Sustainability Assessment Report
Of
Tim Hortons
By Sumaisha Ahmed
Tim Hortons is a Canadian multinational café chain founded in 1964. It is based in Toronto
and serves consumers a variety of items ranging from coffee to doughnuts and other fast-food
items. Tim Hortons is one of Canada’s largest restaurant franchises and serves over 5 million
cups of coffee every day. In addition to that, they have about 4,949 locations across 15
countries. Coffee is a highly demanded product across the world. The global coffee industry
is estimated to be worth about $460 billion as of 2022 with a CAGR of 5.3% between 2022
and 2025. This industry invests millions of dollars every year to establish fair trade schemes
and find new sustainability innovations. Despite these efforts, the industry is riddled with
ethical, social and environmental issues.
Environmental Issues
The simple process of coffee going from bean-to-cup has caused long term environmental
damage. Moreover, with the ongoing pressure of the climate change crisis, it is more crucial
now than ever to have sustainability strategies in place to offset or eliminate these negative
externalities.
Deforestation and Climate Change
Coffee production is largely monoculture and therefore, affects the biodiversity of the
environment. In addition to that, mass coffee production leads to chemical buildup in soil
which eventually leads to chemical runoff that pollutes rivers and causes soil erosion, marine
life depletion and land degradation. Moreover, as traditional coffee production methods
require specific climate conditions, the climate change crisis has also greatly affected coffee
farmers due to precipitation becoming more volatile while rising temperatures, floods and
droughts become more common. This leads to farmers moving into the mountainside in
search of cooler temperatures which, in turn, causes further deforestation. The Water
Footprint Network reports that the global average water footprint of a 125 ml cup of coffee is
140 liters.
Plastic Waste
After the coffee has been produced, the industry continues to pollute the environment with
single use plastic. In today’s world, businesses have been able to capture a large customer
base with single use cups as it allows consumers the convenience to take-away and save time.
The thin layer of plastic on the inside of the cups keeps the beverage warm for longer periods
but also makes the cup non-recyclable. As single disposable cup takes approximately 20
years to decompose. In 2019, Greenpeace Canada reported that for the second year in a row
Tim Hortons was one of the top pollutants responsible for coffee cups, lids and other plastic
waste collected in shoreline cleanups across the country. Earlier that year, Tim Hortons
launched their “Roll Up the Rim” promotion that encouraged customers to get their coffee in
a single use cup to enter the contest. It is estimated that about 300 million disposable cups
were specifically produced for this campaign.
Social Issues
A vast majority of the coffee producing countries are experiencing extreme poverty and lack
effective social infrastructure and support. Coffee producers and their families are left
vulnerable due to the notoriously volatile coffee market. The unstable coffee prices pose a
direct impact on necessities like housing, food, education and healthcare. According to a
2021 report from Reuters, coffee producing countries receive less than 10% of the value of
the coffee industry when exporting coffee beans. Coffee farmers work under extreme heat for
long hours and only make between 1% to 3% of the retail price. On some larger plantations in
these coffee producing countries, farmers with poor income struggle to survive and often pull
their children out of school to force them to work long hours to bring food to the table. These
unethical labor practices in the coffee industry’s supply chain is an extensively complex
social issue and action must be taken to tackle the social injustice. Businesses have an
objective to produce coffee quickly and in the cheapest way possible to increase their profits.
Often, the chase for higher profits cause businesses to stray from ethical and sustainable
practices.
Performance
Purpose
Tim Hortons’ purpose of reporting may have been heavily influenced by the various online
articles that negatively affected their reputation. Many of those articles went into detail about
Tim Hortons’ immoral labor practices and their plastic pollution, especially regarding their
“Roll Up the Rim” promotion. This would have been detrimental to their business as it was a
public relations disaster. However, they acted promptly to tackle those issues and clear their
name. They phased out plastic straws and introduced straw-less cold beverage lids as well as
100% recyclable hot beverage lids. According to their website, this was estimated to remove
300 million and 120 million plastic straws out of circulation, respectively. They also took
other measures such as introducing recyclable sleeves to end double cupping. This is
estimated to save about 2,700 tonnes of cups per year, which adds up to about 200 million
cups. Regardless of their commendable efforts to reduce plastic waste, no official
sustainability report was found on their website or any other online sources.
Target
Regarding Tim Hortons’ targets for the future, they appear to be very enthusiastic with their
green efforts. They have a detailed timeline and sustainability plan on their website which
indicates the use of an embedded strategy. In 2022, Tim Hortons plans to test launch
recyclable and compostable cups that were made of 20% recycled material. Moreover, they
are also planning to test fibre hot beverage lids in the fourth quarter of 2022. These
initiatives suggest that they are making a real effort to turn their words into actions.
Performance & Metrics
Tim Hortons has detailed information on their website as well as their parent company
(Restaurant Brands International) regarding their 100% ethically sourced coffee. They claim
to conduct annual audits using a third party, Enveritas, to make sure all their coffee is
ethically sourced and are within a set of social, economic and environmental standards that
measure farm level sustainability. The Tim Hortons for Communities Program is said to have
addressed the gender inequality and child labor issues commonly faced in the coffee industry.
According to RBI’s website, the smallholder coffee farming families are being educated on
“climate-smart” production and encouraged to try new farm technologies, ecological
solutions and the use of technology to improve farm practices.
Tim Hortons has successfully embedded sustainability into their business practices through
changes in their supply chain, changes in packaging and active efforts to benefit smallholder
farmers.
Legitimacy
As previously mentioned above, Tim Hortons uses a third party, Enveritas, to make sure their
supply chain is ethical and there are no unfair practices along the supply chain.
Moreover, their efforts to reduce their plastic waste is demonstrable as there is numeric data
available and the changes have been implemented across all Tim Hortons locations in
Canada.
From this analysis, we may conclude that Tim Hortons sustainability strategy is an embedded
strategy. Paul Yang, the lead of Innovation & Sustainability at Tim Hortons, states,
“Sustainability is not a standalone department within our business. Sustainability has been
knitted into our DNA and is something we consider in every move we make”. They had faced
strong criticism in the past regarding many of their business practices but have since taken
actions to replace those practices with a more sustainable approach.
Institutional Forces
Regulatory
The most important incentive for business is profit. Businesses, including but not limited to
the coffee industry, are always on a constant search for ways to increase profitability.
Although sustainable development and practices are good for the environment and beneficial
to mankind, profit may be more important in a business perspective. This may cause
businesses in the coffee industry to invest less than they are capable of investing into
sustainability innovations and practices. This would explain why most companies in the
coffee industry resort to denial or defense strategies.
Furthermore, businesses in the coffee industry may try to encourage employees to cut costs
with a rewards-based system. This may lead employees to conform to unethical sourcing or
unsustainable waste disposal methods.
Normative
The normative institutional force plays the greatest role in the coffee industry. This is because
there are certain social norms in place which is considerably slowing down the industry in
terms of adapting sustainability practices. For example, it is standard in the industry to serve
coffee in single use cups and food items in single use boxes. This has been the industry
standard for decades and is unlikely to change soon. However, many businesses like Tim
Hortons, are taking initiatives to find a way around industry standards and create new
adaptive standards. These would include the innovation and launch of compostable cups or
switching to 100% recyclable cups, lids, straws and containers.
In conclusion, Tim Hortons is a sustainably adaptive company and is conducting their
business in a way that respects the environment. Although they received some bad publicity a
decade ago, they have used an embedded strategy to connect sustainability to the core of their
operations.
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