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Deforestation,
depletion, and
contamination of water
resources pose a high
reputational risk for
companies involved
in Vietnam’s coffee
production and trade.
Regulatory risks
The extensive use of pesticides and fertilisers on coffee plantations, as well as
waste produced during the processing of coffee beans, contaminates waterways
and causes serious environmental threats. Awareness with regard to
consequences for the environment and people is growing among government
authorities. To make coffee farming more productive while also reducing environmental
impacts, government, farmers, traders, and global food industries
are beginning to see the need to develop sustainable practices and work with
social and conservation groups to find solutions 131 . By 2020, the Ministry of
Agriculture and Rural Development plans on reducing the area for coffee beans
from the nation’s current coverage of 530,000 to 500,000 hectares, 20,000
of which are to be located in the provinces of the Central Highlands and Binh
Phuoc, in an attempt to make coffee production more sustainable and effective.
Reputational risks
Vietnam’s intensive coffee monoculture plantations are associated with immense
environmental costs. Deforestation, depletion, and contamination of water resources
pose a high reputational risk for companies involved in Vietnam’s coffee
production and trade. Currently, only 10% of the coffee grown in Vietnam meets
following sustainable standards (in comparison to 75% in Latin America) 132 .
Vietnam is one of the
biggest coffee suppliers
to Germany. Much
of it is irrigated and
droughts may threaten
production in the
future.
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