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Sustainability in the coffee industry, a practical approach



Sustainability in the coffee industry, a practical approach

By Pascal Héritier, COO at MZBG

The current situation: Environmental challenges and sustainability

Coffee is the second most important raw material sold worldwide, being produced in about 70 countries located in tropical areas with hot and humid climates.

The intensive cultivation adopted by large producers with the aim of maximizing returns through monoculture and the abundant use of synthetic chemicals cause the deterioration of the land and the surrounding environment, threatening biodiversity. It has therefore become necessary to rethink the paradigm of industrial commodity production, introducing the concept of sustainability. But what does this word mean?

 According to The State of Sustainable Coffee- A study of 12 international markets”, (ICO)Sustainability is a dynamic continuum and can best be perceived as an ongoing process rather than a static achievement. Sustainability has been defined in several ways and {..} the term {…}, states that in order to achieve sustainability, long-term environmental, social, and economic needs must be met in an integrated manner without compromising the ability of future generations to meet their own needs”.

The common minimum denominator for the challenges posed by sustainability can therefore be translated with the slogan “giving back to the community”.

Market responses

The challenges facing coffee producers are therefore multiple: on the one hand, to guarantee very high levels of production, on the other hand, to ensure respect for the environment and to promote social cohesion and improve the workers’ living standard.

Over the years, an attempt has been made to respond to a need which, while safeguarding product excellence, also guarantees an economic return and benefits in environmental and social terms. This has led to the creation of organic, ecological and fair-trade coffees – whose higher than average price also reflects the goal to enhance the living conditions of the people involved in the production chain, and to satisfy a niche market characterized by a higher sensitivity to the matter. 

The challenging elements in the world of sustainable coffee

Talking about sustainability in the food industry is always challenging given the many aspects that come into play. The elements to be analysed are numerous and range from responsible use of water resources, to the materials used for product packaging and initiatives aimed at supporting local communities.

 Water and respect for groundwater

Careful use of water reserves has always been difficult to match with large-scale intensive farming. However, this issue has to be tackled as a most high priority, especially in times where we are witnessing progressive desertification and increasing global warming concerns.

In this respect, a best practice in the industry comes from Kauai Coffee, the largest coffee plantation in the United States – with over 4 million coffee plants on the island of Kauai in Hawaii – owned by the Massimo Zanetti Beverage Group. Kauai has in fact become the world’s largest drip irrigation coffee company, with over 2,500 miles of drip tubes, a system that allows water to be saved and recycled in the fields.

The use of chemicals is another key aspect. In 2018, Kauai set the objective of reducing the use of all types of pesticides by 70% by 2021 and completely eliminating “Restricted use pesticides” in its processes.


Manufacturers face big pressure also in regard to the materials used in the product packaging process. While they play a pivotal role in the optimization of costs, timing and ways of distribution and delivery, they are also the cause of a waste production that must be hindered.

A further element to consider is the fact that the materials used for packaging allow to preserve intact the freshness, the aroma and, in general, the qualities of the coffee. These are important elements in any industry, but especially crucial for coffee, which is a living product that tends to change its organoleptic qualities according to even the slightest variations in climatic conditions. For this reason, the materials used play a key role in determining the success of a brand or a company.

In this regard, Massimo Zanetti Beverage Group launched several initiatives aimed at reducing as much as possible the impact of coffee capsules on the environment: among these, the example of Segafredo Zanetti France stands out. In 2019, the French company of the group launched 100% biodegradable and compostable capsules; last January, the product was awarded “product of the year”in France. Furthermore, the Group is about to introduce other innovative solutions on the market in the coming months.

Another brand owned by Massimo Zanetti Beverage Group, Boncafè International, was among the first to sign the terms contained in the Singapore Packaging Agreement, an initiative launched in 2007 and supported by the local government, aimed at reducing packaging waste, which today accounts for one third of household waste.

Local communities

Improving the living conditions of populations involved in the cultivation and harvesting of coffee is another key aspect to be considered with a view to achieving a 100% sustainable approach. This is an even more challenging task due to the volatility of the price of green coffee.

In this respect, Boncafè lnternational and Massimo Zanetti Beverage USA decided to join the Sustainable Coffee Challenge, an initiative that aims to promote sustainability along the supply chain, focusing on the well-being of local populations. Massimo Zanetti Beverage USA has devised a project in relation to the education of the local population in one of the main countries of supply for the company.

The Boncafé Group, which has been a partner in the initiative since 2017, has already developed and undertaken its commitment, that is ensuring the long-term well-being of farming communities, by promoting training initiatives aimed at internal and external stakeholders on the importance of traceability and sustainability in coffee growing practices.

All that being said, there is no shortage of sustainable initiatives in the coffee production and distribution chain. The real challenge is to give them a direction, which is first and foremost a matter of vision. Getting them up and running and creating a real culture of sustainability are the natural following steps. Some companies are proving to be one step ahead of others.

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Leon Black step downs as Apollo CEO after review of Epstein ties



Leon Black step downs as Apollo CEO after review of Epstein ties 1

By Mike Spector and Chibuike Oguh

NEW YORK (Reuters) – Leon Black said on Monday he would step down as chief executive at Apollo Global Management Inc, following an independent review of his ties to the late financier and convicted sex offender Jeffrey Epstein.

While Black, whose net worth is pegged by Forbes at $8.2 billion, will remain Apollo’s chairman, his decision to step down illustrates how doing business with Epstein weighed on the reputation of one of Wall Street’s most prominent investment firms. Black co-founded Apollo 31 years ago.

Apollo said it plans to change its corporate governance structure, doing away with shares with special voting rights that currently give Black and other co-founders effective control of the firm.

The independent review, conducted by law firm Dechert LLP, found Black was not involved in any way with Epstein’s criminal activities. Black paid Epstein $158 million for advice on tax and estate planning and related services between 2012 and 2017, according to the review.

Black, 69, said that although the review confirmed he did not engage in any wrongdoing, he “deeply” regretted his involvement with Epstein.

“I hope that the results of the review, and related enhancements … will reaffirm to you that Apollo is dedicated to the highest levels of transparency and governance,” Black wrote in a note to Apollo fund investors. He will step down as CEO no later than July 31.

Apollo co-founder Marc Rowan, 58, will take over as CEO.

Rowan has often kept a low-key profile compared with Apollo’s other co-founder, Joshua Harris, 56, and spearheaded many initiatives that turned Apollo into a credit investment giant, including the permanent capital base the firm enjoys through its ties to reinsurer Athene Holding Ltd.

The revelations of Black’s ties to Epstein took a toll on Apollo, which Black turned into one of the world’s largest private equity groups. Apollo executives had warned in October that some investors had paused their commitments to the buyout firm’s funds as they awaited the review’s findings.

Apollo shares are down 1% since the New York Times reported on Oct. 12 that Black paid at least $50 million to Epstein for advice and services, when most of his clients had deserted him.

Over the same period, shares of peers Blackstone Group Inc, KKR & Co Inc and Carlyle Group Inc are up 19%, 10% and 23%, respectively.

“We think a large number of (Apollo fund investors) took a ‘pause’, and we believe the outcome (of the review) and changes today will cause most of them to return to allocating to future Apollo funds,” Credit Suisse analysts wrote in a research note.

Apollo shares jumped 4% to $47.65 in after-hours trading on Monday.

“We continue to follow these events closely and will evaluate how Apollo addresses its issues,” the California State Teachers’ Retirement System, one of the largest U.S. public pension funds and an Apollo investor, said in a statement.

Epstein was found dead at age 66 in August 2019 in a Manhattan jail, while awaiting trial on sex trafficking charges for allegedly abusing dozens of underage girls in Manhattan and Florida from 2002 to 2005. New York City’s chief medical examiner ruled that the cause of death was suicide by hanging.


Black previously said he had paid millions of dollars to Epstein, but the exact size of his payments was revealed for the first time on Monday. Beyond the $158 million in payments, Black made two loans to Epstein totaling $30.5 million in early 2017.

Dechert said in its report that Black’s social ties with Epstein, who built his fortune by endearing himself to powerful figures in high society, went back to the mid-1990s.

Epstein won Black’s trust by resolving an estate tax issue for him in 2012 potentially worth at least $500 million, the report said. He ended up advising Black on various aspects of his personal financial affairs, from his family office and airplane to his yacht and artwork.

Black believed that Epstein provided advice over the years that conferred between $1 billion and $2 billion in value to him, according to the Dechert report. Black said in his note to investors that he had paid Epstein a fee equivalent to 5% of the value he generated on an after-tax basis, and not tied to hourly rates.

Black and Epstein’s relationship deteriorated after Epstein failed to repay $20 million of the loans and Black refused to pay tens of millions of dollars in fees that Epstein demanded, according to the Dechert report.

They severed ties in October 2018, according to the report. Black knew Epstein had been convicted in Florida a decade earlier for soliciting prostitution from a minor, the Dechert report said, but there was no evidence suggesting Black had knowledge of the other alleged crimes before they were publicly reported in late 2018, culminating in Epstein’s July 2019 arrest.

On Monday, Black pledged $200 million toward “initiatives that seek to achieve gender equality and protect and empower women,” as well as helping survivors of domestic violence, sexual assault and human trafficking.

Apollo said it would pursue a “one share, one vote” corporate governance structure that would do away with shares with special voting rights. It said the move could qualify it for listing on the S&P Global indices.

Apollo also said it would seek to give its board more authority to oversee its business, eroding the power of its executive committee led by Black.

The board will be expanded to include four new independent directors, including Avid Partners founder Pamela Joyner and physician and scientist Siddhartha Mukherjee, Apollo said. Apollo co-Presidents Scott Kleinman and James Zelter will join the board and take on increased responsibility running day-to-day operations.

Apollo had about $433 billion in assets under management as of the end of September.

(Reporting by Mike Spector and Chibuike Oguh; Additional reporting by Lawrence Delevigne and Jessica DiNapoli in New York; Editing by Sonya Hepinstall, Leslie Adler and Kim Coghill)

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EU sees no cliff-edge ending for COVID fiscal stimulus



EU sees no cliff-edge ending for COVID fiscal stimulus 2

BRUSSELS (Reuters) – European governments will not need to abruptly end fiscal support for their economies after the pandemic, top officials said on Monday, noting that any withdrawal of stimulus would be carried out gradually and only once the economy has recovered.

Euro zone public debt rose sharply during 2020 and is likely to exceed 100% of GDP this year as governments borrow to help individuals and businesses survive lockdowns.

The higher debt raises concern about how to deal with it down the road and when to start cutting it again, since the EU last year suspended its rules limiting budget deficits and debt, known as the Stability and Growth Pact (SGP).

EU finance ministers are to discuss when to reintroduce any borrowing limits in the second quarter of this year.

“I believe it important that finance ministers debate and reach a common understanding on the appropriate fiscal stance by the summer. This can then serve as guidance for the preparation of their draft budgetary plans for 2022,” the chairman of the euro zone’s group of finance ministers, Paschal Donohoe, said on Monday.

“To avoid any misunderstanding, let me stress that this is not about an imminent withdrawal of fiscal stimulus,” he told the economic committee of the European Parliament.

“We all agree that our immediate priority is to shield our citizens, in particular younger cohorts and those most exposed to the crisis. There must be no cliff-edges,” he said.

Joao Leao, the finance minister of Portugal which holds the rotating presidency of the EU and therefore sets the agenda for EU finance ministers’ work until June, was equally cautious.

“We should not withdraw stimulus too early. We need to make sure the suspension clause for the SGP remains in force at least until we return to pre-crisis economic figures,” he told the committee. “We need to make sure jobs are maintained as well as the production capacity of companies.”

He said first cash from the EU’s 750 billion euro post-COVID economic recovery programme should reach the economy in the first half of the year.

“Real funding should be getting to the economy before the summer or in early part of the summer,” he said.

(Reporting by Jan Strupczewski; Editing by Giles Elgood)

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IMF to intensify focus on climate change’s economic impact, Georgieva



IMF to intensify focus on climate change's economic impact, Georgieva 3

By Andrea Shalal

WASHINGTON (Reuters) – The International Monetary Fund views climate change as a fundamental risk to economic and financial stability, its chief said on Monday, mapping out the IMF’s plans to help focus investments in green technologies that will boost global growth.

IMF Managing Director Kristalina Georgieva told the Climate Adaptation Summit that global economic output could expand by an average 0.7% annually over the next 15 years and millions of jobs could be created if carbon prices rose steadily and investments expanded in green infrastructure.

“We see climate as a fundamental risk for economic and financial stability, and we see climate action as an opportunity to reinvigorate growth, especially after the pandemic, and to generate new green jobs,” Georgieva said.

She said the IMF was taking action in four areas to accelerate the transition to a new low-carbon and climate-resilient economy.

Georgieva said the Fund would launch a new “Climate Change Dashboard” this year to track the economic impact of climate risks and the measures taken to mitigate them, a key step to ensuring the needed shift.

“Climate resilience is a critical priority,” she said. “This is why we place it at the heart of what do, this year and (in) the years to come.”

The Fund is also integrating climate factors into its annual economic country assessments, also known as Article IV consultations, focusing on adaptation in highly vulnerable countries, and carbon pricing in its assessment of large emitters, Georgieva said.

In addition, she said the IMF is adopting enhanced stress tests and standardizing disclosure of climate-related financial stability risks in its financial-sector surveys, and expanding its training and support to help central banks and finance ministries take climate considerations into account.

The World Bank, the largest multilateral funder of climate finance, boosted funding for adaptation projects to 50% of its total climate finance over the past four years, and plans to maintain that percentage for the next five years, World Bank President David Malpass told the same event on Monday.

In addition to funding projects addressing coastal erosion, increasing crop yields and building cyclone-resistant infrastructure, the Bank was also investing in early warning and evacuation systems, better social protection, and weather observation, he said.

(Reporting by Andrea Shalal; Editing by Paul Simao)

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