Coffee corporates prepare to scale USAID-supported joint carbon footprint model in Southeast Asia
April 12, 2023 (BANGKOK) – Companies and organizations working along the coffee value chain in Southeast Asia prepare to scale to other parts of their global supply chains a joint corporate carbon inventory conducted in Vietnam and Indonesia with support from the United States Agency for International Development (USAID).
“The next step is for us…to consolidate the lessons learned from this collaboration by starting the same activities in other countries with the same pre-competitive approach. This is critical to quickly drive meaningful climate action,” said Angela Aiello, Environmental Sustainability & Life Cycle Assessment (LCA) Manager for Lavazza Group, one of the study’s four company investors.
Global coffee demand is expected to triple by 2050, raising land use change pressures in tropical forests. While more than one-third of the world’s largest companies have net-zero commitments, a big challenge they face to be on track is lack of greenhouse gas emissions data to manage their carbon footprints.
In March 2022, with co-investment from the world’s two largest coffee roasters, Nestlé and JDE Peet’s, USAID Green Invest Asia, a technical assistance facility that helps sustainable agriculture and forestry companies in Southeast Asia secure climate finance, launched a carbon footprint study in the Central Highlands of Vietnam and Southern Sumatra in Indonesia, two major Robusta coffee sourcing regions that together supply 20 percent of the world’s overall coffee. Lavazza Group and Costa Coffee later joined and co-invested in the collaboration, creating the largest-scale effort to date to calculate a carbon emissions baseline of on-farm carbon emissions from Robusta coffee cultivation and production in Southeast Asia.
Eleven of their supply partners sourcing from Vietnam and Indonesia, including many of the world’s largest coffee traders, mobilized over 100 of their agronomists to survey and collect field data from more than 4,500 farms over four months. The result is an unprecedented 15-company collaboration to standardize a method to measure carbon emissions in the coffee sector, and then to collect/share that climate reporting.
“I think this has been one of the most effective and meaningful precompetitive initiatives that I’ve ever been part of,” said Anneke Fermont, Sustainability Manager for Volcafe, one of the world’s largest commodity trading firms and study participants. “It’s extremely valuable to have a neutral baseline for the carbon footprint of coffee production for Indonesia and Vietnam that all stakeholders agree on. The real value comes from creating a level playing field that we can now all use to guide investment decisions to reduce our coffee footprint and report progress against.”
On April 5, USAID Green Invest Asia and the Global Coffee Platform hosted a webinar for the study’s main technical partner, Enveritas, to share preliminary findings from the study, whose objectives included creating a standardized methodology to regularly gather emissions data going forward, calculate an open-source carbon emissions baseline, and train supplier partners on data collection.
“Without carbon baselines, the return on your investments in greenhouse gas reduction is guesswork. Well-intentioned, but still guesswork,” said Steve G. Olive, Mission Director of USAID’s Regional Development Mission for Asia, in his opening remarks to more than 200 on-line participants. “The story that emerges from these data points will shape the industry’s outlook for years to come. Buyers and their suppliers will be on stronger footing to be more climate-resilient, more profitable, and more prepared.”
Though up to 90 percent of supply chain (Scope 3) emissions for companies sourcing agricultural commodities generally comes from farm level crop production, reliable data at that level is rarely available due to the considerable number of smallholder farmers involved, and the multiple ways they manage their farms. To control for these differences, Enveritas designed a randomized sampling strategy, created a survey to collect data from farmers, trained more than 100 agronomists on survey and data collection, and analyzed the resulting data with the Cool Farm Tool, an on-line, open-source greenhouse gas calculator, to identify sources and quantity of carbon emissions. The study will be available at greeninvestasia.com/research by May.
For every kilogram of green coffee beans produced in Vietnam’s Central Highlands, 1.83kg of carbon dioxide equivalent (CO2e) emissions are generated versus 2.38kg CO2e for Southern Sumatra. More details in the blue sidebar. For both countries, the ratio of fertilizer applied to yield was the most important driver of emissions, with residue management being the second biggest factor. Half of harvested coffee is husk, and can increase emissions if not managed properly, with mulching emitting the least emissions. Senthil Nathan, Enveritas’ head of Asia operations, also noted some areas to improve data limitations and representativeness. In addition to optimizing fertilizer use and improving residue management to reduce emissions and lower the carbon footprint, Nathan said there are opportunities to increase sequestration (trap and store) of carbon dioxide on the farm, such as through planting trees and crops alongside coffee, also known as agroforestry and intercropping, respectively. Recommendations will be included in the final report, which will be publicly available.
Niels Haak, Director of Sustainable Coffee Partnerships for Conservation International, which convenes and facilitates the now 170+ partners strong Sustainable Coffee Challenge, asked peers how they could test the methodology and model in other countries. He shared the Sustainable Coffee Challenge plans to conduct a similar study in Brazil, Colombia, Honduras, Mexico and Peru. “It is really great that we can build on this study to replicate it across Latin America and make tweaks to the methodology where needed based on lessons learned…We’re on a good path to roll this out and work towards sector-wide alignment on the methodology used to conduct on-farm carbon footprint accounting” said Haak. Any actor interested to learn more or support replication of the study in Latin America is encouraged to reach the Sustainable Coffee Challenge at [email protected].
“To grow coffee, within planetary boundaries, we need to do that collaboratively,” said Simon Fox, Minimizing Footprint Lead for JDE Peet’s. “We need to work together to drive that systemic change. And working together will build a better future. And I think this consortium is just the start of that.”
Michael Schlup, the Head of Impact and Environmental & Social (E&S) Director of the investment firm Sail Ventures, which manages the blended finance &Green Fund, commended the coffee consortium’s pre-competitive collaboration, and its willingness act on the data. “For us, that is a key prerequisite, when we make an investment. This study has really produced robust data…It’s extremely important for us as a basis for making investments because it brings down all costs, and brings down barriers for entry for other investors as well.”
Laurence Webb, Sustainability Manager for Costa Coffee, which is the last of the four company co-funders to join the consortium said: “It would have been very difficult for us to have gathered data on such a large sample of farms by working alone. Collaboration is more efficient and increases the chances of achieving impact at scale. Hopefully this will be the start of an ongoing collaboration which will drive down the carbon footprint of coffee farming.
To enable this there needs to be a trusted and credible organization [like USAID Green Invest Asia] that can bring together the whole value chain, including both the private sector and potentially some public sector organizations too. It’s a complex task as there are many different actors to coordinate.”
Video recording of event here, and presentation available here. Study available here.