Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental performance
• Social development
• Governance
• Human rights
• Fight against bribery and corruption

Environmental Achievements

• Reduced water consumption by 10%
• Reduced indirect emissions for electricity by 14%
• Reduced direct emissions for thermal energy and corporate fleet fuel by 8%
• ISO 14001 certification obtained for Carte Noire Operations plant in Lavérune (France)
• 90% reduction in discarded packaging due to reel changes (Espresso Point project)
• 25% reduction in time spent changing reels (Espresso Point project)
• 500+ tons of coffee not rejected during the year (Rejected roasted coffee project)
• 44% reduction in total roasted coffee rejected (Rejected roasted coffee project)

Social Achievements

• Launched Goal Zero program to engage stakeholders in UN Global Goals
• Implemented "2030: What Are WE Doing?" internal communication campaign
• Organized "Generation 2030" event at Sustainable Development Festival
• Launched "Lavazza and Youth for SDGs" contest for university students
• Supported various projects benefiting over 94,000 people in 17 countries through the Lavazza Foundation
• Implemented A Cup of Learning project, providing training to 67 individuals in coffee processing and espresso
• Launched Coffee Study Program, sending students to the Dominican Republic to study the Lavazza Foundation's work
• Implemented AAA project, providing barista training to 18 disadvantaged young people
• Kicking Horse Coffee (subsidiary) won 2018 Great Place to Work Canada ranking

Governance Achievements

• Established a structured risk management system
• Created a Compliance Function to ensure regulatory compliance
• Implemented training programs in accordance with Legislative Decree No. 231/2001 and GDPR
• Achieved 32nd place (highest for an Italian company) in the 2018 Global CR RepTrak ranking

Climate Goals & Targets

Environmental Challenges

• Climate change threatening coffee supply and quality
• Supply chain disruptions
• Need to improve customer satisfaction
• Need to integrate sustainability principles into supplier selection and management

Mitigation Strategies

• Implemented Coffee&Climate initiative to support coffee growers in adapting to climate change
• Developed alternative sourcing strategies
• Launched customer satisfaction program and corrective measures to improve order management, logistics, and customer service
• Circulated Supplier Code of Conduct and implemented supplier engagement activities, including a webinar with Save the Children

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct
• CSR questionnaire for suppliers
• Webinar with Save the Children to raise awareness of human rights issues

Climate-Related Risks & Opportunities

Physical Risks

• Climate instability menacing the supply of high-quality coffee

Reporting Standards

Frameworks Used: GRI Standards

Certifications: ISO 14001, OHSAS 18001

Third-party Assurance: PricewaterhouseCoopers Advisory SpA

UN Sustainable Development Goals

• Goal 4 – Quality education
• Goal 5 – Gender equality
• Goal 8 – Decent work and economic growth
• Goal 12 – Responsible consumption and production
• Goal 13 – Climate action

Lavazza's initiatives contribute to these goals through various projects and programs described in the report.

Sustainable Products & Innovation

• ¡Tierra! Bio-Organic coffee

Awards & Recognition

• 2018 Global CR RepTrak ranking (32nd place)
• Brand Finance Soft Drinks 2018 awards
• Kaizen Award for Gattinara production plant
• IF DESIGN AWARD for Firma range coffee systems

Environmental Metrics

ESG Focus Areas

• Gender Equality
• Decent Work and Economic Growth
• Responsible Consumption and Production
• Climate Action

Environmental Achievements

• 8% reduction in electricity consumption, saving 321 MWh
• 2% decrease in energy consumption at Gattinara plant
• Recovery and reuse of tonnes of coffee waste annually at Gattinara plant
• 25% of Espresso Point capsules made using scraps from other capsules

Social Achievements

• Lavazza certified as a Top Employer Italy 2019
• Carte Noire recognized as a Great Place to Work in France
• Launched MAAM (Maternity as a Master) program for parents
• Extended remote working to the whole HQ population
• Launched Workplace Giving and Volunteer Leave in Australia

Governance Achievements

• Reformulated Group’s values to improve employee identification
• Implemented a structured risk management system (ERM)
• Created a Compliance Function to ensure legal compliance
• Developed a Group Human Rights Policy (to be released in 2020)

Climate Goals & Targets

Environmental Challenges

• Climate change threatening coffee plantations and growers
• Falling coffee production in Cuba
• Need to reduce environmental impact of packaging
• Initial resistance to new remote assistance system for coffee machines

Mitigation Strategies

• Alignment with Sustainable Development Goals
• Support for coffee growers through the Lavazza Foundation
• Sustainable packaging roadmap with targets for reduced carbon footprint and recyclability
• Investment in Customer Service training to improve communication and encourage adoption of remote assistance system

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Supplier Code of Conduct
• CSR questionnaire for supplier registration

Climate-Related Risks & Opportunities

Physical Risks

• Weather variations affecting coffee production, productivity and quality

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products and processes

Reporting Standards

Frameworks Used: GRI Standards

Certifications: ISO 14001, ISO 50001, OHSAS 18001, LEED Platinum (Nuvola HQ)

Third-party Assurance: PricewaterhouseCoopers Advisory SpA

UN Sustainable Development Goals

• Goal 8
• Goal 5
• Goal 12
• Goal 13

Selected to promote a balance between social and environmental commitments, applicable to all stages of the value chain

Sustainable Products & Innovation

• EcoCaps
• KLIX Eco Cup™ (planned for 2020)

Awards & Recognition

• International Res Publica Prize (TOward 2030 project)

Environmental Metrics

ESG Focus Areas

• Climate change
• Diversity & Inclusion
• Sustainable supply chain
• Community engagement

Environmental Achievements

• More than 98% of coffee produced with renewable electrical energy
• More than 66% of the packaging of the Group’s entire product portfolio recyclable
• Reduced CO2eq emissions per coffee processed by 16% compared to 2021
• 350,832 tCO2eq offset

Social Achievements

• Publication of the Diversity & Inclusion Manifesto
• First level of EDGE certification for gender equality for the 4th consecutive year
• Average training hours per employee increased by 7.4 hours vs. 2021
• Over 95% of coffee suppliers assessed on the EcoVadis platform; achieved EcoVadis Gold Medal (score 70/100)

Governance Achievements

• Publication of the new Code of Ethics
• No cases of non-compliance with laws or regulations in 2022
• ESG risks incorporated into the Enterprise Risk Management (ERM) framework

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions
• Climate change impacts on coffee plantations
• Ageing of farmers and land abandonment
• Limited diversity and inclusion
• Upstream emissions increase
• Non-compliance with deforestation-free regulations
• Scarcity of raw materials for packaging
• Potential for human rights violations along the supply chain

Mitigation Strategies

• Roadmap to Zero
• Sustainable Packaging Roadmap
• Gap Free Program
• EcoVadis supplier assessment
• Collaboration with NGOs (Save the Children, Oxfam, Rainforest Alliance)
• Investments in R&D to enhance coffee biodiversity
• Agroforestry and reforestation projects
• Increased intermodality in transportation
• Development of energy-efficient products and processes

Supply Chain Management

Supplier Audits: Over 95% of coffee suppliers assessed on the EcoVadis platform in 2022

Responsible Procurement

• Code of Ethics
• Supplier Code of Conduct
• Commitment to Human Rights
• Commitment to Children's Rights
• EcoVadis platform for supplier sustainability assessment

Climate-Related Risks & Opportunities

Physical Risks

• Extreme climatic events
• Rising temperatures
• Droughts
• Frosts

Transition Risks

• Non-compliance with climate change regulations

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI Standards (2021), UN Global Compact

Certifications: ISO 9001:2015, HACCP, FSSC 22000, UTZ/Rainforest Alliance, Fairtrade, Confida, Bio-Organic, NOP, Kosher, Halal, ISO 14001, ISO 14064-1, ISO 14067, ISO 45001, EDGE (Level I)

Third-party Assurance: PricewaterhouseCoopers Business Services Srl (limited assurance)

UN Sustainable Development Goals

• Goal 5: Gender Equality
• Goal 8: Decent Work and Economic Growth
• Goal 12: Responsible Consumption and Production
• Goal 13: Climate Action
• Goal 17: Partnerships for the Goals

Lavazza's sustainability strategy is aligned with these SDGs through various initiatives, including the Roadmap to Zero, the Sustainable Packaging Roadmap, the Gap Free Program, and community engagement projects.

Sustainable Products & Innovation

• La Reserva de Tierra range
• Carbon Neutral capsule ranges
• Product ranges with compostable capsules
• Tiny Eco espresso machine (61% recycled plastic)

Awards & Recognition

• EcoVadis Gold Medal
• Top Employers Italia
• Top Employers Australia
• Great Place to Work in Canada (Kicking Horse Coffee)

Environmental Metrics

ESG Focus Areas

• Environmental sustainability and fight against climate change
• Group’s People
• Innovation and circular economy
• Relations with local communities
• Economic growth
• Supply chain

Environmental Achievements

• Direct emissions and indirect emissions from electricity neutralised since 2020 (Scope 1 and 2)
• More than 89% waste recovered and recycled
• 76% recyclable packaging of the product portfolio
• 98% of vegetable waste from coffee production turned into fertiliser
• 97% of coffee produced with renewable electrical energy
• -6% CO2eq direct emissions (Scope 1) vs 2022
• -26% water withdrawals vs 2022

Social Achievements

• International expansion of GAP FREE programme, dedicated to Diversity & Inclusion
• Extended social inclusion program at global level
• Launched Lavazza Volunteer Program
• Top Employer in UK and Italy for the 5th consecutive year
• Kicking Horse Coffee - Great Place to Work in Canada
• +6,000 beneficiaries reached with projects for children’s rights promotion in Vietnam
• 4,133 employees of which more than 97% with permanent contracts
• 2 ethical and social audits at suppliers’ workplace
• Zero injuries at Italian plants

Governance Achievements

• 30% women in the BoD
• Established a Control, Risk and Sustainability Committee
• Implemented a Whistleblowing system
• ESG parameter integrated into Long-Term Incentive (LTI) system
• Completed several acquisitions

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to geopolitical challenges concerning Suez Canal
• Sharp rise in raw material costs and green coffee prices
• Increase in the average age of coffee growers and lack of training on good agricultural practices
• Difficulties in attracting young candidates and employee turnover
• Limited number of women in managerial positions
• Climate change impacts on coffee production
• Deforestation and human rights violations along the supply chain

Mitigation Strategies

• Developed alternative sourcing strategies
• Implemented ESG-linked Loan
• Developed a global Diversity & Inclusion plan revolving around the GAP FREE project
• Implemented strategies for emission reduction and efficient use of materials and resources
• Implemented agroforestry projects and projects aimed at increasing the efficiency of agricultural production and reforestation
• Implemented a three-step approach to climate change mitigation: measurement, reduction, and compensation
• Implemented a Sustainable Packaging Roadmap
• Launched regenerative agriculture projects
• Implemented on-site audits targeting high-risk suppliers
• Launched two long-term projects in Vietnam to combat child labor

Supply Chain Management

Supplier Audits: Over 97% of green coffee suppliers assessed on the EcoVadis platform; second-party, on-site audits targeting high-risk suppliers

Responsible Procurement

• Supplier Code of Conduct
• EcoVadis platform for monitoring suppliers’ sustainability performance
• Collaboration with suppliers on field projects

Climate-Related Risks & Opportunities

Physical Risks

• Extreme climatic events (hurricanes and frosts)
• Chronic physical damage (rising temperatures and effects on arable land)

Transition Risks

• Regulatory changes on emission reporting and reduction
• European Deforestation-free Products Regulation (EUDR)

Opportunities

• Development of energy-efficient products
• Regenerative agriculture practices

Reporting Standards

Frameworks Used: GRI Standards

Certifications: ISO 9001:2015, HACCP, FSSC 22000, UTZ/Rainforest Alliance, Fairtrade, Confida, Bio-Organic, National Organic Program (NOP), Canadian Organic Regime (COR), ISO 14001, ISO 45001, UNI/PdR 125:2022, EDGE - Economic Dividends for Gender Equality (Level I ASSESS)

Third-party Assurance: PricewaterhouseCoopers Business Services Srl

UN Sustainable Development Goals

• Goal 5
• Goal 8
• Goal 12
• Goal 13
• Goal 17

Lavazza Group's sustainability strategy is aligned with these SDGs, focusing on gender equality, decent work, responsible consumption and production, climate action, and partnerships for the goals.

Sustainable Products & Innovation

• La Reserva de ¡Tierra! Cuba coffee with full traceability through blockchain
• Single Serve products with Carbon Neutral certification
• Tiny Eco espresso machine made from recycled plastic

Awards & Recognition

• EcoVadis Gold Medal
• Top Employer in Italy and UK
• Kicking Horse Coffee - Great Place to Work in Canada
• Welcome. Working for refugee integration award from UNHCR