Nespresso – The Positive Cup
We interviewed Jerome Perez, Global Head of Sustainability, Nespresso.
His responses are illuminating.
- G20 Foundation: “What is the defining characteristic of Nespresso’s sustainability vision? What do you hope to achieve?”
Sustainability is one way by which we bring to life our company purpose to inspire tasteful and meaningful living. We defined a vision for sustainability within our strategic framework of The Positive Cup: To make each cup of Nespresso an extraordinary experience creating pleasure for consumers and benefits for society and the environment..
For 30 years, we have been integrating sustainability into our activities. By focussing in the areas most material to our business and our stakeholders, we can contribute to long term business performance and deliver a positive impact on society and the planet through our value chain. We call this Creating Shared Value.
Our sustainability journey aims to achieve the following ambitions:
- Ensure sustainable coffee sourcing, improving the livelihoods of farmers and communities.
- Unlock solutions for the circular use of aluminium with a focus on sourcing and recycling.
- Take integrated actions on climate change, mitigation and adaptation.
- Engage everyone in our company, our partners and consumers in the benefits of sustainable production and consumption.
These enable us to contribute to 11 of the 17 United Nation Global Goals, particularly the SDG12: Sustainable Production and Consumption and the SDG8: Decent Work and Inclusive Growth
To fulfil our promise to consumers, we depend on the consistent availability of the highest quality coffee, therefore on resilient farming communities. For us, quality and sustainability go hand in hand.
In 2003, together with Rainforest Alliance, we designed the “Nespresso AAA Sustainable Quality™ Program, our coffee sourcing program to promote sustainable agricultural practices and build long-standing relationship with producers. Since 2014, the program also aims at innovating solutions for broader systemic challenges such as climate change and social security, gender. And Last year, we joined the Sustainable Coffee Challenge led by Conservation International to consolidate and complement our coffee ambition into wider industry goals.
Thanks to the network of more than 460 agronomists, the program covers more than 75’000 producers in 12 countries, resulting in CHF 35 Mio investment per year. By end 2017, 90% of Nespresso’s coffee was sourced from the program (target 100% by 2020), 51% sourced from certified farms (Rainforest Alliance, FLO, FTUSA).
- “We are very interested in how your partnership with the Colombian government, and Fairtrade International, has created a retirement plan for smallholder farmers.”
The topic of aging producers is a challenge for our industry: Younger generations are not incentivised to join a sector where social security is lacking.
Inspired by the mission of Fairtrade International to promote empowerment, we felt that we could further leverage the premium that is paid to the certified communities. Joining forces with them and the Colombian Ministry of Labour, we co-created a mechanism that enabled topping up 20% of the national framework of retirement for the agricultural population.
At the end of 2017 , over1400 farmers of the Aguadas Coffee Growers’ Cooperative had planned for their retirement.
And What we are most proud of: two cooperatives have independently adopted a similar mechanism and the programme is spreading beyond the core AAA regions.
- “How did the Peace Dividend in Colombia create such a fertile environment for sustainable development?
Nespresso has a long history in ColombiaThe AAA Program was rolled out in 2004, today reaching over 33 000 producers in 10 regions.
Our November 2017 announcement that we are investing an additional 50 MioUSD in Colombia in the coming 5 years, continues and accelerates the process of building sustainable production of Colombian coffee.
These investments are in parallel with the opening of a new zone now also touched by the peace process: Caquetá. Over the last 2 years we have deployed technical assistance in this area. Around 500 producers have been trained to our sustainable quality practices. More will be enrolled in the program, as we increase our volume of coffee purchased 5 times over the next 5 years.
The peace process brings a fertile and conducive environment for sustainable development and for attracting private sector investments. We wish to increase our investment, with external donors interested in constructing the future of Colombia.
- “Food and Water Security forms one of the cornerstones of this year’s G20 Agenda. Shade-Grown coffee is claiming public attention as a means towards these goals. Can you elaborate?
Water is essential for coffee communities: For farm productivity, post-harvest coffee processing and the quality of life of the farmers themselves.
We have been working on this via the AAA program, supported by co-financing institutions to upgrade the infrastructure of water treatment solutions on farm. These early efforts were stepped up in 2014 through a 20 mioUSD multi-stakeholder initiative, known as Manos al Agua (http://manosalagua.com/). Combining on farm and watershed socio-environmental actions, the 5 year initiative has reached more than 11,000 coffee families.
The recent droughts in Colombia underlined the importance of shade grown coffee farms which are more resilient than full sun production systems.
Since 2014, we have been promoting Agroforestry models for coffee production. In Colombia, over 1 mio native trees have been planted around the coffee farms to protect water sources and provide additional income to farmers (via fruit or timber production). The financing of this transition (around 2 MCHF per year) is made possible by a mechanism similar to a payment for ecosystems services. The agroforestry operations are designed and implemented to deliver carbon credits that compensate the equivalent of our operational carbon footprint. Known as insetting ((http://www.insettingplatform.com/), the approach drives the internalisation of the GHG emissions costs while delivering multiple benefits for the farming communities, like water source protection.
- “Sustainability seems to have come of age, as a global issue, and corporations and the consumer are now fully engaged. The product improves, the environment improves, and both corporation and consumer are enhanced. Can the Colombian model be exported across both borders, and cultures?”
Everyone has their role to play. As a private corporation, we must engineer our value chain to ensure environmental and social performance is part of our business model. We see our role being in innovating to shape tomorrow, related both to food production and agricultural land use as well as resources and the circular economy.
The Colombian model can be exported across borders and cultures but the big challenge going forward is to obtain the recognition by stakeholders like consumers, civil society and policy makers of what is achieved. The positive actions undertaken need to be more widely recognised so we can all promote best practice and further progress. We take this challenge seriously, particularly to engage consumers in the benefit of sustainable choices. This was reflected in our 2017 brand campaign ‘The Choices We Make” in which our ambassador, George Clooney, narrated the true story of Humberto a farmer from the Jardin community in Colombia, whose life has been positively affected by the commitments of our company.
Headquartered in Lausanne, Switzerland, Nespresso operates in 76 countries and has over 13,000 employees. In 2017, it operated a global retail network of more than 700 boutiques.