Coffee companies need to prove their sustainability impact

According to a new report being released today (14 January), coffee companies must start proving their sustainability impact. The findings of the new Coffee Barometer – the latest report from a collective of organisations in the sustainability field; Conservation International, Hivos, Oxfam Belgium and Solidaridad, and produced by Ethos Agriculture – reveals that the largest coffee companies in the world are failing to report transparently on their 2020 commitments and doing too little to ensure sustainability for farming and farmers.

The top 10 coffee companies are responsible for roasting 35% of the world’s coffee, which generated an estimated USD $55 billion in total revenue in 2019. Tracing the flows of finance through the coffee value chain finds it highly concentrated in Europe and the USA, markets where consumers have great interest in the origin of their coffee, and if it’s produced sustainably.

While roasters and traders could play a critical role in coffee-producing countries in many of the most pressing environmental and social challenges identified in the UN’s Sustainable Development Goals (SDGs), the Coffee Barometer finds that their individual policies, plans, and funding are often disconnected from the local realities, from each other, and largely focus on single issues.

The report shows that 15 of the major traders and roasters are not meaningfully contributing to key SDGs that would improve livelihoods and conserve nature, and transparency is still lacking across production, trade, and consumption. While some companies have comprehensive policies in place, many large traders and roasters mentioned in the report remain unclear about their commitments, any progress on promises, and lack a comprehensive sustainability strategy with measurable targets over time. According to the Coffee Barometer, no one is doing enough.

“Big coffee companies need to actually prove their supply chains are free from human rights violations and deforestation, and that they are investing in higher farmer income, better labour standards, and climate change adaptation. Policies are not enough; if you want us to believe you’re doing good, you have to show it,” said Stefaan Calmeyn, coffee programme manager for Oxfam Belgium.

Bambi Semroc, vice president of sustainable markets and Strategy for Conservation International, added, “We have 10 years to meet the UN SDGs and the Paris Climate Agreement. There is an urgent need, and a compelling opportunity, for the coffee industry to take the lead, drive investments to avoid the worst impacts of climate change, and find solutions that benefit people, nature, and coffee in producing landscapes.”

With coffee prices remaining persistently low – this is the third year in a row that coffee farmers are experiencing a commodity price of coffee negatively impacting the profitability of all producers – and many coffee farmers already operating well below the poverty line, most are unable to invest in their farm or make production more sustainable, which is essential if they are to adapt to climate change. The report highlights the negative effects of climate change: that the last decade has been the warmest on record, bringing droughts, hurricanes, and a worsening of coffee-specific pests and diseases, such as the ‘La Roya’ fungus or the coffee berry borer. With farm revenues decreasing, costs rising, and the situation around them worsening, smallholder farmers’ livelihoods are under threat.

Hence, producers are under constant pressure to cut costs, especially those related to labour and the environment. Furthermore, farmers are prevented from covering basic needs like good wages, reducing their environmental impact, or providing for the needs of rural communities. Covid-19 exacerbated the situation leaving a year-end surplus of one million bags of coffee beans after widespread office and café closures.

“There is general awareness in the coffee sector that we are way off track to meet even the most basic economic, social and environmental goals. Companies’ sustainability activities tend to focus on the expansion of coffee production at farm level. Even if some specific gains are made, they are never sufficient to transform the sector at large,” said Sjoerd Panhuysen from Ethos Agriculture.

The 2020 Coffee Barometer calls for existing players in the industry to “step up.” Per the findings, all the major billion-dollar coffee corporations are part of one or more partnership initiatives with the potential to influence the global governance of sustainability policies and agreements. With some traders and roasters publicly asking for mandatory sustainability regulations, they have the opportunity now to get ahead of the curve and use these partnerships to achieve real impact — without further delay.

According to the report, if more of the value generated from coffee is to get into the hands of coffee farmers, then multi-stakeholder initiatives need binding commitments, robust mechanisms that confirm progress in the field, and more than shoestring budgets so we can all see the concrete impact being delivered.

Commenting on the findings, Andrea Olivar, global programme manager coffee for Solidaridad, said, “The dawn of a new decade brings a wave of attractive new initiatives, while companies in the coffee sector struggle to report on commitments they made in the last decade. If we want to avoid being part of everything and delivering nothing, we have to move from narrative to action.”

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