What are the impacts of the introduction of human rights and environmental due diligence in the business approach of a medium-sized cooperative company on:
- the company itself, e.g., management structure, inhouse sustainability expertise, pricing and buying policy, sales?
- selected key players within its value chain, e.g., sustainability in production methods, buying and labour practices, rentability?
Coffee value chains can be characterised in social, labour and environmental terms. Generally, there is an increase in awareness of these issues, and the coffee industry has been a leader in applying sustainability initiatives such as certification and verification systems. However, many root causes of social, labour and environmental issues remain unaddressed. A possible approach to address the externalisation of key social and environmental costs is the implementation of proper human rights and environmental due diligence, as suggested by the UN Guiding Principles on Business and Human Rights and the OECD’s Guidelines for Multinational Enterprise (MNEs). This case study is to improve our understanding of the potential impact of introducing human rights and environmental due diligence in a medium-sized cooperative company in terms of
- the company itself, e.g., the business approach, management structure, inhouse sustainability expertise, pricing and buying policy, sales; and,
- selected players within its value chain, e.g., sustainability in production methods, buying and labour practices, rentability.
- Voluntary sustainability certification schemes
- Corporate Sustainability Due Diligence Directive
The case study contributes to
- ongoing policy processes designing a mandatory human and environmental due diligence at national and European level;
- the elaboration and implementation of the Corporate Sustainability Due Diligence Directive.
The coffee supply chain is characterized by extreme inequality in terms of power and risks between the producers (small scale farmers) on the one side, and the processing and retail industry on the other side.
- Value chain analysis
- Preliminary impact study using a participatory approach, to map effects of the measures applied and to critically investigate the theories of change they are based on.
- Human rights and environmental impact assessments (HRIA) (Oxfam methodology)with a strong emphasis on engagement of rightsholders and taking a gender lens, delivering data on actual and potential risks in different stages of the coffee value chain, as was as baseline data on business models and practices.
- Mapping global value chains and value chain analysis.
- Risk ranking and identification of salient risks.
- Qualitative desk research and participatory (group) interviews.
- Interviews and focus groups with stakeholders across the value chain, delivering insights on possible ways to address risks as well as insights on extent in which measure taken have effect.
- Before and after data on the management structure, existence of inhouse sustainability expertise, pricing and buying policy, sale figures in the buyer.
The case study will contribute to a better understanding of the potential and the risks of a human rights and environmental due diligence approach for SMEs and the different parts of their value chain. A better understanding of the potential and the risks can inform ongoing policy processes designing a mandatory human and environmental due diligence at national and European level, as well as processes designing and introducing due diligence at company level. It can also build capacity amongst different value chain actors on due diligence and how to engage with it.
Product and market focus
Coffee, EU market
Research design: medium-sized fair-trade company initiating human rights and environmental due diligence, key stakeholders in the value chain (including farmers).Research level and data gathering: SME, farmers, cooperatives of cacao farmers, other chain actors (including in transformation and transport), research institutions involved in complementary research. Sharing outputs: other companies, different value chain actors, fair trade movement, consumers and the wider audience.