Starbucks and other major companies ditch key initiatives: 'There's a real danger'

As climate goals grow more urgent, some major companies are rolling back the commitments they once publicly made. According to the Financial Times, Starbucks is among the high-profile companies removing climate goals from its executive bonus structures — a move that has sparked concern among environmental experts and investors alike.

What's happening?

Earlier this year, Reuters reported that Starbucks shareholders voted to strip DEI benchmarks from executive pay packages. The decision comes as Mellody Hobson, the company's influential lead independent director and longtime DEI advocate, prepares to step down.

The reversal is part of a wider trend: companies citing legal uncertainties and shifting priorities are walking back on ESG (environmental, social, and governance) metrics. Others to make this type of change include UBS, Standard Chartered, and HSBC, the Financial Times reported.

The timing has raised eyebrows. Starbucks, under scrutiny for inconsistencies between its environmental messaging and executive actions, such as its CEO's controversial private jet commutes, may be sending mixed signals about its commitment to environmental responsibility that threaten to undo some of the goodwill the company has been building with measures like permitting customers to bring their own cups or take an order to drink on the premises in a ceramic mug.

Why are climate goals in pay plans important?

Experts say decoupling executive incentives from environmental and social goals weakens accountability and slows progress. With the climate crisis accelerating, the lack of enforceable environmental benchmarks at the leadership level could stall real change. DEI reversals also risk further marginalizing underrepresented communities in the corporate space.

At the same time, Starbucks faces criticism over failed recycling promises, where recyclable cups still end up in landfills. If a company is not committed to backing up such programs with methods to ensure compliance, it is an example of what some might call greenwashing.

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"ESG targets aren't really making nasty companies do less nasty things. There's a real danger that you just end up with more pay, not more ESG," said Tom Gosling, director of the London School of Economics' initiative in sustainable finance, per Financial Times.

What's being done about climate goals by major companies?

Starbucks has pledged to reduce its water and carbon footprint by 50% by 2030 and promoted ceramic mugs at some stores. However, these initiatives may feel hollow without accountability from its executives.

For now, the company's next steps will signal whether this is a course correction or a quiet retreat. The best way to encourage stronger action is to stay informed and support businesses that match words with measurable progress.

Would you work for a company that doesn't have a sustainability strategy?

No 🚫