OUR SUSTAINABILITY REPORT 2017/2018 - Löfbergs

Page created by Howard Tran
 
CONTINUE READING
OUR SUSTAINABILITY REPORT 2017/2018 - Löfbergs
OUR
SUSTAINABILITY REPORT
2017/2018
OUR SUSTAINABILITY REPORT 2017/2018 - Löfbergs
OUR SUSTAINABILITY REPORT 2017/2018 - Löfbergs
CONTENTS
   FOREWORD                                          4
       Comments from CEO and Chair                   4
       Business highlights 2017/2018                 5

   ABOUT US                                          7
       Meet the Löfbergs Coffee Group                8

   SUSTAINABILITY AT CORE                           13
       Sustainability is the core of our business   14
       Our sustainability story from 1906           17
       Great results and ambitious goals            18
       Key responsibilities and contributions       20
       to Agenda 2030 and the global goals

   SOURCING                                         22
       Farming the coffee of the future             23
       Coffee is grown in high risk countries       28
       More than coffee                             30

   PROCESSING                                       31
       Towards 100% renewable resources             32

   CUSTOMERS                                        37
       Sustainable offers and consumption           38

   CO-WORKERS                                       43
       Committed and proud people                   44

   ABOUT THIS REPORT                                47
       About our sustainability report              48
       GRI Index                                    50

LÖFBERGS COFFEE GRO UP                                   S U S TA I N A B I L I T Y R E P O R T   3 OF 52
OUR SUSTAINABILITY REPORT 2017/2018 - Löfbergs
FO R E WO R D   A B O U T US   SUSTA I N A B I L I T Y AT C O R E   S O U RC I N G   P RO C E S SI N G   C USTO M E R S   C O-WO R K E R S           A B O U T T H IS R E P O RT

COMMENTS FROM CEO AND CHAIR
                                                                                     More certified coffee,
                                                                                     supporting more coffee
                                                                                     farmers, a higher share
                                                                                     of renewable energy, new
                                                                                     climate-smarter packaging
                                                                                     and initiatives for greater
                                                                                     equality. A lot is happening
                                                                                     in terms of sustainability
                                                                                     within Löfbergs Coffee
                                                                                     Group. Kathrine Löfberg,
                                                                                     chairman of the board,
                                                                                     and Lars Appelqvist, CEO,
                                                                                     talk about challenges and
                                                                                     oppurtunities.

                                                                                                                                         S U S TA I N A B I L I T Y R E P O R T     4 OF 52
OUR SUSTAINABILITY REPORT 2017/2018 - Löfbergs
FO R E WO R D   A B O U T US   SUSTA I N A B I L I T Y AT C O R E   S O U RC I N G    P RO C E S SI N G   C USTO M E R S   C O-WO R K E R S           A B O U T T H IS R E P O RT

C O M M E N T S F RO M C EO A N D C H A I R

     – Climate change and fewer young people seeing             And this resulted in an organizational change?                                              BUSINESS HIGHLIGHTS – 17/ 18
a future in coffee farming are still the two biggest                 - That is right. We are making major investments
challenges in our industry, and something that we work          in the rapidly growing Ready To segment and formed
with in different ways. It is important to encourage the        a whole new business area with focus on On the Go                                        Started a NEW BUSINESS AREA within Ready To
transition to sustainable farming methods. That is what         products. We are launching a number of natural,
we do through certifications and our own development            healthy and tasty products that respond well with                                                                                                                 56 MILLION
projects in the producing countries. But also through the       new consumption patterns, not least among younger                                                                                                                 SEK in premiums
Next Generation Coffee initiative, where we are giving          conscious consumers with focus on well-being and                                                                                                                  to the Fairtrade
the next generation of coffee farmers the tools and hope        health, says Lars Appelqvist.                                                                                                                                     cooperatives we
to meet the future, says Kathrine Löfberg.                                                                                                                                                                                        buy our
                                                                Exciting, but a lot of other things happened                                             Started preproduction of PACKAGING                                       coffee
The green coffee prices have fallen to extremely low            in the organization this year?                                                           material from RENEWABLE sources                                          from.
levels this year and effect coffee farmers as well as                - Yes, indeed. We established a subsidiary in
Löfbergs Coffee Group?                                          Canada, our two British companies moved in to new                                                                 Acquired the VEGAN, ORGANIC & RAW
     – Yes, it is probably the one external factor that         premises together and we are pushing the development                                                              snack company Superbonobo
affects us and the industry the most. It is not sustainable     within sustainability in the Baltic region with new
for anyone that the green coffee price is lower than the        management for Löfbergs Baltic, says Lars Appelqvist.                                    Reached the goal of 75 000 small holders
production cost. It creates a cycle where the farmers
                                                                Löfbergs Coffee Group works towards several                                              within International Coffee Partners
stop investing and switch to other crops. The access to
coffee will decrease in a couple of years, which makes          tangible sustainability targets in 2020. Are things
                                                                going in the right direction?                                                                            Started roasting with partly
the prices go up and many starts to farm coffee again.
                                                                      - I believe they do. We increased the share of                                                     BIOPROPANE in our main
And that is how it continues. This is where Fairtrade is an
                                                                certified coffee this year and we will reach the target                                                  production site in Karlstad
important tool, as they always guarantee the farmers
a minimum price higher than the production cost, says           of a completely certified assortment. We started
                                                                                                                                                                                                          Continued our work with
Lars Appelqvist.                                                incorporating biopropane in our roasting house in                                           We bought 10 000
                                                                                                                                                            tonnes of organic coffee.                     NEXT GENERATION
                                                                Karlstad, which contributes to us reaching the target of
What trends can we see on the consumer side?                                                                                                                Hence an area                                 COFFEE.Now in Kenya,
                                                                100 per cent renewable energy and decreasing our total
      - Happily, the awareness of climate change and                                                                                                        corresponding                                 Tanzania and Colombia.
                                                                climate impact with at least 40 per cent. And we have
sustainability is increasing. More and more are interested                                                                                                  to 27 918
                                                                already reached the target of 75,000 coffee farmers
in the origin of coffee and expect it to be farmed in a                                                                                                     football pitches was                          Started a new group wide project
                                                                participating in our development projects, says Kathrine
good way. When it comes to the consumption of coffee,                                                                                                       converted into organic                        with the goal to become a more
                                                                Löfberg.
we are drinking more coffee outside of home and on the                                                                                                      production.                                   GENDER EQUAL company
go. It gives us possibilities to offer coffee in new exciting   Great, but there are challenges as well?
forms, says Lars Appelqvist.                                        - There are. We are not quite there yet when it

                                                                                                                                                                                                               S U S TA I N A B I L I T Y R E P O R T     5 OF 52
OUR SUSTAINABILITY REPORT 2017/2018 - Löfbergs
FO R E WO R D   A B O U T US   SUSTA I N A B I L I T Y AT C O R E   S O U RC I N G   P RO C E S SI N G   C USTO M E R S   C O-WO R K E R S           A B O U T T H IS R E P O RT

C O M M E N T S F RO M C EO A N D C H A I R

   comes to gender equality. Today,           We are naturally affected by changes               the southern and northern hemisphere.                                                - I also think that both knowledge in
30 per cent of our managers are women.        in the world around us, for example by             We, along with other players, have to                                          and passion for sustainability issues will
We are not satisfied with that. It is about   increased digitalization, which we have            create more value for the coffee farmers,                                      increase, and that it will affect all steps
changing both attitude and behaviour.         to prepared for. That is why we have               for example through certifications and                                         of the way. How the coffee is farmed,
We are actively working with equality         done some major changes this year, says            development projects that promote                                              produced and consumed. Certifications
in our leadership and talent programs,        Lars Appelqvist.                                   better profitability for them, says                                            will be a minimum requirement, but
where we offer just as many seats for                                                            Lars Appelqvist.                                                               customers and consumers will make
                                              What are your thoughts about the
women as for men. This year, we also                                                                                                                                            greater demands than that. We already
                                              connection between sustainability                       - Exactly. If we are to get a
                                                                                                                                                                                see that our Out of Home customers
started a norm and inclusion project
                                              and profitability; is there a conflict?            financially, socially and environmentally
                                                                                                                                                                                want to run their own development
together with the Gender Academy at
                                                    - We do not see it like that. As we          sustainable development, it has to
the University of Karlstad, which feels                                                                                                                                         projects together with us. We will see
                                              get more resource-efficient, our costs             include everyone in the entire value                                           new exciting products as we are getting
very topical in regards to the #metoo
                                              drop. At the same time, it is about                chain. We must always have that                                                better at using more than just the coffee
movement that swept over the world,
                                              changing and investing step by step. As            perspective, says Löfberg.                                                     beans from the farms, and various types
says Lars Appelqvist.
                                              we have with certifications, biopropane            And what will happen within the                                                of renewable energy and packaging
How about the target in the longer            and renewable packaging material,                  sustainability area ahead?                                                     materials of course.
term, what does it look like and what         where we continuously are increasing the
challenges are there?                                                                                  - Of course there are great                                                    - One thing that will not change
                                              levels, says Lars Appelqvist.                      challenges that we need to tackle, and
     - We will be a successful and                                                                                                                                              is that coffee affects a lot of people’s
sustainable company in the longer                  - That is right. Sustainability is an         we need to do it now. Here Agenda 2030                                         lives every day of the year. The 20 million
term with international presence, good        integrated part of our entire company,             will play a crucial role, that is something                                    people who farm coffee for a living, and
profitability and quality. We will create     from purchase, production to how we                that we focus quite a lot on right now.                                        all of us who drink coffee every day.
value throughout the entire value             make business. We are doing a lot of                                                                                              It means that we as consumers can
chain for coming generations of coffee        great things and have many times                                                                                                  influence for the better, for example by
farmers, consumers and co-workers. I          been a pioneer. Take certified coffee for                                                                                         choosing organic, Fairtrade or Rainforest
can see that we are following our plan.       example. We have been pushing this                                                                                                Alliance certified coffee. It is a bit more
We are growing in a sustainable way, in       issue for a long time, which has affected                                                                                         expensive, but it might be worth it if
terms of both turnover and results, says      suppliers, business colleagues, customers                                                                                         you know that it makes a difference
Kathrine Löfberg.                             and consumers. That is good, from a                                                                                               for people and the environment, says
                                              sustainability perspective and for our                                                                                            Kathrine Löfberg.
     - The challenge is to break down the
                                              competitiveness, says Kathrine Löfberg.
long-term targets and have the courage
to make decisions and dare to change,              - The major challenge is probably                                                                                             Kathrine Löfberg, Chairman of the Board
to set up new targets and strategies.         the big difference in distribution between                                                                                         Lars Appelqvist, CEO

                                                                                                                                                                                                           S U S TA I N A B I L I T Y R E P O R T     6 OF 52
OUR SUSTAINABILITY REPORT 2017/2018 - Löfbergs
F O R E WO R D   A B O U T US   SUSTA I N A B I L I T Y AT C O R E   S O U RC I N G   P RO C E S SI N G   C USTO M E R S   C O-WO R K E R S           A B O U T T H IS R E P O RT

                         MEET THE LÖFBERGS
                         COFFEE GROUP

LÖFBERGS COFFEE GRO UP                                                                                                                              S U S TA I N A B I L I T Y R E P O R T     7 O F 52
OUR SUSTAINABILITY REPORT 2017/2018 - Löfbergs
F O R E WO R D   A B O U T US   SUSTA I N A B I L I T Y AT C O R E   S O U RC I N G   P RO C E S SI N G   C USTO M E R S   C O-WO R K E R S           A B O U T T H IS R E P O RT

M E E T T H E LÖ F B E RG S C O F F F E G RO U P

                                             Löfbergs Coffee Group is one of the Nordic region’s
                                             biggest family-owned coffee businesses, but our history
                                             began 112 years – or four generations – ago. We have been
                                             passionate about great tasting coffee with a vision for
                                             a sustainable world right from the start. Today, we are
                                             a bunch of devoted coffee lovers operating in Northern
                                             Europe and Canada, sharing the passion for taste, trends
 OUR OWNERS, the Löfberg family,
                                             and sustainability. And for securing great coffee for
 now in third and fourth generation.
                                             tomorrow. Coffee is still the core of our business and
                                             we are constantly developing new products and looking
                                             for business opportunities that can add value to our
                                             increasingly international group.

                                             Löfbergs Coffee Group was founded in 1906 by the                                         Our commitment to sustainability has also been with
                                             brothers Anders, John and Josef Löfberg. We started                                      us since the beginning. We are a value-driven family
                                             roasting our own coffee in Karlstad back in 1911. Today,                                 business, taking a long-term perspective on our
                                             we are one of the Nordic region’s biggest family-owned                                   operations without standing still at all. Our heritage
                                             coffee businesses, producing the equivalent of more than                                 together with our desire to continually evolve and remain
                                             10 million cups of coffee every day. The company is still                                at the cutting edge are our strengths on a fast moving
                                             fully owned by the Löfberg family, now in its third and                                  and highly competitive market.
                                             fourth generations, and a passion for great tasting coffee
                                             has been part of the company since its inception.

                                                                                                                                                                                            S U S TA I N A B I L I T Y R E P O R T     8 OF 52
OUR SUSTAINABILITY REPORT 2017/2018 - Löfbergs
F O R E WO R D    A B O U T US     SUSTA I N A B I L I T Y AT C O R E   S O U RC I N G   P RO C E S SI N G   C USTO M E R S   C O-WO R K E R S           A B O U T T H IS R E P O RT

M E E T T H E LÖ F B E RG S C O F F F E G RO U P

             WE ARE                     HEAD OFFICE                                           VOLUMES OF...                                                                EMPLOYEES                                      BRANDS

                                                                                                              27 944                                                       338
                                        Karlstad
                                        Sweden                                                                               tonnes
                                                                                                              COFFEE (2016/17: 27,617)

                                                                                                              165     tonnes
                                                                                                              TEA (2016/17: 158)
           2017 / 2018
                                                                                                              3  million packages
                                                                                                              READY TO PRODUCTS

                 OWNERS
                 The Löfberg family,
                                          SEK   50,6               million

                 now in its third and     OPERATING PROFIT
                 fourth generations.      (2016/17: 33)

                                                                                                                                        MARKETS

       TURNOVER                SEK   1 911 million        (2016/17: 1,879)                       Sweden, Norway, Denmark, Finland, Estonia, Latvia,
                                                                                                      Lithuania, the UK, Canada and Ireland.

                                                                                                                                                                                                           S U S TA I N A B I L I T Y R E P O R T     9 OF 52
OUR SUSTAINABILITY REPORT 2017/2018 - Löfbergs
F O R E WO R D   A B O U T US   SUSTA I N A B I L I T Y AT C O R E   S O U RC I N G   P RO C E S SI N G   C USTO M E R S   C O-WO R K E R S           A B O U T T H IS R E P O RT

M E E T T H E LÖ F B E RG S C O F F F E G RO U P

The Löfbergs Coffee Group’s                                               The board of directors consists of six ordi-
organization                                                              nary members, of whom three are owners                                        O U R T U R N OV E R I N D I F F E R E N T M A R K E TS
We have a central organization for strategy,                              and three are external members, as well
purchasing, supply chain/production, HR,                                  as two employee representatives and
corporate communications, sustainability,                                 two deputies. 37,5 per cent of the board’s
                                                                                                                                                                                                                                 Sweden            54%                   Lithuania                 3%
product development and financial                                         members are females. Kathrine Löfberg is
management. Our sales organization                                        Chair of the Board. The opera­tional busi-
                                                                                                                                                                                                                                 Denmark           19%                   Latvia                    2%
is divided into four business areas, each                                 ness is managed by the group manage-
with profit and loss responsibility. Our                                  ment team, which consists of twelve exe­                                                                                                               UK                 8%                   Estonia                   2%
products are sold in some ten countries,                                  cutives – four women and eight men. Our
primarily in Northern Europe, under the                                   CEO is Lars Appelqvist. The other members                                                                                                              Finland            5%                   Canada                     1%
brands Löfbergs, Peter Larsen Kaffe, Percol,                              of the group management include HR,
Superbonobo, Green Cup, Kobbs and                                         Communication, Supply Chain, Purchasing,                                                                                                               Norway             4%                   Other                      1%
Crema. We also produce coffee sold under                                  Quality & Sustainability, Brands & Product
our customers’ brands all over the world,                                 Development, Finance & Strategy and the
such as IKEA and McDonald’s.                                              Directors of each business area.

  L EGA L ST RU C T U R E                                                                                                                              WE ARE HERE

                                                     Bröderna Löfberg AB

                                                                                                                                                                                                                                                                                Offices
                                 Löfbergs Coffee Group (AB Anders Löfberg)
                                                                                                                                                                                                                                                                                Roasting houses

                                         Peter Larsen       Löfbergs                                                                  RNT
                                                                                                                                                                                                                                                                                Sales
  Löfbergs    Kaffehuset i   Löfbergs                                     Löfbergs                     Food Brands    Löfbergs
                                        Kaffe A/S (85%)      Lila A/S                  Löfbergs Ltd.                               Nutrition AB
  Logistics   Karlstad AB     Lila AB                                     Baltic SIA                    Group UK     Canada Inc.
                                          Denmark           Norway                                                                    (51%)

                                                             Crema
                                                          Kaffebrenneri
                                                               A/S

                                                                                                                                                                                                                                                               S U S TA I N A B I L I T Y R E P O R T    10 OF 52
F O R E WO R D   A B O U T US   SUSTA I N A B I L I T Y AT C O R E   S O U RC I N G   P RO C E S SI N G   C USTO M E R S   C O-WO R K E R S           A B O U T T H IS R E P O RT

M E E T T H E LÖ F B E RG S C O F F F E G RO U P

                                                                 Our vision – “Passion, responsibility and taste. Beyond                                   Out of Home
 O RGA N I SAT I O N                                             expectations” – is part of everything we do. To realize this,                             We believe strongly in the Out of Home category, since
                                                                 we have a strategic plan that is updated every year. The                                  demand for served cups of coffee is increasing rapidly,
                                                                 plan encompasses our most important target areas and                                      both in our home markets and internationally. Part
                                                                 perspectives – our balanced scorecard. READ MORE ON PAGE 15                               of this business includes services, where we educate
                                CEO                                                                                                                        our customers on the subject of coffee, sustainability
                                                                 The sustainability report covers all the brands and markets
                                                                                                                                                           and how to create a profitable coffee business. We
                                                                 within the Löfbergs Coffee Group (under AB Anders
                                                                                                                                                           are currently the only player in Sweden that can offer
                                                                 Löfberg) listed in the organizational scheme on page 10.
                                                                                                                                                           training in coffee sensory skills according to the SCAE,
                 HR                        Finance & Strategy                                                                                              the Speciality Coffee Association of Europe.
                                                                 Divided into four business areas
                                                                                                                                                           This category covers all coffee consumed outside the
                                                                 Retail                                                                                    home - in other words, coffee sold to cafes, restaurants,
         Brands & Product                                        Retail is our largest business area. The markets where we                                 hotels, large chain customers and players within the
                                      Quality & Sustainability
           Development                                           operate are dominated by several large retail customers.                                  public sector. We work with everyone from local corner
                                                                 In Sweden, the business is tightly controlled and we                                      cafes to big international customers such as Sodexo,
                                                                 negotiate five times a year with our customers on prices,
         Communications
                                                                 the number of items on the shelf, campaigns and the
                                                                 size of our presence in our customers’ channels. We work
                                                                 with all of the players in Swedish retail and we are one of
                                                                 four major coffee brands.
                                                                 In Denmark, we are known as Peter Larsen Kaffe
                       Out of         Private
                                                                 with a presence in most of the Danish chains and an
        Retail                                       Ready To    established and appreciated brand among Danes.
                       Home            Label
                                                                 We are also a well-known brand in Estonia under the
                                                                 Löfbergs brand. We are still relatively small in Latvia
                                                                 and Lithuania, but our market shares are growing. Our
                                                                 market share in Finland is growing rapidly and we are
                            Supply Chain                         known as the dark roasted coffee among Finns. In the
                                                                 UK, we are working actively with the Percol brand to
                                                                 boost our presence in retail chains’ product ranges.

                                                                                                                                                                                                                 S U S TA I N A B I L I T Y R E P O R T    11 OF 52
F O R E WO R D   A B O U T US   SUSTA I N A B I L I T Y AT C O R E   S O U RC I N G   P RO C E S SI N G   C USTO M E R S   C O-WO R K E R S           A B O U T T H IS R E P O RT

M E E T T H E LÖ F B E RG S C O F F F E G RO U P

   Nordic Choice and Circle K. We also work with high-             It is still a small business area but we have high growth                                Our values are described in a leaflet, Our Good Will, which
end restaurants and offices in places such as London,              ambitions and it is a category we have high hopes for in                                 all new employees receive in their native language. The
Stockholm, Riga, Oslo and Copenhagen.                              the future on all our markets. We have already gained                                    values play a crucial part in our everyday work and are
                                                                   a market share of 20 per cent on the Swedish ice coffee                                  used in our leadership developing program, in appraisals,
Sales to the public sector is also a very important part of        market. During the year, we also signed an agreement                                     salary discussions and strategic as well as day-to-day
our sales in both Denmark and Sweden and our coffee is             with the company Humm Kombucha to start selling their                                    decisions. It is therefore particularly pleasing to see that
sold to the small preschool as well as large regions and           health drink kombucha, on our core markets.                                              as many as 94 per cent of the group’s employees say they
municipalities. Our position on different markets varies,                                                                                                   believe in our values, according to the latest employee
in Sweden we are market leaders. In Denmark we are                 Guiding values
                                                                                                                                                            survey from 2017. It is essential to us that our values
strong on convenience and building our presence all over           Our values are our compass, guiding our actions amongst
                                                                                                                                                            characterize the entire group.
the category. In the UK we are growing strong in the               each other and the world around us. They unite everyone
traditional Horeca sector. In Norway we primarily work             who works within Löfbergs Coffee Group, providing
with chains and vending companies. In Finland we are still         guidelines for our behaviour, so that we achieve our goals
small but growing in all segments.                                 and create value for our stakeholders.

Private Label
In our Private Label business, we produce coffee for large                                                                                                      O U R VA LU E S
customers, frequently international ones, under their own
brands. Here, our strength lies in having the capacity of a                                                                                                                  Responsibility – We make decisions that
                                                                                                                                                                             are sustainable – economically, socially and
large player but the flexibility of a small one, and the ability
                                                                                                                                                                             environmentally.
to adapt to every customer’s wishes. We compete for major
global contracts, and we are a proud supplier and partner                                                                                                                    Commitment – We strive to improve and we
to players such as IKEA, Coop and McDonald’s.                                                                                                                                challenge long-held beliefs, so that we are in
                                                                                                                                                                             a constant process of change.
Ready To
                                                                                                                                                                             Entrepreneurship – We are at the cutting edge,
In 2017/2018, we started off a new business area for all
                                                                                                                                                                             and we develop new products and services rapidly.
our sales of Ready to products, which to date consists
of coldbrew, ice coffee, caffeine water along with                                                                                                                           Long-term approach – We build long-term
Superbonobo’s organic and vegan raw bars and balls.                                                                                                                          relationships, which requires us to be honest and
                                                                                                                                                                             transparent and to always keep our promises.
The goal is to present natural, healthy and tasty products
answering to new consumption patterns, not least among                                                                                                                       Professionalism – We always act professionally,
younger, conscious consumers with focus on health and                                                                                                                        with a high moral standard and a healthy sense
well-being. Customers are retailers, convenience stores,                                                                                                                     of perspective, and we endeavour to do our best.
                                                                      QUALITY and sustainability have been important to us
gyms and sports facilities as well as cafés and restaurants.          ever since we were founded in 1906, and remain so today.

                                                                                                                                                                                                                  S U S TA I N A B I L I T Y R E P O R T   12 OF 52
F O R E WO R D   A B O U T US   SUSTA I N A B I L I T Y AT CO R E   S O U RC I N G   P RO C E S SI N G   C USTO M E R S   C O-WO R K E R S           A B O U T T H IS R E P O RT

                         SUSTAINABILITY
                         AT CORE

LÖFBERGS COFFEE GRO UP                                                                                                                             S U S TA I N A B I L I T Y R E P O R T   13 O F 52
F O R E WO R D   A B O U T US   SUSTA I N A B I L I T Y AT CO R E   S O U RC I N G   P RO C E S SI N G   C USTO M E R S   C O-WO R K E R S           A B O U T T H IS R E P O RT

S U S TA I N A B I L I T Y I S T H E C O R E O F O U R B U S I N E S S

A sustainable development                        Ever since the company was founded in 1906,
                                                 sustainability has been an important feature of our
is crucial for our future                        operations. Much of our sustainability work has focused
                                                 on increasing demand for coffee from certified farms
business success, and                            during the last 20 years. In 1995, we imported the very first
                                                 container of organic coffee into Sweden, and today we are
therefore we do all we can                       one of the world’s biggest buyers of organic and Fairtrade-
                                                 certified coffee. A lot of our sustainability work in recent
to contribute to a more                          years has focused on developing new sustainable products

sustainable world. We                            and working together with other stakeholders on driving
                                                 the change we want and need to see.
concentrate our efforts                          For future generations
                                                 The term “sustainable development” was coined in
on the areas where we can                        1987, when the Brundtland Report was commissioned

make the most impact.
                                                 by the UN. The report defines sustainable development
                                                 as “development that meets the needs of the present
Working together with                            without compromising the ability of future generations
                                                 to meet their own needs”. For us, this is as important as
small-scale coffee farmers                       ever. Climate change means that we are facing significant
                                                 challenges, not least in those countries where coffee is
and giving them the right                        grown, and fewer and fewer young people see a future as
                                                 coffee farmers. Our most important focus going forward
conditions to grow in a                          will be to get new generations to see a bright future as
                                                 coffee farmers; we call it Next Generation Coffee.
sustainable way. And we                          The Sustainable Development Goals
work hard to increase                            Löfbergs Coffee Group supports Agenda 2030, the UN’s
                                                 Global Goals for Sustainable Development. We are
demand and offer our                             convinced that private sector plays a decisive role in the
                                                 work to achieve these goals, not least when it comes to
customers and consumers                          dealing with climate change and reaching the two-degree
                                                 goal. The global goals therefore provide guidance for all
truly sustainable products.                      our decisions, whether they relate to our work at

                                                                                                                                                                                                S U S TA I N A B I L I T Y R E P O R T   14 OF 52
F O R E WO R D    A B O U T US   SUSTA I N A B I L I T Y AT CO R E   S O U RC I N G   P RO C E S SI N G   C USTO M E R S   C O-WO R K E R S           A B O U T T H IS R E P O RT

S U S TA I N A B I L I T Y I S T H E C O R E O F O U R B U S I N E S S

                                                                                                               origin, business development, product                                       more sustainable coffee and find ways on
      OUR COMMITMENT THROUGHOUT THE VALUE CHAIN                                                             development or day-to-day operations.                                          how to become more sustainable and get
                                                                                                            They are all interconnected and cannot be                                      new ideas. We also take a clear position
        Our sustainability work stretches all the way through the entire value chain,
                                                                                                            separated.                                                                     in the social debate for better working
     from bean to cup. Each part is important but Consumption and Coffee farming
                                                                                                                                                                                           conditions for coffee farmers in low-
                               are our most prioritized areas.                                              Cooperating for a sustainable future                                           and medium-income countries; we are
                                                                                                            We are always looking for ways to develop                                      especially active in Denmark under the
                                                                                                            and improve, and we are convinced                                              Peter Larsen Kaffe brand.
                                                                                                            that we need to cooperate to achieve a
                                                                                                            sustainable development. We are for that                                       Commitment throughout
                                                                                                            reason active in a number of networks                                          the value chain
                                        Social responsibility                                               and initiatives to influence sustainable                                       Together with our vision and values, this
                                   Investments and commitment,                                                                                                                             commitment forms the foundation for our
                                   both at home and in producing                                            development, and to share sustainability
                                             countries.                                                     knowledge and experience with other                                            sustainability work. For us, it involves taking
                                                                                                            players. Examples of joint initiatives and                                     responsibility for people and the planet, all
                                                                          Coffee farming
          Consumption                                                Encourage more sustain­able            cooperation include International Coffee                                       the way from bean to cup.
  Increase demand for certified                                          farming methods                    Partners, the Haga Initiative climate
 coffee and create awareness for       I N FLU EN CE A N D                 and conditions.                                                                                                 Sustainability as a strategy
   the challenges coffee faces.        R E S P O N S I B I LIT Y,                                           network, the Swedish International                                             Our sustainability work is part of the
                                           FRO M B E A N                                                    Develop­ment Cooperation Agency’s                                              strategy for the entire company, and is
                                              TO CU P                                                       Swedish Leadership for Sustainable                                             managed by Group management through
                                                                                                            Development network, RISE Research                                             initiatives and goals in our balanced
                                                                                                            Institutes of Sweden’s Food & Environment                                      scorecard. Our goals, initiatives and key
                                                                                                            network, CSR Sweden and WWF’s                                                  performance ratios are divided into the
                                                                                                            Sustainable Food Chain. In Denmark, we                                         following areas: finance, customers and
                                                                             Transport                      are involved in the Danish Ethical Trading
                                                                     Boats and trains all the way
                                                                                                                                                                                           markets, internal processes, responsibility
               Delivery                                                to the roasting house.               Initiative, Danida, Kids Aid and the SDG                                       and employees.
        Effective, responsible                                                                              network within the Confederation of
         logistics solutions.                                                                                                                                                              The Director of Quality & Sustainability
                                                                                                            Danish Industry.
                                              Processing                                                                                                                                   is part of Group management and has
                                   Energy-efficiency improvements,                                          Taking an active part in the debate
                                      renewable energy sources
                                                                                                                                                                                           several internal forums available, such as
                                        and smart packaging.                                                We have an ongoing dialogue, both in                                           the cross-functional Sustainability Group,
                                                                                                            the media and with various stakeholders                                        where various sustainability issues are
                                                                                                            in other channels, to boost demand for                                         considered and decided. Other forums

                                                                                                                                                                                                                      S U S TA I N A B I L I T Y R E P O R T   15 OF 52
F O R E WO R D   A B O U T US   SUSTA I N A B I L I T Y AT CO R E   S O U RC I N G   P RO C E S SI N G    C USTO M E R S   C O-WO R K E R S           A B O U T T H IS R E P O RT

S U S TA I N A B I L I T Y I S T H E C O R E O F O U R B U S I N E S S

                                                 Our Code of Conduct – the basis for                     The exception is the Crema micro roasting
                                                 our sustainability work                                 house in Norway, which accounts for less
 OUR 2017/ 2018                                  Our group wide Code of Conduct, which                   than 0.1 per cent of our production. The                                                      S U S TA I N A B L E
 FINANCIAL YEAR                                  includes our Sustainability Policy and our              facility in Karlstad, which is responsible
                                                                                                                                                                                                  CONSUMPTION AND
                                                 Business Ethics Policy, is the top-level                for 92 per cent of our production, also
 Revenue                             1 971 020   governing document for our sustainability               holds ISO 9001, ISO 14001 and FSSC 22000                                                C O F F E E FA R M I N G A R E
 Operating expenses                 -1 672 291   work. It is based on UN Global Compact’s                quality and environmental certifications.                                               O U R M O S T M AT E R I A L
                                                 principles and covers environmental issues,             Löfbergs UK is certified according to                                                       S U S TA I N A B I L I T Y
 Salaries and remuneration
                                                 human rights, social compliance and                     ISO 9001 and ISO 14001.
 to employees                        -248 095                                                                                                                                                             M AT T E R S .
                                                 anticorruption. The policies form the basis
                                                                                                         Tax contributions
 Payments to providers of capital      -41 424   for our sustainability work. All employees
                                                                                                         Our growth and profits contribute to tax
 Debt                                -563 575    are educated in our Business Ethics Policy
                                                                                                         revenues in all countries we operate in.
                                                 during the introduction for new employees
 Equity                               447 745                                                            This is a very crucial part of how we as a                                    around SEK 1.7 million in the development
                                                 and everyone working within the company
                                                                                                         company contributes to society, and pays                                      projects carried out within ICP. Moreover,
                                                 has also signed the policy. To ensure
 Tax paid to the public sector                                                                           for the services that we enjoy and that                                       we are also investing in our initiative
                                                 that any violations against the code of
                                                                                                         help our operations to function. We always                                    Next Generation Coffee with projects in
 Sweden                                 -6 191   conduct are reported, we have a strictly
                                                                                                         pay tax in the country where the revenues                                     Tanzania (through ICP), Colombia (through
 Denmark                               -4 800    anonymous whistleblower system in place.
                                                                                                         are obtained, and we follow established                                       FNC) and Kenya. READ MORE ON PAGE 23
 Norway                                  -549    Our Code of Conduct for Suppliers is our                principles for transfer pricing for our
                                                                                                                                                                                       In Sweden, we invest in the local
 Latvia                                  -963    most important steering document for                    internal pricing.
                                                                                                                                                                                       community and sports. Our main
                                                 sustainability within our supply chain and
 UK                                         0                                                            Community investments                                                         investment, which should also be seen as a
                                                 all suppliers must commit to it.
 Canada:                                 -242                                                            Besides taxes, we are also investing in                                       marketing activity, is one of Swedens most
                                                 READ MORE ON PAGE 28
                                                                                                         society through our development projects                                      suceesful ice hockey teams Färjestad BK
 Community investments                 -9 432
                                                 Supported by ISO-certified                              in coffee producing countries but also                                        where we 2017/2018 prolonged our support
 Economic value retained               55 267
                                                 management systems                                      in projects on our core markets. Our                                          with three years. In Denmark, we support
            (all figures are in SEK thousands)   Clear management systems are important                  largest community investment for coffee                                       a project called Knus Kræft, which is an
                                                 to achieve our ambitious goals. Our                     farmers is through International Coffee                                       initiative to raise money for children with
                                                 operations are therefore largely covered                Partners (ICP), a non-profit organization                                     cancer. In Denmark we are also supporting
   include the Environmental Group and           by ISO-certifications. Our Quality & Food               that we co-founded in 2001 together                                           local sports, not the least football.
the Packaging Forum, as well as the more         Safety Policy governs our systematic food               with four other family-owned European
temporary Project 100 per cent Certified         safety efforts, and our facilities in Karlstad,         coffee companies, that today has grown
and 100 per cent Renewable Energy forums.        Viborg and Riga are all ISO 22000 certified.            into seven. Every financial year we invest

                                                                                                                                                                                                                   S U S TA I N A B I L I T Y R E P O R T   16 OF 52
F O R E WO R D      A B O U T US   SUSTA I N A B I L I T Y AT CO R E   S O U RC I N G       P RO C E S SI N G   C USTO M E R S   C O-WO R K E R S           A B O U T T H IS R E P O RT

O U R S U S TA I N A B I L I T Y S T O RY F R O M 1 9 0 6
                                                                                                  Started using biogas                   Invited to join the                           Reduced energy
                               Started using wind          Co-founded Interna-
                                                                                                  in Viborg, Denmark,                    Swedish Leadership                            consumption in
                               power electricity           tional Coffee Partners
                                                                                                  achieving 100 percent                  for Sustainable                               Riga, Latvia, through
                               and replaced oil with       (ICP), which improves
                                                                                                  renewable sources.                     Development                                   energy mapping and
                               district heating in         conditions for small-
                                                                                                                                         network, which                                additional insulation.
                               Karlstad.                   scale coffee farmers.                  Built the world’s
                                                                                                                                         works for sustainable                         Drew up a new three-
                                                                                                  first large-scale
                               Installed new roasting      Launched coffee that                                                          development.                                  year plan for diversity
                                                                                                  test facility using
                               machines and reduced        is both organic and                    solar panels for both                  Started Coffee for                            and equality.
                               LPG and electricity         Fairtrade.                             heating and cooling.                   a Better Future,                              The entire Löfbergs
                               consumption by 20                                                  The technology reduces                 a development                                 range is certified as
                               percent.                    Co-founded the                         energy consumption                     project in Kenya that                         sustainable (organic,
                                                           Common Code for the                    and CO2 emissions.                     strengthens coffee                            Fairtrade, Rainforest
                               Co-founded CSR              Coffee Community                                                              farmers through
                                                                                                  The Löfberg Family                                                                   Alliance).
                               Sweden.                     Association (4C).                                                             education, training
    Began producing                                                                               Foundation is formed,                                                                Operations in
                                                                                                                                         and trade.
    coffee that takes          Travel, working             Operations in Latvia                   with the purpose of                                                                  Sweden are verified
    people and the             environment and             are certified in                       promoting sustainable                  New business ethics                           in accordance with
    environment into           ethical/social policies     accordance with ISO                    development in                         policy and whistle-blower                     ISO 26000 (social
    consideration.             drawn up.                   22000 (food safety).                   producing countries.                   function drawn up.                            responsibility).

  1906              1993-1999                              2000-2009                                    2010-2012                                                     2013-2015                                                 2016-2018
                  Environmental policy           Purchased Green            Created the Sustain-                Operations in                         Launched plant-                           The first to use Scania’s             Operations in Latvia
                  drawn up.                      Cup in the UK, which       able Quotations tool,               Sweden certified in                   based capsules for                        new climate-smart                     achieve silver level in the
                  First to remove aluminium      sells certified coffee     which shows hotel,                  accordance with ISO                   the Nespresso system                      hybrid truck, which                   Latvia Sustainability Index.
                  from coffee packaging.         and recycles coffee        restaurant and café                 14001 (environmental                  under the Löfbergs,                       reduces CO2 emissions                 Launched Next
                                                 grounds into e.g.          customers how they                  management).                          Peter Larsen Kaffe and                    by 92 percent.                        Generation Coffee – an
                  Imported the first             garden fertiliser.         contribute towards                                                        Percol brands.
                                                                                                                                                                                                Started preproduction                 initiative that supports
                  container of organic                                      concrete effects                    Produced our first                    Opened Sweden’s first                     of packaging material                 young coffee farmers
                  coffee into Sweden.            Joined the Haga            for people and the                  sustainability report.                high-bay warehouse to                     from renewable                        in Colombia, Kenya and
                  New green coffee goods         Initiative business        environment when they                                                     achieve Environmental                     sources.The intention                 Tan­zania through edu­-
                  inward facility where          network, which aims        choose certified coffee.            Co-founded Coffee &                   Building Silver                           is to be able to replace              cation and direct trade.
                  trains run right into the      to inspire the business                                        Climate, which helps                  certification.                            fossil plastic in all                 Started roasting with
                  roasting house.                sector to take greater     Operations in Sweden                small-scale coffee
                                                 climate responsibility.    and Denmark certified                                                     Increased proportion of                   packaging by 2020.                    partly biogasol in our
                                                                                                                farmers to deal with
                  Installed geothermal                                      in accordance with ISO                                                    female managers to 32                     Collected more than                   main production site
                                                                                                                climate change.
                  heating in Karlstad.           The first in Sweden to     22000.                                                                    percent. Our goal is at                   SEK 2 million for                     in Karlstad.
                  Operations in Sweden           launch aluminium-                                              Switched to                           least 40 percent by 2020.                 children with cancer                  Reached the goal of
                  certified in accordance        free, Fairtrade coffee                                         electricity from wind                 Purchases of organic                      in Denmark through                    75 000 small holders
                  with ISO 9001 (quality         capsules.                                                      power in Viborg,                      and Fairtrade coffee                      Peter Larsen Kaffe’s                  within International
                  management).                                                                                  Denmark.                              reach new highs.                          Crush Cancer project.                 Coffee Partners

                                                                                                                                                                                                                                S U S TA I N A B I L I T Y R E P O R T   17 OF 52
F O R E WO R D   A B O U T US       SUSTA I N A B I L I T Y AT CO R E   S O U RC I N G    P RO C E S SI N G   C USTO M E R S     C O-WO R K E R S           A B O U T T H IS R E P O RT

G R E AT R E S U LT S A N D A M B I T I O U S G O A L S

The past year was a great year for the whole                           wards even higher goals for our continuous                                                         1 percentage on female managers. To be mentioned
group. We are strengthening our positions on                           growth and contribution to a sustainable                                                           especially is that we reached our 2018 target on 75 000
                                                                                                                                                                          coffee farmers to be reached within International Coffee
almost all sustainability aspects with clear                           development.
                                                                                                                                                                          Partners and we are now working hard with the coming
progress in terms of economic, environmen-                                                                                                                                five year strategy for ICP.
tal and social performance. We are of course                           Below we have brought together our main goals and
                                                                       performance indicators to give an overview of our                                                  Goals and initiatives
happy and proud of what we have achieved.                              performance. We have had a positive development on                                                 Our aim is to have clear long-term and short-term
However, we will never rest but continue to-                           all areas besides gender equality where we dropped                                                 measurable targets for all our sustainability focus areas.

GOAL FOR 2020: 100%                   GOAL FOR 2020: 100%               GOAL FOR 2020: 40%                         GOAL FOR 2018: 75,000                                      GOAL FOR 2020: 12%                                  GOAL FOR 2020: 30%

      Result for 2017/2018:                Result for 2017/2018:              Result for 2017/2018:                          Result for 2017/2018:                                     Result for 2017/2018:                               Result for 2017/2018:

  86.5%                                50.7%                                   31%                                      74,336                                                       8.4%                                                  1.2%
         C E RT I F I E D               R E N E WA B L E E N E RGY         F E M A L E M A N AG E R S                    C O F F E E FA R M E R S                                       RETURN ON                                    I N C R E A SE I N C O F F E E
     P RO D U C T R A N G E                                                                                           H AV E I M P ROV E D T H E I R                               C A P I TA L E M P LOY E D                            S O L D, TO N N E S*
                                              (2016/17: 41,4)                     (2016/17: 32)
          (2016/17: 84,8)                                                                                              O P P O RT U N I T I E S F O R                                      (2016/17: 5,6)                                       (2016/17: 10,8)
                                                                                                                          SE L F- SU P P O RT*
                                                                                                                                  (2016/17: 65,973)

                                                                                                                       Our work to achieve this goal
                                                                                                                       contributes towards achieving
  Our work to achieve this goal        Our work to achieve this goal      Our work to achieve this goal                  SD goals 1-8, 13, 15 and 17.                           Our work to achieve this goal                       Our work to achieve this goal
  contributes towards achieving        contributes towards achieving      contributes towards achieving                  * Within the framework of                              contributes towards achieving                       contributes towards achieving
   SD goals 1-8, 12, 13, 15 and 17.          SD goals 7 and 13.                     SD goal 5.                         International Coffee Partners.                                     SD goal 8.                             SD goal 8.* Compared with 2014/2015

                                                                                                                                                                                                                                   S U S TA I N A B I L I T Y R E P O R T   18 OF 52
F O R E WO R D   A B O U T US   SUSTA I N A B I L I T Y AT CO R E   S O U RC I N G   P RO C E S SI N G   C USTO M E R S   C O-WO R K E R S           A B O U T T H IS R E P O RT

G R E AT R E S U LT S A N D A M B I T I O U S G O A L S

For aspects where we do not yet have           Supporting Agenda 2030                              example no 1 No Poverty, 2 Zero Hunger,
defined goals, baseline and/or timeline,       The Global Goals provide guidance for               8 Decent work & Economic growth,
we start with action plans and initiatives     the Löfbergs Coffee Group’s operational             12 Sustainable consumption and
guiding in the right direction. Decisions on   goals. We fully commit to the whole                 production and 13 Climate Action.
reducing climate impact from our business      Agenda 2030 and understand we have an
                                                                                                   Following this report, we will show and
travelling and choosing electric cars are      impact on many of the 17 goals since they
                                                                                                   describe more in detail how we work to
two examples.                                  are all interconnected. We have identified
                                                                                                   take our responsibility and contribute
                                               some of the goals as more material than
Development of our goals                                                                           towards the Agenda 2030.
                                               others to our operations and business, for
During the year we have made decision
on some new goals and changing of some
current. These will be valid from next
year. One is our 2030 goal concerning
packaging where we want all our
                                                     AGENDA 2030 – SUSTAINABLE DEVELOPMENT GOALS
packaging to consist of material from
renewable or recycled resources. This
goal is one important part of our overall
100 per cent renewable resources goal for
2030 which goes for energy, material and
transportation. Moreover, when we have
reached our goal of 100 per cent certified
coffee we will focus on scaling up our Next
Generation Coffee initiative, which will be
formulate into goals during 18/19.

   The Global Goals provide guidance for
   our operational goals on sustainability
   and we fully commit to it.

                                                                                                                                                                                                            S U S TA I N A B I L I T Y R E P O R T   19 OF 52
F O R E WO R D   A B O U T US   SUSTA I N A B I L I T Y AT CO R E   S O U RC I N G   P RO C E S SI N G   C USTO M E R S   C O-WO R K E R S           A B O U T T H IS R E P O RT

KEY RESPONSIBILITIES AND CONTRIBUTIONS
TO AGENDA 2030 AND THE GLOBAL GOAL S

  SOURCING
  No Poverty
  1.2 Reduce poverty by
       at least 50 per cent.
  1.5 Build resilience of the poor
       and those in vulnerable situations                                                          PROCESSING
  Zero Hunger                                                                                      Affordable and clean energy
  2.3 Double the productivity and incomes of small-scale food producers.                           7.2 Increase global percentage of renewable energy.
  2.4 Sustainable food production and resilient agricultural practices.                            7.3 Double the improvement in energy efficiency.
  Decent work and economic growth                                                                  Responsible consumption and production
  8.1 Sustainable economic growth.                                                                 12.1 Implement the 10-year framework on sustainable consumption and production
  8.8 Protect labour rights and promote safe working environments.                                 12.2 Sustainable management and use of natural resources.
                                                                                                   12.5 Substantially reduce waste generation.
  Climate action
  13.1 Strengthen resilience and adaptive capacity towards climate change                          Climate action
  13.3 Build knowledge and capacity to meet climate change.                                        13.2 Build knowledge and capacity to meet climate change.

                                                                                                                                                                                                      S U S TA I N A B I L I T Y R E P O R T   20 OF 52
F O R E WO R D   A B O U T US   SUSTA I N A B I L I T Y AT CO R E   S O U RC I N G   P RO C E S SI N G   C USTO M E R S   C O-WO R K E R S           A B O U T T H IS R E P O RT

KEY RESPONSIBILITIES AND CONTRIBUTIONS
TO AGENDA 2030 AND THE GLOBAL GOAL S

                                                                                                   EMPLOYEES
  CUSTOMERS                                                                                        Gender equality
                                                                                                   5.1 End discrimination against women and girls.
  Responsible consumption and production                                                           5.5 Ensure full participation in leadership and decision-making
  12.3 Halve global per capita food waste.
                                                                                                   Decent work and economic growth
  12.8 Promote universal understanding of sustainable lifestyles.
                                                                                                   8.4 Improve resource efficiency in consumption and production.
  Climate action                                                                                   8.5 Full employment and decent work with equal pay.
  13.1 Strengthen resilience and adaptive capacity towards climate change                          8.8 Protect labour rights and promote safe working environments.

                                                                                                                                                                                                      S U S TA I N A B I L I T Y R E P O R T   21 OF 52
FOREWORD   A B O U T US   SUSTA I N A B I L I T Y AT C O R E   S O U RC I N G   P RO C E S SI N G   C USTO M E R S   C O-WO R K E R S           A B O U T T H IS R E P O RT

                         FARMING THE COFFEE
                         OF THE FUTURE

LÖFBERGS COFFEE GRO UP                                                                                                                        S U S TA I N A B I L I T Y R E P O R T   22 O F 52
FOREWORD    A B O U T US   SUSTA I N A B I L I T Y AT C O R E   S O U RC I N G   P RO C E S SI N G   C USTO M E R S      C O-WO R K E R S           A B O U T T H IS R E P O RT

FA R M I N G T H E C O F F E E O F T H E F U T U R E

Changes in climate are                       W H E R E W E B U Y O U R C O F F E E F RO M
impacting coffee harvest
                                                                                                                                                                                       W H E R E C O F F E E I S G RO W N

and, consequently, the
125 million people who
earn their livelihood from
coffee. To secure coffee
for tomorrow, we are                                                                                                                                                                              Latin America                     58%

working hard to get more                                                                                                                                                                          Asia                               31%

young people to be able
                                                                                                                                                                                                  Africa                             11%

to support themselves as                                                                                                                                                               W H E R E C O F F E E I S D RU N K

coffee farmers and adapt
to climate change.

                                                21% 64% 12% 3%
                                                 Central America           South America                      Africa                                 Asia
                                                                                                                                                                                              Europe 34%

                                                                                                                                                                                              Latin America 20%
                                                                                                                                                                                                                               Asia 21%

                                              Honduras, Costa Rica,        Brazil, Colombia              Ethiopia, Kenya,                     Vietnam, Indonesia
                                              Nicaragua, El Salvador,         and Peru                    Tanzania and                             and India                                  North America 18%                     Africa 7%
                                              Mexico and Guatemala                                           Uganda

                                                                                                                                                                                                 S U S TA I N A B I L I T Y R E P O R T    23 OF 52
FOREWORD   A B O U T US   SUSTA I N A B I L I T Y AT C O R E   S O U RC I N G   P RO C E S SI N G   C USTO M E R S   C O-WO R K E R S           A B O U T T H IS R E P O RT

FA R M I N G T H E C O F F E E O F T H E F U T U R E

                                                                                                                      Coffee is a unique commodity. Around the world, we drink
                                                                                                                      a combined total of 2.25 billion cups every day, and coffee
                                                                                                                      supports 20 million farmers and their families in about
                                                                                                                      70 different countries. Global coffee exports are worth
                                                                                                                      USD 19 billion every year and consumption is increasing
                                                                                                                      around 5 per cent/year. Coffee is an important export
                                                                                                                      commodity for many low- and medium-income countries.
                                                                                                                      We purchase our coffee from about 20 countries, with
                                                                                                                      the most important countries shown on page 21. Around
                                                                                                                      40,000 farmers grow the coffee we buy from roughly
                                                                                                                      55 suppliers where some are cooperatives consisting of
                                                                                                                      small scale farmers.
                                                                                                                      There are two main types of coffee varieties, arabica and
                                                                                                                      robusta. Within the Löfbergs Coffee Group, we almost
                                                                                                                      exclusively use high-altitude arabica.
                                                                                                                      Safeguarding tomorrow’s coffee
                                                                                                                      Climate change has an impact on the entire planet, and
                                                                                                                      coffee is a crop that is extremely sensitive to the changes
                                                                                                                      affecting cultivation conditions in terms of drought/rain/
                                                                                                                      temperature/soil conditions/presence of plant diseases
                                                                                                                      etc. Half of all the land in the world where we grow coffee
                                                                                                                      run the risk of becoming unusable by 2050 due to climate
                                                                                                                      change according to the Climate Institute.
                                                                                                                      Climate change together with the ageing population of
                                                                                                                      farmers, in East Africa the average age is around 60 and
                                                                                                                      in Colombia around 57, and the unwillingness of the next
                                                                                                                      generation to take over is seriously threatening future
                                                                                                                      supply of coffee and the livelihood of young people in

                                                                                                                             MIRIAM NYAWIRA, 27, is part of Next Generation Coffee
                                                                                                                             in Othaya, Kenya

                                                                                                                                                                            S U S TA I N A B I L I T Y R E P O R T   24 OF 52
FOREWORD   A B O U T US   SUSTA I N A B I L I T Y AT C O R E   S O U RC I N G   P RO C E S SI N G   C USTO M E R S   C O-WO R K E R S           A B O U T T H IS R E P O RT

FA R M I N G T H E C O F F E E O F T H E F U T U R E

    coffee producing regions. Thus, these two challenges
are our most important sustainability issue by far.
Adapting farming to climate change and enabling
the next generation to see a positive future in coffee
is therefore something we put a lot of effort in. We
are working actively to get more farmers to convert
to sustainable farming methods, as well as improving
living conditions for the approximately 40,000 coffee
farmers who supply coffee to us. And we are investing in
initiatives and projects aiming to find solutions to both
interconnected challenges.
Adapting to climate change
We operate the Coffee & Climate project, together
with the members of International Coffee Partners
and several other coffee companies, as well as the
development assistance organizations SIDA in Sweden            AVERAGE AGE of a coffee farmer in Colombia                                            NEXT GENERATION COFFEE under our brand
and local NGO´s. The project combines knowledge from           is 57 years old.                                                                      Peter Larsen Kaffe in Denmark.
international climate research with coffee farmers’
practical experience. The project has developed a           the types of efforts that we want to see more of, and                             coffee farming. We work to improve development
specific toolbox that can be used by coffee farmers         we therefore encourage farmers to take part in climate                            opportunities for the next generation of coffee farmers
all over the world to manage climate change and             initiatives such as the Coffee & Climate project and the                          through education and trading with few intermediaries.
safeguard the coffee resources of the future. The           Rainforest Alliance certification body.                                           At the same time, it is a way for us to secure access
project has reached almost 80,000 farmers so far and                                                                                          to really good coffee in the future. We are currently
we see very positive results.                               Some coffee farms emit the powerful greenhouse gas
                                                                                                                                              working with young farmers in Tanzania, Colombia
                                                            methane. These are the farms that use the so-called
Reducing the climate impact                                                                                                                   and Kenya, from where we also source coffee to our
                                                            ‘wet method’. With the right technology, this gas can
The biggest climate impact from our coffee arises                                                                                             Next Generation Coffee products. During 2017/2018,
                                                            be captured and used instead as climate-smart biogas,                             we started a new project in Colombia. We have also
during farming, but a new literature study by 2050
                                                            which both contributes towards reduced emissions and,                             further developed our work in Kenya with greater focus
Consulting shows that, under the right conditions,
                                                            in the best case, can replace fossil fuel.                                        on young farmers.
coffee farms can actually absorb more CO₂ than they
produce – they can be what are known as “carbon             Enabling the next generation to take over
sinks,” carbon can be kept in the soil and carbon is also   Next Generation Coffee is our initiative to encourage
bound into the plants themselves. These are exactly         the young generation to see a positive future in

                                                                                                                                                                                                    S U S TA I N A B I L I T Y R E P O R T    25 OF 52
FOREWORD   A B O U T US   SUSTA I N A B I L I T Y AT C O R E   S O U RC I N G   P RO C E S SI N G   C USTO M E R S   C O-WO R K E R S           A B O U T T H IS R E P O RT

FA R M I N G T H E C O F F E E O F T H E F U T U R E

   O U R CO N T R I B U T I O N S TO I N T E R N AT I O N A L CO F F E E PA RT N E RS P ROJ EC TS

       A total of 75,000
       coffee farmers
       have been reached
                                                                                                 INDONESIA
       (2017/2018)
                                                                                                AND VIETNAM

        BRAZIL, COLOMBIA,
      DOMINICAN REPUBLIC, EL
      SALVADOR, GUATEMALA,                                          CAMEROON,
         HONDURAS, PERU                                              TANZANIA
                                                                    AND UGANDA

75,000 farmers’ livelihoods have been                       The farmers are small-scale, and they
strengthened so far                                         usually farm on less than two hectares
Together with four other privately-owned                    of land, which is equivalent to about two
European coffee companies we founded                        football pitches. The project’s method
the non-profit organization International                   consists of help to achieve self-help, and
Coffee Partners (ICP) in 2001. Today,                       it focuses on increasing productivity,
the number of family-owned European                         improving coffee quality and strengthening
companies operating ICP has risen to                        the farmers’ knowledge of marketing. This
eight, and Kathrine Löfberg has been                        contributes towards higher profits for the
Chair of the Board since 2016. ICP supports                 farmers in both the short and long term.
local projects that provide coffee farmers
with education and practical training in                        During the year we visited Amani
subjects such as farming methods, gender                        and Ikupa Msafiri in Igale Tanzania
equality and adapting to climate change.                        that grow the coffee we buy for our
                                                                Next Generation Coffee products.

LÖFBERGS COFFEE GRO UP                                                                                                                                                                                                        S U S TA I N A B I L I T Y R E P O R T   26 OF 52
FOREWORD   A B O U T US   SUSTA I N A B I L I T Y AT C O R E   S O U RC I N G   P RO C E S SI N G   C USTO M E R S   C O-WO R K E R S           A B O U T T H IS R E P O RT

FA R M I N G T H E C O F F E E O F T H E F U T U R E

The participants have often doubled or
even tripled their income, which naturally
has a great effect on the standard of
living and the development of the local
community.
The total budget is approximately
EUR 1 million per year, of which our
contribution is around 15 per cent. Since
2001, EUR 13.2 million has been invested
in projects in 12 countries. In many cases,
we cooperate with other players including
the Swedish International Development
Cooperation Agency (SIDA).
During 2018, we reached our goal, and
now over 75,000 farmers and their families
have participated in our projects. The new
five-year strategy for ICP will be finalized
in 2018. To further strengthen young coffee
farmers and to align the work of ICP with
the Agenda 2030 goals are two important
objectives going forward.

   During the year we reached our goal of
   75 000 small holders farmers taking part
   in International Coffee Partners projects.

                                                                                                                                                                            S U S TA I N A B I L I T Y R E P O R T    27 OF 52
FOREWORD   A B O U T US   SUSTA I N A B I L I T Y AT C O R E    S O U RC I N G          P RO C E S SI N G        C USTO M E R S        C O-WO R K E R S           A B O U T T H IS R E P O RT

C O F F E E I S G RO W N I N H I G H R I S K C O U N T R I E S

Coffee is grown in high risk countries                          coffee from hundreds of different coffee farmers. Despite
The most prevalent global risks concerning human rights         this, we always have traceability. We have long-standing                                     H O W M U C H O RGA N I C G R E E N CO F F E E W E P U RC H A S E
are found in the agricultural sector, and coffee is no          relationships with our suppliers and cooperatives, and we                                                                                      (Tonnes)
                                                                                                                                                                                                                                                       10,399 10,292
exception. Low wages and long working days together             spend about 100 to 150 days a year travelling to meet and
with the growing issue of migrant workers are prevalent         get to know the farmers. This together with a systematic                                                                                                                     8,226
risks. Migrant workers involved in the picking are the most     risk assessment and evaluation according to our risk                                                                                                                7,021
vulnerable and a development that is global and also            pyramid are our key instruments for mitigating risks.                                                                                                  6,132
prevalent in developing countries in the agricultural sector.                                                                                                     5,168       5,161 5,372 5,331
                                                                                                                                                                        4,978
                                                                Minimizing risks within our supply chain
Two thirds of the world’s coffee producers are small-scale      We are well aware of both the environmental and human
and coffee is a family business, therefore issues such as       rights risks connected to coffee production. We take part
                                                                                                                                                        17
child labour is of course also a constant risk.                 in many forums, i.e. Global Coffee Platform, where we
                                                                give our view and get updates to constantly be on top
When it comes to environmental impact from coffee
                                                                of new risks evolving. Our deep understanding is also
production, there is an increased focus on impact on

                                                                                                                                                   95

                                                                                                                                                                   9

                                                                                                                                                                              0

                                                                                                                                                                                                                                                                         8
                                                                                                                                                                                                                3

                                                                                                                                                                                                                           4

                                                                                                                                                                                                                                     5

                                                                                                                                                                                                                                                 6

                                                                                                                                                                                                                                                            7
                                                                                                                                                                                                     2
                                                                                                                                                                                          1
                                                                                                                                                                  00
                                                                why we have decided to go for 100 per cent certified

                                                                                                                                                                            01

                                                                                                                                                                                                                                                          01
                                                                                                                                                                                                               01

                                                                                                                                                                                                                                    01

                                                                                                                                                                                                                                                                     01
                                                                                                                                                                                                                          01

                                                                                                                                                                                                                                               01
                                                                                                                                                                                        01

                                                                                                                                                                                                     01
                                                                                                                                                   19

                                                                                                                                                                        /2
                                                                                                                                                                  /2
water qualities for the local communities around the

                                                                                                                                                                                                                                                        /2
                                                                                                                                                                                                           /2

                                                                                                                                                                                                                                  /2

                                                                                                                                                                                                                                                                    /2
                                                                                                                                                                                                                      /2

                                                                                                                                                                                                                                             /2
                                                                                                                                                                                      /2

                                                                                                                                                                                                 /2
                                                                                                                                                                       09
                                                                                                                                                             08

                                                                                                                                                                                                                                                                    17
                                                                                                                                                                                                                                                      16
                                                                                                                                                                                                          12

                                                                                                                                                                                                                                14

                                                                                                                                                                                                                                           15
                                                                                                                                                                                                                      13
                                                                                                                                                                                    10

                                                                                                                                                                                                11
                                                                coffee READ MORE ON PAGE 40 and why we have a systematic

                                                                                                                                                                                                                                                                20
                                                                                                                                                                                                          20
                                                                                                                                                                                                20

                                                                                                                                                                                                                                                     20
                                                                                                                                                                                                                                         20
                                                                                                                                                                                                                    20

                                                                                                                                                                                                                               20
                                                                                                                                                                       20

                                                                                                                                                                                  20
                                                                                                                                                             20
coffee farms. When using the so-called wet method to
                                                                way of assessing new and evaluating current suppliers.
peel of the flesh from the coffee bean, a lot of water is
                                                                However, the risk level according to our systematic risk
needed and the water from this process, if not handled
                                                                assessments of suppliers is becoming lower each year
and cleaned properly, can pollute local streams and rivers.
                                                                since we increasingly buy our coffee from certified farms.
A new risk that we see evolving and are becoming                And if we find activities that violate our code of conduct,
aware of is fraud when it comes to certification papers,        we have hard mechanisms for addressing these situations.
especially on organic coffee. We have not had any               During the year, we have finalized our cooperation with
reported incidents, but it is a topic that is discussed more    one supplier due to quality issues.
frequently.
                                                                Our Supplier Code of Conduct consists of a set of
Every cup can be traced                                         requirements and guidelines for sustainable farming and
The supply chain of coffee is in most cases long with           purchasing. The Code is based on the Global Compact’s
many middlemen. We purchase our coffee directly from            ten principles, the ILO’s fundamental conventions and our
the producing countries with as few intermediaries as           own guidelines for ethics and the environment. This Code
possible, often only one to three between us and the            of Conduct also includes a requirement that suppliers
individual farmer. A large percentage is sourced from           guarantee GMO-free cultivation.                                                          WE KNOW THE COOPERATIVES we buy our coffee from.
small-scale coffee farmers who sell their coffee through                                                                                                 On the picture Martin Löfberg visiting young coffee
                                                                                                                                                         farmers in Antioquia, Colombia.
cooperatives. A delivery from a cooperative can consist of

LÖFBERGS COFFEE GRO UP                                                                                                                                                                                                     S U S TA I N A B I L I T Y R E P O R T    28 OF 52
FOREWORD          A B O U T US     SUSTA I N A B I L I T Y AT C O R E   S O U RC I N G     P RO C E S SI N G        C USTO M E R S      C O-WO R K E R S          A B O U T T H IS R E P O RT

C O F F E E I S G RO W N I N H I G H R I S K C O U N T R I E S

                 H O W M U C H O F T H E G R E E N CO F F E E                                     R I S K M A N AG E M E N T W I T H I N O U R SU P P LY C H A I N
                     W E P U RC H A S E I S C E RT I F I E D

%                                                                                                                                                            DEVELOPMENT MEETINGS,
60                                                                                                                                                  CALIBRATION AND LONG TERM RELATIONSHIPS

 50
                                                                                                                                                           EXTERNAL STANDARDS / CERTIFICATIONS
                                                                                                                                                            (Rainforest Alliance, FairTrade, organic, UTZ, ISO, Iseal)

40
                                                                                                                                          EVALUATION ON:                                                           EVALUATION ON:
                                                                                                                                     Quality, delivery performance,                                            Environment, human rights,
 30                                                                                                                                        cost & relationship                                                working conditions, child rights

                                                                                                               GENERAL RISK ASSESSMENT                                              SUPPLIER CODE                                        SUPPLIER RISK ASSESSMENT
 20                                                                                                       (Origin / country risk, raw material, product, process)                    OF CONDUCT                                          (incl. general & specific supplier criteria)

 10                                                                                                                               PURCHASING HANDBOOK, BUSINESS ETHICS POLICY, CODE OF CONDUCT
                                                                                                                                                                            (general & specific supplier criteria)

  0
                                                                                               Our risk pyramid describes how we work with risk                                                   parameters. When visiting coffee farmers, we always
        2012 / 2013   2013 / 2014   2014 / 2015   2015 / 2016   2016 / 2017      2017/ 2018
                                                                                               management within our supply chain. Before starting up                                             check sustainability and quality parameters such as water
                                                                                               a new cooperation with a supplier, we have a thorough                                              management, labour situation, quality of the crops etc.
                                                                                               assessment process covering all aspects of sustainability                                          Data is registered and followed up until next time.
      Organic                         Organic/Fairtrade                       Fairtrade        as well as quality. This assessment is made together                                               During the year we have worked to further professionalize
                                                                                               with a risk assessment covering origin/country, type of                                            our risk management work. We have started to educate
      Rainforest Alliance             Rainforest Alliance/Organic                              product, process etc. After passing, all suppliers sign and                                        our buyers and other key persons within the Academy for
                                                                                               commit to our Code of Conduct for Suppliers. During                                                Human Rights in Business within CSR Sweden. We have
      UTZ Certified                   UTZ Certified/Organic
                                                                                               the year we have assessed eight larger suppliers where                                             also begun to digitalize our assessment and evaluation
                                                                                               six of them passed the assessment. Current suppliers are                                           tools to get an even better control of the data and
                                                                                               evaluated regularly on sustainability as well as quality                                           traceability to the farm level.

                                                                                                                                                                                                                                                                 S U S TA I N A B I L I T Y R E P O R T   29 OF 52
FOREWORD      A B O U T US   SUSTA I N A B I L I T Y AT C O R E   S O U RC I N G   P RO C E S SI N G   C USTO M E R S   C O-WO R K E R S           A B O U T T H IS R E P O RT

MORE THAN COFFEE

                                                                                                                                         More than coffee
 P U RC H A S I N G C AT EG O R I E S                                                                                                    During last year we started a new business area within
                                                                                                                                         Ready To consisting of different ready to drink products
                                                                                                                                         based on coffee, but also raw bars and snacks. All
                                                                                                                                         products with ingredients that can be certified are
                                        Green coffee           73.4%      Others                        0.6%                             certified, Fairtrade or organic or both. We have the
                                                                                                                                         same requirements and processes for the suppliers of
                                        Ready to drink         19.6%      Paper                         0.6%                             these products. However, the risks for the Superbonobo
                                                                                                                                         products are a bit different compared to green coffee. The
                                        Corrugated cardboard   2.5%       Instant                       0.6%
                                                                                                                                         Superbonobo products are based on oat, cashew nuts,
                                        Plastic                  2%       Capsules                      0.2%                             cacao and dates. All ingredients are certified organic with
                                                                                                                                         full traceability and we have a close relationship with the
                                        Ready to eat           0.6%                                                                      two suppliers of these products. It is a new area for us and
                                                                          Total               44,258 tonnes
                                                                                                                                         we are working intensively to gain knowledge and secure
                                                                                                                                         the same sourcing and supply chain procedures as for
                                                                                                                                         coffee and tea.

 OUR NEW PRODUCT CATEGORY
 Ready To, certified and delicious.

                                                                                                                                                WITH THE SUPERBONOBO brand we offer vegan,
                                                                                                                                                organic raw bars and balls.

                                                                                                                                                                                               S U S TA I N A B I L I T Y R E P O R T   30 OF 52
FOREWORD   A B O U T US   SUSTA I N A B I L I T Y AT C O R E   S O U RC I N G   P RO C E SS I N G   C USTO M E R S   C O-WO R K E R S           A B O U T T H IS R E P O RT

                         PROCESSING

LÖFBERGS COFFEE GRO UP                                                                                                                        S U S TA I N A B I L I T Y R E P O R T    31 O F 52
FOREWORD   A B O U T US   SUSTA I N A B I L I T Y AT C O R E       S O U RC I N G       P RO C E SS I N G       C USTO M E R S         C O-WO R K E R S          A B O U T T H IS R E P O RT

T O WA R D S 1 0 0 % R E N E WA B L E R E S O U RC E S

We strive to avoid                   The vast majority of the climate impact from
                                     each cup of coffee we drink – 80 to 90 per cent
contributing towards
                                                                                                                                                             O U R G H G E M I SS I O N S
                                     – comes from farming the coffee, that is why we                                                                                                                                                           TONNES
                                                                                                                                                                                                                                               CO2e
                                     focus our efforts in the producing countries and
climate change. And we               sourcing of certified coffee. But we also need to                   TONNES
                                                                                                                                                                                                                                               / TONNE
                                                                                                                                                                                                                                               ROASTED

have tough and ambi­
                                                                                                              CO 2e                                                                                                                            COFFEE
                                     do everything we can to reduce emissions from
                                     our own production and business operations.                         4 ,000                                                                                                                                0.16 0

tious goals. By 2030, we             Tough climate goals                                                 3,50 0                                                                                                                                0.14 0
strive to use 100 per cent           By 2020, our emissions of greenhouse gases
                                     per tonne of coffee produced should be cut by
re­newable resources,                at least 40 per cent (compared to 2005).* Our
                                                                                                         3,00 0                                                                                                                                0.12 0

                                     environmental footprint is calculated annually
and by 2020 we shall                 as part of our membership of the Haga                               2,50 0                                                                                                                                0.100

have reduced our CO2                 Initiative and includes our operations in Sweden
                                     and our production in Denmark. The reduction                        2,00 0                                                                                                                                0.08 0

emissions by 40 per cent             to date has been 39 per cent meaning that we
                                     have almost reached our goal of 40 per cent
and use 100 per cent
                                                                                                          1 ,500                                                                                                                               0.06 0
                                     2020 already. And during the past financial

renewable energy. We
                                     year, our greenhouse gas emissions have gone                         1 ,00 0                                                                                                                              0.04 0
                                     down with 12 per cent. Primarily due to the
are moving in the right              biobased gas we have started to mix in for
                                     roasting at our production plant in Karlstad.
                                                                                                             50 0                                                                                                                              0.02 0

direction and are proud              So we are very happy to see that we are taking
                                                                                                                   0                                                                                                                           0.000
                                     great steps in the right direction.
of our achievements this             Efficient use of energy from
                                                                                                                              2005           2012 / 2013   2013 / 2014    2014 / 2015      2015 / 2016     2016 / 2017      2017/ 2018

last year.
                                                                                                                        ( B A SE Y E A R)

                                     renewable sources
                                     We have doubled our coffee production                                                                  Own transport                        Business travel                          Energy
                                     in Karlstad since 1991, but our electricity
                                     consumption has remained at the same level                                                              Roasting                    Emissions tonnes/produced coffee
                                     as before. We naturally need to ensure that we                                                             (Tonnes of CO2e, Scope 1 and 2, as well as business trips in Scope 3.)
                                     take actions to reduce our energy consumption
                                     even further.

                                                                                                                                                                                                           S U S TA I N A B I L I T Y R E P O R T   32 OF 52
You can also read