For the first time, the World Bank’s BioCarbon Fund Initiative for Sustainable Forest Landscapes has gone into partnership with a private company to support a sustainability initiative aimed at combating the effects of climate change.
The BioCarbon Fund, along with bank’s International Finance Corporation has entered into a joint investment of $US6 million with coffee capsule company Nespresso to support reforestation of coffee farms in Ethiopia to improve the farms’ resistance to climate change.
As part of the scheme, farmers will also be trained in agricultural best practices to help improve their productivity and the quality of their harvests.
The move is a landmark example of how the public and private sectors can combine forces to achieve a “greener” industry, says John Roome, the bank’s senior director for climate change.
“This first-of-its-kind collaboration is based on shared goals of ensuring higher productivity for famers, and making the coffee industry in Ethiopia more resilient to climate change.”
Creating shared value
This is one of many in Nespresso’s arsenal of initiatives aimed at creating shared value: the company wants consumers to benefit from quality coffee, but at the same time it wants to preserve the environment for future generations too.
Nespresso’s Daniel Weston, who heads the company’s Creating Shared Value division, is the first to admit that by looking after its coffee supply chain, the company is first and foremost looking after itself. After all, what coffee company is worth its beans without reliable access to consistently good coffee?
However, Weston also says there’s more to it than the self-interest of generating profits: “If you step back and ask the really big question of what is business for, then if it’s having a negative impact at any point, its licence to operate really comes into question.”
Environmentally responsible packaging
Nespresso – the company that created capsule coffee – realised early on in its 30-year history how important it was to deal responsibly with the additional element that capsule coffee had added into the coffee equation: the aluminium packaging, and started recycling in 1991.
Even though the company uses a surprisingly small amount of aluminium (there are 13-14g of aluminium in a soda can compared to just 1g in a coffee capsule), Weston says) it is striving to improve the sourcing and recycling of the aluminium it uses.
Nespresso executives know that a company can only do so much to encourage consumers to recycle, so Nespresso continues to bolster efforts to make recycling as easy as possible, and to ensure consumers are aware of their options.
“We want 100% of our customers to have an easy recycling solution available to them,” Weston says.
Nespresso co-founded the Aluminium Stewardship Initiative (ASI) in 2012 along with the International Union Conservation of Nature and other leading suppliers, packagers and users of aluminium to drive the responsible production of aluminium.
“By 2020, we aim to source 100% of aluminium we use compliant with the Aluminium Stewardship Initiative (ASI) standard, the first global standard for aluminium sustainability,” Weston says.
Sustainable supply chain
In addition to packaging, Nespresso has also been looking at its coffee supply chain.
“For us, each of our coffees should always have the same taste and the same aromas for the consumer, and the taste of the coffee depends very much on the plant and also on the terroir – the soil, climate, amount of sunshine” Weston says. “The approach we have taken is to buy consistently from the same areas and the same farmers.”
The challenge? As the business hit its stride and began to grow rapidly at the end of the 1990s, Nespresso faced a continuity hurdle: unless it could get more of the coffee its customers knew and loved, company growth would be constrained.
“We started to work very closely with the Rainforest Alliance and created our bespoke coffee sourcing program, the Nespresso AAA Sustainable Quality™ Program,” Weston says.
The aims of the AAA Program are threefold, Weston explains: “The first aim is self-interested. We want to help the famers to produce more very high quality coffee, that’s why we couldn’t take an off-the-shelf sustainability certification.
“The second aim is environmental and social sustainability.” The program sets rigorous environmental and social standards that are based on those of the Sustainable Agriculture Network (SAN). They include water management, protection of biodiversity and farm workers’ rights.
“Thirdly, we want to enhance farmer welfare and productivity,” Weston says. The program helps farmers improve their productivity by implementing cost-reduction initiatives such as infrastructure and training programs.
Launched in 2003, the program has resulted in improved social, environmental and economic performance for coffee farmers. Independent Colombian consulting and research firm, CRECE, created a sustainability index specifically to measure the impact of the AAA Program in coffee-producing regions.
The company determined that AAA farms had 41 per cent better economic, 22.6% better social, and 52% better environmental conditions than non-AAA farms. It also found that net income levels were 46% higher for AAA farmers than non-AAA farmers.
Tensie Whelan, former CEO of the Rainforest Alliance, says: “The Nespresso AAA Program is one of the most rigorous and comprehensive programs in the coffee industry.”
Looking out for farmers
Under the AAA Program Nespresso, with the Colombian Ministry of Labour and Fairtrade International, has also launched a retirement savings plan to continue to care for farmers as they get older.
Harriet Lamb, the former CEO of Fairtrade International, says: “Coffee farmers work very hard their whole lives, yet they don’t have the means to support themselves when they reach old age. This is why Fairtrade International and Nespresso are collaborating with the farmers in Colombia on an innovative retirement plan. We hope that this will also help the younger generation see coffee farming as a viable career, preserving this essential part of the Colombian economy and heritage.”
Caring about its carbon footprint
Using a Life Cycle Assessment, Nespresso determined that contrary to widespread perception, the biggest environmental impact is not the packaging, but the coffee growing phase, closely followed by the point of consumption, ie the use of coffee machines and the washing of the cup. Packaging came in third.
“At point of consumption, we looked at the things we can most easily influence, such as the use of the machine, and ensuring fast heat-up times, and that the machines go into standby mode,” Weston says.The introduction of automatic standby and switch-off modes was a major contributor to Nespresso’s ability to reduce the carbon footprint of a cup of coffee by 20% between 2009 and 2012.
The Positive Cup
Building on this strong history of sustainability awareness, in 2014 Nespresso launched The Positive Cup, an initiative based on the idea that a cup of coffee can have a positive impact on the environment and society.
As part of this, Nespresso aims to reach several targets by 2020, including 100% sustainably sourced coffee, 100% sustainably managed aluminium, and 100% carbon efficient operations.
“Improving our sustainability is something that Nespresso has been doing for a very long time,” Weston says. “And we continue to challenge ourselves to do better.”
Sustainability think tank
To ensure the company doesn’t lose sight of the end goals related to sustainable operation, in 2013 it set up its own board of experts, the Nespresso Sustainability Advisory Board (NSAB).
The board’s job is to recommend new ways that Nespresso can enhance its sustainability strategy.
“Implementing shared value takes time and resources,” says Nespresso CEO Jean-Marc Duvoisin. “You have to commit to it every day in your business. You have to be patient, you have to be humble, you have to continuously adjust and improve. And you cannot do it alone.”
Learn more about Nespresso’s capsule recycling options here
