Climate Change Data

Environmental Metrics

ESG Focus Areas

• Economic
• Social
• Environmental

Environmental Achievements

• 100% of electricity from renewable sources
• Significant energy savings achieved through energy efficiency and renewable energy projects (avoided 936 tons of CO2 emissions)
• 99.5% of waste produced was recycled

Social Achievements

• illycaffè was named one of the World's Most Ethical Companies for the fourth consecutive year.
• Launched the Ernesto Illy International Coffee Award for coffee farmers promoting quality and sustainability.
• Trained over 22,173 people through the Università del Caffè.

Governance Achievements

• No reports of violations of the Code of Ethics or the 231 Law.
• Implemented a wide-ranging Enterprise Risk Management project.

Climate Goals & Targets

Environmental Challenges

• Difficult economic times
• Threat of climate change impacting coffee growing
• Economic scenario with contrasting signals in different countries

Mitigation Strategies

• Updated and developed a new Sustainability Plan
• Continued participation in programs like the Global Compact and International Coffee Organization
• Investment in research and knowledge sharing to address climate change impacts on coffee cultivation

Supply Chain Management

Supplier Audits: 136 audits with suppliers

Responsible Procurement

• Responsible Supply Chain Process (RSCP) certification
• Supplier Management System for strategic suppliers
• Supplier Accreditation Portal (being implemented)

Climate-Related Risks & Opportunities

Physical Risks

• Heatwaves, drought, above-average rainfall affecting coffee plantations

Reporting Standards

Frameworks Used: GRI G4 (In accordance-Core)

Certifications: ISO 9001, ISO 14001, ISO 50001, EMAS, BRC, IFS, HACCP, ISO 17025 (Aromalab and Sensorylab)

Third-party Assurance: DNV GL Business Assurance Italy, S.r.l.

Sustainable Products & Innovation

• Soft-can refill system
• Iperespresso drip capsules
• Cold Brew System
• ECO easy capsule opener

Awards & Recognition

• World's Most Ethical Companies (Ethisphere Institute)

Environmental Metrics

ESG Focus Areas

• Social
• Environmental
• Economic

Environmental Achievements

• 100% Electricity coming from renewable sources
• 12,290 Plants and native trees planted thanks to the reforestation project in Támara, Colombia
• Reduced electricity consumption by 3.03% despite a 5.4% increase in roasted coffee output.

Social Achievements

• illycaffè recognized as the World’s Most Ethical Company for the sixth consecutive year.
• 99% of third-level suppliers (producers) compliant with the Responsible Supply Chain Process protocol.
• Launched “Quality in the Cup” project to monitor coffee quality and provide assistance to Ho.Re.Ca. customers.

Governance Achievements

• Established a Sustainability Committee composed of Board members to oversee sustainability issues.
• Maintained certifications: ISO 9001, ISO 14001, ISO 50001, EMAS, BRC, IFS, HACCP, Qualité France.
• Implemented Sourcing Risk Management project to map supply chain risks.

Climate Goals & Targets

Environmental Challenges

• Supply chain risks related to environment, health and safety, social & ethics, compliance, and innovation.
• Child labor in some third-level suppliers in Colombia.
• Risks related to the use of highly toxic phytosanitary products in El Salvador.

Mitigation Strategies

• Implemented Sourcing Risk Management project to identify and mitigate risks.
• Addressed child labor issues through education and awareness programs.
• Undertook in-depth training activities in El Salvador to mitigate risks related to phytosanitary products.

Supply Chain Management

Supplier Audits: 308 audits of suppliers (304 green coffee suppliers)

Responsible Procurement

• Direct relationships with producers
• Knowledge transfer through University of Coffee and field visits
• Above-market prices for quality production
• RSCP certification

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI (In accordance-Core)

Certifications: ISO 9001, ISO 14001, ISO 50001, EMAS, BRC, IFS, HACCP, Qualité France, ISO 17025 (Aromalab and Sensorylab)

Third-party Assurance: DNV GL Business Assurance Italia S.r.l.

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Iperespresso capsules
• 3-kg cans with improved sealing technology
• Easy Capsule Opener

Awards & Recognition

• World’s Most Ethical Company (Ethisphere Institute)

Environmental Metrics

ESG Focus Areas

• Responsible value and sustainable agriculture chain
• Happiness and quality of life
• Circular economy and innovation

Environmental Achievements

• Electricity consumption at the Trieste production site (100% renewable energy) fell by 2.8%
• Methane consumption fell by 0.96% due to machinery replacement
• Water used decreased by 25.5% compared to 2018
• 99.6% of total waste produced was recovered

Social Achievements

• Developed a new model of leadership and corporate culture involving all workers
• Launched the Casas de la Alegria project in Costa Rica providing childcare for children of coffee pickers
• Supported education projects on good environmental practices in Nicaragua, Honduras, Colombia, and Brazil

Governance Achievements

• Adopted Società Benefit (benefit corporation) legal status
• Renewed the Board of Directors in 2019, guaranteeing 60% independent members
• Established a Sustainability Committee

Climate Goals & Targets

Environmental Challenges

• Responding to changes in today’s context as a Società Benefit
• Communicating and creating a culture of sustainability
• Achieving carbon neutrality by 2033
• Multiplying positive impact through partnerships

Mitigation Strategies

• Researching and testing radically innovative agriculture models
• Promoting new models advocating new sustainable agriculture solutions and circular economy models
• Encouraging all actors to unite towards a shared goal
• Implementing the Sustainable Procurement Process (SPP) standard

Supply Chain Management

Supplier Audits: 334 audits in 2019

Responsible Procurement

• Sustainable Procurement Process (SPP) standard

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 14001, EMAS, ISO 45001, ISO 50001, ISO 9001, BRC, IFS, HACCP, AEO

Third-party Assurance: BDO Italia S.p.A.

Sustainable Products & Innovation

• Compostable materials for capsules
• Eco-efficient coffee machines
• Reduced-impact packaging

Awards & Recognition

• World’s Most Ethical Company (multiple years)
• EMAS Award

Environmental Metrics

ESG Focus Areas

• Responsible value chain and sustainable agriculture
• Aspiration for happiness and quality of life
• Circular economy and innovation to benefit the planet

Environmental Achievements

• Introduction of new sustainable disposable materials eliminating around 175 tonnes of plastic per year.

Social Achievements

• Launched numerous projects to support coffee communities in Nicaragua, Honduras, Colombia and Brazil, including education on environmental best practices, integrated agriculture, reforestation, tree planting, and wastewater treatment. The Vivero de Atitude project in Brazil produced over 74,000 plants and benefited over 240 people.
• Supported the hospitality industry during the Covid-19 pandemic.
• Supported the local community through product donations and creation of a Covid sub-intensive care unit in Trieste hospital.

Governance Achievements

• Expanded the Board of Directors in 2020, guaranteeing 50% independent members.
• Updated the Code of Ethics to continually combat active and passive corruption.
• Achieved B Corp certification in April 2021.

Climate Goals & Targets

Environmental Challenges

• Responding to changes mandated by the current context while promoting sustainability values.
• Preparing people for the effects of climate change on coffee cultivation.
• Communicating and creating a culture of sustainability.
• Achieving carbon neutrality by 2033.
• Multiplying positive impacts through partnerships.

Mitigation Strategies

• Researching and testing radically innovative agriculture models.
• Developing a ‘One makes the difference’ communication platform.
• Implementing a multi-year programme to achieve carbon neutrality by 2033.
• Developing projects to transfer knowledge needed to prevent social risks (child labor, forced labor).

Supply Chain Management

Supplier Audits: 267 audits

Responsible Procurement

• Sustainable Procurement Process (SPP)

Climate-Related Risks & Opportunities

Physical Risks

• High temperatures and excessive rainfall damaging coffee plants.

Reporting Standards

Frameworks Used: GRI Standards (In accordance-Core option)

Certifications: ISO 14001, EMAS, ISO 50001, ISO 9001, BRCGS, IFS, B Corp

Sustainable Products & Innovation

• X1 E.S.E & Ground coffee machine
• New compostable paper ESE pods
• New ESE machine
• Milk frother

Awards & Recognition

• World’s Most Ethical Company
• EMAS Award
• B Corp Certification

Environmental Metrics

ESG Focus Areas

• Climate neutrality
• Well-being
• Circular economy
• Sustainable quality
• Responsible sourcing
• Ethics and governance

Environmental Achievements

• Reduced emissions intensity by 9.3% vs 2021
• Reduced energy intensity by 10.1% vs 2021
• Reduced water intensity by 5.0% vs 2021
• Reduced waste generated in plastic by 1.6% vs 2021
• 100% renewable energy for Trieste headquarters
• 76.3% renewable electricity sources overall (down 3.0% from 2021)

Social Achievements

• Launched global talent assessment process
• Implemented initiatives for employee well-being (fuel bonus, healthcare support)
• No incidents of discrimination
• Supported education in coffee-growing communities (Coffee Kindergarten, Coffee Camp)
• Provided training to 1,979 people along the green coffee supply chain (up 15% from 2021)

Governance Achievements

• Renewed Board of Directors in June 2022
• Established Sustainability Steering Committee
• No cases of non-compliance with Italian Legislative Decree 231/2001 or corruption
• Approved “Management Equity Plan 2022-2029” to incentivize and retain key personnel

Climate Goals & Targets

Environmental Challenges

• Raw material availability risk (climate change, geopolitical instability)
• Goods/services supply risk (inflation, supply chain disruptions)
• Production stoppage risk (climate events, energy rationing)
• Market risk (inflation, reduced consumer spending)
• Increased competition
• ESG risks (climate change, social and governance issues)

Mitigation Strategies

• Sustainable procurement policy, long-term agreements with producers
• Continuous monitoring of critical goods supplies, mitigation measures
• Insurance coverage, diversification of energy sources, efficiency improvements
• Pricing leverage, cost control
• Continuous monitoring of competitive landscape
• In-depth analysis of ESG risks, integration into risk management framework

Supply Chain Management

Supplier Audits: 6379 audits

Responsible Procurement

• Sustainable Procurement Process (SPP)
• Code of Ethics
• Code of Conduct
• ILO principles
• UN Global Compact

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events, drought, frost

Transition Risks

• Regulatory changes, market shifts

Opportunities

• Development of energy-efficient products and processes, regenerative agriculture

Reporting Standards

Frameworks Used: GRI Standards, SASB

Certifications: B Corp®, ISO 14001, ISO 50001, ISO 45001, BRCGS Food, IFS Food, EMAS

Third-party Assurance: KPMG S.p.A.

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• X1 Anniversary ECO MODE machine
• Recycled plastic Re-Chair

Awards & Recognition

• World's Most Ethical Companies (10 consecutive years)
• Best ESG Ratings Award (Standard Ethics)
• illy Bar of the Year Award

Environmental Metrics

ESG Focus Areas

• Climate change mitigation
• Biodiversity and ecosystems
• Circular economy
• Own workforce
• Workers in the value chain
• Communities concerned
• Consumers and end users
• Business conduct

Environmental Achievements

• Reduced greenhouse gas emissions by 5.3% to 242,009.5 t CO2eq compared to 2022
• Increased renewable energy share to 37.7% (electricity from renewable sources at 95.5% for the Trieste headquarters and 100% for the Parent Company)
• Reduced energy intensity by 11.3% to 5.5 GJ/t of roasted coffee
• Reduced emission intensity by 8.2% to 10.5 t CO2eq/t of roasted coffee
• Reduced water withdrawals from water-stressed areas to 0.4%
• Launched Arabica Selection Brasile Cerrado Mineiro, the first coffee produced entirely from regenerative agriculture and certified by regenagri®
• Achieved UNI/PdR 125:2022 gender equality certification

Social Achievements

• Implemented talent assessment process
• Launched a four-year commitment to support Food For Soul
• Provided 18,239 hours of training globally (average 15.4 hours per employee)
• Improved customer satisfaction index (CSI) to 4.5/5 in Italy
• Won first place in Italy's 2023/2024 Best Customer Service Award

Governance Achievements

• 55% of the Board of Directors are women
• Implemented an annual self-assessment process for the Board of Directors
• Established a Diversity, Equity & Inclusion (DE&I) Committee
• Updated the Code of Ethics with a specific focus on gender equality
• No cases of non-compliance with Italian Legislative Decree 231/2001 or episodes of corruption

Climate Goals & Targets

Environmental Challenges

• High volatility in green coffee prices
• Supply chain disruptions due to geopolitical tensions
• Inflationary pressure on green coffee prices
• High number of plantations not complying with illycaffè's minimum requirements (mainly related to labor contracts in Brazil)
• High number of plantations with non-compliant wastewater treatment systems
• Risks associated with staff motivation and retention
• Increased market competition
• Risks relating to the environmental impacts of products (especially Iperespresso plastic capsules)
• Risks of failure to achieve pre-established CO2 emission targets
• Risks on the sustainability of production processes and of the supply chain
• EU regulatory developments in terms of due diligence
• Risks relating to the protection of own brands
• Reputational risks
• Liquidity risk
• Commodity price risk
• Exchange rate risk
• Interest rate risk
• Geo-political context

Mitigation Strategies

• Sustainable Procurement Process protocol
• Direct and lasting relationships with coffee producers
• Training initiatives for producers on regenerative agriculture and local community well-being
• Continuous monitoring of supply chains
• Collaboration with national and international institutions
• Talent assessment process
• Mitigation actions with recovery, recycling and reuse initiatives for Iperespresso capsules
• Decarbonisation strategy
• Internal and external initiatives to support decarbonisation
• Annual updates of environmental, employment, and corporate and product ethics risks analysis
• Engagement with suppliers on decarbonisation issues
• Periodic monitoring of intellectual property
• Mitigation and crisis management tools
• Constant monitoring of cash flows, borrowing requirements and liquidity
• Predefined price agreements with producers and use of derivative financial instruments
• Centralisation of activities related to exchange rate risk management
• Financial Risk Policy
• Ongoing control on exposure for operational and strategic areas and definition of mitigation or adaptation strategies
• In-depth analysis on inside-out risks and integration of assessment on employees, environment, ethics and governance

Supply Chain Management

Supplier Audits: 427 audits carried out from plant to cup in 2023 (+12.7% vs 2022)

Responsible Procurement

• Code of Ethics
• Sustainable Procurement Process (SPP)
• Direct relationships with producers
• Premium price for superior quality coffee
• Knowledge transfer through Università del Caffè
• Support for school facilities and educational offers

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (drought, frost)
• Plant diseases

Transition Risks

• EU Regulation on Deforestation-free products

Opportunities

• Development of energy-efficient products
• Regenerative agriculture

Reporting Standards

Frameworks Used: GRI Standards 2021, SASB Standards, UN Global Compact

Certifications: ISO 9001, ISO 14001, BRCGS Food Safety, IFS Food, ISO 50001, ISO 45001, B Corp®, RegenAgri®, UNI/PdR 125:2022, Colombia PGI, Kosher, Halal

Third-party Assurance: KPMG S.p.A. (limited assurance)

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Arabica Selection Brasile Cerrado Mineiro (regenerative agriculture)
• Re-Chair (recycled Iperespresso capsules)

Awards & Recognition

• EE rating from Standard Ethics
• 2023 Innovation Award from UNIDO
• Italy's 2023/2024 Best Customer Service Award