Lavazza: The Social and Business Value of Sustainability

LavAzza!_Christian ScholzLuigi Lavazza S.p.A.’s first sustainability report makes the point that the Italian coffee company is no stranger to sustainability — it’s been doing it for 120 years.

This year the world’s seventh largest coffee roaster is celebrating its 120th anniversary, so the report places an historical perspective on sustainability and corporate social responsibility, as well as a look forward.

“At Lavazza, commitment to sustainability is an intrinsic value, which is not simply dictated by the market, but responds to a need to create shared value throughout the supply chain: It is an essential driving force for continuous improvement,” said Antonio Baravalle, Lavazza’s CEO.

Prepared in accordance with the Global Reporting Initiative (GRI) standards, the 85-page report slickly captures the company’s 120-year vision, which operates on the basis of three pillars: quality, innovation and continuous improvement.

Lavazza promotes the concept of “integrated sustainability,” which is implemented through a lifecycle thinking approach that enables the “creation of shared value throughout the industry, as part of a process of continuous improvement.” At Lavazza, social and environmental sustainability are integral components of economic sustainability.

In order to respond effectively to growing expectations in Lavazza’s current and potential markets, the company’s economic commitment to sustainability increased from $3.1 million in 2012 to $6.6 million in 2014. This was achieved through a savings of 3.9 percent on total industrial production costs by improving production efficiency. This savings will be reinvested in the continuous improvement of production process, Lavazza says, “resulting in a progressive minimization of the environmental impact.”

“Sustainability is not a solitary journey. It is crucial to integrate the most varied and diverse experiences in the business model, with a systemic approach. Creating shared value with internal and external stakeholders, and regularly investing resources for more sustainable and efficient production processes is the only way for companies to keep growing,” said Giuseppe Lavazza, vice-chairman of the company.

The report adds: “If we look at sustainability as an opportunity to create value, adopting it as a management model requires a cultural shift. However identifying the link between sustainability and value is complex. The relationship between the costs and benefits of an investment in sustainability can, in fact, appear not to be beneficial in the short term, but actually turn out to be so if we adopt a long-term view.

“The entire supply chain, from the processing of green coffee to the end product, must make this paradigm shift: investing in sustainability depends on the margins it generates.”  Lavazza shares its values with its entire supply chain, via its Code of Ethics and the Supplier Code of Conduct.

The report notes that the projects designed to minimize the effects of climate change include Coffee & Climate initiatives that seek to improve production techniques, as well as encourage sharing of good agricultural practices and foster entrepreneurship. These goals are generally achieved in partnership with the International Coffee Partners (ICP).

The Giuseppe and Pericle Lavazza Foundation, a nonprofit that sponsors long-term development projects in coffee-producing countries, is aimed at improving agricultural productivity and disseminating best practices throughout the coffee sector.

According to the report, the foundation’s projects are developed from a “social business perspective. These are projects focused on a product/service with a social value, where profit is reinvested to the benefit of the local community.”

Coffee is a great (and for many a necessary) social beverage, so it’s highly fitting that Lavazza operates from a social business perspective.

Image credit: LavAzza! by Christian Scholz via Flickr CC

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