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What Does the Word "Sustainability" Mean for Big Companies?

You know what happens when a trendy word or phrase gets used over and over: it starts to lose meaning. This abuse of terms, if you will, almost always creates confusion, and often does serious damage.

It's precisely what I fear about the word "sustainability" right now. When everything is called sustainable, then what really is? Nearly 25 years have passed since the U.N.'s Bruntland Commission captured the term's true essence and implications as, "development that meets the needs of the present without compromising the ability of future generations to meet their own needs."

Think back to the 1990s, when an organic label seemed to magically appear on anything raised on a farm and offered for sale. The inevitable soon happened: news reports appeared about products falsely labeled as organic, putting responsible producers at risk, as increasingly skeptical consumers questioned any product staking such claim. The USDA came to the rescue in 2002 with its organic certification and seal program, establishing four levels of permissible organic claim-making for marketing purposes. The EU was a decade ahead of the U.S., regulating organic produce starting in 1992.

Sustainability stands at a crossroads right now. In the organic foods sector, consumers and producers alike have been fortunate that the government stepped in and provided the equivalent of a regulatory bailout. But in the case of sustainability, regulators have been slow to act, leaving it to industry to develop credible, meaningful, independent certification mechanisms.

Let me be clear about terms. I'm not just addressing environmental sustainability. (The Federal Trade Commission is already proposing tougher guidelines for environmental claims by marketers.) I'm taking about a broader notion of sustainability that includes social and economic equity right alongside environmental responsibility, serving a triple bottom line.

The key is acting early—acting now—before the confidence of consumers, investors and other stakeholders is irreparably damaged. The best rescue of sustainability's meaning and power is one that is never made.

The coffee industry provides a seminal example. "Sustainable" can mean just about anything a roaster or a brand wants it to mean. Farming practices, processing methods, purchase models: the list goes on. Simply choose the one or ones that apply, and call your coffee sustainable. There are responsible certifying bodies bringing meaning and order to some of these areas, imposing discipline and creating a measure of value. But the problem remains that only certain aspects of coffee's sustainability are evaluated, and even within each aspect there can be competing definitions of the term.

Consequently, a genuinely holistic approach to sustainability is required: one that creates value throughout the entire supply chain. And in order to do that we must focus on raising quality. Fostering solidarity with a cause like raising farmers' incomes is critical, but not sufficient on its own as a mechanism. This is why Illy has argued for a standardized, farm-to-cup definition and certification of coffee sustainability for quite some time. Our 20-year operating principle is that the supply chain and the idea of sustainability go hand-in-hand, working together to create lasting value for farmers, consumers and other stakeholders.

By perpetually seeking higher quality, a cycle goes into motion, creating sustainable value for every player. The result is long-term viability in lockstep with ever-increasing quality in the cup. The critical, initial factor is relationships with farmers, from whom we directly purchase coffee at significant premiums in exchange for meeting strict quality standards, and with whom we share knowledge at no cost. From there, all other supplier relationships and virtually every operating procedure is scrutinized under specific quality social, environmental and safety objectives, With a replicable model and definition of sustainability in place, the next step is independent certification. Here, the coffee industry has historically erred in placing most of certification's burdens on the weakest actors, the farmers, who must invest precious dollars to earn certification and then keep spending to stay certified. There are, however, some ideas being explored to address this inequity.

The leading international, independent certifying body, Det Norske Veritas (DNV), which has a stated commitment to safely and responsibly improve business performance, shares our belief that the entire supply chain needs to be measured for valid sustainability certification, and that economically stronger players must shoulder the costs. DNV has introduced a Sustainable Supply Chain Certification for coffee that is available to the entire industry. The standards are necessarily tough. My company had to apply like any other, and undergo rigorous evaluation of numerous key performance indicators. After a two-year process, we recently received certification.

DNV has designed its certification scheme to apply to any industry's supply chain. Broader adoption and smart marketing of a powerful certification symbol (perhaps DNV Sustainable Certified) will create widespread understanding of what sustainable agriculture means, and place the power to demand genuinely responsible production squarely where it belongs: in the consumer's hands.

Andrea Illy is Chairman and CEO of illycaffè S.p.A. (commonly known as illy), representing the third generation of Illy family members to lead the company.