Sustainable is the New Normal

Q&A with an Expert

A quick chat with Blanca Castro, Executive Director of the nonprofit International Women’s Coffee Alliance (IWCA)

The livelihoods of many people depend on the coffee industry – as does the ever-increasing demand for one of the world’s most popular beverages. Yet a web of challenging environmental, social and economic factors is putting the coffee sector and the livelihoods of many contributing to it at risk.

Find out more about the issues threatening the coffee supply chain, the sustainability framework in place today and sustainable pathways for tomorrow in Chapter 2 of The Coffee Guide, 4th Edition.

Climate change advances, business as usual is not sustainable

With the rapid advance of climate change, maintaining or even increasing production to meet growing demand is becoming difficult. Low incomes, volatile prices and the lack of an enabling operational framework continue to challenge the livelihoods of farmers. To keep going in the long term, the industry must re-examine business as usual.

Climate change refers to long-term shifts in temperatures and weather patterns. Climate change implies rising temperatures, more severe and frequent extreme events such as drought, floods, hurricanes and storms, greater pest and disease incidence, and soil degradation. Arable land for coffee may decrease as a consequence, and keeping up productivity sustainably is becoming increasingly difficult.

Conversely, global coffee production has more than doubled since 1960 and has shot up in the last 20 years especially. To keep up productivity sustainably, climate change adaptation on the farm and mitigation from seed to cup will be crucial. 

Some of the anticipated impacts of climate change on coffee production include:

• Yields at risk
• Declining quality of coffee beans because of warmer temperatures and erratic rains
• Soil degradation because of deforestation, full-sunlight cultivation systems and loss of biodiversity
• A likely increase of pests and diseases because of higher temperatures, erratic rainfall and biodiversity loss

Sustainable production and consumption systems protect the environment, mainstream sustainable practices across the sector and engage all actors. Measures include:

• An industry-wide approach: 
  • Actions at production level to enhance farm performance sustainably
  • Actions at market level including price and premium management, sustainable trading practices, and investment strategies by value chain actors to cover the costs of sustainable production
  • Actions at sector governance level, governments and governing bodies at the national, regional and international level

ITC Circular Economy Working Group, adapted from The Ellen MacArthur Foundation

• A circular economy: Circularity rethinks the connection between people and planet, resources and products, and value and capital. In coffee, a circular economy system seeks to conserve and regenerate natural resources and ecosystems, promote the well-being of coffee-producing communities, and offer economic opportunities for all stakeholders to increase their competitiveness. The circular economy can help us to achieve global ambitions to reduce pollution, emissions and waste – as well as increase jobs and prosperity, especially for small and medium enterprises at origin. To get there, trade and production in inclusive and sustainable international value chains play a central role. We invite you to join ITC in The Center for Circular Economy in Coffee, a global, precompetitive platform for enhancing and nurturing circular economy principles in practice in the coffee sector.
• Alliances for sustainable growth that leverage public-private partnerships and collaboration from farm to fork for a greener coffee sector.

Coffee farmers’ livelihoods

The volatility of the world’s coffee prices, the effects of climate change and global inflation have heightened pressure on coffee producers and thrown a huge number of them below the global extreme poverty line of $1.90 a day. The outbreak of COVID-19 adds a new layer of complexity and challenges, as demand and supply dynamics are shaken around the globe and across sectors.

A decent standard of living for smallholder coffee farmers is the foundation of sustainable global coffee supply chains, prosperous rural communities and the natural environment. At a minimum, economic sustainability requires coffee production to be economically viable in the long term. This demands a strategy that takes into consideration the social and environmental aspects of production.

Achieving a living and prosperous income for coffee producers worldwide, diversifying and increasing growth opportunities through value addition at origin and women and youth empowerment, creating incentives for present and future generations of coffee growers, and sharing value more equitably across the coffee supply chain are all pieces of the puzzle for a sustainable coffee sector. 

The sustainability framework today 

Today, a designated set of standards leads efforts for a more sustainable coffee sector. These cannot fully address the complex challenges the sector faces, however, and a true sustainable transformation of the coffee supply chain has yet to be achieved.

Voluntary Standards and Certifications

Below is a non-exhaustive list of some of the main sustainability standards and certifications in the coffee sector today. Beyond their social and environmental objectives, they also seek to achieve a price premium that will reward coffee producers for their sustainability efforts, and offer coffee roasters a competitive asset in the form of a marketable seal of sustainability for consumers that will justify that premium. 

While they have paved the way for the growing sustainability framework we see today and have achieved positive impact to date, they remain an imperfect system and are not a stand-alone solution to the industry’s sustainability issues.

ITC’s Standards Map tool offers comprehensive, verified and transparent information on standards, codes of conduct and audit protocols addressing environmental protection, human rights, social and labour rights, economic development, quality and food safety, as well as business ethics. Producers, cooperatives, exporters and importers use the Standards Map to identify the most relevant standards applicable to their industry, compare information through tables and charts, and run self-assessments of their performance against the requirements of standards. 

Shift from voluntary standards to mandatory sustainability frameworks

The framework for mandatory human rights and environmental due diligence 

For a long time, sustainability efforts in the coffee sector happened in the framework of voluntary sustainability standards, which can help address socio-environmental concerns. To date, voluntary guidelines have provided companies with various frameworks that help facilitate their human rights and environmental due diligence. While these have been helpful in raising the profile of certain socio-environmental concerns within some business sectors, in 2022 only 16% of companies worldwide considered taking action to address human rights and environmental impacts within their value chain.

The switch to a duty of care with legal consequences is a reality that is now going global. The trend appears to be accelerating and will drastically impact value chains. The European Union, through its Green Deal Policy initiatives on Global Supply Chain Sustainability is leading the shift towards the mandatory framework for human rights and environmental due diligence, but similar steps are under consideration in several importing regions. In January 2023, the Corporate Sustainability Reporting Directive (CSRD) entered into force. This directive aims to modernise and strengthen the rules concerning the social and environmental information that companies have to report. A broader set of large companies, as well as listed SMEs, will now be required to report on sustainability. In June 2023, the EU Regulation on deforestation-free products also entered into force Under this Regulation, under which any operator or trader who places these commodities on the EU market, or exports from it, must be able to prove that the products do not originate from recently deforested land or have contributed to forest degradation. As of December 2023, the EU Council and the European Parliament reached a provisional deal on the   EU Corporate Sustainability Due Diligence Directive (EU CS3D). In September 2022 the EU Forced Labour Regulation was also proposed and remains under review. 

These examples of policy initiatives on global supply chain sustainability under the EU Green Deal clearly demonstrate that the ball is undeniably rolling, and that the shift towards mandatory approaches is underway. However, legislative frameworks are an iterative process that can leave room for constructive criticism, dialogue, action, and improvement. This will require collective collaborative and pre-competitive efforts across the sector.

Sustainability initiatives beyond certification

Beyond certification, new sustainability initiatives have also been emerging. Supply chain actors have rallied to find their own solutions through self-promoted, self-implemented sustainability programmes, as well as multi stakeholder initiatives. Producers and buyers are also finding other ways to achieve concrete impact. Having more control over variables is part of the attraction. These might range from coffee quality to social issues and environmental concerns at origin.

IWCA Vietnam

ITC’s Alliances for Action is one example of an international development initiative that focuses on a comprehensive methodology of support from seed to cup, at every step of the value chain. It combines development goals and methodology with a market-based approach.

The forthcoming Coffee Sustainability Initiatives Map, a collaborative effort between International Coffee Organization via the Coffee Public Private Task Force and International Trade Center with co-funding from the European Union, is an interactive mapping tool that provides more visibility on sustainability and support initiatives in coffee producing countries around the world. Governments, funders, nonprofits, and corporate actors can use this tool to discover what is being done, where, and by whom, in order to identify gaps, synergies, and opportunities for collaboration.

Coffee Sustainability Initiatives Map

Useful tools and resources to navigate coffee’s sustainability landscape

The coffee sector’s sustainability landscape, and the corporate sustainability framework at large, is constantly evolving and new standards, initiatives, platforms and tools are popping every day. To help you navigate this sector, we have compiled an indicative list of useful resources, tools and initiatives.

ITC and partners help the coffee sector prepare for new EU sustainability rules

ITC

European Commission has adopted a proposal for a Directive on corporate sustainability that will hold companies accountable for conducting sustainability due diligence in their supply chains. Businesses will have to establish systems to identify, prevent and mitigate environmental and social risks. This due diligence covers a company’s own operations, as well as its sourcing model.

Voluntary sustainability guidelines can help address socio-environmental concerns. But in 2022, only 16% of companies worldwide said they would consider acting to address human rights and environmental concerns in their supply chain. Since the proposal for Corporate Sustainability Due Diligence (CS3D) was published in February 2022, attention has turned to how value chain actors and stakeholders will operationalize its requirements. 

Building on the notion that a ‘smart mix’ of mandatory and voluntary implementation measures is needed, the proposed Directive makes provision for ‘accompanying measures’ to be developed so companies and their value chain partners can fulfill their new obligations.

ITC underscores the importance of accompanying measures

The proposed EU CS3D directive makes provision for ‘accompanying measures’ to be developed so companies and their value chain partners can fulfill their new obligations. The ITC Alliances for Action sustainable agribusiness initiative is helping shape implementation mechanisms to guide suppliers and producers in developing countries through this change.  

The initiative has been working closely with the European Commission’s Directorate-General for International Partnerships and other important partners on actionable measures to implement mandatory human rights and environmental due diligence sustainably for all. The initiative works with a blueprint for accompanying measures targeting small enterprises in producer countries and pilot implementation projects.

Partnerships are key to inclusive implementation

ITC supports Value Chain Due Diligence pilots for cocoa in Ghana, coffee in Ethiopia and Uganda, and textiles in Eswatini. These pilots work through collaborative efforts with

• The European Commission, Directorate-General International Partnerships
• The Organisation of African, Caribbean and Pacific States (OACPS)
• The International Coffee Organization (ICO)
• The Ministry of Foreign Affairs of the Netherlands
• CLAC, which leads and finances additional pilots in coffee in Honduras and Brazil, and for cocoa in Dominican Republic and Peru
• Policymakers and value chain operators

This complements and is under the umbrella of ITC's existing formal partnerships with the Fair-Trade Network organizations Fair Trade International, Max Havelaar Switzerland, Fairtrade Advocacy and Fair Trade Africa.

Source: ITC, Alliances for Action (2023)

Coffee entrepreneurship in the South Pacific

Tanna Coffee Development Company

When countries in the South Pacific, and particularly the small island nation of Vanuatu, gained independence, it was not without repercussions. Very few agricultural cooperatives survived. The key focus since has primarily been aimed towards smallholder farming development and direct private sector engagement. 

A positive example of this collaborative style is Tanna Coffee Development Company. Over the past two decades, it has helped 1,000 smallholder farmers become self-employed entrepreneurs. Through its Coffee Development Programme, the company provides coffee growers with skills, training, materials and equipment so they can maximize the value of their produce and processing.

Diversity in action

The focus in recent years has been to help growers diversify crops to boost food security and to improve on-farm biodiversity and climate resilience. Coffee plants are intercropped with fruit trees, vegetables, kava (use to make a traditional drink of the Pacific) and sandalwood. 

The entire coffee-growing sector in Vanuatu, from the tree to the cup, operates in an ethical, sustainable and synergistic fashion. This approach is, according to Tanna Coffee, ‘beyond fair trade’ and provides better livelihoods, higher living standards, gender equality and education to the farmers, their families and communities. 

Beyond the production of quality coffee and the empowerment of smallholder farmers, Tanna Coffee seeks to create naturally diversified organic and self-sustainable lifestyles that deliver positive and inclusive growth, along with the essential socioeconomic benefits of development that accompany it, says company founder Terry Adlington. 

Source: Karen Mapusua,  Director,  Land Resources Division, The Pacific Community

Helping women in the Jamaican coffee industry reach higher ground

Jamaican Women in Coffee

Jamaican Women in Coffee (JAWiC) seeks to empower female coffee growers in the Caribbean nation despite the challenges posed by the COVID-19 pandemic and the inequities facing black people and women.

Supported by the International Women in Coffee Alliance and the Coffee Quality Institute, JAWiC embraces a broad vision of sustainability. This partnership coalesced around the notion of enabling self-sustaining community leadership and knowledge infrastructure through an adaptable evaluation and implementation framework.

Higher Ground is a multi-year project that uses the Coffee Quality Institute’s design framework to empower women coffee producers in Jamaica through education and leadership development, with the aim of creating a self-sustaining and thriving coffee community. While the project specifically targets women, this framework concept can be transferred and applied to any coffee growing community. It requires collaboration among local entities and private–public funding partners.

The lay of the land

The first step was to evaluate the needs of and challenges facing the community and its goals. Baseline field interviews and survey data helped identify the barriers and shape the framework for sustainable and equitable change.  

The survey found that women lack support in education and training, leadership development, infrastructure, finance and market connections. Although coffee is the largest foreign exchange earner, representing 83% of traditional agricultural exports, only 27% of registered coffee farmers are women and of these, just 57% own their land.  

In addition, female coffee growers are an ageing group (with the average age being 52). Half of those surveyed indicated they did not want their children to work in coffee due to declining incomes. While 82% identified coffee as their main income source, 94% of these said the income was insufficient to meet the needs of their family. Interestingly, 69% said they had not received any training in farming – 48% learned by trial and error. 

These facts are alarming as productivity and prices fall and as other concerns such as climate change and disease continue to stress this industry and make life difficult for these women.

Learning the ropes

With this information, the project identified education and market access gaps as significant barriers to progress. Higher Ground produced a tiered approach using the Coffee Quality Institute’s good practices learning and leadership empowerment alongside traditional certification of Q Grader and Q Processing professionals. 

Ultimately, the project works to strengthen the common coffee language of Jamaican women coffee growers. This helps them improve the quality of their coffee, while developing internal leadership capacity and expertise to elevate their product to a level that will appeal to the international coffee market. Parallel to education and leadership development, the targeted women are receiving market-based training and infrastructure is being developed.

Training is taking place online due to the COVID-19 pandemic. In-person training will resume as soon as conditions allow.

One trainee said the training was important because it taught new techniques such as fermentation and honey processing. After learning that processing affects the taste of coffee, another trainee said small farmers needed access to processing information. 

Between sharing good practices and training trainers, JAWiC will help build a strong foundation for a healthy, thriving and sustainable coffee industry. When women succeed in business, communities benefit. 

Source: Tina Yerkes, Chief Executive Officer, Coffee Quality Institute.

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