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Corporate Social Responsibility
News
6.21.2005 ET
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One Year After Investment: Pre-Financing Used To Make Possible The Sale Of Over 22.3 Million Pounds Of Coffee, Improve Circumstances For Small Coffee Farmers
(CSRwire) BETHESDA, Md., and SEATTLE- One year after the Starbucks Coffee
Company (Nasdaq: SBUX) invested $1 million to support Latin American
coffee farmers, the Calvert Foundation reported today that it so far has
"recycled" those funds into $2.7 million worth of loans to coffee
cooperatives, benefiting 24,400 of the world's smallest coffee farmers and
supporting them in their efforts to export more than 22.3 million pounds of
Fair Trade and shade-grown coffee.
Since the spring of 2004, when Starbucks announced its $1 million
investment in the Calvert Foundation to finance coffee farmer
cooperatives, Calvert Foundation initially distributed the investment to
three coffee cooperatives -- located in Costa Rica, Mexico, and Nicaragua
-- and EcoLogic Finance, Inc., a Massachusetts-based nonprofit. When that
financing was repaid by coffee cooperatives, it then was loaned out again
by Calvert Foundation to other coffee growers.
Today, Calvert Foundation announced that, based on the success of the
first and second round of investments, it is recycling another $650,000 in
new investments in Fair Trade coffee cooperatives. The new third round of
financing will enable Calvert Foundation to further extend the impact of
the capital initially provided by Starbucks, using repaid funds from the
first and second rounds to provide financing for coffee-producing
cooperatives in Peru and bringing the total amount of recycled financing
so far to $2.7 million.
Calvert Foundation Executive Director Shari Berenbach said: "Calvert
Foundation is all about helping individuals and institutions make a real
difference in the world through the power of investment. That emphasis on
results is clearly on display in the $1 million invested in Calvert
Foundation by Starbucks. This investment demonstrates the success that we
can achieve when corporations and non-profits work together on sustainable
strategies that address the needs of those outside the economic
mainstream. Calvert Foundation makes available to the public a financial
instrument, called a Community Investment Note. This safe and convenient
investment instrument makes it possible for investors to channel capital
to low-income communities in the US and abroad. By investing with Calvert
Foundation, institutions and individuals achieve a real impact that
directly benefits people who otherwise might have few hopes -- and even
fewer opportunities."
Starbucks Vice President of Business Practices Sue Mecklenburg said:
"Starbucks is proud to work with the Calvert Foundation which is
empowering thousands of small holder farmers in Latin America by enabling
them to get money when they need it. When farmers have access to credit,
we believe they are able to negotiate better prices for their crops, build
credit histories and improve their lives and that of their families and the
local communities. These are important components in ensuring sustainable
development as it helps farmers gain more control over their lives and
build more secure futures for their families."
William Foote, president, EcoLogic Finance, Inc., said: "We're
thrilled to count both Calvert Foundation and Starbucks as our partners.
The farmers we extend loans to play a vital role as stewards of the land.
Without financing, many of these coffee-farming communities cannot invest
in scaling up their operations; they are therefore unable to invest in
quality for the specialty markets."
Calvert Foundation provided the following details about the Starbucks-
supported coffee investments:
$200,000 to COOCAFE -- Consorcio de Cooperativas de Caficultores
de Guanacaste y Montes de Oro R.L., a certified Fair Trade Coffee
cooperative in Costa Rica. The funds were used for the pre-financing of
the purchase of coffee for export. The investment affected a total of
4,500 farmers in nine different cooperatives.
$200,000 and $300,000 to Union Regional de Huatusco (Huatusco), a
certified Fair Trade coffee cooperative located in Mexico and with 14
percent of the land involved dedicated to organic coffee production. The
investment had an impact on 1,908 coffee growers, including 438 women
farmers.
$250,000, $250,000 and $387,500 to Prodecoop Central de
Co-operativas, a nonprofit owned by 40 cooperatives in Nicaragua. The
investments focused on sales and distribution. The nonprofit focuses on
providing credit and technical assistance to member cooperatives. The
financing benefited a total of 2,300 coffee growers, including 504 women
farmers.
$300,000 to CEOCOAFEN -- La Central de Cooperativeas Cafetaleras
del Norte, a Fair Trade registered federation of small coffee farmer
cooperatives in Nicaragua. Fair Trade coffee represents 23 percent of
sales and Fair Trade organic coffee represents 18 percent of sales. The
investment has an impact on 2,016 farmers, including 329 women.
$250,000 to EcoLogic Finance, which has operations in Belize,
Bolivia, Brazil, Colombia, Costa Rica, Ecuador, Guatemala, Honduras,
Mexico, Nicaragua, Peru, Rwanda and Uganda. The investment was used to
capitalize a fund generating 135 loans totaling $21 million for Fair Trade
agriculture, eco- tourism and sustainable fisheries. Additionally,
EcoLogic joined Calvert Foundation in founding the Finance Alliance for
Sustainable Trade (FAST), the members of which leverage each other's
resources to identify producer needs, raise loan capital, and mitigate the
risks involved in lending.
The new third round of $650,000 in Fair Trade Coffee investments by
Calvert Foundation involves three cooperatives:
COCLA is located in the Quillabamba region of Peru, east of the
Incan city of Machu Picchu. The cooperative is composed of 7,500 producers
from 22 co-ops and 10 associations, with women comprising 25 percent of the
membership. In an area with very few economic options, Fair Trade offers an
alternative to growing coca, the main ingredient in cocaine.
CECOVASA is federation of coffee-producing cooperatives in the
Peruvian Andes, with 5,000 members (30 percent of whom are women).
La Florida started out as a group of 100 small-scale family
coffee farmers from Peru's Chanchamayo region who joined together in 1965
to form their own cooperative. Their efforts focused on education,
infrastructure, credit, and environmental restoration for their remote
corner of the Peruvian jungle. Today, the cooperative has grown to include
more than 1,200 farmers who work together to improve the quality of the
cooperative's coffee.
Starbucks and Calvert Foundation have worked together on a range of
projects in recent years. In 2001, Starbucks invested $150,000 to help
grow affordable housing programs and small-business facilities in
disadvantaged communities across United States. Starbucks' initial
investments in Calvert Foundation benefited The Low Income Housing Fund in
San Francisco, the Corporation for Open Land in Illinois, and ACCION New
York, Inc.
Starbucks is helping EcoLogic Finance work on an even larger scale.
In September 2004, Starbucks approved a $2.5 million loan to EcoLogic
Finance for lending to coffee farmer cooperatives across Latin America and
in East Africa. From 2001 through 2003, Starbucks provided $650,000 in
credit to EcoLogic Finance and Conservation International to support
short-term harvest loans for small holder coffee farmers operating in
Chiapas, Mexico.
Fair Trade certification is a program that guarantees coffee farmers a
fair price while also encouraging social and environmental sustainability.
The Fair Trade system currently includes 670,000 farmers. Fair Trade
certification guarantees a price of $1.26 for coffee, or $1.41 for organic
coffee.
With Fair Trade premiums established, farmers are often able to
purchase equipment and machinery that ordinarily would be financially out
of reach. Drying beds and cupping laboratories aide important aspects of
the coffee farming process, and the farmers in turn make larger profits
for their coffee harvest. Fair Trade also impacts the farming community
outside the scope of the farming business. Children who would otherwise
be forced to work in order to take advantage of free labor are in school,
and more money means more food on the table, a higher standard of living,
and an elevated sense of pride in the farmers themselves.
ABOUT CALVERT FOUNDATION
The Calvert Foundation (http://www.CalvertFoundation.org)
is an independent 501(c)3 nonprofit organization that uses the power of
investment to revitalize poor communities, reverse inequality and create
hope and opportunity where it's most needed. The Calvert Foundation
receives investment capital from individuals and institutions, and uses
industry- leading due diligence to select and manage a diversified
portfolio of high social impact investments. Over the past 10 years,
Calvert Foundation has recycled more than $250 million in investments that
have helped to create over 100,000 jobs for low income individuals, built
of rehabilitated approximately 6,000 affordable homes, and financed more
than 5,000 nonprofit facilities, including daycare centers, community
health clinics, and schools. Calvert Foundation makes available a wide
range of innovative financial instruments. Its Web-based information
services and philanthropic products include Community Investment Notes,
the Community Investment Profile Database, the Calvert Giving Fund, and
Community Giftshares. Calvert Foundation is a separate entity from Calvert
Group Ltd. and its products should not be
confused with any Calvert Group-sponsored investment product.
ABOUT STARBUCKS COFFEE COMPANY
Starbucks Corporation is the leading retailer, roaster and brand of
specialty coffee in the world, with more than 9,000 retail locations in
North America, Latin America, Europe, the Middle East and the Pacific Rim.
The Company is committed to offering the highest quality coffee and the
Starbucks Experience while conducting its business in ways that produce
social, environmental and economic benefits for communities in which it
does business. In addition to its retail operations, the Company produces
and sells bottled Frappuccino(R) coffee drinks, Starbucks DoubleShot(R)
coffee drink, and a line of superpremium ice creams through its joint
venture partnerships. The Company's brand portfolio provides a wide
variety of consumer products. Tazo(R) Tea's line of innovative
superpremium teas and Hear Music's(TM) exceptional compact discs enhance
the Starbucks Experience through best-of- class products. The Seattle's
Best Coffee(R) and Torrefazione Italia(R) Coffee brands enable Starbucks
to appeal to a broader consumer base by offering an alternative variety of
coffee flavor profiles.
ABOUT ECOLOGIC FINANCE
EcoLogic Finance provides low-interest loans and financial training to
help struggling farming communities in the developing world maintain their
livelihoods in environmentally sustainable ways. Launched in 2000, the
organization manages a portfolio of $25,000 to $500,000 loans. Their
borrowers: small- and medium-sized farmers' co-ops which are too large for
microcredit agencies and too small or untested to be "bankable" with a
commercial bank. EcoLogic Finance loans benefit villagers involved in
agroforestry (shade-grown and sustainable agriculture), wild-harvested
products, sustainable fisheries, and ecotourism, with a particular focus
on small-scale producers of sustainably-grown coffee.
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