key partners of the Starbucks™ Shared Planet™ commitment toethically source our coffee.

Total Purchases of Fair Trade Certified™ Coffee – Fiscal 2008
Starbucks global purchases of Fair Trade Certified coffee totaled 19 million pounds (ninemillion kilograms), representing approximately 10 percent of global Fair Trade Certified
coffee imports and 20 percent of U.S. Fair Trade Certified coffee imports in fiscal 2008.
This equaled five percent of Starbucks total coffee purchases.

Hurdles.
Together, Starbucks and Fair Trade have had good success working with farmers toencourage good agricultural and environmental practices and in improving the prices
farmers can receive for their coffee – particularly in Latin America.

But both groups have recognized the difficulty of expanding their programs with farmers
in the Africa/Arabia and Asia/Pacific coffee-growing regions, where locations of farms
can be extremely remote, and the coffee industries and infrastructure pose greater
challenges due to supply chain complexities.

Specific challenges that we are committed to working together to overcome include:

●

●

●

Making field inspections more efficient for farmers, mills and suppliers. The
proliferation of certification programs is frustrating for many farmers because ofsometimes conflicting requirements and cost of audits. We hope to solve this by
unifying the inspection processes for Fair Trade inspections and C.A.F.E.
Practices verifications. Our end goal is that the farmers who implement responsible
growing practices and socially responsible working conditions can qualify for both
C.A.F.E. Practices and Fair Trade certification labeling in the marketplace.
Developing efficient systems for licensing and labeling Fair Trade Certified coffee
so that Starbucks can offer Fair Trade Certified products globally under one
recognizable Fair Trade brand for customers around the world.
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need, but this initiative will further help farmers implement changes and benefit
from both the C.A.F.E. Practices and Fair Trade systems.

What we're working on.
Increasing our purchases of Fair Trade Certified coffee will result from the criticalsteps (outlined above) in our collaboration toward achieving our Starbucks™
Shared Planet™ goal of 100 percent responsibly grown, ethically traded coffee by
2015.

We're working to double our purchases of Fair Trade Certified coffee in 2009. And,
we've also committed that 100 percent of the espresso coffee sold – both as wholebean and in espresso-based beverages – in Starbucks stores in the UK and
Ireland will be both Starbucks™ Shared Planet™ and Fair Trade Certified by theend of 2009.

*TransFair USA is one of the 23 member organizations that comprise Fairtrade Labelling Organizations
International. In the U.S., TransFair labels certified products with its Fair Trade CertifiedTM label to indicate that
Fairtrade standards have been met, as does TransFair Canada. In other countries, member organizations use
the FAIRTRADE certification mark to label Fairtrade products.

Starbucks and Conservation
International
Supporting farmers, combating climate change.

According to Conservation International (CI), there are 34 biodiversity hotspots in theworld –areas that are some of the Earth's most biologically rich and most endangered
eco-regions. One of these vital biodiversity hotspots is in Chiapas, Mexico, the area
where 10 years ago we started working with CI on a project to encourage local coffee
farmers to use responsible farming practices and to also help protect the environment.

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Like CI, we believe responsible coffee production contributes to higher quality coffee andis better for the environment. It also provides a direct benefit to farmers and theircommunities. Farmers are able to earn the higher prices that premium-quality coffee
commands, while also implementing more ecologically sound growing practices that
help sustain the health of the coffee-growing areas and surrounding forests.

Over time, and with CI's help, our entire approach to responsibly grown, ethically tradedcoffee has been strengthened. Today our approach is based on a comprehensive set ofenvironmental, social, economic and quality guidelines, Coffee and Farmer Equity (C.A.
F.E.) Practices, developed in collaboration with CI. These are the principles under which
our Starbucks™ Shared Planet™ coffees are purchased, and our coffees that carry thislogo are responsibly grown and ethically traded.

Starbucks and CI have also collaborated to provide loans to farmers through Verde
Ventures, a loan fund serving farmers in areas of high biodiversity and withincommunities working to conserve critical ecosystems. These loans help farmers make
improvements to their farms and invest in more sustainable measures.

We asked CI to review our C.A.F.E. Practices suppliers' progress from 2008 and provide
some additional feedback and insight, so we can continue to learn what is working best
and to help our suppliers improve.

Starbucks and CI are working proactively to affect climate change by offering farmers incentives to prevent
deforestation beginning with pilot programs in Sumatra, Indonesia, and Chiapas, Mexico.

The link between coffee farmers and the planet.
Together with CI, we are addressing one of the most pressing environmental challengesof our time – global climate change – which threatens the natural resources andlivelihoods of farming communities.

The same tropical forest regions that produce the world's best coffee and sustain
millions of farmers also extract and store vast amounts of carbon dioxide. The problem
is, these forests have been disappearing at a rapid rate. In fact, the burning and clearingof tropical forests emits at least 20 percent of all greenhouse gases that are cited as acause of climate change. That's more than all the world's cars, trucks and airplanes
combined. This causes changing rainfall patterns, increasing drought and rising diseaserisks – all directly impacting the surrounding coffee-growing regions and the people who
depend on these lands for their livelihoods.

You're already helping.
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Starbucks Shared Planet - Our Responsibility

Every time customers buy Starbucks™ Shared Planet™ coffees they can be assured
that they are contributing to better environmental practices and a more stable future forcoffee farmers.

We introduced our first Starbucks™ Shared Planet™ coffee, Pike Place™ Roast, in U.S.
stores in March 2008. A series of offerings followed in autumn 2008, starting with
Espresso Roast in our European, African and Middle Eastern markets. We will continue
to roll out more of these coffees, moving toward our goal of having 100 percent of ourcoffee being responsibly grown and ethically traded by 2015.

We also offer our customers direct ways to join our efforts to address climate change
and support coffee farmers. On Earth Day in April 2008, our customers had a chance togive back to the environment just by using their Starbucks Card at participating
Starbucks stores in the U.S. and Canada. With each Starbucks Card purchase that day,we donated five cents to CI to plant trees in Chiapas, Mexico. In this one simple action,
Starbucks customers helped us donate money to plant thousands of trees in an areathat has suffered from deforestation. We hope to bring more such opportunities to ourcustomers in the future.

Addressing climate change on coffee farms.
There is literally no time to waste. So in 2008 Starbucks and CI announced a renewed
five-year relationship, joining forces to tackle climate change head-on and to measure
the impact of our responsible coffee growing methods, C.A.F.E. Practices, on farmers
and the environment.

Starbucks committed $7.5 million over the first three years, with more than half of thisfunding aimed at project sites in Mexico and Indonesia. Our plan is to help implement
the findings from these projects in other coffee-growing communities in the Asia/Pacific,
Africa/Arabia and Latin America growing regions.

Efforts will focus on expanding farmer participation in C.A.F.E. Practices and leveraging
our guidelines to support farmer activities, protect important habitat for the world's plant
and animal species, and help farmers directly address the potentially devastating causesof climate change.

Starbucks Shared Planet
Principles
Our goal – 100% responsibly grown, ethically traded.
In 2008, we put a major stake in the groundby making a public commitment that all of
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Starbucks Shared Planet - Our Responsibility

ethically traded by 2015. This is our goal for
ethical sourcing under Starbucks™ Shared
Planet™ – and our pledge to you. Readabout our progress.

Starbucks™ Shared Planet™
coffee.
We have always worked to buy our coffee in a way that respects the people and places
that produce it. It's simply what we believe to be right. We've also established specificenvironmental, social, economic and coffee quality principles. These principles are thefoundation of our commitment to ethical sourcing under Starbucks™ Shared Planet™.
Coffees that are responsibly grown and ethically traded under these principles are called
Starbucks™ Shared Planet™ coffees.

Over the last decade, Conservation International has helped us develop guidelines that
address our principles for ethical sourcing. Called Coffee and Farmer Equity (C.A.F.E.)
Practices, these guidelines help our farmers and suppliers fulfill the principles ofStarbucks™ Shared Planet™ coffee offerings. C.A.F.E. Practices is a comprehensive setof measurable standards, including 24 criteria supported by more than 200 environmental
and social indicators.

In 2008, seventy-seven percent – 295 million pounds – of the coffee we bought waspurchased from suppliers who have been verified and approved under C.A.F.E Practices
guidelines. To gain approval, suppliers must be evaluated by an independent third party
to demonstrate they are in compliance with our zero-tolerance standards and are making
progress toward the implementation of the guidelines. Find out how our suppliers scored.

Good for farmers – and the earth.
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Starbucks Shared Planet - Our Responsibility

Responsibly grown, ethically traded coffee also means we're working with farmers to
produce coffee in ways that help provide benefits to their business, their communities andthe environment.

Since establishing our first Farmer Support Center in Costa Rica in 2004, we've beenable to work more directly with farmers in the field, encouraging their use of the best
agricultural practices. In 2008, 1.2 million farmers and workers were impacted by C.A.F.
E. Practices.

Also in 2008, we expanded our on-the-ground presence in Africa by hiring a director ofagronomy to oversee the new Farmer Support Center in Rwanda. We also remaincommitted to opening a Farmer Support Center in Ethiopia at some point in the future.

Read how coffee farmers helped rebuild East Timor and joined C.A.F.E. Practices.

Starbucks™ Shared Planet™ Ethical Sourcing Principles
Our ethical coffee-sourcing principles have four areas of focus.

Product Quality (requirement):
All coffee must meet Starbucks standards of high quality.

Economic Accountability (requirement):
Transparency is required. Suppliers must submit evidence of payments
made throughout the coffee supply chain to demonstrate how much of theprice Starbucks pays for green (unroasted) coffee gets to the farmer.

Social Responsibility (evaluated by third-party verifiers):
Measures in place that concern safe, fair and humane working conditions.
These include protecting the rights of workers and providing adequate
living conditions. Compliance with the indicators for minimum-wage
requirements and addressing child labor/forced labor and discrimination is
mandatory.

Environmental Leadership (evaluated by third-party verifiers):
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and energy, preserve biodiversity and reduce agrochemical use.

Farmer story

Renewing a partnership, rebuilding a community – Cooperativa
Café Timor, East Timor
Cooperativa Café Timor (CCT) is acoffee farmer cooperative formed in
1995 with the intention of raisingquality standards so local coffee
farmers could get higher prices. And
it worked – soon after CCT was
established, Starbucks began buying
the co-op's coffee and paying about

Starbucks helped improve primary health services in

30 percent or more than the
Estado, Dukurai, Lissapat and Manelobas villages so

commodity market price. Conditions
more expectant and new moms would have accessfor local farmers improved as
to quality care.

planned – until a setback in 1999
when violence erupted after East Timor sought independence from Indonesia.

The new government had the task of rebuilding the local economy. Coffee is asignificant industry, with 25 percent of East Timor's population depending directly
on it for their livelihoods. CCT, which exports more than half the country's coffee, isparticularly vital not only to the more than 20,000 local small-scale farmers who aremembers, but to the nation as well.

CCT re-emerged as a voice in the Timor coffee industry, renewing its focus on
coffee quality. It became a Fair Trade Certified™ co-op in 2001, and two years
later began selling to Starbucks again. Today CCT is not only part of the
Starbucks™ Shared Planet™ coffee-supplier base, it is the largest single-source
producer of organic-certified coffee in the world.

In 2008, the Starbucks relationship brought added benefits to residents of four
remote villages within CCT's network. Through direct social investments, local
primary-health services were greatly improved with a focus on expectant and new
mothers and their infants, especially in the remote rural coffee-growing highlands.
Today, access to health services is a key benefit offered to CCT's vastmembership.

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Performance and Progress

Big vision, big results.

When we launched our original ethical coffee coffee-buying guidelines in 2001, our
vision was to ensure that the coffee we purchased from suppliers was responsibly grownand ethically traded. Our vision has not changed. In fact, our commitment has only
deepened.

Since then, we've established a big goal: By 2015, all of the coffee we purchase will be
responsibly grown and ethically traded. Given our ambitious goal, we're continuallyworking on ways to increase the supply of responsibly grown and ethically traded coffee.

As of today, the best indicator we have to gauge our progress is to track, year-over-year,
the amount of coffee we purchase under C.A.F.E. Practices. In fiscal 2008, wepurchased 295 million pounds, or 77 percent of our total coffee purchases, fromsuppliers who have been verified and approved under the C.A.F.E. Practices guidelines.

To be approved under C.A.F.E. Practices, suppliers must be evaluated by anindependent third party to demonstrate their progress and level of compliance with our
24 criteria and more than 200 supporting indicators.

Tracking our suppliers' progress.
For the first time, we're publishing the average compliance rates per criteria from theindependent verifications of coffee farms and coffee mills during the 2008 verification
period. Below we discuss some of the highlights and challenges we gleaned from thescores.

We also asked Conservation International, our partner that helped in designing C.A.F.E.
Practices, to review our suppliers' progress from 2008 and provide some additional
feedback and insights.

How our suppliers scored: a few highlights.
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Over the past four years, we've seen average supplier scores improve considerably
among the following criteria and set of indicators, especially in Latin America where themajority of C.A.F.E. Practices–approved suppliers currently are located.

●

●

●

Hiring practices and employment policies: When C.A.F.E. Practices was firstlaunched, some suppliers were not fully aware of local labor laws and their
obligation to uphold them. Since then, both suppliers and workers have gained abetter understanding of the local laws and regulations along with their respective
obligations and rights. Additionally, they better understand the C.A.F.E. Practices
guidelines requirements that in some circumstances address aspects that are
beyond those stipulated by local laws or regulations.
Ecological pest and disease control: Scores in this area have improved for two
reasons: First, we've been emphasizing the value of employing environmentallyfriendly pest and disease control techniques and teaching farmers how to
implement them. Second, is that the costs of agrochemicals have increased,making them a less attractive option for farmers to use on their farms.
Waste management practices: Scores for dry milling have greatly improved inthis area. Many mills are using coffee by-products as a fuel source for energy.
Much of the improvements can be attributed to the high cost of energy. Suppliers
are motivated to cut costs, and if it means making certain investments andmodifications to their infrastructure, they will. In the end, it's a responsible way toeliminate waste and reduce energy costs.

How our suppliers scored: some challenges.
Among the criteria and indicators for C.A.F.E. Practices, there are several areas wherescores are lower than we'd like. These include:●●

Protecting water resources: Water management is an important component of C.
A.F.E. Practices and something we stress in the training we provide to farmers.
But for many farmers, water resource management hasn't been a top priority,especially compared to other factors that may have a more direct impact on coffee
quality, like soil productivity and the shade canopy levels in the coffee fields.
Minimizing water consumption: C.A.F.E. Practices contains five indicators
related to water consumption at the wet mills that process the coffee cherries.
Scores in this area have been relatively low for a couple of reasons, both of which
could involve a considerable investment from millers in order to address: a lack ofproper equipment to monitor, manage and reduce the volume of water used in wet
milling processes; and a lack of resources to recycle used water.
In order to maintain coffee quality, yet still maintain a low ratio of water to coffee
cherry, new technologies are being implemented that reduce the amount of waterused – by as much as 90 percent, when compared to older technologies. But thesetechnologies cost money, an investment that farmers can't always make.

●

Farm management: Small-scale farmers tend to score low on farm management
indicators in large part because they don't typically develop annual work or
business plans, things that are emphasized in C.A.F.E. Practices. Through ourFarmer Support Centers, we're helping farmers develop plans for the steps they
can take to make improvements in the more challenging or costly areas of C.A.F.
E. Practices.

What we're doing to address the challenges.
We've recognized for many years that both the size and scale of a farm impacts a
farmer's ability to implement many of the social and environmental practices contained in
C.A.F.E. Practices. That is why we designed a smallholder scorecard in 2005 andincluded it again with the Version 2.0 release. This is a modified version of the genericscorecard that includes only the 74 indicators that are most relevant for conditions on
small farms of 30 acres (12 hectares) or less.

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Starbucks Shared Planet - Our Responsibility

cases, we encourage these suppliers to help the small farms with the implementation of
C.A.F.E. Practices by creating networks of coffee farmers. For these networks, there is aseparate set of indicators and a corresponding “Producer Support Organization”
scorecard designed to evaluate the extent to which the local supplier is providing
support to the small farms. The scorecard covers a variety of things, from providing a listof endangered species to helping farmers implement a system for maintaining receipts
when there isn't an existing process in place.

With the focus on helping small-scale farmers, we've seen big improvements in theirscores year-over-year. But, as always, more needs to be done. One hallmark of C.A.F.
E. Practices is that it was designed to drive continuous improvement. We don't see thisemphasis changing because there will always be advancements and more responsible
ways to grow and produce quality coffee.

Verification & Transparency

C.A.F.E. Practices third-party verification and transparency.
When we developed C.A.F.E. Practices with
Conservation International, we put measures inplace to help ensure the integrity of the program.
We believe that having farm evaluations
completed by third-party organizations andrequiring price transparency are essential to asystem that can provide our customers assurance
that the products they buy meet certain criteria.

Verification ensures integrity.
Since launching C.A.F.E. Practices in 2004, Starbucks has worked with Scientific
Certification Systems (SCS) to develop and oversee the third-party verification system.
Inspectors working for a diverse group of third-party organizations based in the Latin
America, East Africa/Arabia and Asia Asia/Pacific coffee-growing regions receive
training from SCS before they are approved to conduct C.A.F.E. Practices verifications.

SCS trainings focus on teaching inspectors how to evaluate coffee suppliers against C.A.
F.E. Practices criteria. In addition to offering these trainings, SCS oversees reporting by
the organizations, utilizing periodic audits to confirm the accuracy of reports submitted toStarbucks.

Becoming a C.A.F.E. Practices-verified supplier.
When suppliers apply to become C.A.F.E. Practices verified, they hire an independent
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third-party organization to evaluate the degree to which their practices are aligned withour comprehensive set of criteria in the areas of social responsibility, coffee growing andcoffee processing. Evaluations involve field inspections, worker interviews, fieldobservation and document review.

When the evaluations are completed, the verifier organization first sends the report tothe supplier and then to Starbucks for review. The evaluations in the report determine
the supplier's approval status in C.A.F.E. Practices.

Suppliers are verified on an on-going basis, generally every one to three years tocontinue their participation in the program. Continuous improvement through theimplementation of additional sustainable practices (a main objective of the program) canbe measured through evaluations on a regular basis.

A hurdle and a solution.
To be verified for C.A.F.E. Practices, a supplier or farmer must have an independent
inspection conducted of their supply chain. As with other verification or certification
programs, there is a cost involved for an audit, which may make it unaffordable for some
farmers. This challenge can be addressed if suppliers plan in advance, and preparematerials to make the inspection process more efficient.

Ensuring farmers and workers are paid equitably.
To help ensure that farmers receive an equitable share of the purchase price paid byStarbucks, a requirement for economic transparency is included in most of our coffee
contracts, including those contracts with suppliers who aren't yet participating in C.A.F.E.
Practices. This provision requires our suppliers to provide proof of payments made andprices paid throughout the coffee supply chain, often going to the farm level. Although
we make an effort to ensure we have such documentation for our contracts, thestructure of the coffee markets in some countries makes this difficult.

What we've been doing.
Building on the release of our updated C.A.F.E. Practices scorecard and a new online
verification reporting system in March 2007, SCS continued training on verification andreporting procedures to continually strengthen the verification process. Five newverification organizations were trained to work in the C.A.F.E. Practices program,including three in Latin America, one in East Africa, and one in Asia/Pacific.

At the end of fiscal 2008, the verification system involved 29 different organizations witha combined network of more than 150 inspectors who conducted verifications for
Starbucks in 18 countries around the globe.

See how suppliers scored.

C.A.F.E. Practices checks and balances
Inspectors

Verification

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Starbucks

Starbucks Shared Planet - Our Responsibility

Organizations

Certification

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Responsibility(SCS)

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Starbucks Shared Planet - Our Responsibility

assurance
report for
more
information.

The list of verifier organizations we've worked with.
The following third-party organizations were some of the organizations that were part ofour global network of approved verification organizations for C.A.F.E. Practices at theend of fiscal 2008. They evaluate coffee suppliers for performance against C.A.F.E.
Practices guidelines and help us ensure that coffee is being produced in anenvironmentally and socially responsible manner.
Africa Now
Africert
Aires de Cambio S.C.
Gagas DinamiGa Aksenta
BIOCertBio Latina Certificadora Latinoamericana
BIOTROPICO S.A.
CERES GmbHCONTROL UNION CERTIFICATIONS, LATIN AMERICACONTROL UNION CERTIFICATIONS, Indonesia
Eco-LOGICA S.A.
Fundación Interamericana de Investigación Tropical(FIIT)IMO Control Latinoamérica
Koffee Seedz Guatemala S.A.
Latcert S.A.
MACS Guatemala
María Regina Barillas
Mayacert, S.A.
Programas Sustentables para Certificación
SalvaNATURA
Sistemas Empresariales de Mesoamerica (SEM)
Søren Knudsen Group/Vaering Corp.
Suárez Solórzano S.A.
Tanzania Organics Limited

Scorecard

Download the PDF

Farmer Support Centers

Connecting in the •eld with our Farmer Support Centers.

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Starbucks Shared Planet - Our Responsibility

Making a personal connection in coffee-growing communities is important to the successof our coffee sustainability efforts.

When we formally launched C.A.F.E. Practices in 2004, we believed one of the best
ways to gain adoption of our new standards would be to spend time in the field, learning,
explaining and demonstrating the benefits to farmers. We appointed a team of agronomy
experts to start the first Starbucks Farmer Support Center in Costa Rica.

The decision turned out to be a good one. Working on-the-ground with farmers andsuppliers throughout Latin America, agronomists like Carlos Mario Rodriguez havehelped them to improve their coffee quality through the adoption of C.A.F.E. Practices.
This has also led to a 20 percent increase in farmers' yields per hectare, an 80 percent
reduction in the use of pesticides, and a 383 percent increase in the supply of highquality coffee purchased from approved C.A.F.E suppliers since 2005.

More support for farmers in Africa.
In 2008, we expanded our on-the-ground presence in Africa by hiring a director ofagronomy to oversee the new Farmer Support Center in Rwanda. Like Carlos Mario
Rodriguez, our director of agronomy in Central America, the staffs of both centers areworking with East African coffee communities to help farmers continue to improve theircoffee quality and increase the number of suppliers participating in C.A.F.E. Practices inorder to achieve our sustainability goals.

We had originally hoped that an additional Farmer Support Center in Ethiopia would be
open by now. However, delays in opening the regional center in Rwanda and the global
economic slowdown have made it challenging for us to move as quickly as we'd like. We
remain committed to opening a Farmer Support Center in Ethiopia, but do not have a an
opening date to share at this time.

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A day in the field with aStarbucks agronomist.
Carlos Mario Rodríguez is the directorof agronomy at the Starbucks Farmer
Support Center in Costa Rica. As a
Starbucks agronomist, Carlos works
hand-in-hand with farmers onsustainable crop production and soil
management. Below he shares what a day in his life is all about.

I start my day at 5:30 a.m. with a good cup of coffee and a half an hour walkaround the neighborhood. After that, I drive with my six-year-old daughter Elena to
her preparatory school in a small town called Grecia in Costa Rica.

From there, I travel to Coopeatenas, where Leopoldo, the cooperative's
agronomist, is waiting for me to visit four farmers to take soil samples from theircoffee farms. This allows us to tailor their fertilization strategy to each individual
plot of land using computer tools that facilitate an understanding of the soil
analysis.

By helping farmers learn how to take soil and leaf samples and to interpret theresults, Starbucks is helping them develop a "precision agriculture" model thatguides us to use the proper macro- and micro-nutrients in the amount that eachplot or farm needs.

This process is helping farmers to reduce the cost of production, correct the soil
composition, reduce fungus infections, improve coffee quality and increase theproduction of premium coffee. All these components are directly related toStarbucks C.A.F.E. Practices guidelines and our focus on coffee sustainability.

I feel very proud to work at Starbucks Farmer Support Center because we are truly
giving farmers the support and tools they need to produce more and better coffee
in harmony with nature – by reducing the total amount of pesticide use and theirproduction costs while improving high-quality coffee yields.

What our farmers say.

Luis Alberto Monge"For us, it has been very important to participate
in C.A.F.E.Chacon
Practices. We have been able toHerbertLuis Alberto Monge
Santa Martha and San Isidro farms

identify what the real needs are for our coffee"Thanks to the assistance from the C.A.F.E.
plantations by the soil and leaf analysis. This has
Practices team, the Las Peñas and Chacon
been helping us to apply what our coffee farms
Morera farm and mill group is very pleased forreally need. And we have been able to see thethis great help. We made many improvements in

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San Lorenzo de San Marcos deTarrazu, Costa Ricachanges that our farms made which is reflected
our coffee farm yield and maintenance in ourin the improvement in their higher and morecoffee farms with the collaboration and direct
stable yield. All these changes have been very
support from the agronomy team from Starbucks
positive for our lives, especially in these difficult
office. Thank you very much, friends."
moments in our economy. Besides these

Herbert Chacon

benefits, we don't need to apply so many

Las Peñas farm

agrochemicals, which has been allowing us work

Sabanilla de Alajuela, Costa Rica

in harmony with nature."Social Investments In Coffee
Communities
Helping the people and places that grow our coffee.
Supporting social programs in coffee communities isn't justabout doing the right thing. It's also the right thing to do for ourbusiness – helping those communities to thrive and keep
growing high-quality coffee for the future. We believe ourinvestment of resources to help sustain coffee farms andstrengthen surrounding communities is mutually beneficial.

There are a number of ways we do this, including our support of
the following non-governmental organizations and programs:
Conservation International
African Wildlife Foundation
Philanthropic support
Loans for farmers
Coffee community projects
Starbucks® Black Apron
Exclusives

Projects in coffee-growing communities.
Through some of our coffee contracts Starbucks invested $1.6 million in social projects
in coffee-growing communities during fiscal 2008. The funds benefited more than
186,000 people in 10 countries where our coffee is grown.

The projects range from helping to fund schools and health clinics to infrastructure
projects that serve the farmers, cooperatives and their surrounding communities.

Focusing on health for farmers of San Miguel Duenas, Guatemala.

In the coffee-growing community of San Miguel Duenas, many farmers share a sense of
loyalty to Estuardo Falla Castillo and his company, Entre Volcanes, S.A.

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Entre Volcanes owns San Miguel Mill, a place where local farmers come to process andsell their freshly harvested coffee cherries – and where they receive some of the highest
prices paid in the surrounding area. Entre Volcanes is an approved C.A.F.E. Practices
supply chain and produces coffee used in several Starbucks offerings, such as
Guatemala Casi Cielo®.

There is another benefit associated with San Miguel Mill. It is the site of the area’s only
health clinic, staffed by Dr. Isabel Rivera. Since the clinic opened in 2002, Rivera hasdispensed treatment and medications free-of-charge to thousands of farmers, workers
and their families, some of whom are employed on Falla’s farm, El Tempixque, andothers who run their own small neighboring farms.

The clinic is unique because of the way it is funded. The facility, known as Clinica Rural
Arturo Falla, opened with a $13,000 startup stake from Starbucks and $10,000 from a
Special Reserve Award, a Starbucks coffee coffee-quality competition won by Entre
Volcanes in 2001.

Every year Starbucks provides funding to keep the clinic stocked with medicines and topay Dr. Rivera. The other operating costs are paid by Estuardo Falla. In 2008, Starbucks
and Falla both contributed $34,000 toward the clinic’s expenses to provide bothpreventive and necessary medical care.

Special coffees with special rewards.

Starbucks® Black Apron Exclusives®
program was designed to recognize some of
the most extraordinary and unique coffees in
the world. Typically limited in quantity, these
coffees are often discovered in small, remoteareas of Africa, Latin America and Asia
Pacific. Starbucks awarded $15,000 to thefarming community that produced the coffee
for use for a targeted project that will serve toimprove the sustainability of its farms, thevillage or the local environment. Since
launching the Black Apron Exclusives®
program, Starbucks has featured 18 coffees,
including three that were introduced in fiscal
2008.

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Starbucks and the African
Wildlife Foundation

Conserving wildlife and wild lands in Africa's coffee regions.

AWF’s Robert Thuo (right) grew up on a five-acre coffee farm and pursued a degree in agronomy. He aspired to make adifference in a lifestyle he loved. Working with small-scale farmers in Kenya on implementing C.A.F.E. Practices andimproving coffee quality, he is doing just that.

For well over a century, Kenyan farmers havecultivated some of the most distinctive, highly
desired coffee in the world. In particular, theareas surrounding Mount Kenya and theAberdares National Park in the Samburu
Heartland are home to thousands of small-scalecoffee farmers – and some of Africa's most

AWF works with Starbucks topromote coffee quality,
environmental sustainability andnatural resource conservation

impressive wildlife.

among farmers in East Africa.
It is here that Starbucks and the African Wildlife
Foundation (AWF) have found shared andinterdependent interests. AWF seeks to protect critically endangered ecosystems thatare essential both for sustaining wildlife and coffee-based livelihoods.

Reaching out with the Kenya Heartland Coffee Project.
In 2005, Starbucks and AWF joined forces and launched the initial three-year phase of
the Kenya Heartland Coffee Project at two coffee cooperatives. The second three-year
phase of the project began in early 2008, with the addition of five new sites and an
expanded scope that now involves 7,000 coffee growers. In fiscal 2008, Starbucks
provided AWF with $550,000 for the project.

From the start, Starbucks and AWF established clear objectives:●

Increase the supply of high-quality coffee from the area●

Improve profitability for small-scale farmers●

Safeguard the ecological integrity of the land●

Support economic development in the area

AWF's agricultural experts work directly with farmers to implement C.A.F.E Practices
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guidelines. For Robert Thuo, an AWF agronomist and the son of coffee farmers, hisdays are spent going farm to farm and teaching state-of-the art growing practices andecologically sound techniques that will help sustain the health of their lands.

Of course, one person alone cannot possibly reach the 7,000 small-scale farmers acrossseven project sites, each with its own coffee-processing mill. In the first and second
phases of the project, AWF has sought to use promoter farmers to train other farmers at
the co-ops and mills. In February 2008, AWF brought coffee farmers together from thenew project sites and mills to train them on C.A.F.E. Practices. When they returned totheir farms, they shared what they learned with their neighbors. As a result, nearly 1,500
growers were brought into the program in fiscal 2008.

What we've been doing.
In fiscal 2008, Starbucks purchased 128,000 pounds (58,000 kilograms) of coffee fromfarmers who participated in the project.

Hurdles.
While the response from farmers has been positive, and an increasing number are
participating and benefiting from the various training offered, there are several
challenges that Starbucks and AWF have identified to be addressed in the project's
second phase:

●

●

●

●

●

Farmers may have a difficult time implementing changes due to cost andfluctuating global coffee prices.
Climate change is having an increasing impact by creating unpredictable weather
and harvests. Conditions that lead to problems such as coffee berry disease,which struck the area during the last growing season, will undoubtedly affect coffee
volumes. This is compounded by the high cost of copper-based fungicides, aneffective standard industry treatment.
The drought in Kenya in 2008 will also affect coffee volumes and quality due tomoisture stress.
The nature of cooperative society politics can lead to management turnover and alack of transparency and accountability. In these cases, the project outputs areaffected.
Some of the promoter farmers recruited during the project's first phase ended up
not wishing to continue in this role. They will need to be replaced by more willing
participants in the future.

What we're working on.
Most coffee farmers never get to taste their own coffee because they lack accessto tasting and roasting facilities. We've found that experiencing and understanding
the taste profile specialty coffee buyers (like Starbucks) are looking for is a criticallink for farmers in the process toward quality improvements.

As an objective of the project's second phase, AWF had hoped to establish a local
tasting room during fiscal 2008. Plans were delayed, but as of September 2008,
AWF and Kimathi University signed a memorandum of understanding to build andequip a coffee-quality laboratory for farmers to sample and taste their beans. Our
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goal is to help farmers be in a position to earn the prices that higher-quality coffee
deserves.

Starbucks Earthwatch
Expeditions

Working side by side with scientists and coffee farmers in Costa
Rica.

Spending time at a coffee cooperative in Costa
Rica can be a transformational experience.
Starbucks Earthwatch Expeditions offer ourpartners (employees) and customers the
chance to become active members of ascientific research team on coffee farms in
Costa Rica’s CoopeTarrazú cooperative. Those
selected for the expedition conduct researchthat encourages environmentally sound farming
practices at 24 C.A.F.E. Practices–approved
farms.

Earthwatch Institute helps ourpartners (employees) andcustomers participate in
expeditions to replant
rainforests, map water sources
and biodiversity indicators, andshare sustainable farming
practices.

Building on a relationship formed in 2001, Starbucks and Earthwatch Institute began athree-year pilot program in 2007 to assist scientists with soil testing, identifying bestpractices for pest management and mapping farm sites.

Three separate expeditions took place in fiscal 2008, providing 17 customers and 13
Starbucks partners with the unique opportunity to help farmers improve farming
techniques and the quality of their coffee.

Earthwatch plans to publish the findings of the three-year pilot and make them available
to scientists.

Here's one story:

Starbucks Earthwatch Expedition Partner Blog
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Wednesday, July 23, 2008

This is Matt with a few final thoughts after
returning from our expedition.

A week has passed since I left Costa Rica andparted ways with some amazing new friends.
I’ve had some time now to decompress, getmuch-needed rest and think about how our
expedition has affected me and what it means.

First, I want to say that Earthwatch did a greatjob in describing what was needed. But I don’t
think anyone can prep you for the mental stressof living every moment in a vacuum for two
weeks with a dozen strangers, working in the pouring rain on slopes steep enoughto start the adrenaline pumping, and the bouts of home sickness that would hit as
you went to sleep each night.

In the end we all made it, we all learned about our mental and physical limits andhow to push through them, and now we are all stronger for it. This is somethingthat I simply could not experience in my world of information technology at the
Starbucks Support Center.

Once you go through that inner transformation, you have more mental clarity andare able to better see the world around you. Observing the world that the coffee
farmers live in, the challenges they face trying to balance between sustainability
and profitability where the standard of living continues to rise, you develop an
immense respect for what they do and the intense pride they exude for their farms
and country.

Some people may go home and make life-changing decisions because of thisexpedition, while others will simply make small but meaningful changes to better
themselves and the world we live in.

I don’t believe anyone will simply return to the status quo. We’ve experienced whatsustainability really means at the source, and I hope we can all teach that to others
and improve the lives and ecosystems around us in even the smallest way.

Costa Rica left an imprint on every one of us. I can’t look at one of the 500 photos
that I brought back without taking a deep breath and feeling a sense of peace. I
can’t sip a cup of coffee without thinking about where those tiny beans came fromand if I might have counted one of the trees.

I know that this is a place that I will return to as often as possible and when I do, I
know that there are warm and welcoming people waiting to say hello at the local
market.
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Thank you, Starbucks, Earthwatch, Costa Rica and all my new friends.

- MattMatt Redetzke is part of the information technology team at the Starbucks Support
Center in Seattle.

Certified Organic Coffee

Certified Organic – good coffee that's better for the planet.
Organic coffee is grown using methods andmaterials that have a lower impact on theenvironment. Organic farming practices help
replenish and maintain soil health, reduce
the use of toxic and persistent pesticides
and fertilizers, and build biologically diverse
agriculture.

A small portion of the coffee Starbucks
purchases is certified as organic. The
organic certification is a third-party assurance that the coffee was grown without the useof synthetic pesticides, herbicides or chemical fertilizers, helping to maintain healthy soil
and groundwater.

Starbucks offers our customers certified organic coffee to meet their requests for theassurance that the label provides. We also believe that organic farming practices
support our commitment to environmental responsibility. In fact, we value the principles
of organic certification so much that we incorporated them into our ethical sourcing
guidelines.

What we've been doing.
Starbucks purchased 10 million pounds (4million kilograms) of certified organic
coffee in fiscal 2008. Even though it is asmall percentage of our overall purchasesof responsibly grown coffee, we're proud tooffer the best possible organic coffees we
can find.

One of our customers' favorite certified
organic coffees is Serena Organic Blend®.
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Serena is the Spanish word for “calm” or"tranquil" – we thought it was the perfectname for a coffee that provides peace of mind to customers wanting to protect theenvironment. Our other organic offerings include Organic Shade Grown Mexico andseveral in the Seattle's Best Coffee® lineup.

Hurdles.
Our purchases of organic coffee are limited due to the limited quantities available
worldwide and the constraints of the organic certification system for producers.

Only a small percentage of coffee in the world is actually "certified organic." Official
certification requires farmers to verify that they are using accepted organic farming
practices. In some cases, they must conduct three years of soil testing during transition
periods before they are eligible for organic certification, and annual testing thereafter.
This process can often be very costly for farmers.

What we're working on
We will continue to purchase certified organic coffee because we believe it's betterfor the planet, and the assurance of this label is a priority to some of ourcustomers. And organic growing methods and practices complement our C.A.F.E.
Practices guidelines, too. So we'll continue to encourage their use by providing
scoring incentives and preference to suppliers who reduce and eliminate the use ofchemicals and synthetic fertilizers.

Loans For Farmers

Loans for farmers – a better future for farmers and theircommunities.

See how farmer loans are making a difference for a coffee-growing community in Tanzania.

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We know our long-term success is linked to the success of the thousands of farmers
who grow our coffee.

One way we make sure we have a sustainable supply of high-quality coffee is byinvesting in the future of our coffee farmers and their communities through alternative
loan programs. These provide farmers with access to loans that the commercial or
traditional lending sector is unable to serve. Starbucks has already committed $12.5
million to a variety of farmer loan funds. Now, as part of the Starbucks™ Shared
Planet™ commitment to ethical sourcing, we plan to nearly double our investment inthese kinds of programs to $20 million by 2015.

Why it’s important.
During the growing and harvest cycles, many coffee farmers dip into their modest
reserves to cover expenses until they can sell their crops. Some farmers may evenexperience a cash shortage, prompting them to sell their crops early—and for less—tolocal buyers. Alternatively, farmers will sometimes borrow money at exorbitant local
interest rates until they can sell their crops. This cuts into their profits and sets up asimilar scenario for the next year.

Starbucks provides funding to organizations that make loans to coffee growers, which
will help them sell their crops at the best time to get the right price. The loans also help
farmers to invest in their farms and make capital improvements.

Our commitments include:●$7 million loaned to Root Capital●$4.5 million committed to Verde Ventures●$1 million loaned to Calvert Foundation

In turn, these organizations provide trade credit to cooperatives and farmers who needaccess to financing for pre-harvest activities, improvements to farms or equipment, or
export financing.

One story of success.

Since 2004, Starbucks has provided $2.5 million in loans to Verde Ventures, aninvestment fund managed by Conservation International (CI). In fiscal 2008,
Starbucks made an additional $2 million commitment to Verde Ventures.

Verde Ventures was able to use this money to provide pre- and post-harvest loans
and capital improvement financing to farmers located near key biodiversity areas in
Mexico. The investments benefited 379 farmers managing 7,300 acres (3,000
hectares) of land.

In terms of financing power, the initial $2 million from Starbucks actually translated
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loans are repaid, the money becomes available for new loans. Since our originalcommitment in 2004, a total of more than $7 million worth of loans have been
issued, repaid and rotated to coffee growers. In that time, these cumulative
investments have directly benefited more than 7,600 farmers and 51,000 acres(20,000 hectares) of land.

Where we’re investing.
Our total commitment to these financing organizations is $12.5 million.
(See chart below.)

Organization

Amount ofStarbucks
loans

Loans infiscal
2008

Averageloan size(perborrower)in fiscal
2008

Purpose(s)of loansmade from
Starbucks
capital# of farmers
participating

CalvertFoundation$1 million
in fiscal
2004

3 loans
valued at$1.5
million —Peru$496,000

Prefinancingof Fair Tradeand Organic
coffeecontracts

18,233

Verde
Ventures$2.5
million in
fiscal 2004

3 loans
valued at$700,000—Mexico$233,000

Prefinancing
and working
capital for C.
A.F.E.
Practices andConservation
Coffee™
farms

379

13 loansvalued at$5.9
million —
Costa
Rica,
Peru,
Rwanda,Tanzania,
Ethiopia$454,000

Prefinancingof Fair Trade,
Organic andspecialty
coffee andcocoa
contracts;
capitalinvestmentsforinfrastructure

85,091$2 million
in fiscal
2008

Root Capital$2.5
million in
fiscal 2004
$2.5
million in
fiscal 2005
$1 million
in fiscal
2006$1 million
in fiscal
2007

Sustainable Prices For Quality
CoffeeQuality coffee, quality prices.
Starbucks is committed to paying the higher prices that premium-quality coffee
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commands. This means our approach to pricing (meaning the amount we pay for coffee)
is largely based on quality. In fact, when we’re working closely with people throughout
our coffee supply chain – farmers, millers, exporters and importers – quality is always
stressed as the best, most sustainable driver of higher prices.

Extra rewards for extra effort.
Other factors can influence contract decisions and how suppliers are rewarded forcertain coffees, too. Suppliers who have been independently verified and scored against
our social and environmental criteria are able to join C.A.F.E. Practices and become partof a network that we buy from first. Suppliers strive to continuously improve and increase
their yearly scores against our criteria—because improved scores mean higher
preference in terms of our purchasing decisions.

When suppliers achieve Starbucks best practices levels, reaching 80 percent or more ineach of the social and environmental categories, they become Starbucks "strategic
suppliers", the highest level that can be achieved in C.A.F.E. Practices.

Suppliers are rewarded with a five-cent per pound premium on their coffee deliveries tous, on top of the purchase price paid, for the first year after they achieve strategic
supplier status. They receive the same reward when they have improved their scores byanother 10 percentage points over their previous scores.

In fiscal 2008, 38 million pounds (17 million kilograms), or 13 percent, of all the coffee wepurchased from C.A.F.E. Practices suppliers came from new strategic suppliers andexisting strategic suppliers who had improved their scores by 10 percentage points ormore. These suppliers were rewarded with an additional $1.9 million in premiums, overtheir fiscal 2008 contract prices.

The $1.9 million in extra money earned from these premiums helps farmers offset the outof-pocket investments they may have made to improve their agronomy practices and/or
enhance the working conditions on the farm.

The facts on pricing.

What determines coffee prices?

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For Starbucks, quality is the most important factor when it comes to pricing.
Other contributors include the cost of production and the prevailing market
conditions, which vary from country to country and even from region toregion. Social and environmental practices on the farm are considered too,based on information gathered through C.A.F.E. Practices or throughcertification systems like Fair Trade and Certified Organic.

How much does Starbucks pay for coffee?

In fiscal 2008, Starbucks purchased 385 million pounds (175 million
kilograms) of coffee and paid an average price of $1.49 per pound ($3.28
per kilogram).

Our total purchases include some third-party certified coffees, such as Fair
Trade Certified™ and Certified Organic. These certified coffees often cost
us a little more because they include licensing fees and charges for thirdparty labeling. If we remove the purchases of certified coffees from ourtotal coffee purchases in fiscal 2008, then our average purchase price is$1.48 per pound.

What is the "C" market price?

Arabica coffee is traded as a commodity on the New York "C" market (theworldwide pricing mechanism for commercial grade arabica coffee and areference used by coffee traders). In the early 2000s, "C" market prices
were depressed due to an oversupply of coffee that exceeded demand. In
the past few years, demand and supply have been more in balance, which
has been reflected in the rise of "C" prices. (see chart)

Why doesn’t Starbucks buy coffee at the "C" market price?

Prices for premium-quality arabica beans, sold as specialty coffee, areoften negotiated independently of the "C" prices. These prices are set
higher to compensate farmers for producing premium-quality beans. Coffee
can be purchased from exporters, brokers, multi-national trading
companies, cooperatives and, in some cases, directly from farmers.

While the "C" market price tends to fluctuate as a result of weather
conditions, speculation and other factors, the price we pay remains
relatively stable. In 2002 and 2003, Starbucks paid approximately twice the"C" market price. Although the "C" prices have gradually risen in recent
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market price. (see chart)

Up close: How much a
Guatemala farm got paid.
In fiscal 2008 we purchased coffee
from Finca El Hato, an approved C.A.
F.E. Practices farm since 2007
located in Guatemala. In fact, Finca El
Hato became a strategic supplier infiscal 2008 and was eligible for a five-cent per pound premium for deliveries madeto Starbucks during that period, which was in addition to the purchase pricereflected below.

Our contract for this coffee was negotiated with the exporter, in which we agreed to
pay $1.37 per pound for coffee from Finca El Hato. Of this purchase price, theexporter retained five cents per pound and paid $1.32 per pound to the producer
who grew and milled the coffee. Based on our transparency requirements noted in
the contract, we received documentation from the exporter indicating how muchcoffee was received by the exporter and paid to the producer. This was in the formof notarized receipts and statements from the producer.

In addition, Finca El Hato became a strategic supplier in fiscal 2008 and was
eligible for a 5-cent-per-pound premium on top of the negotiated purchase price fordeliveries to Starbucks during this period.

Based on our transparency requirements noted in the contract, we received
documentation from the exporter indicating how much coffee was received by theexporter and paid to the producer. This documentation was in the form of notarizedreceipts and statements from the producer.

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Our coffee supply chain is diverse andcomplex, and it differs from country to country,
or even within areas. So the price distribution
can vary depending on different purchase anddelivery structures, production costs, quality
premiums and the margin distribution withineach country.

Beyond Coffee

Beyond coffee: working to ethically source all our products.
From the cocoa found in our Starbucks® hot chocolate, to the teas in our Tazo®
beverages, to the aprons worn by our baristas – we're are committed to making
sure our products are produced in a responsible way.

Cocoa
We're committed to purchasing cocoa that has been
produced and traded in ethical, transparent and responsible
ways. That's why we're working with the cocoa industry,
growers, processors, exporters and manufacturers todevelop a program that ensures that we buy cocoa in a waythat is aligned with our ethical sourcing principles.

Learn more about how we buy cocoa.

Tea
Tazo (our tea brand), is dedicated to bringing high-quality,
distinctive blends to our customers. As a member of the
Ethical Tea Partnership, we're working along with otherbuyers to improve conditions across the tea industry.

We also reach out to communities that produce Tazo® tea
ingredients through the CHAI (Community Health andAdvancement Initiative) project, a joint partnership with
Mercy Corps. This project targets the needs of tea- and spicegrowing communities with health services and economic
development. Since 2003, Starbucks and our tea suppliers
have contributed $2.4 million, including $530,000 in fiscal
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2008, to the CHAI project.

Products for our stores
The merchandise we buy to sell in our stores and for use in
our operations is purchased with the same commitment tosocial and environmentally responsibility as our coffee, tea
and cocoa. This not only supports the communities we buy
from – it's also good for our business. We strengthen thereliability of our supply chain by working with suppliers whoshare our commitment to ethical sourcing.

Learn more about how we buy products for our stores.

Cocoa

Ethically sourcing our cocoa.

Saying cocoa is an important ingredient in many of our products might be anunderstatement. Cocoa is contained in some of our most popular beverages, such as
our Caffè Mochas and Mocha Frappuccino® blended coffees.

Just like coffee, our approach to cocoa buying is designed to ensure a long-term supplyof high-quality, ethically sourced cocoa while contributing positively to the environment
and to cocoa-farming communities. To achieve this, in 2007, we launched a two-year
pilot using a set of responsible buying guidelines that we call Cocoa Practices, modeled
after our guidelines for ethical coffee sourcing.

Cocoa Practices are our set of buying guidelines for growing, processing and trading
cocoa in ways that are more environmentally sound and socially responsible. Cocoa
Practices are meant to promote equitable relationships with farmers, workers and theircommunities.

The guidelines and corresponding scorecard contain more than 200 specific indicators
designed to address the issues facing cocoa farmers, especially small-scale farmers inWest Africa. Suppliers, farmers, processors and exporters who participate in Cocoa
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Practices must comply with the required indicators and demonstrate best practices, all ofwhich are subject to independent verification.

About cocoa

Approximately five million farmers around the world depend on cocoa for their livelihoods.
Ninety percent of them are smallholder farmers, growing cocoa on less than 25 acres (10hectares) of land.*A combination of low and volatile commodity prices, lack of credit, and pests and diseasechallenges have made cocoa farming unpredictable for many of the families who dependon this crop for their livelihoods. At the same time, cocoa farmers cultivate in some of themost biodiverse regions on the planet, and their stewardship of these areas is vital.
Worldwide cocoa production for the 2007/2008 crop year was eight billion pounds (fourbillion kilograms). Most of this was produced in West Africa.
In fiscal 2008, Starbucks purchased 26 million pounds (12 million kilograms) of processedcocoa from our suppliers in five countries, but primarily from the Cote d'Ivoire in West
Africa. Of that, eight million pounds – or 30 percent - was bought through suppliers
participating in Starbucks Cocoa Practices, exceeding our projected goal of 28 percent.
The cocoa will be used into fiscal 2009.
* International Cocoa Organization and Conservation International

Reaching out to cocoa communities – social investments andloans for farmers.
In 2008, Starbucks joined the ECHOES (Empowering Cocoa Households with
Opportunities and Education Solutions) Alliance, a joint project with USAID, the World
Cocoa Foundation, and the non-profit development organizations International
Foundation for Education and Self Help and Winrock International. ECHOES aims tohelp improve education and the quality of life for young people in cocoa farming
communities in West Africa.

Our support of ECHOES helps to integrate basic education (reading, writing and math)and livelihood education (farming and business skills) through teacher training andagriculture education. The ECHOES alliance also funds scholarships that support microenterprise development for families in cocoa-growing communities in Cote d'Ivoire. This
program supports families by funding three years of a child's education while making it
possible for their mothers to use two years' worth of funds to earn increased income byadding capital to her own small businesses.

Knowing that farmers also need reliable and affordable loans to get through the growing
season, we've been working with Root Capital since 2004 to provide capital for farmer
loan programs. Over the years, we've provided $12.5 million in funding for use in coffee
and cocoa communities, including the $1.7 million Root Capital loaned to seven cocoa
farming cooperatives during 2008.

What we've been doing.
After first introducing Cocoa Practices in 2007, we focused on working with our suppliers
to implement the program and help farmer cooperatives meet our criteria. We've also
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been using this pilot period to test our approach and work through problems as theyarise.

We began by enlisting the help of TechnoServe, an international non-governmentalorganization (NGO), to conduct an independent audit to assess our suppliers' ability tosource responsibly produced cocoa that could be traced to back to the farm.

They found, just as we have in coffee communities, that farmers needed training
materials and cooperatives needed better financial management systems. Processes
were also required to ensure that participating farmers were getting their fair share ofany price premiums paid.

In 2008, we invested in developing third-party inspection capacity for Cocoa Practices
verifications in West Africa. We contracted with Scientific Certification Systems (SCS) to
select, train, and oversee independent verification organizations with local inspectors
who could evaluate the performance of farms, cooperatives, and suppliers' against the
Cocoa Practices guidelines.

By the end of fiscal 2008, approved verifiers had completed evaluations of thousands offarms in Cote d'Ivoire against Starbucks Cocoa Practices guidelines. SCS also
completed a verifier training in the region, and performed shadow audits in the field andon cocoa farms in Cote d'Ivoire in 2008.

By the end of fiscal 2008, one of our key suppliers had completed the verification
process to become our first Cocoa Practices–approved supplier, using one of the two
independent third-party verifiers we had identified for this purpose.

While Starbucks is not a major purchaser of cocoa beans, the company's efforts inpromoting sustainable and responsible cocoa production has been welcomed by theindustry. In 2008 Starbucks disseminated the Cocoa Practices evaluation guidelines tomembers of the World Cocoa Foundation, prospective suppliers, certification entities
such as Utz Certified, and retailers like Wal-mart. The World Cocoa Foundation, of
which Starbucks is a member, recently launched an initiative to define cocoa
sustainability.

Hurdles.
Identifying and training local verification organizations in the Cote d'Ivoire with thecapacity to conduct farm inspections against our Cocoa Practices guidelines has been achallenge. In 2008, only two organizations were approved by SCS to conduct
inspections in the region, although at least five organizations received formal training.
This challenge reflects the complexity of the social and environmental circumstances in
the cocoa sector and the diverse expertise and staff required to evaluate supply chainsin West Africa.

Cooperatives verified in 2008 demonstrated ongoing challenges in disseminating
information to farmers, providing training to farmer members, and ensuring transparent

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financial management systems and internal control systems.

What we're working on.
We're committed to improving the Cocoa Practices Guidelines and increasing ourpurchases of responsibly grown cocoa. Specifically we plan to:

●

●

●

●

Increase cocoa purchases from verified and approved Cocoa
Practices suppliers to 35 percent in 2009.
Continue support the ECHOES Alliance project through $200,000
over three years.
Update the criteria in Cocoa Practices based on feedback fromverifiers, suppliers and the program auditor.
Collaborate with the World Cocoa Foundation and the Bill and Melinda
Gates Foundation to support a West Africa Cocoa Farming
Communities Livelihoods Improvement program.

Products For Our Stores

Ethically sourcing products for our stores.
The merchandise on our shelves, the tables andchairs in our stores, the aprons worn by our baristas
and more – we care how the products manufactured
for our stores are made. And just like with coffee, wewant to buy from suppliers who share our values andhave a commitment to social and environmental
responsibility.

Our buyers work directly with suppliers, negotiating contracts for the products we needin our operations or sell to our customers. Their purchasing decisions are influenced bymany factors, including how well a supplier performs against our Supplier Social
Responsibility (SSR) Standards for manufactured goods and services.

Supporting economic development in Ethiopia.

It's a fact that local economies are strengthened when jobs are created from a diverse
range of sectors, from farming to manufacturing. This is as true in the communities where
our coffee is produced as any other.
So, in 2008 we worked with a factory in the Tigray region of Ethiopia, an important coffeegrowing community for Starbucks, to produce aprons for our stores. Now for the first time,
the factory is producing some of the black aprons worn by our Coffee Masters, our mostknowledgeable coffee experts.

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What we've been doing.
We originally piloted our Supplier Social Responsibility program and standards in 2006,
and began implementing it in 2007. Starbucks SSR standards for manufactured goods
and services address the specific expectations we have of our suppliers. Thesestandards outline our preference for long-term and collaborative relationships with
suppliers and, when needed, our commitment to help them continuously improve theirpractices in order to meet our high expectations for performance.

In fiscal 2008, we continued to make advances to key areas of our SSR
program:Training suppliers and buyers: For suppliers, we conducted training in factories,
held one-on-one supplier meetings, and made more than 50 factory visits. We also
continued to conduct in-field and classroom SSR training for Starbucks buyers to help
ensure they are buying our products according to our ethical standards.
● Monitoring conditions across industries: We continue to participate in the Fair
Factories Clearinghouse, a nonprofit organization that helps companies acrossindustries to share their factory assessment results and corrective action plans.
● Empowering workers: Factory workers are being empowered to report abuses
through Clear Voice, a communications hotline, which we piloted in 2008.
●

Factory Audits – Fiscal 2008
Hurdles.
Factories assessed

94 in the following countries:
China
Colombia
Ethiopia
Italy
Japan
MexicoMalaysia
Peru
PolandPortugalRwandaThailandTaiwanUSA

Factories failing zero zero-tolerance standards

24

Factories participating in Starbucks continuous
improvement efforts

33

Factories that are discontinuing as a Starbucks
supplier due to non-compliance with ourstandards

18

As of the end of fiscal 2008, our monitoring firms had conducted 94 on-site
assessments, 16 more than the previous year. There were 24 instances of failure
to comply with our zero-tolerance standards, mostly due to a lack of transparency,
primarily related to wages and working hours. This is an improvement over lastyear when 41 instances of zero-tolerance violations were identified. In all cases weencourage suppliers to participate in continuous improvement plans. However,some suppliers are unwilling to do so or cannot resolve their issues even after
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remediation. This is why 18 factories were dropped from our supplier network in
2008.

Despite the advances made in 2008, we also had some challenges.

In a factory being used by a supplier located in China that produces a key supply for ourstores, we discovered that workers were being paid less than the prevailing minimum
wage. This is a violation of our “zero-tolerance” standards.

Once the problem was identified through our third-party monitoring program, we began
working with the supplier on a remediation plan. We asked if the price we were paying
was sufficient to cover production costs and pay workers the legal minimum wage. Our
supplier said no. We asked the supplier to provide us with a higher price and a complete
cost breakdown, called an open-book costing approach. When this work was completed,
the Starbucks buyer was able to justify the increased cost and renegotiated the contract
at the higher price.

During a follow-up visit at the factory three months later, we found that factory
management had never been notified of the new agreement and had not increased
workers' wages. We brought in a third-party organization with experience in wage
compliance to ensure the new contract terms were met and that factory workers were
paid the correct wage and given full back wages. We were at the factory the day theworkers were presented with their back wages.

This experience reinforced for us that our commitment to ethical sourcing brings with it
the obligation to uphold our standards.

What we're working on.
Building on the progress we made in 2008, our next steps will involve conducting
social responsibility verification assessments to determine the degree to which our
suppliers can manage ethical sourcing themselves or need assistance indeveloping internal systems. Our intent is to create increased ownership andaccountability among suppliers around social and environmental issues.

We will also continue to identify and assess potential new suppliers of products
and merchandise in regions where we buy coffee.

Read our Supplier Code of Conduct

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China earthquake triggers Starbucks aid.
Sometimes tragic events demonstrate
just how interconnected we are in ourshared world. When a severe
earthquake rattled China’s Sichuanprovince in May 2008, Starbucks
partners (employees) and customers
joined the global relief effort, rallying tobring much-needed financial, volunteer
and in-kind support to the devastatedcommunities.

In partnership with the American Red
Cross and the International Federationof Red Cross and Red CrescentSocieties (supporting the Red Cross
Society of China), The Starbucks Foundation provided $250,000 for immediatehumanitarian and long-term recovery efforts.

In addition to The Starbucks Foundation’s support, Starbucks Coffee Greater China
contributed $100,000 for immediate disaster relief and long-term recovery throughcompany donations, materials and fund raising by partners and customers.

Starbucks partners in Chengdu, close to the disaster area, volunteered with the local
Red Cross, delivering food and cleaning devastated public and residential areas. Many
partners made visits to the Chengdu Children’s Hospital, bringing donated books andfood.

Efforts to help took place in many Starbucks stores across Greater China. Collection
bins for donations were set up in stores, and opportunities were created for customers
and partners to give to a variety of organizations. Through the dedicated work of ourpartners across Greater China and beyond, we were able to donate thousands ofjackets, tents, blankets and other items requested by the Red Cross Society of China.

The International Coffee Partnership, a joint venture between Starbucks and PepsiCo,
also committed $25,000 for immediate disaster response.

Starbucks Coffee Greater China is working on programs to continue our support ofrebuilding efforts through Starbucks China Education Fund.

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Mexico coffee-growing community gets local help.
High in the mountains of the Chiapas state ofsouthern Mexico, farmers grow the beans we use
in our Organic Shade Grown Mexico coffee. The
cooperatives in this area are made up of more than
150 families working small plots, often in their own
backyards, many hours away from any city center.

One of these cooperatives, located in an extremely
remote area, has been producing high-quality coffee for Starbucks for several years.
Although the children of the village could attend primary school in the central co-op area,
there was no secondary school within a reasonable distance. That meant most children
either left their families for school in bigger towns or left their education altogether to staywith their families.

Because Mexico is one of the countries where we not only have retail stores but also an
excellent source of coffee, our partners (employees) in Mexico have the unique
opportunity to give back to the very places that grow our coffee – within their national
borders.

In 2005, our partners in Mexico and our joint venture partner, Alsea S.A.B. C.V., began
working to help bring a secondary school to this community so that local children could
continue their education without leaving home.

The community provided the land and construction workers, using premiums earned
from selling high-quality coffee grown under Starbucks™ Shared Planet™ principles.
The well-respected Tecnológico de Monterrey university donated the online curriculum,and Starbucks gave $10,000 to help build the single-classroom school and the satellite
hookups needed. Sedesol, a public institution for social development in Mexico, donatedcomputers and equipment for the classroom.

When this first classroom opened in June 2006, it became so successful that thecommunity asked for another. We shared this story with our customers in Mexico, andthrough a variety of donations and fundraising efforts from Starbucks partners andcustomers, a fully equipped second classroom and sports court were built for thechildren in July 2008.

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In fiscal 2008, Starbucks Mexico launched a second in-store campaign to build thevillage’s next request: a student dormitory. Our Mexico partners held a fundraising eventfor customers, honoring Chiapas farmers by auctioning pieces of a lifelike coffee tree
sculpted by an internationally renowned Mexican artist. Starbucks also donated $10,000
to this part of the project.

Altogether, more than $180,000 has been raised for the community since the beginningof the project. The Mexico team hopes to continue working with the Chiapas community
for as long as the area can benefit from the collaboration.

Starbucks Spain partners help students make the grade.
Madrid has dozens of Starbucks stores, and Starbucks partners (employees) in Spain
have found a way to inspire and impact the community in significant ways through their
youth tutoring program.

In fiscal 2008, Starbucks, our Madrid team and our joint venture partner Grupo Sigla, S.
A., worked together with Fundación Voluntarios por Madrid on a project to help children
ages five to 14 with their schoolwork.

The children invited to be part of the program were identified as having trouble in schoolor coming from families where they couldn’t get help at home. Store partners met on a
weekly basis with these students at their schools and tutored them in whateverassignments they were working on at the time.

The program identified students and schools in the same neighborhoods as the
Starbucks stores where the volunteering partners worked. This increased the value andconnection of the program for partners, students, local customers and the community.

Since March 2008, partners in Madrid have contributed more than 750 hours ofvolunteer service.

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Good coffee deserves good health.
The coffee farms of Northern Thailand grow rich, bold coffee that we have been buying
since 2002 for our Muan Jai™ Blend. One village in this area is Huay Som Poi.

Starbucks Coffee Thailand has been supporting the Huay Som Poi community for anumber of years. It was traditionally a very poor farming community, but with the
involvement of Starbucks, coffee farmers here have seen their welfare and lives
elevated.

In fiscal 2008 – around the time of our one-hundredth store opening in Thailand – ourpartners (employees) held a fundraising event for the creation of a health clinic in Huay
Som Poi. In partnership with the Integrated Tribal Development Program, and withconstruction help from Starbucks Coffee Korea and Malaysia partners, Starbucks Coffee
Thailand helped build and open the clinic in less than a year. It is now providing better
access to immediate medical attention for many villagers.

Additionally, Starbucks Coffee Thailand contributes five percent of its Muan Jai™ Blendsales to continuously support Huay Som Poi and other coffee-growing villages. This
money has been used to help build water tanks and drainage systems and fund themaintenance and continued operation of the clinic.

Our partners from this entire region are proud that they are able to support and honor
these farming communities.

Starbucks UK puts reading first.
2008 marked the seventh anniversary of the Starbucks UK team working with the
National Literacy Trust (NLT), a leading domestic literacy charity. We focused our
support on the NLT Reading is Fundamental, UK initiative, which promotes a love of
reading among children from disadvantaged backgrounds.

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Our partners (employees) in the UK also ran their fifth annual Starbucks Book Drive,
collecting more than 200,000 books from local customers, partners and businesses. The
books were given to more than 300 primary schools. Since the inception of thispartnership with the NLT, Starbucks partners and customers have donated more than
460,000 books to communities throughout the UK.

Starbucks has also supported the National Literacy Trust in 2008 through one of its
inaugural international youth grants. The support helped NLT implement a plan to more
fully engage youth.

Starbucks UK and Ireland help coffee farmers in Ethiopia.
Since 1992, The Starbucks Foundation has contributed to CARE International, thehumanitarian and development organization. The Foundation has committed $500,000
to CARE for a three-year social development project with the coffee-growing communityof Gewgew Dingete in West Hararghe, Ethiopia.

Starbucks Coffee UK and Ireland have committed an additional $350,000 to support
initiatives for improved water resources, sustainable farming and life-long learning forthe people of Gewgew Dingete. Starbucks partners helped raise additional money
toward the project through events and volunteering time toward charitable projects intheir local communities.

In fiscal 2008, UK and Ireland Starbucks partners showed their support for Gewgew
Dingete in an unusual way – by raising money through an adventure race organized by
CARE. Partners tackled over 15 miles of forest trails on mountain bikes, kayaked the
choppy waters of the local reservoir and completed a tough trek in the Brecon Beacons
National Park in Wales. The team effort, along with local collections in stores, helped
raise $100,000.

Rebuilding New Orleans together.

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Communities along the U.S. Gulf Coast affected by the 2005 hurricanes Katrina and Rita
have faced a long and difficult task to recover and rebuild.

In 2005 The Starbucks Foundation and Starbucks Coffee Company pledged $5 million
over five years for relief, recovery and rebuilding efforts immediately following the storms.

Sharing the power of 9,000 volunteers.
Starbucks was involved in an extraordinary way in early fiscal 2009, contributing one of
the largest blocks of service in the history of New Orleans. Starbucks mobilized 9,000
partners (employees) to contribute about 36,500 service hours in projects from October
27-30, 2008. This was a big step toward accomplishing our Starbucks™ Shared
Planet™ goal to contribute more than one million hours of community service per year incommunities where we do business by 2015.

We helped restore homes, parks and schools by painting, landscaping, cleaning up,
planting trees, building playgrounds and creating artistic murals. The Starbucks
Foundation invested $900,000 in fiscal 2008 to local organizations to support the effort.

Continuing to help with COAST Fund community grants.
Starbucks continues to be involved with community-based grants through the Creatorsof a Strong Tomorrow (COAST) Fund. COAST Fund grants are awarded to communitybased, grass roots organizations that are directly involved in the recovery efforts.
Starbucks partners who live in the Gulf Coast area participate in the review andrecommendations of COAST Fund grants.

A shared commitment to diversity.
In May 2006, Starbucks and the National Association for the Advancement of Colored
People (NAACP) announced a partnership to identify and support projects reflecting ourshared commitment to diversity, and social and economic equality. Starbucks committed$2.5 million of funding and in-kind donations over five years to the NAACP.
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In fiscal 2008, Starbucks and the NAACP worked on two major projects stemming fromour shared belief in the importance of social and economic empowerment for individuals
and communities.

The first project was the NAACP Civil Rights Schools, which documented the
Association’s history and sought to promote civic engagement. This program, part of the
NAACP’s 100th year anniversary, brought a Civics 101 class to Howard University inWashington, D.C., Harvard University in Cambridge, Mass., and New York University.
This innovative program brought together leading scholars, historians, social scientists
and jurists to discuss and teach the history of the NAACP, social activism and civilrights.

What we're working on.
Our partnership with the NAACP is dynamic by design, to evolve and expand withthe changing needs of communities. We continue to develop initiatives that
promote the shared values of the two organizations, including their desire to beforces for positive action in the communities we serve.

Youth Grants
Jennifer Staple launched Unite for Sight (UFS) in 2000 while a sophomore at Yale
University in New Haven, Conn. Today, UFS is a global nonprofit working to improve
eye health and eliminate preventable blindness.

“Eighty percent of all blindness is curable or preventable, which means that 36 million
people throughout the world are living with needless blindness,” Jennifer says. “We
eliminate the barriers to eye care for patients living in poverty.”

To date, UFS has provided eye care services to more than 600,000 people worldwide,with more than 19,500 individuals benefiting from sight-restoring surgeries. Central tothe organization’s approach is training community eye health workers who can reach thepoorest and most vulnerable patients.

In 2008, through a partnership between the International Youth Foundation andStarbucks, UFS received a $15,000 youth grant to train and employ 24 new community
health care workers to screen for eye disease in Ghana. Once trained, these workers
are expected to reach more than 86,000 patients annually.

International Youth Foundation (IYF) prepares young people to be healthy, productive
and engaged citizens. In 2008, IYF and the Starbucks Foundation helped support 25
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young social entrepreneurs just like Jennifer around the world.

How are things going so far?

Learn more in Jennifer’s blog.

February 3, 2009

The 24 community eye health workers received training in October by Ghanaian
ophthalmologist Dr. James Clarke at Crystal Eye Clinic. The community eye healthworkers were trained to coordinate vision screenings in local communities andidentify basic eye diseases such as red eye, cataract, pterygium and foreign body.
Each received instructions in how to carry out simple first aid for an eye injury andthe importance of notifying an eye clinic immediately. Each also learned how torecord their activities and follow the tenets of professionalism and ethical patient
care.

Leticia, one of the community eye health workers, explains the importance of the
training course:“Following the training, I can now identify common eye problems. I can now screen
the patients and organize them for further screening. The training helped me tobetter organize and advise patients about what a particular patient is supposed to
do after a cataract or pterygium surgery. Other benefits I acquired include advisingpatients on how to take good care of their eyes, what and what not to put in theireyes, and diets that aid good sight. I wish to express my sincere gratitude for thiskind gesture of having a little knowledge about the eye.

Following their training in October 2008, the community eye health workers servedin their communities during November, December and January. Already, theimpact of their work is identifiable.

Dr. Clarke, who also provides surgeries for 2,000 patients annually through Unite
For Sight’s program, is impressed that patients now come for surgery with a better
understanding of what is being done for them. He says the patients have muchless fear of surgery.

Most importantly, with the aid of the community eye health workers, patients areadhering to their postoperative medication regime, resulting in a better recovery.

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Connecting customers and partners through V2V.
Every April, Earth Day inspires Starbucks partners (employees) and customers to
become involved in projects to help the environment.

Starbucks partner Peter Johnson from store #7482 in Newtown, Conn., reached out forvolunteers for his Earth Day 2008 community project in a new way. He invited volunteers
to gather on V2V.

V2V is an online community that helps connect partners and customers in community
service.

There, Peter created an action for a project to revitalize the nearby Old Quarry Nature
Center, an indoor/outdoor classroom and sanctuary in Danbury, Conn. He also used theonline community to invite others, post registration and event information, share project
photos and celebrate the results.

More than 30 volunteers – Starbucks partners, mentors and kids from the local
mentorship organization Good Friend – participated in the effort. They completed morethan a dozen projects that support the natural science education.

To join V2V, visit www.v2v.net/starbucks

Revitalizing neighborhoods

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The Local Initiatives Support Corporation (LISC) has played an active role in Chicago’s
historic Bronzeville neighborhood for many years.

LISC is dedicated to helping community residents transform distressed neighborhoods
into healthy, sustainable mixed-income communities of choice and opportunity –goodplaces to work, do business and raise children. LISC mobilizes corporate, government
and philanthropic support to provide local community development organizations.

Bronzeville is one of the nation’s most significant landmarks in African-American urban
history. In the early 20th century, it was known as “Black Metropolis” – a vibrant,
dynamic area of African-American-owned businesses, cultural institutions andentertainment destinations. By the 1960s, the area began a period of steep decline. In
particular, the area around 35th and State Street on Chicago’s South Side became
notorious for its crime and blight.

Today, that corner is home to a bright, bustling Starbucks, which sits within a masterplanned development called Park Boulevard. Where there used to be a deteriorating
1,600-unit public housing project, there are now rental apartments, condominiums,
townhouses and new retail space. Starbucks anchors this corner and benefits fromongoing redevelopment efforts while at the same time helping attract new ones.

LISC and its tax-credit affiliate – National Equity Fund – invested in multiple pieces ofthe ongoing redevelopment effort and a variety of other projects throughout thecommunity.

Investing in Coffee
Communities

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Rural communities that are dependent on cash crops – like coffee – often facechallenges that begin at the farm and extend beyond. Starbucks contributes resources
to strengthen coffee-growing communities through our community investments
programs, and through social investments funded in some of our coffee contracts. We
also invest in programs in communities that grow our cocoa and tea.

What we've been doing.
Starbucks invests in coffee communities by working collaboratively with nongovernmental organizations (NGOs). These organizations have the specialized
experience and expertise to work with farming communities, improving their ability tobring high-quality coffee to market, and providing access to education and health carethat helps improve their overall quality of life.

Hurdles.
Our work with NGO partners:
African Wildlife
Foundation
The African Wildlife Foundation(AWF) is one focal point of our coffee
community investments in Kenya.
The three-year project helps improve
coffee quality and promoteresponsible growing practices while
helping preserve the wildlife and wildlands of Africa. Learn more.

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Conservation International
Conservation International (CI) andStarbucks are working to tackle
climate change by working with
farmers to help protect forests andrestore degraded landscapes, andby raising consumer awarenessabout climate issues. Learn more
about CI and Starbucks.

CARE
Our partnership with CARE is
dedicated to improving economicand educational opportunities forfamilies in the rural coffee-growing
region of West Hararghe, Ethiopia. In
fiscal 2008, The Starbucks
Foundation made a gift of $68,000.
Starbucks partners (employees) in
our Europe, Middle East and Africa
region have taken this effort to heart,raising additional money to support
this initiative.

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Save the Children
A quality education for Mayan
children in Guatemala can be difficult
to find – often because school istaught in Spanish instead of theirnative Mayan language. In fiscal
2005, Starbucks launched the
Guatemala Education Initiative, afour-year, $1.5 million effort with
Save the Children to bring bilingual
education programs to remote,coffee-growing Mayan villages. In
fiscal 2008, Starbucks helped morethan 9,000 young people and 26
schools.

This program goes beyond our
corporate giving – Starbucks
partners have also raised money andvolunteered their time to help. In
September 2008, 15 Starbucks store
managers traveled to Guatemala tohelp. To read about their trip, visit
their blog.

Coffee Kids
Since 2000, Starbucks has given$200,000 to Coffee Kids, including$25,000 in fiscal 2008. Coffee Kids
helps coffee-farming families
improve the quality of their lives.
Coffee Kids is a nonprofit that works
with local organizations in Latin
America to create education, healthcare, micro-credit and communitybased programs for coffee farmers
and their families. For more
information, visit their website

We want to help improve the overall quality of life in the farming communities that growcoffee, tea and cocoa for Starbucks. The wide range of needs found in thesecommunities can make it challenging to determine which investments will make the mostsignificant impact. This dynamic and the nature of communities can also makemeasuring the short- and long-term impacts of our efforts difficult.
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What we're working on.
We will continue to support the people and places where our coffee is grown andwork closely with the organizations with expertise in managing programs in thesecommunities.

Starbucks (Red)Saving lives in Africa with (PRODUCT)REDTM

Howard Schultz (right) and Bono join Starbucks partners to announce Starbucks partnership with (PRODUCT) REDtm.

Africa is home to many of the world's best coffees. It's also a key coffee-growing region forStarbucks.

We buy coffees from ten African countries: Burundi, Cameroon, Congo, Ethiopia, Kenya,
Malawi, Rwanda, Tanzania, Uganda and Zambia. We have doubled our coffee purchases in
East Africa since 2006, and we announced plans to open two new Farmer Support Centersthere, in Rwanda and Ethiopia.

In early fiscal 2009, Starbucks joined (PRODUCT)RED to help save lives in Africa. Under themulti-year agreement, a contribution is made from the sale of special STARBUCKS(PRODUCT)RED products to the Global Fund to help in the fight against AIDS.
Teaming with (PRODUCT)RED strengthens our connection to Africa and provides anopportunity to raise awareness with our customers. We hope that together with ourcustomers we can make a real difference –by providing lifesaving medication tocommunities in need.

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Investing in Retail
Communities

The heart of the neighborhood.
Starbucks stores can be found in thousands ofcommunities around the world. We want to be agood neighbor and give back in meaningful

We've always believed inways. Two ways we do this is by encouraging

doing business a different way.

our partners (employees) and customers to
Since 1971, when we opened our very firstparticipate in community service and bystore in Seattle, to today with nearly 17,000

supporting young people to make positive
differences in their communities.

stores around the world, we've always beencommitted to doing business responsibly andBy 2015, our goal is to contribute more than one

conducting ourselves in ways that earn the

million hours of community service each year.

trust and respect of our customers andWe're also working to engage 50,000 young people to take action and solve problems inneighbors. We call this Starbucks™ Shared

their communities.

Planet™ – our commitment to doing business
responsibly.

There are so many great stories we want to share, of remarkable people who work for orwith Starbucks to make extraordinary impacts in their communities. Here are a few ofthe programs that help make this happen.

What we're working on.
Global programs
Connecting volunteers through social networking
V2V (Volunteer to Volunteer): Our online social network encourages volunteerism andconnection.
Inspiring youth leaders for change
Youth Grants: Starbucks is working to help the next generation of youth leaders realize
their natural potential to reinvent the world.

Regional programs
Supporting partner volunteerism
Community Service Grants: Our long-standing volunteer program in the United States
and Canada continues to inspire and motivate Starbucks partners.
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Matching donations
We encourage our partners in the United States and Canada to make charitable gifts toorganizations they care about. Starbucks partner matching grants are part of a flexible
matching gift program in the United States and Canada that matches each partner's
charitable contributions, up to $1,000 annually. In fiscal 2008, Starbucks matched$836,000 of our partners' charitable contributions.
Supporting education in China
In 2005, as part of our ongoing commitment to social responsibility and in recognition ofChina's rich tradition of placing importance on education, Starbucks established theStarbucks China Education Project. This $5 million commitment supports educational
programs in China through Give2Asia, a U.S. nonprofit organization founded by The Asia
Foundation to promote philanthropy in Asia.
Since that time, the inaugural grant made to the China Soong Ching Ling Foundation has
supported training for nearly 2,000 teachers in rural communities, provided scholarships
to 600 teaching college students in need, and created or improved libraries for 75 schools
in remote regions. The partnership with the All China Women's Development Foundation
provided training to more than 8,000 women who in turn helped teach water sanitation
practices to approximately 40,000 women in remote villages.
Nurturing Community Development
As part of our Starbucks™ Shared Planet™ commitment to communities, we partnered in2008 with the Local Initiatives Support Corporation (LISC), a U.S. organization with acommunity focus. Under our partnership a portion of each purchase using a Starbucks
Card Duetto® Visa® is donated to LISC in support of their community development work.
To date $60,000 has been contributed to LISC.
NAACPStarbucks and the NAACP work together to identify and support projects reflecting ourshared commitment to social and economic equality.

Hurdles.
The difficult business climate in fiscal 2008 and beyond has brought challenges toStarbucks and the communities we serve.

We are working to balance our business priorities with the engagement of our partners
in community initiatives. We hope partners will use Starbucks V2V and other social
media to mobilize other partners and our customers. We will explore these media tohighlight and help focus their efforts.

What we're working on.
Starbucks is committed to being actively involved in the communities we're a partof. We hope we can do that by contributing more than one million hours ofcommunity service per year and engaging 50,000 young people to create positivechange.

Community Service

Helping make the world a better place through community service.

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We believe that being involved in our communities is not only the right thing to do, it’s also
good business. Year after year, our partners (employees) and customers inspire and amaze us
with how enthusiastically they come together to make the world a better place.

Starbucks has created a variety of programs to facilitate community service and giving. And wekeep looking for innovative ways to do this, as we did in January 2009 when we saluted
customers with a cup of brewed coffee for their pledge of five hours of community service.

It’s our goal that by 2015, we will contribute more than one million hours of community service
each year.

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What we’ve been doing.
Hurdles.
V2V – connecting volunteers through social
networking
Starbucks launched the V2V (Volunteer-to-Volunteer)
online social network in 2008 to extend and encourage
human connections beyond our stores. The site, which
now has more than 10,000 members in more than 60 countries, promotes directconnections among Starbucks partners and customers to share community
experiences and opportunities to improve our local communities.

Starbucks™ Shared Planet™ Community Service Grants – encouraging
volunteerism
Starbucks community service grants (formerly known as Make Your Mark) is ourvolunteer program in the United States and Canada that brings partners andcustomers together to work on projects that directly affect their communities. Our
partners organize projects – such as park cleanups, AIDS walks and reading
events – in conjunction with local nonprofit organizations. In fiscal 2008, partners
and customers volunteered 246,000 volunteer hours in community service events.

In addition to the hands-on help from Starbucks partners, we make a donation incorrelation to the number of hours volunteered – by partners and customers alike –up to $1,000 per project. Since it was started in 2000, our community service
program has inspired our U.S. and Canadian partners and customers to volunteer
1.7 million hours for thousands of community organizations.

Make Your Mark participation has declined the past two years, and we’ve heard anecdotal
examples from partners that participation may have declined due to competing businesspriorities. But we know that giving back to our communities isn’t a distraction from our business– it’s an essential component of our success.

To reach our global goal of more than 1 million hours of community service each year, we willdevelop a global strategy with input from our NGO partners. We hope to encourage and record
community service activities, encourage store managers to promote volunteerism and leverage
V2V. The Make Your Mark program only captured activities in the United States and Canada.
We know there are many community service projects going on around the world that are notyet systematically tracked.

What we’re working on.
Starbucks is committed to being actively involved in our communities. By 2015, it isour goal to contribute more than one million hours of community service each year
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and engage 50,000 young people to take action in their communities.

Social Entrepreneurship

Young people have the power to change the world.
It’s part of who we are at Starbucks to create and innovate. With Starbucks youth grants,
we use our spirit of entrepreneurialism and innovation to inspire young people. Throughthis initiative – formerly called the Starbucks Social Entrepreneurs Fund – we hope they
will create positive solutions for the needs they see in their communities. We believe thatby supporting young social entrepreneurs, we can make real change in local
communities. Our goal is to engage 50,000 young people, who will in turn innovate, takeaction and inspire 100,000 individuals in their communities by 2015.

Supporting young people.
In fiscal 2008, we made 64 grants totaling $2.1 million to organizations supporting young
people.

We established major relationships with International Youth Foundation and Youth
Venture. These organizations are experts in providing comprehensive support to help
young people identify and address the needs in their communities. Young people also
receive advocacy, training, financial help and other resources for their efforts to flourish
around the world.

Here’s one story.

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Investing in Coffee
Communities

Since 2001, Starbucks has donated $142 million to help make a positive difference in thecommunities where our stores are located. We also make investments in the regions thatgrow our coffee, tea and cocoa. And, through the Ethos Water Fund, we’re helping
communities affected by the global water crisis.

Our community investments include cash and in-kind donations from across the company,
investments in coffee community projects, partner volunteer and matching gifts programs,
and contributions from The Starbucks Foundation.

The Starbucks Foundation is a separate 501(c)(3) charitable organization that receives
most of its funding from Starbucks Coffee Company and the rest from private donations.
Since it was founded in 1997, The Foundation has provided more than $32 million in
funding to efforts that strengthen communities where we do business.

What we’ve been doing.
In fiscal 2008, Starbucks cash and in-kind contributions were valued at $14 million; or three
percent of the company’s earnings before interest and tax.

The Foundation made 89 grants to nonprofit organizations in fiscal 2008, totaling just over
$6.5 million. Significant accomplishments included $2.1 million in grants through Starbucks
youth grants,$900,000 to continue our support of rebuilding efforts after Hurricane Katrina,$2 million in Ethos Water Fund grants for clean water projects, and $250,000 to assist
some of the areas hardest hit by the earthquake in China’s Sichuan province.

Hurdles.
Given the headwinds experienced across the globe with the current economic crisis,Starbucks cash contributions to communities decreased from the previous year. Goingforward, we’re taking a closer look at our giving to ensure we remain consistent andhttps://test.starbucks.com/SHAREDPLANET/customGRPage.aspx (107 of 108)6/1/2010 2:23:03 PM

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focused in our funding.

What we’re working on.
We continue to support local neighborhoods and coffee communities because it’score to who we are. We will continue to increase our impact by focusing our efforts
on community service and young people.

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