Coffee Shops

When it comes to the ethics of buying a coffee in a coffee shop, there are more issues to consider than just the coffee itself and the ethical sourcing claims of the shops.

Contemporary concerns, for example, include single-use coffee cups and reusable cups, whether you have to pay a surcharge for plant milk and whether the shops pay any corporation tax in the UK. We discuss all these issues below and explore some solutions.

Since our last guide in 2019, Coca-Cola has taken over Costa Coffee, which has caused its score to plummet from 6 to 2. And Nero Group has added Coffee#1 to its portfolio which already included Caffè Nero and Harris + Hoole.

Costa Coffee is the most popular coffee shop and has nearly three times more outlets than its nearest competitor Starbucks. You can buy a Costa coffee not only in their high-street shops and from motorway service stations, but also from their Costa Express machines which are everywhere, from petrol stations, gyms, and supermarkets, to hospitals and sixth form colleges.

Caffè Nero is the next most popular place for a coffee after Starbucks. These big three account for over 80% of all coffee shop visits.

But Costa Coffee and Starbucks are the least ethical of the shops we cover, so ethical consumers could try to seek out more ethical alternatives like local independent coffee shops (see box at the end on what to look for in an independent shop).

Boston Tea Party, at the top of our score table, is a chain with only around 23 outlets (compared to Costa’s 2,672). Greggs scores best of the coffee shops that you can find in most towns and cities.

Which coffee shops are in this guide?

We have focused on the coffee shop chains which specialise in selling coffee and tea as their main product.

We have also added in sandwich shops Pret a Manger and Greggs, which are also popular places to buy coffee. We have not covered food-led venues like McDonald's which also sell coffee but are more likely to be visited for their burgers.

The carbon footprint of coffee shops

Our Carbon Reporting rating results show a need to seriously question why some of the UK’s biggest coffee chains are failing in the carbon reduction department.

For our carbon reporting rating, which is included in the Climate Change column on the score tables, we checked all the coffee shops for publicly available data which shows that companies:

• (a) have set targets for carbon reduction in line with international agreements,
• (b) are reporting annually on what their emissions actually are, and
• (c) have a plausible plan for how they meet the targets, including reporting on measures they’ve already taken.

The worst in terms of reporting was Caffè Ritazza, the only company with no mention at all of the environment on its website.

Soho had very little information. Starbucks and Costa (via the reporting of Coca-Cola) received a best rating whilst Greggs was middle. The other 11 brands got a worst rating.

Dairy milk is a coffee shop’s biggest carbon footprint

According to Starbucks’ sustainability report, dairy milk is the biggest single contributor to its total carbon footprint, and we have therefore assumed that this applies to all coffee shops. Packaging and coffee cups make a relatively small contribution.

Unfortunately, the nation’s favourite coffee is a latte – a coffee with a lot of milk.

A large latte with cow’s milk has the biggest carbon footprint of all coffee and tea varieties: 552g of CO2e which is roughly equivalent to driving about a mile in an average UK car. The milk accounts for three quarters of a latte’s footprint. A disposable cup adds another 110g.

Using soya or oat milk almost halves the footprint of a latte and reduces it for all other drinks.

The lowest carbon option is to drink your tea and coffee black. Black tea or herbal tea has half the footprint of a black coffee.

So for the sake of the climate, it should be out with coffee shops and back in with tea shops! But realistically, the UK’s coffee habit is going to be hard to shift.

This is why it’s even more important that companies reduce the climate impact of a coffee by not charging more for plant milk (see later).

In the USA, a chain of coffee shops called Blue Bottle Coffee has made oat milk the default milk rather than dairy at more than a third of its shops. That’s a good idea. So is offering a discount for plant milk to show a company’s commitment to reducing its carbon footprint. We couldn’t find any coffee shops in the UK doing any of that. On the contrary, just over half of the coffee shops in this guide offer a discount for dairy milk (by charging extra for plant milk).

In the UK, we found the following dairy-free coffee shops but there may be more. Let us know: email us at enquiries@ethicalconsumer.org

• Potts Coffee, 18a Slater Street, Liverpool
• The Bright Store, 268 Hackney Road, Hoxton, London

Of course, you don’t have to go to a speciality coffee shop for a coffee with plant milk: there are many vegan cafes around the country where you can get a coffee to sit in or take away. Happy Cow is still the most used app for finding vegan cafes around the world.

The plant milk surcharge

Starbucks used to charge for oat, coconut or almond but not soya, but stopped the surcharge in January 2022. The announcement followed a spoof campaign against it in December 2021 by dairy-free campaign group Switch4Good. They distributed a fake press release saying the company would drop its surcharge due to the prevalence of lactose intolerance among Black, Indigenous, and People of Color (BIPOC) communities. Switch4Good claimed that 95% of Asians, up to 80% of Black and Latinx people, and more than 80% of Indigenous Americans cannot digest dairy. In contrast, just 15% of white people have lactose intolerance. The group accused Starbucks of dietary racism. Starbucks claimed the move was environmentally driven.

8 of the 15 coffee brands, that’s just over half, still charge extra for some plant milks, although most give you soya for free. Puccino's is the only one in this guide that even charges for soya milk.

Though not in this guide as a coffee shop, we thought it was worth noting that McDonald's still doesn’t offer any plant milk in the UK, surcharge or not, and was the last of the major fast-food chains to offer a vegan meat burger. It does offer oat milk in Australia.

To encourage more people to adopt a carbon- and animal-friendly diet, and to not penalise lactose intolerant people, all plant milk should be free, just like dairy milk.

Those who don’t charge extra for all plant milks are: Esquires, Boston, AMT, Pret a Manger, Starbucks, Greggs (though it only offers soya).

Arguably, given the major role that cow’s milk has in the carbon footprint of a hot drink, the charge should be reversed so that dairy milk is extra.

Coffee certification schemes and plant milk: what are coffee shops doing?

We reviewed all the coffee shops in this guide to see who was doing what on the important issues of coffee certification and use of plant milk.

Coffee certification schemes

As our rating system takes a wider view, we have taken a look at how ethical the coffee shops are in terms of sustainable and ethical coffee.

Fairtrade coffee in coffee shops

A 12-year partnership between Starbucks and Fairtrade UK ended recently. Starbucks coffee in the UK is no longer Fairtrade certified although it will continue to be globally. The company has replaced it with its Coffee and Farmer Equity Practices (C.A.F.E) standard developed internally in partnership with Conservation International. It insisted the standard, which has been running since 2004, is equally rigorous but we don’t think so.

It is the most significant firm to depart from Fairtrade UK since Nestlé announced plans to stop buying Fairtrade cocoa and sugar for its KitKat brand in 2020.

Aside from the blow to Fairtrade, nothing much has changed since our last guide in 2019.

Best practice

• Four coffee shops sell only Fairtrade coffee, the highest standard: AMT, Esquires, Greggs, Soho.
• Three companies use Direct Trade which, in theory, means they have a direct relationship with coffee farmers: Boston Tea Party, Coffee#1, Harris + Hoole.
• Three companies sell organic coffee, which is grown without pesticides and the core standards of the International Labour Organisation must be adhered to: Esquires, Pret, Soho.
• Soho Coffee is triple certified, and Esquires is double certified.

Middle practice

• Half of the shops sell Rainforest Alliance coffee, which we view as the weaker standard because of its lack of Fairtrade’s fixed price premium paid on top of the market price.

Worst practice

• Caffè Ritazza still doesn’t seem to be certifying its coffee at all.
• Coffee shops and their websites don’t say much about whether their tea is certified.

Our separate article on coffee (and tea) certification schemes looks a number of certification schemes including bird-friendly coffee.

Organic milk is only offered by 4 of the 15: AMT, Boston Tea Party, Pret and Soho. Aside from the carbon impact of milk, organic milk at least ensures some environmental and animal welfare standards.

The coffee cup problem

Along with drinks bottles and carrier bags, the take-away coffee cup has become a poster child for our plastic problem.

It is not surprising considering that, in the UK alone, we throw away 500 of them every minute. That’s about 2.5 billion a year, enough to circle the planet five and a half times. Fewer than 1 in 400 cups (0.25%) are actually recycled, the rest ending up in landfill.

Coffee cups that end up in the UK’s landfill sites produce an annual carbon footprint equivalent to over 152,000 tonnes of carbon dioxide, similar to what 33,300 cars produce in a year.

But cups and packaging are a very small part of the carbon footprint of coffee shops. The problem with cups is more to do with litter and plastic pollution than climate change.

Each coffee cup can take up to 30 years to degrade – and by degrade we really mean break down into parts too small to be easily detectable, rather than too small to do any damage. The plastic parts of the cup can also leach toxins into the environment as they breakdown.

We have already got to the stage where microplastics are being found in our drinking water.

Why don’t more coffee cups get recycled?

The term ‘paper cup’ is rather a misleading one.

To stop your drink soaking through the cup they are lined with polyethylene – a non-biodegradable, oil-based plastic. The plastic layer is fused to the paper at high temperature which makes it difficult to separate the two materials at the recycling stage. Because of this, the cups can’t be put in a mixed recycling bin but have to be collected separately to be recycled at just four recycling facilities in the UK.

In reality, most are put in the non-recycling bins and are destined for landfill.

What are the solutions to disposable cups?

With plastic pollution being such a hot topic right now, most of the coffee shops are discussing the issue. There are three main solutions proposed.

1. Improve recycling infrastructure

One solution is to keep the cups as they are but ensure that more of them are recycled. Currently, the coffee cup does not have much value as an item to recycle as there is very little return on the effort and cost of recycling them. That explains why there are only four recycling facilities for them.

Costa launched the UK’s National Cup Recycling Scheme in 2018 to pay waste collectors an incentive for every tonne of cups they collect, to help to fund the right infrastructure and processes for cups to be recovered for recycling. 163 million cups have been recycled via the scheme since its launch (40 million a year) and it is now supported by more of the UK’s leading coffee brands: Caffè Nero, Pret a Manger, Greggs.

That’s way under Costa’s target of 500 million by 2020. And it’s nowhere near enough if we throw away 2.5 billion a year.

Costa lobbied against the ‘Latte Levy’

It has been argued that the recycling scheme was started by Costa as an attempt to persuade ministers that there was no need to introduce the ‘Latte Levy’ which they opposed for fear that sales would be affected.

Even though the charge on plastics bags had a huge impact on making people bring their own bags, UK MPs voted against the ‘Latte Levy’, a similar 25p charge on single-use cups in 2018. The levy was recommended by cross-party Environmental Audit Committee. It was meant to fund infrastructure to make all cups recyclable and, if that failed, the sale of disposable cups should be banned by 2023.

Just before it was to be introduced Costa “obstructively lobbied” against it and the proposal was dropped. Costa said it wouldn’t work and claimed the government would be “deliberately targeting coffee drinkers” and questioned whether cups made from plastic and paper could be deemed single-use plastic because they are ‘recyclable’.

Not long after this, Costa was bought by Coca-Cola, another single-use packaging company that has lobbied against deposit return systems or other legislation to regulate single-use plastic.

Surcharge vs discount

The Environmental Audit Committee found that consumers are more likely to respond to extra charges than they are to discounts.

A 25p surcharge on takeaway cups in the Houses of Parliament’s own catering outlets introduced in October 2018 led to a 74% reduction in single use cups. Starbucks introduced its own 5p ‘latte levy’ and noticed that there was a 126% increase in the use of reusable cups but still the vast majority of customers were using the disposable option.

Scotland have unilaterally decided to introduce a mandatory 20-25p surcharge, hopefully later in 2022.

Boston Tea Party said that the discount didn’t really work as an incentive. "We know first-hand this has a very low penetration and when we launched that scheme ourselves, only 5% of customers took it up.”

But with no mandatory charge scheme or levy, the UK government recommended that shops voluntarily introduced reusable cup discounts which most coffee shops plumped for. Perhaps they are banking on the fact that most people forget to bring their reusable cup so it doesn’t affect their income.

2. Redesign the take-away cup

A few companies in this guide – Esquires Coffee House, Harris + Hoole and Coffee#1 – have redesigned their take-away cups into ‘biodegradable’ or ‘compostable’ versions. They’re still single use but maybe better than recycling. However, there are a couple of significant problems with this approach.

Cups that are labelled ‘compostable’ cannot just be thrown onto your garden compost and need to be sent to a special industrial plant to be composted because home compost doesn’t get hot enough. There’s only 50 in the UK, not all of which deal with packaging. Many councils are not yet accepting them on the kerbside, meaning that they can be just as difficult to recycle as the paper-polyethylene cups.

The plant starch used has the potential to do harm to the environment. As George Monbiot pointed out in 2018 in reaction to a call for Starbucks and Costa to replace their plastic with corn starch:

“Those who supported this call failed to ask themselves where the corn starch would come from, how much land would be needed to grow it, or how much food production it would displace. They overlooked the damage this cultivation would inflict: growing corn (maize) is notorious for causing soil erosion, and often requires heavy doses of pesticides and fertilisers.”

3. Reusable coffee cups – reuse and refill

Both disposable and compostable cups are single use so instead of just exchanging one problem for another, we need to move away from the whole notion of ‘disposability’ and single use.

Bring your own

There is now a huge range of reusable cups on the market made from all sorts of materials including glass, bamboo, rice husks and even recycled coffee cups.

Discounts for reusable cups were put on hold over Covid, and a recent coffee shop survey we did found that most of them weren’t really displaying or promoting the discount.

Most coffee shops offer a 25p discount but Pret gives you 50p which is clearly advertised. It’s even more important to take your reusable cup to Pret because they seem to have stopped giving you a china cup if you sit-in. Caffè Ritazza didn’t seem to offer any discount.

Returnable cup schemes

A problem with reusable cups is that it relies on people remembering to take their reusable cup with them everywhere. A solution is a deposit return loan scheme such as the one proposed for soft drinks bottles. You pay a deposit for a reusable cup which is refunded if you bring it back for washing and reuse.

The following schemes have been voluntarily introduced by companies:

• Boston Tea Party started a cup loan scheme in 2018 when they banned single use cups – £2.50 deposit.
• Starbucks is trialling a returnable cup scheme in Canary Wharf in London which it says it will have in all in its stores by 2025 – £1 deposit.
• Costa is trialling a reusable cup scheme – BURT (Borrow, Use, Reuse, Take back) – in shops in Glasgow. The trial ended on 29th March 2022.
• McDonald's trialled a scheme in six cafes in Northampton last year (2021) but we couldn’t find out the results of the trial – £1 deposit.

Returnable cup schemes need to be made mandatory but the one planned for soft drinks bottles has been plagued with setbacks and corporate lobbying for years. It will not be in place in England until late 2024 at the earliest, six years after being announced by the government as a key environmental policy.

Ban single-use cups

Boston Tea Party, our Best Buy in this guide, made a bold move in 2018 and eradicated take-away cups altogether. Customers can either bring their own reusable cup, buy one at the counter or borrow one using the deposit scheme. They said:

“We have lost around 25% of our takeaway coffee sales but we modelled that into our costs as passing trade who don't want to get involved in the cup loan scheme. We felt this was a financial loss we had to take and we want this to be a call to action to other companies.”

It would be great to see more businesses follow in the footsteps of Boston Tea Party.

What are coffee shops doing about disposable cups and reusable cups

We did some research to find out what each of our brands is doing on the ground to help curb the number of coffee-cups going to landfill.

Which coffee shops are not paying tax fairly?

Prior to its take-over by Coca-Cola, Costa Coffee’s record on tax was relatively good. In the 2017-18 tax year it paid £24.7 million in taxes on profits of £103 million – over the headline rate of corporation tax. However, in the same period, Coca Cola in the US was paying 15% below the corporate rate of 35% (admittedly a tax rate above that of the UK’s).

At the time of the takeover, MPs raised concerns that Coca-Cola might restructure Costa to avoid a UK tax bill. We have noted that Costa Coffee’s immediate parent company is now Ireland-based Coca-Cola subsidiary, European Refreshments. Ireland is on our current list of tax havens. The company has yet to receive criticisms for its tax affairs but it is certainly one to watch.

It still loses a full mark under Tax Conduct as, when you buy a coffee from Costa, the profits (whether they get taxed in the UK or not) still end up in the hands of a company with our worst rating for likely use of tax avoidance strategies.

Caffè Nero is one of the prime examples of tax avoidance – it has not paid corporation tax in the UK since 2007.

This is because the company is loaded with debt from when its owner Gerry Ford borrowed to take the company off the stock exchange. Caffè Nero is charged exorbitantly high interest rates on this debt which pushes the company into a loss even if its coffee business makes a healthy profit. Reporting a loss means it is not required to pay any tax here in the UK. And the company it is paying these high interest rates to? Well that would be its parent company, of course! Based in Luxembourg, where it can reap the benefits of a very low tax rate. While this parent company is then responsible for paying back the original loans to financial institutions this is at a far more favourable interest rate than the one it charges Caffè Nero and the company consistently re-finances these allowing the system to continue.

Starbucks has long been criticised for its tax affairs as well. In 2020, it was reported to have claimed a UK tax credit of £4.4 million due to losses incurred during the pandemic. However, in the same year its parent company actually made a profit of £870 million. The sheer complexity of Starbucks’ filings means that it is nearly impossible to tell whether its approach to tax has actually improved. With staggered filings at Companies House, and an absence of country-by-country reporting, showing exactly where profits have been made, it is very difficult to say.

As is always the case, the likes of Starbucks and Caffè Nero will point out that they pay all the tax that they are legally required to in the UK. However, the difference is between aiming to pay the right amount of tax in the right place at the right time and having an aggressive tax minimisation strategy.

In 2018, we were pleased to report that AMT had become the first coffee shop chain to be awarded the Fair Tax Mark. Unfortunately, it is no longer accredited due to some restructuring that the company has undergone. It did not, however, lose any marks for likely use of tax avoidance strategies.

How the companies rated for tax

Our best rating for tax was received by: Boston Tea Party, Change Please (AMT), Greggs, Business Trading Company (Soho Coffee) and Cooks Global Foods (Esquires).

The rest received our worst rating.

Anti-Social Finance

Companies lost half a mark under Anti-Social Finance for paying directors annual amounts of £200,000 or more and a whole mark for paying over £1 million.

Greggs and SSP (Caffè Ritazza) lost half marks, although it was noted that Greggs directors had received payments over £1 million in previous years.

Coca-Cola (Costa) and Starbucks lost whole marks.

How do the coffee shops rate on other ethical issues?

Workers’ Rights

As hospitality and catering are industries with traditionally low wages, we marked down companies that were not publicly committing to paying the Real Living Wage. Only Change Please / AMT had clear commitments to pay the Real Living Wage.

Controversial Technologies

Every company also lost half a mark under Controversial Technologies for a lack of a clear company-wide policy of GMO-free sourcing (including animal feed).

Habitats & Resources

Every company except Boston Tea Party lost half a mark here for selling fish that was not certified sustainable.