Nespresso: Milestone 1 Evaluation

Nestlé Nespresso S.A. (Nespresso), which produces capsules, coffee makers, and other accessories, was included in the FLA Agriculture Program in June 2022. Since then, Nespresso has been improving its social compliance program, which was co-developed with a certification partner in 2003 and is embedded into the ‘inclusive’ pillar of its Nespresso AAA Sustainable Quality™ Program (AAA Program). It supports quality, productivity, and sustainability, implemented in 18 sourcing countries. Nespresso has kept pace with the updates to FLA standards in the agriculture sector that have been enacted over the intervening years. This report details FLA’s evaluation of Nespresso governance at the headquarters level (Milestone 1). 

Highlights of Nespresso for Milestone 1 – Governance and Alignment include:

• Strong Senior Management Commitment: Nespresso has a strong top-management commitment to the FLA Agriculture Program. The Nespresso headquarters and regional sustainability staff coordinate well to deliver on their commitments. The sustainability teams in all regions (Central America, Latin America, Africa, and Asia) have prioritized the FLA accreditation work and are fully engaged in the activities with FLA staff.
• Responsible Procurement Practices: Nespresso fosters strong cross-departmental collaboration to ensure responsible procurement and sourcing. Suppliers receive comprehensive guidance on the key operational aspects of the AAA Program, including payment processes and terms and premium payment requirements. Farmers are encouraged and provided opportunities to share their thoughts and concerns regarding the impacts of the AAA Program and coffee prices, although coffee prices are dictated by the market fluctuations and not under the control of Nespresso. Additionally, Nespresso works closely with its partners to enhance income diversification and insurance schemes designed to improve farmers’ living income.
• Standards and Monitoring: Nespresso has a centralized approach to its coffee supply chain management. The labor standards are embedded into the AAA Program, a coffee sourcing program designed to procure high-quality coffee while improving the livelihoods of farmers and their communities and protecting the environment. The Nespresso Tool for the Assessment of Sustainable Quality (TASQ), which is used to monitor coffee farmers, includes detailed labor standards that are aligned with the FLA Workplace Code of Conduct for Agriculture.
• Supplier Engagement: Nespresso collaborates closely with its suppliers to implement the AAA Program in 18 countries. Nespresso provides field investments in its suppliers to hire and develop agronomists and social workers to operationalize the program. These agronomists and social workers function as an extension of Nespresso staff to implement the AAA Program standards at the local level. They drive continuous improvement by staying in regular communication with the farmers, providing technical assistance, deploying interventions and capacity building, and conducting annual TASQ assessments.
• Traceability and Risk Assessments: Nespresso has a high level of traceability to farms in all AAA Program countries. Nespresso works with various third-party entities on risk assessments and monitoring, certification, training, and remediation.
• Capacity-Building for Suppliers: Nespresso understands and takes an approach that allows all stakeholders – the company, suppliers, and workers – to play a role in promoting workers’ rights. Nespresso has built supplier training program covering all elements of the FLA Workplace Code of Conduct. Nespresso has also financially invested in supporting its suppliers to hire social workers and female agronomists to support the implementation of the social aspects of the AAA Program. The headquarter-level team supports the tools and information sharing across regional teams. The company is now strategizing and supporting country-level operations to cascade the labor standards to thousands of small coffee farmers and workers across the sourcing countries.  
• Stakeholder Engagement: Nespresso demonstrates strong stakeholder engagement. In 2013, Nespresso established an external and independent multi-stakeholder governance body, the Nespresso Sustainability Advisory Board (NSAB), that advises Nespresso’s sustainability strategy and efforts. It meets annually.