Ethical and Environmental Policies of Costa Coffee


Costa Coffee House is a multinational company located in Britain. The company was established in 1971 by Bruno and Sergio Costa as a supplier of roasted coffee to hoteliers and coffee shops located in London. It makes huge profits because it has roasting machines and outsources its beans from farmers and its farms. Coffee shops started replacing bars in Britain in 1980 due to the popularity of Costa Coffee House. However, some parts of this country rejected and protested the acquisition of planning permits for this company to establish branches in their locations. People invest in business activities to get profits and ensure the public gets goods and services at affordable prices. Investors use different approaches to win support from consumers and control markets while dictating the terms of business for competitors. Governments play important roles in regulating the behavior of companies and ensuring they do not violate the rights and freedoms of consumers. In addition, these regulations ensure there is level ground for all investors and that no company enjoys more freedoms than others. Companies have a responsibility of ensuring they do not violate the rights of customers or break laws that govern their activities. Investors should take proper care of the environment and support governments and organizations that promote healthy and friendly practices (Mackey 2011). Companies should have and implement ethical principles to avoid promoting activities that violate the rights and freedoms of their employees or the public. This report examines the reasons why companies have ethical and environmental policies and uses the Costa Coffee House Company as a case study.

Why Companies Claim to Have Ethical and Environmental Policies

Ethical policies refer to the steps that companies take to ensure their activities do not violate the moral expectations of the public or employees. Environmental policies are measures taken to ensure companies do not pollute or cause severe damage to the surrounding. All companies and individuals are supposed to respect and obey the laws that govern their interactions with the public (Mahoney 1994). The essence of this obedience is to promote a healthy work environment and ensure investors and the public benefit without violating the freedoms and rights of each other. There are three main reasons why companies boast robust ethical and environmental policies. First, most business activities are controlled by modern trends and fashions that seem suitable to attract investors and customers (Spyker 2013). It becomes fashionable to do what other companies do, and this explains why some have these policies, yet there is no tangible evidence to show how they are implemented. Secondly, there is too much pressure from activist groups and governments that compel companies to establish these policies for posterity. Thirdly, wise investors know that having ethical and environmental policies is profitable in the long run even though they may suffer short-term losses (Thompson 2012). They struggle to build a good reputation by doing good, and this wins the loyalty of customers. Wise investors understand that making profits should not be the core value of a company; therefore, they focus on integrity through establishing ethical and environmental policies as a strategy for enhancing profitability.

Stakeholders and Their Challenges

The internal stakeholders of a business include owners (shareholders), managers, and employees. Companies must work to achieve the missions and objectives set by their owners. The reason for investing in business activities is to generate profits through a structured chain of defined activities. A business must always observe ethical and environmental policies in ensuring that the expectations of owners are realized. Owners can influence the decisions of a company and even stop its operations if they do not get reasonable returns on their investments. Managers are responsible for integrating all resources and ensuring all employees follow company policies to maximize production and sales. Companies should hire qualified, experienced and dedicated managers who have their interests at heart. Employees require a healthy work environment, and this means that companies may be forced to spend a lot of money and forego making profits to ensure this is achieved. The external stakeholders of a company include suppliers, customers, shareholders, government, creditors, and society (Gardiner 2013). The policies of a company should reflect the expectations of these stakeholders to make sure that there is a healthy relationship between them. External stakeholders may interfere with the activities of a company if it does not respect their wishes and fulfill their expectations.

Ethical and Environmental Policies for Protection of External Stakeholders

Coffee is associated with health complications like obesity and high blood pressure. However, Costa House Company has established a consumer guide that enables customers to purchase healthy products. In addition, the company believes that it has the responsibility of educating its customers on the importance of maintaining a healthy lifestyle through exercising and eating whole foods. Most of its outlets are located in places where fast foods are popular to help consumers in avoiding these foods and preferring coffee to them (Flichy 2009). The company’s policies promote a transparent and fair recruitment process that gives all applicants equal chances of getting jobs. The establishment of its loyalty program influences customers to buy Costa’s products because they know their consumers will enjoy their benefits later. Its environmental policies promote the use of recyclable materials and encourage farmers to adopt environment-friendly practices through the Rainforest Alliance programs.

Analysis of the Credibility of these Policies

The policies stipulated by the Costa Coffee House Company are the true reflection of what happens in other companies. These policies are good and may promote ethical and environmentally-friendly practices. However, they are rarely used for the benefit of the public. For instance, Sally Norton, a journalist for Daily Mail, argues that this company has taken over all hospital shops and replaced healthy foods with coffee (Cameron 2013). This is an unhealthy drink for patients, and it is unethical to replace healthy food with coffee. Secondly, the company encourages farmers to use genetically modified seeds that are produced through unethical means and pollute the environment. The use of excess fertilizers, pesticides, and insecticides worries the public and exposes it to health complications. Lastly, there has been opposition from some parts of the country to resist the opening of Costa’s new branches because the locals believe that this company is irresponsible and it discriminates against them in job allocations. However, the lawsuits filed against this company are yet to be determined because of the ongoing investigations to confirm the credibility of these accusations. Society has become increasingly sensitive and wants to see companies adopting ethical and environmentally friendly approaches in various activities. On the other hand, companies are forced to establish these policies to silence pressure and interest groups and stop them from prodding into their affairs.


Ethical and environmental policies are important because they shape the reputation, behavior, and activities of a company. However, most companies do not pay attention to the need to have robust ethical and environmental policies. The Costa Coffee House Company has an excellent reputation for producing the best coffee in the United Kingdom. However, most of its ethical and environmental policies are not applicable in promoting a healthy nation. The company focuses too much on generating profits and expanding its market. This is a reflection of what most companies do at the expense of the rights and freedoms of their employees, the public, and the environment. Therefore, it is fashionable for Costa Coffee House to have ethical and environmental policies to match with the current trends exhibited by multinationals. Companies do not want to be left out of the bandwagon of companies struggling to establish ethical and environmental policies for publicity. Lastly, it is ethical for companies to behave following the expectations of society and laws that govern human behavior. All companies are expected to observe ethical and moral standards in their activities because it is the right thing to do. They have no other option except to follow the laws of their countries and avoid being prey to government agencies that are responsible for ensuring all companies respect the laws that govern business activities. Costa Coffee House and other companies should have regular and constant contact with external stakeholders to know their needs and ensure they identify issues that may affect their relationships. Issues like inflation can be managed properly if a company has good relationships with the government, suppliers, and creditors.


Cameron, J 2013, Take Back the Economy: An Ethical Guide for Transforming Our Communities, University of Minnesota Press, Minneapolis.

Flichy, P 2009, Dynamics of Modern Ethical and Environmental Policies: The Shaping and Impact of New Communication Technologies, Sage Publishing, New York.

Gardiner, S M 2013, A Perfect Moral Storm: The Ethical Tragedy of Climate Change, Sage Publishing, New York.

Mackey, K 2011, Technology in War: The Impact of Science on Ethical Environmental Issues, Simon and Schuster, New York.

Mahoney, J 1994, What makes a business company ethical? Business Strategy Review, vol. 5, no. 4, pp. 1-5.

Spyker, S 2013, Technology and Environment: How the Information Revolution Affects Our Environment, Skylight Paths Publishing, New York.

Thompson, A 2012, Ethical Adaptation to Climate Change: Human Virtues of the Future, The MIT Press, Cambridge.

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