Sustainable supply chains are essential to ensure the livelihood of millions of smallholder farmers, mitigate the effects of climate change and safeguard natural ecosystems, meeting consumer demand for responsibly grown and traceable coffee.
As one of the world’s top coffee merchants, we are determined to play our part. This is why LDC’s coffee sustainability strategy takes a comprehensive approach that rolls out solutions that have been piloted over the years, and is supported by a new platform for coalition-led investments aiming to bring scale to low-carbon, sustainable agriculture, facilitate innovation at farm level and improve collaboration among coffee supply chain stakeholders, and beyond.
The effect of climate change is challenging coffee origins around the world. Predictable seasonal temperatures and consistent rainfall patterns are no longer the prevailing scenario, making it harder for plantations to produce consistently. This is endangering areas where coffee has grown for generations, which may no longer be suitable for production in the future, creating uncertainty as to how supply will meet future demand.
The combined effects of rural poverty and inefficient farming techniques exacerbate the situation, leading to deforestation, soil erosion and the consequent sedimentation of waterways, reinforcing the negative effects of climate change on coffee production, and making change more expensive and harder to implement for coffee farmers, some of whom live below the poverty line.
Without support, many growers will become locked in a spiral of decreasing yields and income, and could be forced either to abandon their farms or switch to crops that are less vulnerable to climate change.
As a leading global merchant of green coffee, LDC is well-positioned and equipped to help coffee farmers address the challenges they face, and make their production more sustainable and profitable.
We believe that sustainable agriculture is closely linked with farmers’ economic wellbeing. That is why we choose to work directly with coffee farmers on the ground, supporting them through initiatives that aim to increase their income, productivity and environmental stewardship, while promoting labor rights, gender equity and youth empowerment.
Fundamentally, we actively seek to create tangible impacts at farm level and across our commercial operations, leveraging our expertise and wide network of partners to ensure supply continuity and sustainability.
Our coffee sustainability strategy takes a holistic approach built on four complementary pillars:
Pillar 1: Responsible Sourcing
As consumer preference and demand for sustainable coffee increases, especially in North America and Western Europe, so too has the percentage of coffee produced under sustainability certification and verification schemes.
According to Coffee Barometer, 55% of global coffee production was certified under voluntary sustainability standards in 2019/2020, and the Global Sustainability Platform reported that 55% of the coffee purchased by major roasters in 2021 was from certified and verified responsible sources.
The principles of responsible sourcing, such as due diligence on human rights issues and deforestation, are also becoming part of the regulatory environment in consumer market.
As a leading global coffee supply chain participant, LDC is well placed to help farmers ensure that work conditions and agricultural practices meet baseline sustainability standards, enabling them to continue selling their coffee, and allowing roasters to meet consumer expectations.
LDC has defined its responsible sourcing principles in its Global Code of Conduct for Coffee Suppliers. This document builds on LDC’s global responsible sourcing policies and Group Code of Conduct, enforces compliance with applicable local laws and regulations, and aligns with International Labour Organization conventions and other global standards related to business and human rights, as well as various codes of conduct and sourcing policies developed by our customers.
Our objective is not to exclude farmers or suppliers from our supply chains, but rather to encourage them to commit to a long-term and continuous improvement process, supported directly by LDC and its partners.
A key pillar of LDC’s responsible sourcing approach is our commitment to eliminate deforestation and conversion of native vegetation of high conservation value for agricultural purposes from all its supply chains by the end of 2025.
“Eliminating deforestation and native vegetation conversion associated with agriculture is among the most significant contributions we can make to the world’s 1.5°C Paris Agreement target to limit global warming.”
Michael Gelchie, LDC’s Chief Executive Officer
Boosting Production of Certified and Verified Coffee
Certification and verification schemes remain one of the most powerful vehicles for sustainability within the coffee industry. Through regular audits and controls, these schemes give assurance to consumers that their coffee is responsibly produced, while supporting farmers and supply chain participants to meet well-defined standards.
LDC works to certify farmers through most verification and certification schemes used in the coffee sector.
Many farmers, cooperatives and suppliers, however, are not in a position to achieve this level of compliance from the onset.
In order to meet producers where they currently are, before helping to lead them on a path of continuous improvement toward greater sustainability, LDC also operates its own Responsible Sourcing Program with two levels: RSP-Core and RSP-Advanced.
Pillar 2: Supporting Farmers
By extending our focus beyond responsible sourcing, LDC’s Stronger Coffee Initiative facilitates coalition-led investments that support strong coffee communities, restore soil and tackle climate change.
Guided by our vision for a world where every cup of coffee improves lives and the planet, we support farmers with a three-pronged approach: Farmer Prosperity, Low-Carbon Production and Regenerative Agriculture.
Pillar 3: Sustainable Operations
Our third work stream follows naturally from the first two, by focusing on Scope 1 & 2 emissions, transitioning to renewable energy where possible.
To ensure that every coffee bean going through an LDC facility has a minimal impact on the environment, we continually strive to reduce water consumption, waste generation and direct emissions, for instance by shifting to renewable energy sources, as at our processing facilities in Ho Chi Minh, Vietnam and El Cofre, Veracruz, Mexico.
Pillar 4: Sectoral Partnerships
The first three pillars of our sustainability strategy focus on the coffee we source and process ourselves – but our responsibility and efforts don’t end there!
As one of the world’s leading coffee merchants, LDC also actively contributes to broader sustainability goals by supporting key sectoral initiatives.
Working pre-competitively with our industry peers and value chain partners, we contribute to the definition of industry standards such as the Global Coffee Platform’s Baseline Coffee Code. As a member of the International Coffee Organization’s Public-Private Task Force – and as a signatory to the London Declaration on price levels, price volatility and the long-term sustainability of the coffee sector – we also contribute to the generation of critical knowledge, such as the establishment of living income benchmarks.