The proverb “with great power comes great responsibility” has never been more applicable to food supply chains, with new EU rules requiring companies to report on how their activities impact people and the environment. (Click for more information about the EU Corporate Sustainability Due Diligence Directive and the EU Deforestation Regulation).

As the largest pure-play tea and coffee company in the world, Netherlands-headquartered JDE Peet’s is acutely aware of its responsibilities in this respect. The company has been investing in projects at origin since 2015 and championing an inclusive and regenerative ecosystem since 2018 through its Common Grounds Programme – an action plan to positively impact people, planet, and the future of coffee and tea.

“We rely 100% on farmers for our business to exist, which is why all topics related to sustainability are critical to us,” said Laurent Sagarra, vice president of sustainability at JDE Peet’s, in an exclusive interview with Fi Global Insights. “The climate is affecting the ability of farmers to grow coffee. Without farming we don’t have a future. It is a matter of building resilience to make sure we, the farmers and the rest of the supply chain are able to continue to grow and develop in the future.”

When the company analysed its emissions, it discovered that green coffee was a major contributor – responsible for over 50% of its carbon footprint – and that 25% of the emissions arising from green coffee were related to past deforestation.

“Having established that past deforestation was a key driver of our climate impact, stopping future coffee related deforestation became a priority for us,” recalled Sagarra.

Forest mapping: The first step in the deforestation journey

The first step in JDE Peet’s’s deforestation journey was to map out where its coffee was being grown because, as Sagarra put it: “If you want to stop coffee related deforestation, you need to know where it is.”

This required a forest map that (as per the EU definition) provided a representation of forest cover at the end of 2020. However, the problem with existing tree cover maps was that they resulted in a misleading picture, for reasons Sagarra explained:

“The issue we came up against was that 60% of the coffee in the world outside of Brazil grows under shade, and those coffee fields show as forest on the maps. This means that coffee from those fields will be rated as deforested coffee. So, the first problem we had to overcome was obtaining a forest map that didn’t exclude farmers who are actually doing the right thing and protecting biodiversity by growing under shade,” he said.

JDE’s solution was to collaborate with technology partner Enveritas and support the development of a forest and coffee map based on high-definition satellite imagery.

“They developed an AI-powered system to analyse the images. Training the system to distinguish between coffee plant, forest etc, involved having hundreds of people on the ground to verify the reference points,” said Sagarra.

Result: 90% of coffee mapped

JDE Peet’s says this advanced imaging technology has allowed it to map forests in 90% of the coffee world.

The second task was to map coffee plots. Fortunately, the same maps and AI system that Enveritas had developed for the forest mapping worked for this purpose.

“That was a huge relief for us because mapping coffee plots by hand involves walking round the field with a GPS, which is both time consuming, unreliable, and costly,” said Sagarra.

Overlaying the coffee plot and the forest maps gave an accurate representation of where coffee had been planted on deforested land post 2020, in alignment with the EUDR definition and cut-off date.

JDE Peet’s started this exercise in Vietnam, where it mapped 1.8 million coffee plots. Of these, less than 200 were shown to be deforested.

“We knew that if we could remediate those plots, we would be able to keep Vietnam’s entire coffee production deforestation-free going forwards,” said Sagarra.

Enveritas has repeated the mapping exercise in more than 20 coffee-producing countries around the world, and is now working with governments and farmers in each country to remove and reforest any deforested plots.

“Our strategy is to share this data with governments and cooperate with them to develop a protocol for remediating those plots in a way that engages farmers and ensures they are treated fairly and are indemnified. We, as a company, are financing the reforestation of the plots and we will continue to invest through our farmer programme in those areas at risk, because fundamentally, poverty is the driver for deforestation. When we invest in farmers to increase yield and fight poverty, we also reduce the risk of deforestation,” said Sagarra.

Seven zero-deforestation deals signed

JDE Peet’s has already agreed Memoranda of Understanding (MOUs) with governments in seven countries, of which five - Papua New Guinea, Rwanda, Burundi, Tanzania, and Uganda - have completed the protocol.“Those fields have been remediated and today, those five countries are technically deforestation-free post 2020 when it comes to coffee,” said Sagarra.

He admitted that engaging with governments is challenging, but that once they realise the value of this approach they generally cooperate.

“It’s not easy because each government has different priorities and climate change is not always the top priority when they are having to deal with poverty and other challenges. On the other hand, this approach allows the coffee industries in these countries to stay competitive.”

Collaboration is key: Working with Solidaridad

In some countries, JDE Peet’s is working with NGOs to help build engagement, for instance, the civil society organization, Solidaridad. Through a localised on the ground presence, Solidaridad has been helping coffee growers to adopt circular cultivation practices. For example, growers are being supported in obtaining official land use permits from the government to plant coffee under agroforestry systems and in converting waste water from wet mills and organic matter into fertiliser. 

“Ultimately, the key to progress is bringing all the parties together and ensuring farmers have a voice and their interests are represented. We need to make sure no-one gets left behind. In this respect, Solidaridad’s support has been instrumental in Peru and Honduras,” said Sagarra.

It is also important to note that JDE Peet’s has approached the issue of deforestation pre-competitively, addressing it not only in its own supply chains, but at a country level. And this comes back to the so called ‘Peter Parker Principle’.

“We have developed these solutions and have invested to make it happen, but we are sharing the information with governments and farmers for free. Today, we are alone in this journey but other roasters are welcome to join in the effort – it is open to everybody. For us it is about responsible sourcing. If you are the leader, you need to act as a leader.”

EUDR stops at traceability

In parallel to JDE Peet’s’s own deforestation journey, the EUDR – a piece of legislation aimed at halting the import of products linked to deforestation – has been winding its way through the EU law making process.

Whilst there is some cross-over between the work JDE Peet’s has done on eliminating deforestation and the requirements of the regulation, Sagarra was keen to distinguish between the two.

“The EUDR requires operators to demonstrate traceability, which is useful as it helps the industry know where its coffee is coming from. But traceability alone will not prevent future deforestation, as companies will just source from the existing pool of deforestation-free coffee.

“If you want to drive impact, you have to go beyond simply complying with the regulation to engaging with countries and farmers to drive change and prevent any further deforestation in the coffee world. That is what we have done and that is why we always say that our work on stopping deforestation is different from EUDR compliance,” he said.