Value Chain Coffee
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- Environmental
indicators - Emissions, effluent and waste
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Resource consumption
A further risk lies in the high consumption of resources, particularly water. Coffee cultivation exacerbates local water stress in regions with water scarcity or adverse climatic conditions. Furthermore, water-intensive primary processing methods – particularly wet processing – place a strain on the environment due to high water consumption and wastewater. In Ethiopia, for example, there is a shift in suitable growing areas due to rising temperatures, changes in rainfall patterns, post-harvest losses and extreme weather.
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Biodiversity
A major environmental risk is the conversion of natural or near-natural areas into agricultural land. The loss of these forests destroys habitats and reduces biodiversity. This is particularly problematic where coffee cultivation, through conventional intensification, involves increased use of agrochemicals.
In addition to the immediate loss of forest areas, this risk area encompasses the downstream impacts on ecosystems, biodiversity, the climate and human health. - Transport emissions
- Animal welfare
- Human rights
- Discrimination
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The interests of the local community
Anyone who considers the interests of the local population will recognise a fundamental risk: smallholder farming structures, price fluctuations and unequal bargaining power between producers and traders create a structural problem that gives rise to further risks. In short: as incomes fall, the incentive for deforestation, the use of intensive chemical farming, and problems relating to informal labour practices and quality standards increases.
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Child labour
As well as forced labour, child labour is also common in supply chains. Poverty and a lack of basic social protection drive children to take on inappropriate work, particularly at the earliest stages of the supply chain. In doing so, they risk physical and psychological harm. Without adequate education, they lose prospects for the future, which reinforces the vicious circle of forced labour, debt bondage and poverty across generations.
- Forced and compulsory labour
- Freedom of association
- Work practices/
-quality -
Employment
statusPrecarious employment conditions are among the key social risks. Particularly in the early stages of the supply chain, informal employment, seasonal work, unregistered employment, long working hours during harvest periods, health risks and even forced labour can occur.
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Health and Safety at Work
Precarious employment conditions are among the key social risks. Particularly in the early stages of the supply chain, informal employment, seasonal work, unregistered employment, long working hours during harvest periods, health risks and even forced labour can occur.
- Discrimination / Diversity
- Governance
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Corruption, bribery, accepting benefits
At the supply chain stages of collection, local trade, export and customs clearance, risks arise from unclear proofs of origin, mixed flows of goods, false declarations and the circumvention of regulations. Particularly when it comes to deforestation, weak or manipulated controls, as well as problems with audits, certification and traceability, are significant factors. Corruption also plays a role: abuses frequently occur in the allocation of land titles, usage rights and permits. Furthermore, price fluctuations between producing countries encourage the cross-border smuggling of coffee beans.
- Anti-competitive behaviour
- Compliance
- Tax evasion
- Poor Governance
- Product
responsibility - Customer safety
- Labelling of products
- Marketing, Advertising
- Protection of customer data
- Environmental
Coffee – an Ethical Risk Assessment
Coffee has long been a particularly clear example of what fair trade, sustainable production and corporate due diligence are all about.
Public awareness of social, ethical and environmental risks is correspondingly high. The network of certifications, industry standards and voluntary commitments is equally dense. New legal requirements have further intensified the debate, particularly regarding deforestation-free supply chains.
Despite this attention, the fundamental structural problems in the coffee supply chain persist. Economic value creation remains unevenly distributed. A significant proportion of the environmental and human rights risks lie at the start of the supply chain, in the so-called ‘Coffee Belt’. These include Brazil, Colombia, Costa Rica, Côte d’Ivoire, the Dominican Republic, El Salvador, Guatemala, Honduras, Guinea, Kenya, Mexico, Nicaragua, Panama, Sierra Leone, Tanzania, Togo, Uganda and Vietnam.
The main risks lie primarily in cultivation. It is here that smallholder farmers, some of whom are part of cooperatives, grow the coffee plants. They harvest the coffee cherries and carry out the initial processing: they pulping, ferment, wash or dry the cherries. The end result is usually export-ready green coffee.
Local dealers, co-operatives, exporters or international traders usually consolidate the green coffee. They check its quality, grade it and ship it.
In the importing country, traders or roasters take delivery of the goods. They store and process the coffee. The packaged coffee eventually reaches the end market via the retail sector, the hospitality industry or private-label brands.
The following risks are particularly serious in the Coffee industry: