Why British coffee and tea maker Taylors prioritizes supplier resilience

Businesses no longer need to be convinced that the world is changing at an alarming rate. That’s old news. Today’s companies understand that global warming is happening now, that weather patterns are increasingly unpredictable and that millions are at risk from rising sea levels in some parts of the world and water shortages in others.

After the 2015 Paris Agreement, businesses also know that in many countries political support for taking action on climate change is growing. Even in countries where political action is stagnating, there is a significant discerning, well-informed and increasingly worried electorate. Where once the cost of inaction was outweighed by the cost of action, it’s a very different story today.

What is less well understood is how these factors — climate change, climate regulation and customer demand — will affect their businesses and what they, as companies, need to do to safeguard the future of their operations.

So how can a business capitalize on the opportunities, mitigate the risks and navigate its way through so much environmental, economic and social uncertainty?

Sustainability as a commercial imperative

For many businesses, particularly those reliant on global exports and commodities, a big part of the solution lies in building resilience across the supply chain. Ensuring the continuity of supply is a strategic must for all long-term planning.

This is no truer than in the tea and coffee sectors, where the impacts of climate change already affect production in some areas — a problem compounded by migrating workforces and increased competition for land, energy and water. Rural poverty is also rife in many farming communities and there are unsettling reports of forced labor and human trafficking.

For companies such asTaylors of Harrogate, the family-owned company behind the Yorkshire Tea brand, quality product is the lifeblood of the business. Without its steady supply, the company simply will not survive.

Taylors collaborates with key suppliers to identify and address sustainability challenges; establishing long-term contracts that provide suppliers with security, funding and input on quality.

After years of building a reputation for responsible trading, the U.K.-based company established a bold and ambitious sourcing strategy in 2012 based on a vision "to guarantee the long-term supply of quality tea and coffee in a safe, ethical and sustainable way, enabled by relationships."

Taylors' Sourcing Approach, which formally recognizes the inextricable link between quality, sustainability and the value of relationships, has led the company to completely transform the way it works with its suppliers and growers, and go far beyond environmental compliance and good practice.

This has meant collaborating with its key suppliers to identify and address sustainability challenges; establishing long-term contracts that provide suppliers with security and access to funding; and working together on quality and continuous improvement.

At the same time, Taylors, a comparatively small company with a loud voice, has been using its influence to leverage change at the industry level. It is an active participant in theEthical Tea Partnership(ETP), World Coffee Research, Rainforest Alliance and other industry bodies.

In recognition of its achievements, Taylors was awarded a prestigious Queen’s Award for Sustainable Development in the U.K. in April.

泰勒斯可持续发展负责人西蒙·霍奇金（Simon Hotchkin）表示，其供应链中的建筑弹性是基于强大的商业案例，而不是仅仅是“做正确的事”的愿望。

"None of this has been about philanthropy or CSR. This is about sustainability being a commercial imperative for the business, about ensuring business continuity for everyone in the value chain," he said.

"The strength of our relationships means that producers benefit from our long-term commitment to purchase, meaning they can plan into the future with some sense of security. They also benefit from transparent pricing mechanisms designed to reward quality, and support in coping with sustainability challenges like the effects of climate change, which ensures that they can continue to produce a quality product. In return, we get a secure supply of that quality product and come to be seen as the buyer of choice. It works both ways."

Partners, not clients

Stakeholders have different interests and incentives based on where they sit in the supply chain. For Taylors, it is about securing supply to maintain and grow its business. At the other end of the spectrum, farmers are most interested in improving their livelihoods and community development, which is dependent on a fair and consistent income for their crops and the necessary tools and support for adapting to climate change.

For Hotchkin, the mutual understanding of each other’s needs and the realization that issues such as climate change are a common threat unites all parties.

"It’s about having a shared language, and developing our plans together," he said. "Traditionally tea and coffee buyers go around the world tasting and quality checking, deciding whether they want to buy or not. It’s tactical and transactional, rather than future focused — it’s also time-consuming and doesn’t establish trust and commitment.

"By having three- or even five-year contracts in place it pays to invest in those relationship so that our growers really understand our specifications, and we understand their needs and the context in which they are operating. As such, we regularly have face-to-face contact to build these close working relationships, and have processes in place that enable near instant feedback."

Taylors’ willingness to face up to 'very difficult' problems in its supply chain stands the company apart.

John Gitao, factory unit manager at Makomboki Tea Factory, said Taylors’ approach to working with its supply chain has "greatly improved" the quality of lives of the local communities and tea farmers in terms of health, income and the local environment.

他说：“在我20年的茶业经验中，没有其他茶购买者价值他的产品来自泰勒人。”“这家公司一直在不断地试图通过奖励质量，通过能源效率干预降低成本，通过水提供支持，为有需要的和弱势儿童提供助学金以及以高价购买茶水来改善我们的关系。”

Cutting carbon

For an industry so acutely affected by climate change, it follows that Taylors is committed to becoming carbon neutral by 2020. With 67 percent of the company’s overall carbon footprint attributable to the agronomy and processing of tea and coffee in countries of origin, a lot of focus has been on training producers on energy monitoring, efficiency and management.

In Kenya, one collaborative project involving the Ethical Tea Partnership (ETP), Mars Drinks, GIZ (the Deutsche Gesellschaft fuer Internationale Zusammenarbeit GmbH) and 10 factories under the control of theKenya Tea Development Agency(KTDA), has reduced energy consumption by more than a million kilowatt-hours, saved circa 20,000 trees and cut costs by about $300,000. The next phase of the project aims to reach all 67 of KTDA’s factories before 2019, benefitting 600,000 farmers, and saving 300,000 trees and $5 million.

Taylors also has helped establish and fund a customized carbon-finance initiative withNatural Capital Partners, specialists in working with corporations on market-based solutions for their environmental goals. (Full disclosure: I am employed by Natural Capital Partners as a writer.)

社区造林计划的目的是在肯尼亚山山麓的泰勒斯供应商心脏地带的茶农中种植一百万棵树。鼓励参与的农民种植土著树种，可提供多种益处，例如经济作物，牛，阴影和土壤养分的饲料。他们被教导如何最大化土地用途以提高生产率，增强生物多样性并适应气候变化的影响。后来的第二阶段将看到该公司在其咖啡业务中解决类似问题。

"We could have gone carbon neutral pretty much overnight by buying credits from any carbon-finance project," Hotchkin said. "But for us, this has never been about getting the badge of approval. It’s a farmer livelihoods project, it’s action on climate change, it’s a direct investment in our long-term security of supply — it’s the way that we get it and the relationships we build that counts.

“Natural Capital Partners have worked with us to develop a program that truly delivers multiple benefits in the heart of the community in which we operate, and is contributing towards a sustainable landscape.”

自然资本合作伙伴全球市场负责人乔·巴克莱（Joe Barclay）表示：“越来越多的企业正在与我们谈论减少供应链的影响，而在肯尼亚这样的项目非常适合。就像“锚租户”一样；它们使该项目能够起步并发挥作用。但是，它与众不同的是农民参与建立哪些活动将帮助他们改善生计，并在很长一段时间内对气候变化更具弹性学期。”

A beacon of excellence

Sarah Roberts, executive director for the ETP, said Taylors’ willingness to face up to "very difficult" problems in its supply chain where there are no obvious or easy solutions stands the company apart.

她说：“如果其他一些公司可能不愿参与解决极端贫困和人口贩运等问题，那么泰勒人总是愿意将其头放在栏杆上。”

"It’s like they’re saying, 'We know we’re not going to be able to change this acting alone, but we’re absolutely determined to be part of the effort to get it changed.' It’s an extremely bold and courageous approach, and if the industry is going to succeed in the face of so many challenges, we’re going to need a lot more companies like Taylors."

For more information on Taylors Sourcing Approach, the partners it works with and the places and people the company supports, visitexplore.bettysandtaylors.co.uk.