An increase in demand for transparency from consumers is prompting significant changes in the coffee industry's approach to sustainability reporting. The call for such accountability comes from a variety of sources, encompassing not only consumer preferences but also regulatory frameworks influencing business practices.
At the forefront of this movement is the European Union's Corporate Sustainability Reporting Directive (CSRD), which became effective in early 2023. This regulation mandates that companies, including coffee importers and exporters, disclose the environmental, social, and governance (ESG) impacts of their operations. This sets the stage for stakeholders, business partners, and consumers alike to assess the sustainability performance of various coffee industry players.
This heightened scrutiny poses particular challenges for coffee roasters, who must adeptly interpret the incoming data to understand how their sourcing practices affect operations, marketing, and branding efforts. In a discussion with Perfect Daily Grind, Nicole Ochojski, Sustainability Reporting Manager at Neumann Kaffee Gruppe, articulated the complexity of sustainability reporting requirements. She stated that "the requirements for sustainability reporting vary depending on the company’s size, type, and location," indicating that large listed companies in the EU have been disclosing non-financial information for years.
From 2025 onwards, the CSRD demands that all businesses, with the exception of micro-enterprises, release sustainability reports detailing risks and opportunities related to social and environmental issues in their operations. On this note, Ochojski reflected on the commitment of Neumann Kaffee Gruppe to sustainability efforts, explaining, “When we published our first sustainability report in 2018, it wasn’t because we had to – it was because we wanted to.” As the CSRD takes effect, clear commitments like these are anticipated to shift from voluntary to mandatory practices.
The drive for increased transparency comes alongside a growing demand for sustainability within the coffee sector. A study conducted by the International Institute for Sustainable Development revealed that 43% of coffee consumers are influenced by ethical, environmentally friendly, or socially responsible options when making purchases. For coffee roasters, this trend opens the door to new market opportunities, allowing businesses to set themselves apart through responsibly sourced products.
Despite the absence of mandatory reporting for all coffee businesses currently, there is a noticeable uptick in traders and roasters voluntarily publishing their sustainability reports. Such reports enable better-informed decisions regarding sourcing, as they provide valuable insights into the ESG performance of exporters and importers.
Ochojski outlined the process of sustainability reporting, which involves conducting a materiality assessment. This assessment enables companies to identify specific impacts, risks, and opportunities throughout the supply chain that are most relevant to their operations. This focus allows for the delivery of meaningful insights into sustainability efforts, tailored to diverse company profiles.
As companies prepare for increased scrutiny under the CSRD, the need for reliable data becomes paramount. Reporting on sustainability issues, especially those related to traceability and deforestation, will now be essential as they look to comply with both the EU’s regulations and evolving consumer expectations.
Sustainability reports are instrumental for coffee roasters, serving as decision-making tools that allow them to evaluate potential partners and understand how sourcing aligns with their sustainability goals. The latest sustainability report from Neumann Kaffee Gruppe, released in early September 2023, outlines various initiatives, such as the NKG Verified supply chain programme, which helps ensure traceability in coffee sourcing.
Annalena von Rhein, Sustainability Manager at Bernhard Rothfos, highlighted the significance of carbon footprint assessments in the roasters' decision-making process. She noted that roasters seek information not only about the carbon footprint but also about sustainable supply chain initiatives, reflecting a broader desire to align sourcing behaviours with responsible practices amid pressing climate concerns.
Data provided in these reports not only enables roasters to substantiate their claims but also serves as a vehicle for building consumer trust. Since consumers are increasingly sceptical about claims of sustainability, clear, data-backed reports act as a safeguard against perceptions of greenwashing. Ochojski pointed out that detailed reports give roasters the chance to share crucial insights into their sustainability initiatives, including attempts to eliminate child labour in coffee production.
With the coffee industry facing mounting pressure to meet sustainability expectations, the emergence of structured, transparent reporting methods is turning into a necessity rather than an option. By effectively utilising sustainability reports, roasters position themselves to meet growing consumer and regulatory demands while contributing to a more sustainable future within the sector. Ultimately, these reports serve as vital tools for compliance, relationship-building, and fostering awareness among consumers, thereby reinforcing accountability throughout the supply chain.
Source: Noah Wire Services