Coffee Sustainability Catalogue 2016 · Coffee Sustainability Catalogue 2016 2 © Global Coffee...
Transcript of Coffee Sustainability Catalogue 2016 · Coffee Sustainability Catalogue 2016 2 © Global Coffee...
Coffee Sustainability Catalogue 2016 1
© Global Coffee Platform, IDH Sustainable Trade Initiative, Specialty Coffee Association of America, Sustainable Coffee Challenge
Coffee Sustainability Catalogue 2016
A collective review of work being done to make coffee sustainable
Coffee Sustainability Catalogue 2016 2
© Global Coffee Platform, IDH Sustainable Trade Initiative, Specialty Coffee Association of America, Sustainable Coffee Challenge
Coffee Sustainability Catalogue 2016
A collective review of work being done to make coffee sustainable
Steering committee: Annette Pensel (Global Coffee Platform)Bambi Semroc (Sustainable Coffee Challenge)Joost Gorter (IDH Sustainable Trade Initiative) Kim Elena Ionescu (Specialty Coffee Association of America)
Author: Sanne Steemers (Valued Chain)
Contributors: Matthew Quinlan & all respondents that provided input in interviews and a survey
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© Global Coffee Platform, IDH Sustainable Trade Initiative, Specialty Coffee Association of America, Sustainable Coffee Challenge
Foreword
Coffee Sustainability Catalogue 2016
The coffee sector has invested heavily in sustainability for decades, recognizing that we must ensure our ability to meet rising demand for coffee while also increasing the prosperity and well-being of producers and conserving nature. In 2014, leaders in the sector came together to develop a vision for coffee sustainability that resulted in Vision 2020: a call for improved alignment within the sector on our sustainability efforts.
In late 2015 the Global Coffee Platform, the Specialty Coffee Association of America and the Sustainable Coffee Challenge jointly recognized the need to inventory existing efforts to make coffee a sustainable agricultural product, understand who is doing what sort of work, where the investments are going and how we can better understand and share our impacts and experiences.
We are grateful for the collaboration and participation of over 80 respondents in this first-of-its-kind catalogue of efforts underway to increase sustainability within the coffee sector. This report, which synthesizes the contributions of those respondents, attempts to organize this work into a coherent strategy that recognizes the role and contribution of actors throughout the sector – retailers, roasters, traders, producers, governments, certification organizations, NGOs and many others.
We hope that this study sheds more light on the tremendous efforts already underway to advance sustainability in the coffee sector and catalyses the additional collaboration and investment necessary to achieve our shared sustainability objectives.
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Table of contents
Coffee Sustainability Catalogue 2016
• Executive summary
• WHO: the actors in coffee sustainability
• WHY: what we aim to achieve
• WHAT: our activities
• WHERE: geographical focus
• HOW: collaboration for strategy, funding and measurement
• Appendix A: current initiatives framework: overview of current sector strategies
• Appendix B: stakeholder directory
• Appendix C: list of respondents
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Executive summary
A collective review of work being done to make coffee sustainable
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Wide involvement in sustainability dialogue
Partnerships between coffee companies and non-profit organizations are common practice and mentioned as a strength by many respondents.
Sustainability is on the agenda of most large value chain actors.
• Low inclusion of specific stakeholder groups in our sample of the current sustainability dialogue: producers, specific large consuming countries in Asia and Europe (Italy, France and Eastern Europe), smaller roasters and retailers that together represent a large share of total coffee volume, governments, service providers in inputs and finance.
Good mix of value chain actors and partners, but low representation of government and specific stakeholder groups
WHO WHY WHAT WHERE HOW
Source: interview and survey respondents, ICO
Source: interview and survey respondents
23%
20%
7%
47%
Sustainability stakeholders in and around the value chain
Roaster
Trader
Producer (organization)
Exporter
Retailer
Non-value chain actors
34%
45%
18%
32%
11%
7%
11%
57%
20%
8%
31%
21%
Share of production (ICO 2014/15)
Share of consumption (ICO 2014)
Sustainability stakeholders includedin mapping (headoffice location)
Representation by region
Europe North America Africa Latin America Asia
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Impact priorities aligned with Global Goals
Objectives are naturally aligned with UN Global Goals (Sustainable Development Goals).
Most respondents share the consensus that economic sustainability is a pre-requisite for prosperity and well-being of producers and environment conservation.
• Respondents are missing one documented shared vision on sustainability.
• Priorities vary between individual respondents and any shared vision needs to allow for different practical definitions to meet the various aims of actors involved.
Social and economical impact together with climate action are pursued by most respondents, but individual priorities vary
WHO WHY WHAT WHERE HOW
Source: interview and survey respondents
Source: interview and survey respondents
0%
10%
20%
30%
40%
50%
60%
Forest, water andsoil conservation
Prosperity and well-being of producers
Sustained supply ofcoffee
% o
f re
spo
nd
ents
pri
ori
tizi
ng
this
im
pac
t in
th
eir
top
5
Prioritization by respondent type
coffee value chain non-value chain actors
Better Coffee Quality
Responsible Consumption
Decent Work And Economic Growth
Climate Action
No Poverty
Top 5 coffee sector desired impacts
Prosperity and well-being of producers
Forest, water and soil conservation
Sustained supply of coffee
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Sustainability embedded in business models
As a sector, we jointly have experience to address most needs. Experienced respondents are willing to share best practices and lessons learned.
Certification/verification is a common business model included in most sustainability initiatives.
Coffee value chain has largely integrated farmer outreach in business as usual.
• Identify and share tools and best practices for
supply chain services.
• A sustainable smallholder farm is diversified,
sufficiently large and inclusive, but this needs
to be more widely addressed in programs.
• Develop strategy based on facts and research.
Increase involvement from governments in
embedding measures in policy and law.
Certification is common business model, several other activities are introduced, but strategy is rarely fact-based
WHO WHY WHAT WHERE HOW
Source: interview and survey respondents
0% 20% 40% 60% 80% 100%
Disaster Relief
Logistics Services
Value Addition In Origin
Diversification Support
Demand Generation
Access To Inputs
Incentives
Access To Finance
Traceability And Assurance
Social Inclusiveness
Business Support
Agricultural Extension Services
% of respondents including this in their programs
Sustainability activities
Certification/verification Supply chain services
Non-coffee activities
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Geographical focus follows supply & demand
Several volume origins have embedded sustainability in business as usual.
Focus countries for sustainability mainly prioritized because of quality, potential productivity increase and supply risks.
Strong regional sustainability relations between North and Latin America, and between Europe, Africa and Asia building on current supply and demand.
• Innovation budget is mainly focused on Latin America. Budget per farmer in Africa is low, partly attributed to economies of scale, but also to low volume per farmer resulting in high cost per MT which puts pressure on cost.
• The Tanzania case illustrates how different programs likely reach out to the same farmers. Discuss justification of current investments in East Africa in relation to possible overlap, efficiency and impact achieved.
Geographic focus follows flows of coffee and origin needs, with risk of overlap in East Africa, and some origins left out
WHO WHY WHAT WHERE HOW
$423 $519
$256
$-
$200
$400
$600
0%
50%
100%
LatAm Asia Africa
Innovation and scaling projects per region
Innovation projects >$500 per farmer
Scaling projects <$500 per farmer
Average budget per farmer
0%
30%
60%
LatAm Asia Africa
% of respondents active in sustainability in this region
Sustainability focus of main consuming regions
% of ICO production 2015/16 North American respondents
European respondents
Source: data provided by donors, public spending databases, interviews
Source: interview and survey respondents, ICO
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Strategy, funding and measurement
Collectively, the sector has a lot of experience in developing sustainability programs. Attributed to experience, most respondents feel comfortable with communication, collaboration and learning.
Existing platforms have trust of members and overlap is less than perceived.
Annual available budget of 350M$ (2% of green coffee value), in sector with low margins.
• Ensure that variety in platforms does not lead to a scattered approach by coordinating between platforms. Balancing inclusiveness and ability to act of platforms.
• Explore pooling resources by investing jointly via a platform or fund. Explore carbon financing for funding coffee sustainability.
• Impact measurement not yet embedded in sustainability work, because of cost and effort.
With current approach we need until 2045 to become a ‘sustainable’ sector
WHO WHY WHAT WHERE HOW
350 M$
0,0%
0,5%
1,0%
1,5%
2,0%
2,5%
0 M$
50 M$
100 M$
150 M$
200 M$
250 M$
300 M$
350 M$
400 M$
Estimated totalannual budget
% o
f gr
een
co
ffee
val
ue
An
nu
al t
ota
l bu
dge
t
Estimated current annual budget for coffee sustainability in relation to green coffee value
Annual private sectorpremiums paid
Annual private sectorbudget (excl premiums)
Annual other funding
Annual donor budget
Source: data provided by donors, public spending databases, interviews, Valued Chain
0
10
20
1985 2000 2015 2030 2045 2060 2075
# fa
rmer
s (m
illio
ns)
time to implement current sustainability approach/definition
Estimated time to become a 'sustainable' sector
At current implementation speed (350.000 farmers/year)
At historical realized implementation speed (140.000 farmers/year)
Producers reached to date
Source: interviews, Coffee Barometer, Valued Chain
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Coffee Sustainability Catalogue 2016
Mapping initiatives, understanding impacts and identifying gaps
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WHO
The actors in coffee sustainability
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Coffee sustainability stakeholders
Coffee value chain actors are supported by a large number of other public and private organizations
• The sample of participating organizations is representative for the membership and network of GCP, IDH, SCAA and SCC. Roasters and traders are well represented, whereas many unorganized producers are less active in the international sustainability dialogue.
• High number of non-profit organizations compared to coffee value chain actors. Partnerships between coffee companies and non-profit organizations are common practice and mentioned as a strength by many respondents.
WHO WHY WHAT WHERE HOW
53%47%
Respondents in and around the value chain
Coffee value chain
Non-value chain actors
44%
37%
13%
Respondents in coffee value chain
Roaster
Trader
Producer (organization)
Exporter
Retailer
49%
24%
10%
10%7%
Types of non-value chain actors
NGO
Platform / partnership
Government / public
Research
Service provider /supplier
Source: interview and survey respondents
Source: interview and survey respondentsSource: interview and survey respondents
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- 500 1.000 1.500 2.000 2.500
Producer (organization)
Exporter
Trader
Roaster
Retailer
Co
ffe
e va
lue
ch
ain
Coffee value chain actors - overall
# estimated large actors # estimated small / other
Value chain representation
• Sector has an hourglass shape: volumes are concentrated with a few large roasters and traders, whereas the top and bottom of the value chain have many more smaller actors.
• Large roasters and traders are considered to be leading the sustainability dialogue. Some small roasters are specifically committed to integrating sustainability. Involvement of retailers in sustainability is limited, and often mainly a certification policy managed by their private label roaster and/or trade supplier.
• Involvement of producers and local exporters is limited, attributed to a lack of organization and resources, and language. Some stakeholders believe that this underrepresentation also relates to a demand-driven agenda more than real needs, although this is debated by others.
Roasters and traders lead the sustainability dialogue, producer and retailer representation is limited
>
WHO WHY WHAT WHERE HOW
0 5 10 15 20 25
Producer (organization)
Exporter
Trader
Roaster
Retailer
Co
ffe
e va
lue
ch
ain
Coffee value chain respondents
# actors included in mapping
Source: interview and survey respondentsSource: estimate Valued Chain
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Enabling environment representation
• Public representation in the sustainability dialogue is still considered too low by most respondents. Government involvement is needed for an effective enforced legal framework and extension to farmers.
• ICO is an exception but has only a representative role, whereas a few producing countries have national platforms where government participates. The UN "Protect, Respect and Remedy" Framework for Business and Human Rights developed by Special Representative John Ruggie provides a starting point for defining roles and responsibilities.
• Larger involvement of service providers especially in inputs and finance is considered a success factor in realizing a sustainable sector, as inputs and finance are a pre-requisite for impact in agricultural practices. Several respondents suggest that a number of large industry associations in consuming countries should become more involved in sustainability.
Ruggie framework: Protect, Respect, Remedy
The State Duty to Protect
The Corporate Responsibility to Respect
Access to Effective Remedy 0 5 10 15 20 25
Service provider / supplier
Research
Government / public
Platform / partnership
NGO
No
n-v
alu
e ch
ain
act
ors
Non-value chain respondents
# actors included in mapping
Sector is supported by civil society and research, but needs more government involvement
WHO WHY WHAT WHERE HOW
Source: interview and survey respondentsSource: UN "Protect, Respect and Remedy" Framework
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Stakeholder representation by region
• Representation is based on the headofficelocation of the organization which causes some bias, especially some very large roasters are based in Europe and market their coffee globally. Even correcting for this bias, sustainability seems to be led from consuming regions Europe and North America.
• Europe is missing representation from large consuming countries including Italy, France and Eastern Europe. Several respondents believe this is partially caused by a lower interest in sustainability, and by a dominant national regulatory approach from government reducing the interest in international dialogue.
• Representation of producing regions with domestic markets in Africa, Latin America and Asia is low. There is a partial bias following the decision to conduct the survey only in English. Respondents however believe that producer representation in the international dialogue is low, even when corrected for this bias.
Sustainability agenda appears to be influenced mainly by consuming regions, missing certain markets and many origins
WHO WHY WHAT WHERE HOW
34%
45%
18%
32%
11%
7%
11%
57%
20%
8%
31%
21%
Share of production (ICO 2014/15)
Share of consumption (ICO 2014)
Sustainability stakeholders includedin mapping (headoffice location)
Representation by region
Europe North America Africa Latin America Asia
26%
26%23%
10%
5%5%
Sustainability stakeholders by country in Europe
Switzerland
Netherlands
Germany
United Kingdom
Spain
Belgium
Italy
Norway
Source: interview and survey respondents
Source: interview and survey respondents, ICO
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WHO: summary of strengths and gaps
Strengths already achieved:
A good mix of value chain actors and other stakeholders.
Partnerships between coffee companies and non-profit organizations are common practice and mentioned as a strength by many respondents.
Sustainability is on the agenda of most large value chain actors.
Gaps and challenges going forward:
• Low inclusion of specific stakeholder groups in our sample of the current sustainability dialogue:
• Producers
• Specific large consuming countries in Asia and Europe (Italy, France and Eastern Europe)
• Smaller roasters and retailers that together represent a large share of total coffee volume
• Governments
• Service providers in inputs and finance
Building on existing collaboration and commitment, the agenda should address inclusiveness
WHO WHY WHAT WHERE HOW
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WHY
What we aim to achieve
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Sustained supply of coffee
Current collective desired impact
People planet profit widely recognized as sustainable impact categories, large overlap with global goals
Prosperity and well-being of producers
Forest, water and soil conservation
No poverty
Zero hunger
Good health and well-being
Quality education
Gender equality
Decent work and economic growth
Clean water and sanitation
Affordable and clean energy
Climate action
Life on land
More coffee availability
Better coffee quality
Stable coffee prices
Value addition for improved margins
Sector trusted by society
UN Sustainable Development Goal
Coffee sector objectivesResponsible consumption and production
Implementation ImpactOutcomesEnablers WHO WHY WHAT WHERE HOW
Source: UN, interview respondents, Valued Chain
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Impact priorities aligned with Global Goals
• 4 out of the top 5 coffee sustainability impacts link directly to UN Global Goals (SDG’s 1, 13, 8 and 12).
• Most stakeholders are driven by social impact, with profit being the main shared interest, and climate change considered the largest risk.
• No poverty is pursued by most but only half of the respondents, priorities vary between individual respondents.
• Desired impacts are overall aligned, with no significant differences between regions and types of actors.
Social and economical impact together with climate action are pursued by most respondents, but individual priorities vary
Implementation ImpactOutcomesEnablers WHO WHY WHAT WHERE HOW
Source: interview and survey respondents
0% 10% 20% 30% 40% 50% 60%
Affordable And Clean Energy
Sector Trusted By Society
Life On Land
Quality Education
Zero Hunger
Clean Water And Sanitation
Good Health And Well-Being
Stable Coffee Prices
More Coffee Availability
Gender Equality
Value Addition For Improved Margins
Better Coffee Quality
Responsible Consumption And Production
Decent Work And Economic Growth
Climate Action
No Poverty
% of respondents prioritizing this aim in their top 5
Prioritization of desired impact
Prosperity and well-being of producers Forest, water and soil conservation Sustained supply of coffee
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Supply impact more important to value chain
• Respondents in the value chain (mainly roasters and traders) prioritize economic impact, whereas non-value chain actors more frequently pursue social and environmental impact.
• Most respondents share the consensus that economic sustainability is a pre-requisite for prosperity and well-being of producers and environment conservation.
• Most programs are executed in partnerships between profit and non-profit actors, which should ensure impact is balanced.
• Whereas profitability is a shared aim for most, the focus varies between volumes, quality, price and cost.
Desired impacts are overall aligned, with economic and commercial impact more important to coffee value chain actors
Implementation ImpactOutcomesEnablers WHO WHY WHAT WHERE HOW
Source: interview and survey respondents
0%
10%
20%
30%
40%
50%
60%
Forest, water andsoil conservation
Prosperity and well-being of producers
Sustained supply ofcoffee
% o
f re
spo
nd
ents
pri
ori
tizi
ng
this
imp
act
in t
hei
r to
p 5
Prioritization by respondent type
coffee value chain non-value chain actors
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WHY: summary of strengths and gaps
Strengths already achieved:
Objectives are naturally aligned with UN Global Goals (Sustainable Development Goals).
Most respondents share the consensus that economic sustainability is a pre-requisite for prosperity and well-being of producers and environment conservation.
Gaps and challenges going forward:
• Respondents are missing one documented shared vision on sustainability.
• Priorities vary between individual respondents and any shared vision needs to allow for different practical definitions to meet the various aims of actors involved.
We are aligned on activities and aims, but relation between implementation and impact is rarely explicit
WHO WHY WHAT WHERE HOW
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WHAT
Our activities
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Current initiatives framework
WHAT / Activities WHY / Motivations
Current individual sustainability strategies and theories of change are classified in a theory of change framework
Implementation ImpactOutcomesEnablers
Policy / law
Research
Sustainability definition
Platform
Extension
Business support
Social and community
Disaster relief
Diversified farm & household
Access to inputs
Access to finance
Logistics
Incentives
Traceability & assurance
Value addition in origin
Demand generation
Yield / productivity
Quality
Cost
Price
Resilience
Cashflow
Market access
Inclusivity
Labour conditions
Pro
fitability
Prosperity and well-being of producers
Forest, water and soil conservation
Sustained supply of coffee
Ecosystem services
Green house gas reduction
Implementation ImpactOutcomesEnablers WHO WHY WHAT WHERE HOW
Source: Matthew Quinlan, interview respondents, Valued Chain
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Common implementation activities
• Almost all programs include outreach via agricultural extension services.
• Certification is the common business model, including consumer awareness, social inclusiveness, traceability and assurance and incentives.
• Business support, access to inputs and access to finance are recognized as important but challenging with a lack of best practices available.
• Value addition via grading or washing is gaining interest.
• Fewer programs have activities outside the coffee value chain. Diversification and disaster relief are least addressed.
Certification is the common business model, additional activities are introduced
Implementation ImpactOutcomesEnablers WHO WHY WHAT WHERE HOW
Source: interview and survey respondents
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Disaster Relief
Logistics Services
Value Addition In Origin
Diversified Farm And Household Support
Demand Generation And Consumer Awareness
Access To Inputs
Incentives
Access To Finance And Risk Management
Traceability And Assurance
Social Inclusiveness And Community Welfare
Business Support
Agricultural Extension Services
% of respondents including this in their programs
Sustainability activities
Certification/verification Supply chain services Non-coffee activities
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Common enabling activities
18%
32%
45%
47%
Policy/Law
Research
Sustainability Definitions
Platform
Enab
lers
% of respondents executing this activity
Enabling activities • Platforms and partnerships are common and appreciated by respondents for sharing lessons learned.
• Many recognize the need to define sustainability in a certification code of conduct, supplier code, or national curriculum, but agree this needs to be complemented with other activities. Few respondents can provide a definition, but several tools and curricula are available.
• Several respondents see a need for more agronomy and development research to substantiate strategies and measure impact based on facts instead of assumptions. This is currently in progress but takes time.
• Many indicate they would like more involvement from governments in embedding measures in policy and law.
Dialogue and sustainability definitions are well-developed, fact-based research and government regulation are needed
Implementation ImpactOutcomesEnablers WHO WHY WHAT WHERE HOW
Source: interview and survey respondents
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Stakeholder roles in execution
• Implementation largely executed by actors that are a direct part of the coffee value chain, embedded in core business.
• Value chain actors also very involved in enabling activities, although their research findings and sustainability definitions are not always shared outside of their own organization.
• Civil society works on inclusiveness, business support and diversification.
Coffee value chain executes many sustainability activities and has largely integrated farmer outreach in business as usual
Implementation ImpactOutcomesEnablers WHO WHY WHAT WHERE HOW
Policy/Law Platform Research SustainabilityDefinitions
Enablers
# o
f re
spo
nd
ents
exe
cuti
ng
this
ac
tivi
ty
Enabling activities by actor type
My organization executes this - Coffee value chain
My organization executes this - Non-value chain actors
Source: interview and survey respondents Source: interview and survey respondents
Dis
aste
r R
elie
f
Div
ers
ific
atio
n S
up
po
rt
Acc
ess
To F
inan
ce
Soci
al In
clu
sive
nes
s
Val
ue
Ad
dit
ion
In O
rigi
n
Acc
ess
To In
pu
ts
Logi
stic
s Se
rvic
es
Bu
sin
ess
Su
pp
ort
Agr
icu
ltu
ral E
xte
nsi
on
Ser
vice
s
Dem
and
Ge
ne
rati
on
Ince
nti
ves
Trac
eab
ility
An
d A
ssu
ran
ce
Implementation
# o
f re
spo
nd
ents
exe
cuti
ng
this
act
ivit
y
Implementation activities by actor type
My organization executes this - Coffee value chain
My organization executes this - Non-value chain actors
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Vision on sustainable smallholder farms
• Several respondents suggest that smallholder coffee farms are sustainable when:
• they are diversified with multiple cash and food crops and other income sources
• have a minimum size allowing to generate enough income and implement good practices
• are managed jointly by the full household of man, woman and youth
• Whereas inclusiveness is generally considered, diversification is not widely implemented, following the sector interest in mainly coffee.
• Diversification reduces economic risks of price and productivity. It also conserves biodiversity on the farm, increases self-sufficiency, and offers inclusive opportunities to women and youth. A mix of coffee, food crops, livestock, processing and/or renewable energy generation is recommended.
• In addition, certain very small and unproductive farms are considered not viable and will never provided a living income to the household, even with support. The sector needs to discuss farmer segmentation and what is considered viable, and what alternatives can be offered to those farmers that are not in that position.
A sustainable smallholder farm is diversified, sufficiently large and inclusive, but this is not widely included in programs
WHO WHY WHAT WHERE HOW
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WHAT: summary of strengths and gaps
Strengths already achieved:
Many activities being implemented in the field. Each project has a different individual focus, sometimes limited in scope. As a sector, we jointly have experience to address most needs. Experienced respondents are willing to share best practices and lessons learned.
Certification/verification is a common business model included in most sustainability initiatives.
Coffee value chain executes many sustainability activities and has largely integrated farmer outreach in business as usual.
Gaps and challenges going forward:
• Identify and share tools and best practices for business support, access to inputs, access to finance and logistics.
• A sustainable smallholder farm is diversified, sufficiently large and inclusive, but this needs to be more widely addressed in programs.
• Increase involvement from governments in embedding measures in policy and law.
• Relation between activities and desired impact is rarely explicit. Develop a sector wide strategy based on facts and research, and define and measure explicit tangible outcomes.
Certification is common business model, several other activities are introduced, but strategy is rarely fact-based
WHO WHY WHAT WHERE HOW
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WHERE
Geographical focus
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Focus countries for sustainability
• Most coffee value chain actors focus on a limited number of origins for their sustainability work, mainly the origins that are important for their sourcing.
• Non profit actors more frequently work across a wide range of origins.
Sustainability work focuses on Latin America and Africa, interest of stakeholder varies between origins
WHO WHY WHAT WHERE HOW
0%
10%
20%
30%
40%
50%
Co
lom
bia
Gu
atem
ala
Per
u
Ho
nd
ura
s
Bra
zil
Nic
arag
ua
Mex
ico
El S
alva
do
r
Co
sta
Ric
a
Ecu
ado
r
Ven
ezu
ela
Ind
on
esia
Vie
tnam
Ind
ia
Pap
ua
New
Gu
inea
Lao
s
Ch
ina
Thai
lan
d
Tan
zan
ia
Uga
nd
a
Eth
iop
ia
Ken
ya
Rw
and
a
Bu
run
di
DR
Co
ngo
Cam
ero
on
Cô
te d
'Ivo
ire
Mad
agas
car
LatAm Asia Africa
Stakeholder sustainability focus
% of respondents active in sustainability in this origin
0% 10% 20% 30% 40%
< 5 origins
6-10 origins
11-15 origins
> 16 origins
% of respondents
Number of origins in which respondents work on sustainability
Coffee value chain Non-value chain actors
Source: interview and survey respondents Source: interview and survey respondents
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Relation between volumes and sustainability
• Less focus on Brazil, Colombia, Vietnam, Indonesia and India where certification has become common with local ownership.
• Larger interest in Central American countries with specific challenges from leaf rust and climate change.
• Larger interest in Africa because of coffee quality in combination with livelihood needs.
• Larger interest in origins in Africa and Asia that have a potential for productivity increase: Kenya, Tanzania, Laos, Thailand, China.
• Ease of working in a country and donor priorities influence prioritization.
Sustainability interest is less driven by current volumes, more by quality, potential productivity increase and supply risks
WHO WHY WHAT WHERE HOW
-25%
0%
25%
Bra
zil
Co
lom
bia
Ho
nd
ura
s
Mex
ico
Gu
atem
ala
Per
u
Nic
arag
ua
Co
sta
Ric
a
El S
alva
do
r
Ecu
ado
r
Ven
ezu
ela *
Vie
tnam
Ind
on
esia
Ind
ia
Pap
ua
New
Gu
inea
Lao
s
Thai
lan
d
Ch
ina *
Eth
iop
ia
Uga
nd
a
Cô
te d
'Ivo
ire
Ken
ya
Tan
zan
ia
Cam
ero
on
Mad
agas
car
DR
Co
ngo
Rw
and
a
Bu
run
di *
LatAm Asia Africa
Difference between % of respondents active in sustainability in this origin and % of ICO production volume
Sustainability focus in relation to production volume
Regional total Sustainability interest smaller than share of volume
Sustainability interest larger than share of volume
Source: interview and survey respondents, ICO
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Sustainability relations are regional
• Following a larger commercial interest of value chain actors, there is some more activity in high volume origins by coffee roasters and traders compared to non profits in the enabling environment. This is visible both on a regional and country level.
• The general alignment in focus origins can be explained by the partnership approach that the sector has developed, with companies and other organizations working together in projects in the same countries.
• Sustainability relations build on current physical flows of coffee, with strong ties between North and Latin America, and between Europe, Africa, and Asia.
• Consumer palates differ between consuming regions and affect demand for a specific quality or flavour profile.
• Geographical proximity is a key factor in supply chain relations, especially for volume.
Regional ties between North and Latin America and between Europe, Asia and Africa
WHO WHY WHAT WHERE HOW
0%
30%
60%
LatAm Asia Africa
% of respondents active in sustainability in this region
Sustainability focus by respondent type
% of ICO production 2015/16 coffee value chain
non-value chain actors
0%
30%
60%
LatAm Asia Africa
% of respondents active in sustainability in this region
Sustainability focus of main consuming regions
% of ICO production 2015/16 North American respondents
European respondents
Source: interview and survey respondents, ICOSource: interview and survey respondents, ICO
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Regional focus of investments
• Major donors are USAID, World Bank, IDH, Bill & Melinda Gates Foundation and regional development banks.
• Overall donor focus on Africa, driving investment in the region.
• Major donors each have different individual focus:
• USAID invests mainly in Latin America and Africa
• World Bank invests more in Asia
• Gates Foundation focuses on Africa
• IDH invests in line with private sector priorities across all continents
• Regional development banks invest in their own region
Sustainability investments by major donors and their private partners focus on Africa
LatAm; 30%
Asia; 24%
Africa; 46%
Total donor budget allocated to regions
WHO WHY WHAT WHERE HOW
Source: data provided by donors, public spending databases, interviews
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Public and private investment priorities
• Interest in Africa and specific origins in Asia is strongly donor driven.
• Projects in Africa are generally larger scale with lower investment per farmer. This can be partly attributed to economies of scale and lower cost levels locally, but is also attributed to low volume per farmer resulting in high cost per MT which puts pressure on cost.
Projects in Africa and Latin America largely publicly funded, with larger outreach and lower budgets per farmer
51%
32%
21%
49%
68%
79%
0% 20% 40% 60% 80% 100%
LatAm
Asia
Africa
Private/public funding ratio per region
Private sector % Matchfunding %
WHO WHY WHAT WHERE HOW
14.000
8.000
24.000
-
5.000
10.000
15.000
20.000
25.000
30.000
LatAm Asia Africa
Average # of farmers/households per project
Average project size per region
$420
$520
$260
$0
$200
$400
$600
LatAm Asia Africa
Average budget per farmer (excl certification premiums)
Average project budget per region
Source: data provided by donors, public spending databases, interviews
Source: data provided by donors, public spending databases, interviews
Source: data provided by donors, public spending databases, interviews
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Investment categories
• Projects can be categorized:
• Implementation projects, aimed to reach out to farmers, with an average budget of around $200 per farmer.
• Enabling environment and/or innovative pilots, with high budgets per farmer, or even pure research without any farmer outreach.
• Investments in innovation are currently mainly in Latin America, attributed to research in relation to leaf rust and other climate change impacts. With existing high reach of certification reaching further scale is less needed.
Implementation projects in all regions, innovation focus in Latin America to address climate change impacts
0% 5% 10% 15% 20% 25%
<$100
$100-150
$150-300
$300-500
$500-1000
>$1000
Imp
lem
enta
tio
n/s
cale
Enab
ling/
inn
ova
tio
n
Innovation and scaling projects per region
LatAm Asia Africa
48%52%
Total donor budget allocated to project types
Enabling/innovation
Implementation/scale
WHO WHY WHAT WHERE HOW
Source: data provided by donors, public spending databases, interviewsSource: data provided by donors, public spending databases, interviews
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0
100.000
200.000
300.000
400.000
500.000
Cumulative reported# farmer outreach
Estimated # coffeefarmers in Tanzania
Potential gap oroverlap
Reported farmer outreach compared to estimated number of farmers in Tanzania
Risk of overlap in East Africa
• Several respondents see risk of overlapping investments. This is illustrated by the case of Tanzania. Summing up reported project outreach compared to different assumptions about the numbers of farmers, we are not sure whether there is an overlap in projects or a gap in outreach.
• Respondents consider it likely that some overlap occurs, while there is also still a large number of farmers that have not been reached. There is a need for coordination and reliable data.
• Analysis of sustainability focus and volumes suggests the same risk applies in Kenya, Rwanda and Burundi.
High interest and investment in East Africa suggests risk of overlap and emphasizes need for coordination and reliable data
WHO WHY WHAT WHERE HOW
Source: data provided by donors, respondent progress reports, interviews Source: interview and survey respondents, ICO
0%
2%
4%
6%
0%
15%
30%
45%
% o
f IC
O p
rod
uct
ion
20
15
/16
% r
esp
on
den
ts a
ctiv
e in
ori
gin
Sustainability focus and production volume
% of respondents active in sustainability in origin
% of ICO production 2015/16
Potential overlap
Potential gap
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WHERE: summary of strengths and gaps
Strengths already achieved:
Several large origins show local ownership and embed sustainability in business as usual, need for temporary projects is decreasing.
Focus countries for sustainability are mainly prioritized because of quality, potential productivity increase and supply risks.
Interest in ‘new’ origins that have potential to increase productivity.
Strong regional sustainability relations between North and Latin America, and between Europe, Africa and Asia building on current supply and demand.
Large investments in all regions.
Gaps and challenges going forward:
• Innovation budget is mainly focused on Latin America. Budget per farmer in Africa is low, partly attributed to economies of scale, but also to low volume per farmer resulting in high cost per MT which puts pressure on cost.
• Discuss justification of current investments in East Africa in relation to possible overlap, efficiency and impact achieved.
• Increase activity in origins currently left out because of perceived difficulty to work there, including Venezuela and West Africa.
Geographic focus follows flows of coffee and origin needs, with risk of overlap in East Africa, and some origins left out
WHO WHY WHAT WHERE HOW
Coffee Sustainability Catalogue 2016 39
© Global Coffee Platform, IDH Sustainable Trade Initiative, Specialty Coffee Association of America, Sustainable Coffee Challenge
HOW
Collaboration for strategy, funding and measurement
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Sustainability challenges
Financing, strategy and impact measurement are current challenges, respondents suggest a role for platforms
Financing our sustainability work
Developing an appropriate strategy for our sustainability work
Measuring impact
Executing our sustainability work
Collaboration in the sector
Communicating about our sustainability work
Learning from other sectors
• Financing sustainability, developing strategy and measuring impact are the largest challenges. Most respondents see a role for platforms to address these:
• Explore pooling resources for cost efficiency by investing jointly via a platform or fund. Explore carbon financing as a means of funding coffee sustainability programs. This is not currently on the agenda in the platforms.
• Develop a sector wide strategy and define contributions of different platforms and actors.
• Develop a set of common indicators for outputs and impact. This facilitates individual organizations in measuring their impact, as well as allows for comparison.
WHO WHY WHAT WHERE HOW
Source: interview and survey respondents Source: interview and survey respondents
Learning from other sectors
Communicating about sustainability
Collaboration in the sector
Executing our sustainability work
Measuring impact
Developing appropriate strategy
Financing our sustainability work
Ranking of challenges
Coffee Sustainability Catalogue 2016 41
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Sector organization
The coffee sector cooperates in a number of platforms, partnerships and alliances
Global Coffee Platform
Specialty Coffee Association of
America
Sustainable Coffee Challenge
Alliance for Coffee Excellence
African and Malagasy Robusta
Coffee Agency (ACRAM)
African Fine Coffees Association (AFCA)
Coalition for Coffee Communities
Coffee & ClimateCoffee Farmer
Resilience FundEuropean Coffee
Federation
Finance Alliance for Sustainable Trade
Green Coffee Association
International Coffee Genome Network
International Coffee Partners
National Coffee Association USA
(NCA)
SAFE PlatformSpecialty Coffee Association of
Europe
Sustainable Commodity
Assistance Network
World Coffee Research
several national coffee platforms
several non-coffee specific platforms
WHO WHY WHAT WHERE HOW
Source: interview and survey respondents
Coffee Sustainability Catalogue 2016 42
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Overlap in platforms
Global Coffee Platform
IDH Sustainable
Trade Initiative
(field level)
Specialty Coffee Association of America
Sustainable Coffee
Challenge
• Interviewed respondents perceive a large overlap, and “see the same people in different settings”. This is likely within their own ‘circle’.
• The overlap is visible but appears to be less than expected:
• GCP has largest unique membership.
• Largest overlap in membership between SCAA and SCC.
• Also large overlap between GCP and IDH, which is now formalized with the merger to GCP.
There is less overlap between platform membership than most respondents expect
13%
14%
6%
1%
2%
16%
8%
8%
0%
0%
0%
0% 0%
% of respondents member of this/these platformsNo memberships: 18% / Unknown: 14%
Overlap in platform memberships
WHO WHY WHAT WHERE HOW
Source: interview and survey respondents
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Platforms are regionally organized
• The perceived ‘Atlantic divide’ is visible in platform membership and is in line with current supply and demand relations:
• Respondents in Africa, Asia and Europe are more likely to be members of GCP and IDH.
• Respondents in North America are more likely to be members of SCAA and SCC.
• Respondents in Latin America adhere to these platforms equally.
• Common platforms appear to have a good mix between value chain actors and the enabling environment.
0% 20% 40% 60% 80% 100%
North America
Latin America
Europe
Asia
Africa
Platform memberships per region
GCP IDH SCAA SCC
0% 20% 40% 60% 80% 100%
Non-value chain actors
Coffee value chain
Platform memberships per respondent type
GCP IDH SCAA SCC
Platform membership confirms the perceived ‘Atlantic divide’which builds on current trade relations
WHO WHY WHAT WHERE HOW
Source: interview and survey respondents
Source: interview and survey respondents
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Feedback to sector organization
Importance of inclusiveness
• Coordination, shared vision and interest, learning, embedding sustainability in policy and value chain
• Importance of inclusiveness mainly emphasized by NGO’s and large companies, specifically in Europe
• But: inclusive dialogue is time-consuming & several respondents feel that producers and governments are not sufficiently involved
Importance of ability to act
• Commitment, innovation, scale directly visible on the ground
• Mainly emphasized by private sector, specifically in North America
• But: assumptions are made in order to act quickly & specific interests may dominate
Respondents see large progress made in collaboration, but also a tension between inclusiveness and ability to act
“We should not try to create another United Nations”“Producers are not sufficiently heard”
WHO WHY WHAT WHERE HOW
Source: interview respondents
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Private sector and matchfunding
• All types of actors use matchfunding grants especially when reaching out to new farmers, on average between 30-50%. Major part of sustainability work is funded privately. This is in line with the data obtained from major donors.
• Certification has led to a business model for sustainability based on premiums which are commonly used to maintain existing programs.
• Traders indicate that declining premiums are insufficient to implement and maintain outreach. Several respondents indicate that certification has an impact but does not address all needs.
• Respondents indicate that budgets are not sufficient to reach out to full value chain and address issues beyond the immediate coffee sector interest.
• Other sources of funding are not yet common, but some respondents are exploring specifically carbon financing.
Private sector is financing major part of sustainability work, matchfunding and certification premiums are common
WHO WHY WHAT WHERE HOW
29%
33%
48%
67%
0% 10% 20% 30% 40% 50% 60% 70%
Other / own sources of funding
Public funding / grants
Private funding: premiums
Private funding: investment
% of respondents using this type of financing
Financing sources for sustainability
Coffee value chain Non-value chain actors
< 30%
30% - 50%
51% - 70%
71% - 100%
Public / grants contribution as % of total budget
% of respondents
Source: interview and survey respondents
Source: interview and survey respondents
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Estimated total sustainability investment
Implementation speed has increased, significant investments still needed to reach all farmers and address wider challenges
• Annual available budget of 350M$ represents 2% of green coffee value, in sector with low margins.
• A lot of work has been done since the 1980s, but we are not there yet. At current implementation speed we could complete outreach by 2045. Required budget to completion (based on current practices) would be 4,1 bln$.
• This can be adjusted up or down based on increased efficiency, new challenges, new definitions of sustainability and/or new findings about the size of the producer population.
350 M$
0,0%
0,5%
1,0%
1,5%
2,0%
2,5%
0 M$
50 M$
100 M$
150 M$
200 M$
250 M$
300 M$
350 M$
400 M$
Estimated totalannual budget
% o
f gr
een
co
ffee
val
ue
An
nu
al t
ota
l bu
dge
t
Estimated current annual budget for coffee sustainability in relation to green coffee value
Annual private sectorpremiums paid
Annual private sectorbudget (excl premiums)
Annual other funding
Annual donor budget
2.600 M$
1.500 M$
Estimated budget needed to become a 'sustainable' sector in 2045
Implementation($200/farmer)
Research andinnovation budgetneeded (50M$/year)
WHO WHY WHAT WHERE HOW
Source: data provided by donors, public spending databases, Valued ChainSource: interviews, Coffee Barometer, Valued Chain
Source: data provided by donors, public spending databases, interviews, Valued Chain
0
10
20
1985 2000 2015 2030 2045 2060 2075
# fa
rmer
s (m
illio
ns)
time to implement current sustainability approach/definition
Estimated time to become a 'sustainable' sector
At current implementation speed (350.000 farmers/year)
At historical realized implementation speed (140.000 farmers/year)
Producers reached to date
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Ongoing efforts on financial constraints
Respondents are working on increasing available funds and decreasing cost of implementation
Wider private sector involvement and
investment
Increase commitment from
stakeholders in large coffee markets (e.g. Sustainable Coffee
Challenge)
Reducing cost of assurance
Standards collaboration reduce
cost of audits and traceability (ISEAL)
Company own standards and
auditing (various)
Data-driven assurance
(suggested)
Regional assurance (suggested)
Pooling resources for cost efficient direct
investment via a platform or fund
Funding for research via a check-off
program (e.g. World Coffee Research)
Shared investment in baseline studies and
impact measurement (e.g.
SAFE)
Non-coffee specific investments in landscapes and
communities (e.g. Coalition for Coffee
Communities)
National ownership and investments
Farmer outreach via national extension
services (e.g. Minas Gerais Brazil)
Involvement of national research institutes for plant
material (e.g. Vietnam)
Coffee sustainability outreach contributes to climate action and can
tap into climate financing
Carbon credits and loans (various)
Nationally Appropriate
Mitigation Actions (NAMA) (suggested)
WHO WHY WHAT WHERE HOW
Source: interview respondents
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Monitoring depends on supply chain data
• Cost and effort of impact measurement are given as a main challenge.
• Current impact measurement mainly based on activity outputs: farm data and traceability. This quantitative data is collected within the supply chain, often in relation to certification.
• Programs are evaluated annually but not always with a baseline. Attribution is a challenge, with rarely a control group in place and very few longitudinal studies.
• Currently impact measurement is mainly driven by donor demands. Respondents suggest these could be aligned.
• Impact measurement is gaining interest. Current workgroups exist within GCP, SCC and COSA, as well as many individual organizations. Some NGO’s and research institutes have developed specific expertise in impact measurement.
Impact measurement is not yet embedded in sector sustainability work, mainly because of cost and effort
WHO WHY WHAT WHERE HOW
0% 10% 20% 30% 40%
Control Group Outside Of Project
Structured Surveys
Narratives
Farm Performance Data
Coffee Traceability
% of respondents
Data collection methods
0% 10% 20% 30% 40% 50%
Longitudinal Study AfterProject/Program End
End Of Project/Program Evaluation
Baseline
Annual Progress Evaluation
% of respondents
Data collection frequency
Source: interview and survey respondents
Source: interview and survey respondents
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Lack of consensus on indicators
Different definitions for common indicators
# farmers/ # households
reached
% farmers reached
by M/F
by age <25/<30/<35
# / % coffee
produced/ sourced
sustainable/ certified/ verified
in MT/ kg/ bags
# yield / % increase
per tree/ ha/ farmer
in MT/ kg/ bags
Common indicators are not comparable, and mainly measure coffee output and outreach but not impact
• Even common indicators for outreach to farmers, inclusiveness, volumes and yields are used in different ways and as such can’t be added up or compared easily.
• A number of respondents are currently working on defining indicators, as well as several platforms notably the Global Coffee Platform and Sustainable Coffee Challenge.
• Most respondents agree that certification data provides a good starting point for measuring output. Some respondents indicate that the IDH KPI framework is a good starting point, while others say this is too much focused on output not impact.
WHO WHY WHAT WHERE HOW
0% 10% 20% 30% 40%
Investments
Inclusiveness
Social Impact
Environmental Impact
Activities Performed
Economic Impact
Outreach
Coffee Output
% of respondents
Indicator categories
Output
Impact
Source: interview and survey respondents Source: interview respondents
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HOW: summary of strengths and gaps
Strengths already achieved:
Collectively, the sector has a lot of experience in developing sustainability programs. Attributed to experience, most respondents feel comfortable with communication, collaboration and learning.
Existing platforms have trust of members and overlap is less than perceived.
Certification premiums have allowed to integrate sustainability in business as usual.
Annual available budget of 350M$ represents 2% of green coffee value, in sector with low margins.
Indicators from certification and current global programs are a good starting point in developing indicators, and further development and harmonization is underway.
Gaps and challenges going forward:
• Ensure that variety in platforms does not lead to a scattered approach by coordinating between platforms. Balancing inclusiveness and ability to act of platforms.
• Develop a sector wide strategy and define contributions of different platforms and actors.
• Explore pooling resources for cost efficiency by investing jointly via a platform or fund.
• Explore carbon financing as a means of funding coffee sustainability programs.
• Align different initiatives that are developing a set of common indicators for outputs and impact. This facilitates individual organizations in measuring their impact, as well as allows for comparison.
Whereas collaboration on strategy and impact measurement is recognized as a need, funding is still a less visible challenge
WHO WHY WHAT WHERE HOW
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Coffee Sustainability Catalogue 2016
We have a way to go, but a good foundation to build on
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Notes on interpretation of this study
A reliable catalogue but not exhaustive, as input for further sector discussion
• Study summarizes the current initiatives in coffee sustainability. This is on overview of what we are currently implementing. It does not specify what the agenda forward should be, this is up for sector discussion.
• Study has focused on organizational strategies not individual projects.
• Findings are based on a sample of respondents from the membership and network of the organizations in the steering committee that were willing to provide input. The overview is not exhaustive. The participation of respondents is however sufficiently large and representative to allow for interpretation. We have consulted 36 respondents in interviews and 51 organizations participated in a survey.
• Perspectives from producing countries are possibly underrepresented following the membership and network of the steering committee, and the decision to conduct this study in English only. Any bias is mentioned in the applicable section of this report.
• Historical data on investment, output and impact is rarely available. Furthermore, most sustainability work is done in partnerships of public and private organizations who all report on investment and outreach, so there is overlap in the numbers reported. We have used mainly data from donors and roasters. Donors and roasters most commonly collect data, and partnerships rarely contain more than one donor and more than one roaster.