rethink sustainability
Sustainable coffee means thinking about communities, climate and circularity: how does Nespresso blend all three?
Nespresso rewrote the rules of coffee in 1986. Its pioneering capsules took what was once home-made and made it barista-grade at the touch of a button. Since then, Nespresso has introduced recycling schemes for aluminium capsules, one of a number of strategies deployed to create circularity along its whole value chain. Its 2023 launch of paper-based home-compostable capsules is taking sustainability a step further.
Alliances with agronomists and farmers are also embedded in the Nespresso model, explains the company’s Marketing Director at Nespresso Switzerland, Irene Balascas. Providing education and assistance in transitioning to sustainable and regenerative farming helps coffee-growing communities create a more productive and profitable future. It also preserves the high quality of the coffee that Nespresso’s customers have come to expect.
Sustainability has long been at the heart of Nespresso’s thinking. Why is it so important to you, and how does it change the way you act?
We believe that coffee can be a force for good, positively impacting the lives of our customers, the farmers we work with, the planet and nature. As a coffee company, we have a responsibility to protect the future of coffee and the communities that depend on it, and this is why sustainability has been at the heart of everything we do for over 30 years.
To consistently deliver high-quality coffee to our customers, we need a reliable long-term supply of high-quality beans. Even in our early days, we recognised that climate change and socio-economic factors were putting that under threat, and as our business grew we became concerned that supply might not be able to keep up with demand. That’s why we designed an innovative coffee sourcing programme that isn’t just about buying beans on the commodity market or securing external certification. It’s about acting directly to support sustainability: helping coffee farmers on the ground, building strong and resilient communities, and making coffee farming environmentally, socially and economically sustainable – all while meeting our high quality standards. It’s called the Nespresso AAA Sustainable QualityTM Program and we co-created it with the NGO Rainforest Alliance in 2003.
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We’ve been finding ways to embed sustainability in our business for over three decades. We gave this strategy a name in 2013: The Positive Cup. It is at the heart of what we do and reinforces our conviction that coffee must be a force for good. From 2014 to 2022, we invested USD 1 billion (CHF 880 million) in this strategy. And we continue to prioritise investment in sustainability.
Recycling has long been central to our thinking. We’ve been working with municipal partners since 1991 to develop recycling solutions, and our Swiss recycling rate for home-use capsules is now 73%. This helped us gain B Corp™ status, making us one of the largest companies certified in 2022.
However, we need to do more and we have set ourselves ambitious goals for the next decade. We believe that a low-carbon economy is the only future, so we will continue to reduce and remove emissions throughout our value chain. We also believe that coffee agriculture can make a significant contribution to addressing the most pressing environmental and social challenges: mitigating climate change, halting and reversing biodiversity loss, and supporting sustainable livelihoods and food security. So we will advance our regenerative farming practices to restore landscapes, and we will continue working to build resilient communities and transform livelihoods.
We will also continue to endorse circular principles, so that end-of-life materials are considered resources from the very start. The journey ahead will require collaboration. We can’t achieve all our ambitions alone, so we will need to harness the strength of our brand, people and partnerships to ensure we make a positive impact to 2030 and beyond.
Nespresso is a certified B Corp™, as is Lombard Odier. This certification recognises a strong and ongoing commitment to high social and environmental standards. How has gaining this certification influenced your decisions and activities?
B Corp™ is more than a certification – it’s a movement. For Nespresso, becoming a B Corp™ is a reflection of our enduring commitment to sustainability. It also provides a benchmark against which we can measure our actions, helping us discover our weaknesses as well as our strengths. And it’s a roadmap too: it can help us find ways to improve and accelerate our actions on sustainability, inspiring us to go further, do more and scale our impact.
IN 2023, you celebrated the 20th anniversary of your Nespresso AAA Sustainable QualityTM Program. What impact has it had?
The Nespresso AAA Sustainable Quality™ Program is our tailor-made approach to sourcing high-quality sustainable coffee. It has three pillars – quality, socio-environmental and productivity – and each embraces the initiative’s three strategic drivers of supporting and enabling quality, regenerative and inclusive coffee farming. What this means in practice is that we work with dedicated agronomists to offer technical assistance to farmers, we pay a price premium for the beans we buy, and we invest in special projects, such as agroforestry.
Nespresso works directly with over 150,000 AAA farmers in 18 countries, as well as with more than 645 dedicated agronomists who support farmers in improving the quality of their coffee and the productivity of their farms through sustainable and regenerative farming. The premium the farmers earn for selling this higher-quality coffee to us also helps improve their income for the long term. Altering the way they approach agriculture increases their productivity year on year, and protects the environmental and social resources they need to build a more sustainable future.
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This framework supports farmers and rewards them for their progress on sustainability and regenerative agriculture. It also allows Nespresso to develop lasting relationships with farming communities. We buy from the same farmers year after year to guarantee the aromatic profile and quality of our coffees. Continuing to work together means we can develop innovative solutions that will make farmers stronger and more resilient.
How do you encourage your customers to act more sustainably?
We make sure our customers are aware of all our sustainability initiatives. We’ve included educational elements in our local initiatives since the launch of the recycling programme for aluminium capsules in Switzerland in 1991, and we’re doing the same today with our new paper-based home-compostable capsules, by encouraging our customers to compost.
Despite your work in the sustainability space, you are regularly accused of greenwashing. How do you respond to your critics?
Sustainability has been part of our DNA since the company was founded in 1986. When we started our journey towards enabling coffee lovers to brew barista-quality blends at the touch of a button, we saw the potential this new value proposition created and it led us to a conviction: that coffee can be a force for good for the planet, and for its people. It has the potential to improve livelihoods and regenerate landscapes, preserving resources and providing sustainable income, today and for future generations. This conviction continues to drive us.
The world is facing unprecedented challenges. Governments and NGOs cannot solve all today’s social and environmental problems alone. The private sector has an important role to play. Businesses can and should contribute to solving these problems. Nespresso is in a privileged position to enact meaningful change. We are embedding transformative actions throughout our value chain, from regenerative agriculture to eco-design and recycling. This is helping build a low-carbon, nature-positive and inclusive economy.
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We’re on a journey to net zero and are committed to accelerating our actions, aiming to reach net zero by 2035 at the earliest, with a milestone to achieve net-zero emissions in AAA green coffee production in 2030. Becoming a B Corp™ in 2022 also meant joining a movement of like-minded companies. We are now cementing our commitment to have a positive impact on the world. At Nespresso Switzerland, we want to keep reducing our carbon footprint. This will include buying electricity from renewable sources, increasing our recycling rate and introducing a circularity programme for our machines, as we just did with the RELOVE programme.
At the end of 2022, you unveiled a major innovation: paper-based home-compostable capsules – another step towards a circular economy. What are your ambitions with this new range?
Our paper-based home-compostable capsules give consumers another sustainable option alongside our recyclable aluminium capsules, without compromising on the high quality of our coffee. They are made using 82% paper pulp and include a thin biodegradable lining that acts as an oxygen protective barrier to preserve the coffee’s freshness and taste. The capsule is compatible with Nespresso Original machines, and we’ve created a new range of coffees that act in harmony with this new material to ensure the in-cup results meet both Nespresso quality standards and the coffee experience consumers know and love.
Important information
This document is issued by Bank Lombard Odier & Co Ltd or an entity of the Group (hereinafter “Lombard Odier”). It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a document. This document was not prepared by the Financial Research Department of Lombard Odier.
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