1. April 2012
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2. On Sustainability and Social Responsibility
in the Coffee Industry
by Michael Rice
T
he terms sustainability and corporate social responsibility (CSR) are It is that fundamental need to respect the dignity of individuals that forms the
getting a lot of attention today. The debates over climate change have foundation of the many initiatives and proposals aimed at improving global
focused the global society on our environmental and our energy ethical behavior, especially in developing countries. The U.N.’s Declarations
futures. The green building movement has gained incredible traction with of Human Rights speaks to respecting and honoring the dignity of all. In
the LEED (Leadership in Energy and Environmental Design) program. The the coffee industry, the discussions over fair pricing and distribution of the
promotion of a multitude of social causes from cancer awareness to treatment wealth generated by this $100+ billion dollar industry beckon the question
of workers in developing countries can be seen every day. And while it is clear of how we respect and honor the dignity of the individual, especially those
that much is going on, there is much more to be done. that are most vulnerable. Fair trade coffee and the education of consumers in
coffee’s Third Wave are all part of this dialogue. The success that the industry
Andrea Illy of illy Caffè highlighted some of the sustainability issues can generate in these areas will determine how effectively it can help promote
impacting the coffee industry at the recent National Coffee Association the social growth that Mr. Illy described as part of social sustainability.
Convention in Charleston, SC. Mr. Illy started the attendees with the UN’s
Bruntland Commission’s 1987 definition of sustainability, “Development that Another element of social growth is personal development. How well do our
meets the needs of the present without compromising the ability of future social systems allow people to reach their full potential as human beings? An
generations to meet their own needs.” interesting way to examine this can be found in Abraham Maslow’s hierarchy
of needs, which Mr. Illy gave us as food for thought. According to Maslow,
The concept of sustainability is part of the broader concept of corporate social individuals need to successfully fill a hierarchy of needs on their way to
responsibility. While there are many definitions of CSR, they all in achieving what he called “self-actualization.” Others have variously
some way involve organizations take responsibility for their defined this as personal fulfillment, self-awareness, openness
impact on society and on the environment. They usually “Development to truth, and true contentment. But, to be able to fully
embody going beyond legal requirements to improve the
quality of life for the company’s stakeholders, which
that meets the achieve self-actualization, one must progress through a
series of lower needs starting with physiological needs
include not only company employees but the broader needs of the present (food, water, sex, sleep, etc.). Once physiological needs
community, locally and globally. At one point, CSR was without compromising are met, security and safety needs (shelter, protection
thought of as philanthropy, charitable contributions to from danger, job security) must be addressed. The
organizations that management thought were worthy the ability of future gen- next need is for love and belonging (affection,
recipients in the community. However, today, the erations to meet their friendship, community). The last need that must be
concept transcends specific causes and communities satisfied before pursuing fulfillment is esteem (both
(although charitable giving of time, treasure, and talent is own needs.” self-worth and the esteem of others).
still an element of CSR) and contemplates how companies
fundamentally operate and carry out their core functions, not When individuals are not able to fully satisfy a lower level
only for the improvement of society but also for the improvement of need, it becomes difficult, if not impossible to progress toward
the company itself. self-actualization, personal fulfillment, and true contentment. Because
of personal hurts we have experienced in our lives, we all have some type
The mantra of the sustainability effort has been the triple bottom line. This of “holes in our souls” that lead us, and our companies, (since companies
three-legged stool has been described in several different ways. There are the are essentially collections of individuals brought together under an
3”Ps” of sustainability: People, Planet, and Profit. And there are the 3”Es” organizational structure) into temptations that compromise our abilities to
as well: Environmental, Economic, (Social) Equity. Mr. Illy talked about act in socially responsible and sustainable fashions.
3”Cs”, an interdependent cosmos: Economic Cosmos, Social Cosmos, and
Environmental Cosmos. In addressing these different cosmos, he spoke about Not surprisingly, much of this poor ethical behavior can be traced back to
shared value, growth, and respect. unhealthy attempts to satisfy unmet needs that usually manifests itself in
actions that disrespect the dignity of others. One can easily identify four
Shared value speaks to the need to find common ground that balances, and great temptations that lead to most unethical behavior in business: sex,
possibly constrains, the drive for profit with the fundamental respect for the money, power, and honor. Interestingly, each of these temptations can be
dignity of the individual and the dignity of the environment for the benefit connected to one of Maslow’s lower four needs. Inappropriate desires for
of the long term. Shared value and sustainability do not ignore the need for physical pleasure, be it sex, gluttony, or any physically addictive behavior, that
profit; they just try to place in perspective vis-à-vis the people that work to disrespect others or disrespect ourselves, are physiological issues. Excessive
produce this profit and the environment from which these profits come. desire for money or material goods at the expense of the dignity of others
relate to security. Unethical use of power can be associated with belonging.
The term respect is fundamental to sustainability and CSR, and to ethical Esteem issues can result in people going to extreme lengths to be honored
behavior in its essence. Whether it is through a secular, natural law at the expense of others. Exploring these connections more deeply can
philosophy or from a religious belief in the inherent value of the human provide insights into the roots of disrespect and unethical behavior. And then
person, respect for the dignity of the individual is the fundamental committing to those values, both individual and corporate, that truly respect
underpinning of a healthy society. And it is precisely when this dignity is the dignity of individuals and rethinking organizational structures and
violated that the seeds of social and environmental turmoil are sown. The management practices to replace exploitation with empowerment will be the
philosopher, Immanuel Kant, privileged us with the thought that we should underpinnings of a responsible, sustainable enterprise.
all, “Act in such a way that you treat humanity, whether in your own person
or in the person of any other, never merely as a means to an end, but always at
the same time as an end.” People need to be treated with respect because they continued on page 32
30 deserve it.
April 2012

3. Social Responsibility
continued from page 30
Respect for the environment comes right after the respect for the individual.
As Mr. Illy demonstrated to convention attendees, “good agronomical
Ted Smithers – In Memoriam
practices will maximize profits to the growers and benefits to consumers On March 28, 2012, the world marked
without harm to the environment.” The keys to this transformation are a the passing of Ted Smithers, one of the
long-term perspective and education (both of consumers to recognize and be great men of our industry and possibly
willing to pay a premium for higher quality and of producers to develop and one of the least known. Kerri and I are
internalize a longer term perspective). priviledged to have known Ted person-
ally for many years and came to know the
Thus, a long-term integrated commitment is essential to successful abiding strength and gentleness of true
implementation and achievement of these principles of sustainability and greatness.
CSR. Such a commitment means that companies integrate these tenets into
As the husband of Linda Smithers, Ted
their core values and their strategic planning. It means that they align their
willingly stayed in the background as
objectives and their core competencies to produce both the motivation and
Linda built her career in coffee – first
the resources to accomplish these goals. And, most importantly, it means with Susan’s Tea and Coffee, a small chain
that both employees and company management, and especially management, in Akron, Ohio and then further as Linda became President of the
are committed in both word and action. There is nothing that will derail a SCAA, and eventually a leading marketer of green coffee from Daterra
sustainability initiative or a CSR effort faster than management giving only Coffee, Brazil.
“lip service” to it.
But Ted was also an intellectual and business force of nature whose
Such efforts require time, patience, and new perspectives, particularly a passion for coffee unavoidably led him to delve deeper into coffee
longer-term perspective. Unfortunately, individuals and companies are and café management with the same enthusiasm with which he
frequently tempted by quick short-term gains and shirk their responsibility approached all things in his life. Ted served on the technical stand-
to their fellow employees, their company, or society at large in the pursuit ards committee of the SCAA for a number of years, and through that
participation learned a deep understanding of our industry and its
of immediate gratification. Oftentimes, people forget that the purpose of a
nuances.
business is to generate long-term wealth.
Many who met Ted Smithers did not know that
However, when companies do live and act in a socially responsible manner, he was an accomplished business person in his
they often find that their actions not only benefit society but also benefit own right who helped guide Smithers-Oasis into a
themselves in a number of areas. These companies are better able to recruit world-class industrial Company into a world-class
and retain talented employees. People want to work for companies they can leader in the floral foam industry. Founded by
trust, companies that respect them, and companies they believe are socially his father in 1954, Smithers Company remains a
responsible. It is no surprise that companies in the “Top 100 Best Companies leader in products for the floral industry world-
to Work For” often perform better than the average corporation. wide. The same values that Ted carried in his Ted with his father
personal life are reflected in the continuing opera- and brothers
Companies also find that being socially responsible also resonates with tion of the Smithers Company – a deep focus on
corporate and social responsibility and a high degree of integrity and
more and more consumers, giving companies another win-win opportunity,
direct involvement.
contributing to society while enhancing brand loyalty and customer
satisfaction. Combine this with motivated employees and you have a recipe Ted recently finished a book about his military experiences during
for financial success. This is part of the “shared value” that Mr. Illy addressed. World War II titled “Lucky to Be Here,” where we are introduced to a
Ted Smithers few knew. A hero of the war, Ted landed in Europe on
Other benefits include an improved risk profile that comes both from D-Day and during his deployment, he was awarded the Silver Star and
proactive measures of a responsible culture that can avert scandals of abuse the Bronze Star for valor and heroism beyond the call of duty, as well
and from a reservoir of good will than can help get a company through an as a four Purple Hearts for wounds received in action. He was part
unexpected crisis. Financial markets like responsible companies because their of the liberation of Dachau Concentration Camp and ultimately the
risk profile is lower and studies have shown that those companies that rate defeat of Nazi Germany.
high in ethical behavior and social responsibility in the eyes of society usually
perform better financially as well. Therefore, whether it is the 3Ps, the 3Es In truth, I believe that we are the lucky
ones for him being here for us. Thanks for
or the 3Cs, embracing the tenets of social responsibility and respect for the
the humor and the wisdom. 100% of the
individual and for the environment can create economic success, which can,
proceeds from the sale of the book will go
in term, create new resources to even further propagate a sustainable society. to the Wounded Warrior Project.
As we move through coffee’s Third Wave and into the Fourth, all participants Join us in celebrating Ted’s life and support
will find opportunities to advance social and environmental sustainability Linda in this time of loss. Kerri and I were
in ways that can meet the needs of long-term economic sustainability. The lucky to get to know Ted well. His passing
question is, “How quickly and how passionately can the industry rise to the is a great loss to all of us but it can be
challenge?” said that he lived a true and good life and
contributed to making the world better and
Michael Rice is Adjunct Faculty at DeSales University in Center Valley, PA brighter by his being here.
where he teaches courses on Ethical Issues in the Workplace, including topics of
Corporate Social Responsibility and Sustainability. Mike is also Senior Product
Marketing Manager for Follett Corporation, a leading manufacturer of ice
machines, ice and water dispensers, and ice storage and transport equipment
focused on promoting health, safety, and well-being in foodservice, healthcare,
and office environments. Contact Mike at mrice@follettice.com.
Linda Smithers, John Conti, Janet Conti, and Ted Smithers in Brazil
32
April 2012