as at 31 December

Impact Report 2023

ANNIVERSARY
The Impact Report 2023 celebrates
the illy Art Collection signed by Judy Chicago,
a multifaceted American artist and pioneer
of the Feminist Art Movement.

For her works, Judy Chicago has used

a range of vivid and vibrant colours to illustrate
the transition from the social constraints histo-
rically imposed on women to a place
of cultural and creative freedom.
 as at 31 December

Impact Report 2023

 illycaffè S.p.A.

“We have decided to include in the company's articles

of association the commitment to perpetuate the
business model of the stakeholder company to reaffirm
our business philosophy, which is that of being a social
institution that pursues its stakeholders' quality of life.”

Andrea Illy, Chairman of illycaffè

2
 Impact Report as at 31 December 2023

Introduction and objectives of the document

In 2019 the adoption of the status of "Benefit Benefit Corporations have two fundamental
Corporation" (as per Italian Law No. 208 of 28/12/2015, characteristics:
paragraphs 376-384) was a step to crystallise the guiding a. protect and align the mission: they express their
principle of doing business of illycaffè: operating as a attention to all stakeholders in the corporate purpose
stakeholder company based on a model of sustainable of their articles of association, balancing the interests
development that, through the sharing of the value of shareholders and the interests of the community;
generated (economic sustainability), harmoniously
b. measure what matters: they measure their results
pursues its own growth and a positive impact on
in terms of positive impact on society and the
the communities it operates in (social sustainability,
environment with the same completeness and with
environmental sustainability).
the same rigour used for economic and financial
results. They report annually on their activities through
With this evolution, illycaffè confirms its choice of
an impact report, which describes both the actions
growing by operating in a responsible, transparent
taken and their plans and commitments for the future.
and sustainable manner for the communities it
interacts with. It promotes a way of doing business
Consistent with this approach, illycaffè has identified
oriented towards the common good and capable
its "Impact Manager", a person responsible for the
of giving the company competitive advantages,
pursuit of the functions and tasks aimed at pursuing
combining economic-financial targets with social and
the purposes of common benefit, as per the
environmental objectives to be pursued in synergy
regulatory provision of Article 380 of Italian Law No.
with a clear long-term view.
208 dated 28 December 2015 (2016 Stability Law).
Besides performing preliminary, proposal and advisory
functions in favour of the Board of Directors in relation
to sustainability assessments and decisions, the
Sustainability Committee approves the common benefit
goals and monitors the projects during the year.

The common benefit goals reported below arise from

compliance with the aforementioned Italian Law
208/2015 on Benefit Corporations, and specifically
paragraph 382: “[…] the benefit corporation prepares an
annual report concerning the pursuit of common benefits,
to be annexed to the company financial statements […]".
The Impact Report includes a description of the
specific objectives achieved during the year and the
new objectives to be pursued in the following year.
The document concludes with a section dedicated to
representing the score that illycaffè, B Corp® since 2021,
obtained by measuring itself against the standard used
by certified B Corporation® companies.

3
 illycaffè S.p.A.

The purposes of common benefit

As a Benefit Corporation, illycaffè operates in a Circular economy and regeneration of the
responsible, sustainable, inclusive and transparent biosphere.
manner towards people, local communities and the
environment, cultural and social assets and activities, In their declination, these three areas of action
entities and associations. It produces social and are integrated with the company’s path towards a
environmental shared benefits, which contribute to the progressive reduction of climate-altering gas emissions
growth of economic value for stakeholders, through and testify how the transition to Benefit Corporation
the search for well-being, the circular economy and the was the natural evolution of the approach adopted by
regeneration of the biosphere. the company so far. As proof of this, illycaffè adheres to
CO2alizione Italia, the first work and sharing platform
The guiding principles of its work are: in Italy for companies committed to climate neutrality,
the interdependence of environmental, economic based on an innovative model of stable collaboration.
and social sustainability; The companies participating in this initiative are
the need for the ecological transition towards a committed to making the pursuit of climate neutrality
regenerative model, which involves the transition objectives in line with the European targets integral
to renewable energy, agro-ecology and circular to their Articles of Association, thus undertaking this
economy; purpose over time with a priority equal to that given
innovation and continuous improvement as a process to profit. This integration confirms the shareholders'
of change. intention to establish a clear and unequivocal direction
to preserve the climate balance, assigning a new and
In accordance with these principles, the areas of innovative mandate to current and future management.
intervention incorporated in the articles of association
and on which the company focuses its efforts are as Again in 2023, illycaffè is committed to describe how,
follows: through its practices and actions, it contributed to the
Creation of economic value for stakeholders; achievement of its own common benefit purposes and
Pursuit of well-being, understood as health and how, in 2024, it will act in accordance with the new
happiness; purposes described above.

4
 Impact Report as at 31 December 2023

Creation of economic value for stakeholders

Goal 1

Contribute to reducing the risks of the coffee supply chain, promoting

actions for the adaptation of coffee cultivation to climate change.

Climate change is one of the main risks in coffee Once the tool was finalised, data collection activities
growing. For this reason, the company is strongly were launched, starting from the Brazilian supply
committed to developing a model that makes it chains. This exercise allowed illycaffè to achieve a
possible to assess the real impacts of the various scope 3 modelling devised on primary and non-
supply chains on the biosphere and a strategy that, inventory data. Furthermore, the definition of a
starting from the results of the aforementioned calculation methodology and the identification of
model, allows to reduce emissions deriving from a clear baseline allow illycaffè to:
the agricultural phase of the value chain. scientifically record the results of the emission
reduction plan;
Development of a model for assessing validate the effectiveness of regenerative
the impacts of coffee-growing supply practices identified by the company and
chains on climate change considered more scalable from an agronomic
In 2022, illycaffè worked on the evolution of the point of view and sustainable from an
tool used by its technicians to conduct audits on environmental viewpoint.
growers' land. Specifically, this was equipped with
a module in preparation for modelling the emission
impacts of coffee growers.
This integration of the data collection tool for the
calculation of green coffee emissions/removals1
took place in accordance with the following
standards:
GHG Protocol2 Land Sector and Removals for
rules to be respected regarding the quantification
of carbon emissions and removals from the agri-
food sector;
ISO 14064 - Carbon Footprint of Products for
accounting rules regarding the product Carbon
Footprint.

(1) Capacity to remove and store carbon from the atmosphere.

(2) International standard for the accounting of greenhouse gases.

5
 illycaffè S.p.A.

Development of a decarbonisation Carbon sequestration: regenerative agriculture

strategy for the agricultural phase based can contribute to carbon sequestration in the
on regenerative practices soil, thus contributing to efforts to contrast
Regenerative agriculture is considered a promising the accumulation of greenhouse gases in the
model for the adaptation of crops to systems more atmosphere. Well-managed soil can act as a
resilient to climate change. This approach focuses carbon reservoir. For example, the application
on promoting soil health, biodiversity and the of compost and the replacement of synthetic
sustainable use of natural resources. crop protection products with organic products
contribute to both reducing greenhouse gas
Improving soil health: regenerative agriculture emissions and increasing carbon stock in the soil.
places a significant emphasis on soil health.
Keeping the soil covered with cover crops illycaffè believes that this is the model to be
and minimising tillage contribute to improving pursued in the ecological transition that the
its structure, its ability to retain water and its company is stimulating along all its supply chains.
fertility. For this reason, a dedicated team of agronomists
Increasing biodiversity: by integrating different is continuously working on the development of
crops and encouraging the presence of wild regenerative models aiming to create agricultural
plants, flowers and natural habitats, regenerative systems that are more sustainable, resilient and
agriculture promotes biodiversity. This diversity adaptable to climate change challenges in the
can contribute to creating more robust and less medium and long term.
disease-prone ecosystems.
Water conservation: practices such as rainwater
management can help reduce soil erosion and
improve the soil's ability to retain water. This is
particularly important in environments affected
by climate change, where extreme weather
events, such as heavy rains or periods of drought,
can occur.
Reduced dependence on chemical fertilisers and
pesticides: by promoting the use of compost
and organic fertilisers, regenerative agriculture
promotes more sustainable and ecological
agricultural practices.
Increased crop resilience: crop diversification,
such as grassing of the space between coffee
rows with different essences, can increase crop
resilience to environmental stresses. Crops can
better adapt to unforeseen climate changes,
such as temperature changes, irregular rainfall or
extreme weather events.

6
 Impact Report as at 31 December 2023

In 2023, key activities were completed for the clusters (archetypes) that share characteristics
decarbonisation of the agricultural phase of the and emission hotspots, and will design the most
value chain: appropriate decarbonisation strategies on their
field data collection of the Brazilian supply basis.
chains: an emission abatement plan must be
based on a model that describes real impacts. This activity led to an excellent result, demonstrating
Simple inventory data does not make it possible that illycaffè's Brazilian supply chains have a much
to identify decarbonisation actions that focus on lower emission profile than that calculated using
real emission hotspots, whether in relation to the inventory data.
supply chain or the company production process. Having validated the effectiveness of this activity,
This activity made it possible to achieve a in 2024 the methodology will be scaled up on the
modelling based on the supply chains primary supply chains in Central America.
data in this geographical area. In parallel, the collection of primary data in Brazil
farm clustering by archetypes: given the on Tier 1 and 2 suppliers3 will be intensified. This
number of players included in the coffee supply targeted approach is essential to implement the
chains, it would be unthinkable to develop ad calculation model in a more precise and detailed
hoc decarbonisation strategies for each of manner and obtain an even more comprehensive
them. Therefore, a simplification is necessary. and accurate view of carbon emissions.
Specifically, illycaffè has created growers

2023 results
Action Target Result

Modelling of green coffee supply Validation of the model Goal achieved:

chains by CO2-equivalent emission on the Brazilian supply chain. updated Brazilian emission
classes. factor (EF);
clustered farms with uniform
footprints.

2024 goals

Action Target

Modelling of green coffee supply chains Scale up of the model on the supply chains
by CO2-equivalent emission classes. in South America.

(3) Green coffee ready for export.

7
 illycaffè S.p.A.

Goal 2

Contribute to the mitigation of climate change through socio-economically

sustainable investments.

To ensure the sustainable quality of its raw materials, and technicians to motivate farmers to produce
illycaffè's supply chain management model is based sustainable quality is one of the pillars supporting
on three specific principles: the system of direct relations with the stakeholders
traceability of resources and raw materials, of the supply chains developed by illycaffè.
throughout the entire production process in or-
der to guarantee their sustainable quality; In 2000, together with the establishment of
reciprocity in the relationship with the members a partnership with PENSA (The Agrobusiness
of the supply chains; Intelligence Center of the University of São Paulo)
economic, social and environmental sustainability. and subsequently SENA (Servicio Nacional de
Aprendizaje), illycaffè launched activities to support
This approach is the expression of a holistic model small and large coffee producers through training
that strengthens the economic sustainability that courses on important issues (from responsible
underlies the green coffee purchasing strategy and, cultivation techniques and good agronomic
at the same time, carries out awareness-raising and practices, essential to increase productivity, reduce
training actions along the supply chain during each production costs and increase the producer’s
visit from technicians and agronomists. profitability, to trading, economic-administrative
aspects and logistics). These programmes promote
The transfer of knowledge through the activities the direct involvement of producers and knowledge
of the Università del Caffè and the constant visits transfer at a local level.
to the plantations from illy buyers, agronomists
In 2023, illycaffè intensified its commitment to
stakeholders through extensive training activities.
The company has paid particular attention to
specific issues, including regenerative agriculture,
recognised as a crucial element for the reduction of
greenhouse gases generated in agricultural phases
and for preserving the biodiversity of the ecosystems
in which coffee is grown. This initiative actively
involved over 750 participants, including members
of the coffee supply chains, representatives of
national and international institutions, universities,
as well as professionals from the public and private
sector, in different geographical areas, including
Brazil, Central America, Colombia, India, Rwanda
and Vietnam.

8
 Impact Report as at 31 December 2023

In 2024, illycaffè's plan envisages the continuation wider dissemination, carefully considering the
of training activities, with an increasingly peculiarities of each context. The company aims
stronger focus on regenerative agriculture to significantly contribute to a greater awareness
and the reduction of carbon emissions. These and implementation of sustainable practices in this
topics require greater research in the field and strategic phase of the value chain.

2023 results
Action Target Result

Training and engagement of supply Involvement of coffee supply chains Goal achieved.
chains on regenerative agriculture and public and/or private institutions Involved supply chains both in
and carbon reduction. in Brazil and Central America. stakeholder engagement activities
and direct training in the field on
issues relating to regenerative
agriculture as a fundamental tool
for reducing emissions.

2024 goals

Action Target

Training and engagement of supply chains on Involvement of coffee supply chains and public
regenerative agriculture and carbon reduction. and/or private institutions in Brazil and Central America.

9
 illycaffè S.p.A.

Goal 3

Promote initiatives and global partnerships to improve sustainability,

through research and knowledge transfer.

illycaffè wants to raise awareness among its academics and industrialists, from both producing
stakeholders on issues related to environmental and consuming countries. The "mission" of ASIC
sustainability and the crucial role that each conferences is:
individual plays in safeguarding our planet. to be the world's leading conference on coffee
Precisely for this reason, the company has always science and technology;
been committed to encouraging and stimulating to evaluate existing and emerging scientific
the development of global partnerships to promote knowledge and techniques on coffee;
sustainability and international awareness in this to be an incubator for future research and
regard. innovation on coffee science and technology;
to promote an interdisciplinary and international
MASTER IN COFFEE ECONOMICS exchange and networking on coffee science and
AND SCIENCE - ERNESTO ILLY technology;
illycaffè supports the Master in Coffee Economics to bring together stakeholders and coffee
and Science - Ernesto Illy of the Ernesto Illy scientists, creating a platform for interdisciplinary
Foundation. The inter-university Master's program dialogue and problem solving.
dedicated to the world of coffee was established The last three editions were held in China, the
by a group of partners of excellence in training: United States and France. The 29th edition of the
the University of Trieste, the University of Udine ASIC Congress was held in Hanoi (Vietnam) from 11
and SISSA (Scuola Internazionale Superiore di to 14 September 2023 and illycaffè participated as
Studi Avanzati - International School for Advanced an operational player.
Studies of Trieste). It aims to offer in-depth and
multidisciplinary training to graduates interested PRE-COMPETITIVE RESEARCH PROJECTS
in working in the world of coffee along the entire illycaffè participates in important European
production chain, from cultivation to catering and pre-competitive research projects with global
retail, including logistics, trading and the industrial repercussions such as, for example, the following
process. The goal for 2024 is to continue to support projects:
the Master. Horizon Europe “Bolero” (Breeding for coffee
and cocoa root resilience in low input farming
ASIC systems based on improved rootstocks),
illycaffè has always been on the Board of ASIC which aims to fine-tune the agronomic graft
(Association for Science and Information on technique to make coffee production more
Coffee). Co-founded by Ernesto Illy at the sustainable and at the same time to study
beginning of the 1960s, ASIC organises a scientific plant-soil interactions and the root system of
Congress every two years that brings together coffee. This project has a four-year duration.
all the most important scientists dedicated to illycaffè is committed to provide support to
coffee in the various areas (agronomy, chemistry, the project for its entire duration. The goal is
biological activities, etc.) and industry experts, both confirmed also for 2024.

10
 Impact Report as at 31 December 2023

EVOQUE, which has the main objective of developing a new sensory system based on photonics with
the potential to exceed current standards and meet the most demanding monitoring requirements for
agriculture, food, environmental pollution and industrial emissions. The project will start in 2024 and
illycaffè will participate in it as a promoter and operating actor.

2023 results

Action Target Result

Master in Coffee Economics Participation as promoter Goal achieved.

and Science - Ernesto Illy. and operating actor. Role of initiative promoter
and operating actor confirmed.

Association for Science and Actively contribute to the Goal achieved.

Information on Coffee. organisation of the 29th edition, The 29th edition of the ASIC Congress
which will be held in Vietnam. was held in Hanoi (Vietnam) from 11
to 14 September 2023.

Horizon Europe “Bolero” (Breeding Horizon Europe “Bolero” (Breeding Goal achieved.
for coffee and cocoa root resilience for coffee and cocoa root resilience Role of initiative promoter confirmed.
in low input farming systems based in low input farming systems based
on improved rootstocks). on improved rootstocks).

2024 goals

Action Target

Master in Coffee Economics and Science - Ernesto Illy. Participation as promoter and operating actor.

Horizon Europe “Bolero” (Breeding for coffee and cocoa Participation as promoter and operating actor.
root resilience in low input farming systems based on
improved rootstocks).

EVOQUE project. Participation as promoter and operating actor.

11
 illycaffè S.p.A.

Pursuit of well-being, understood as health and happiness

Goal 4

Promote a healthy lifestyle by enhancing the health benefits of coffee.

illycaffè is part of the Board of ISIC (Institute for and to inform the public, enhancing the benefits
Scientific Information on Coffee), a non-profit of coffee for health. Support for the initiatives
organisation founded in 1990. ISIC is dedicated to undertaken by the institute has been confirmed
the study and dissemination of issues relating to again for 2024.
coffee and human health through:
scientific in-depth studies into coffee, health and
the environment;
evaluation of studies and scientific information
on coffee, health and the environment;
support of independent scientific research on
coffee, health and the environment;
dissemination of scientific information on coffee,
health and the environment.

Through its own website, ISIC makes it possible to

share the main scientific studies on issues ranging
from cardiovascular and neurodegenerative
diseases to type-2 diabetes and other liver diseases

2023 results

Action Target Result

ISIC (Institute for Scientific Confirm its role as a partner of the Goal achieved.
Information on Coffee). institute by supporting it on studies illycaffè provided support to both
relating to the benefits of coffee both project streams.
for health and for the environment.

2024 goals

Action Target

ISIC (Institute for Scientific Information on Coffee). Confirm its role as a partner of the institute by supporting
it on studies relating to the benefits of coffee both for
health and for the environment.

12
 Impact Report as at 31 December 2023

Goal 5

Promote the improvement of quality of life, through social sustainability,

work environment and coffee culture.

Through the Ernesto Illy Foundation, since 2017 illycaffè's strategic path towards full implementation
illycaffè has been a partner and supporter of the of inclusion and equal opportunities principles
World Happiness Report. Compiled and published continued and reached a new goal in 2023 with
annually by the United Nations Sustainable the UNI/PdR 125:2022 certification on gender
Development Solutions Network, the survey equality, issued by DNV, an independent body that
measures global happiness and ranks 156 countries provides assurance and risk management services
according to the "happiness perceived” by their at global level.
citizens, with a view to promoting well-being and
improving the quality of life. In 2023, the company launched a new subscription
Also in 2023, illycaffè and the Ernesto Illy system dedicated to consumers wanting to drink
Foundation supported the realisation of the World coffee in a bar. This program envisages that, for
Happiness Report. each subscription sold, in addition to the offer
of a coffee, illy undertakes to donate €1 to a
illycaffè recognises the central role of people social sustainability project. The initiative funded
in building a healthy and sound company. The in this way in 2023 was “IEO Second Opinion”, a
development of human resources is based project created with the aim of providing remote
on respect for workers' rights, on their full counselling to Italian and international patients
enhancement, but also on the protection of their wanting a second opinion regarding a diagnosis
pursuit of happiness as a primary component of the already received or treatment already prescribed.
identity of every person.
The same philosophy led the company to actively
In accordance with this, in 2022 the company collaborate with Food For Soul, a non-profit
started the implementation of a structured and organisation founded by chef Massimo Bottura, for
global process for the mapping and management the next four years. Specifically, illycaffè undertakes
of talent, with a view to building a functional to make a multi-year donation both in financial
tool for highly meritocratic and equitable growth terms and in terms of technical support, providing
paths. Ensuring equal employment opportunities coffee, related products and services. As a supporter
and professional growth to all employees on the of Food For Soul, illycaffè organisationally support
basis of merit, professional skills and performance, its non-profit projects, including:
without any discrimination and in full respect of the expansion and discovery of the Refettori
rights of the individual is, in fact, a material topic (Refectories) project;
for illycaffè. This project culminated in 2023, when support, education and commitment to the
a first phase of talent assessment was followed sustainability of the food system;
by the development of a multi-year resource in-kind support for the Refettori project for
management plan. coffee products, supplies and training.

13
 illycaffè S.p.A.

Common objectives are: in their process, given the damage that drugs cause
promoting the sustainability of the food system, to the oral cavity as well as the resulting chewing
social inclusion and well-being; problems deriving from this.
promoting fair and just livelihoods for all; An essential support not only for young people
sharing their respective knowledge and practical who have to take care of their oral system, but
applications to improve consumer habits and also for those involved in the dental laboratory, a
responsible consumption. fundamental training resource aimed at the young
people attending the dental technician course at
Finally, since 2023, the protection of the individual the community study centre. Since 2012, the year
and their aspiration to happiness as a primary the course was launched, 23 people have obtained
component of the identity of every person has a dental technician diploma, one of which in the
driven illycaffè to provide concrete help to the last year. In addition, in the laboratory some of
San Patrignano therapeutic community for drug the guests acquire basic skills to become dental
addicts in Italy. Through financial support, the assistants.
company will help the dental department within illycaffè is committed to confirming their support
the medical centre. This is a fundamental section also for 2024.

2023 results

Action Target Result

Creation and implementation Finalisation of talent mapping and Goal achieved.

of the Talent Management System. preparation of a multi-year resource
management plan.

Launch of the new illydieci Support for IEO Second Opinion. Goal achieved.
subscription program and support
for a social sustainability project.

Support for Food For Soul, Ensure commitment both in terms Goal achieved.
a non-profit organisation founded of economic and technical support.
by Chef Massimo Bottura.

2024 goals

Action Target

Support for Food For Soul, a non-profit organisation Ensure commitment both in terms of economic
founded by Chef Massimo Bottura. and technical support.

Support the activities of the dental department Ensure support in economic terms.
of the San Patrignano community

14
 Impact Report as at 31 December 2023

Goal 6

Promote social development in coffee growing areas, fuelling the virtuous

cycle between well-being for those who consume it and economic value
for those who produce it.

Stakeholders' engagement on issues related to coffee supply chains. In Brazil, where this initiative
gender inclusion is a fundamental activity for the was launched, there was an increase in female
promotion and dissemination of an inclusive and participation in training activities with a presence
sustainable corporate culture. Only through open of 28% of women producers compared to 18% in
and continuous dialogue it is possible to stimulate 2019. Even more consistent was the participation in
the adoption of concrete measures for the promotion the running of the panels for the proposed training
of gender equality and diversity, essential elements activities, run by 60% of women, representatives of
for innovation and long-term business success. the most diverse sectors: from coffee producers to
heads of national institutions, university researchers
From this point of view, the involvement of coffee and company managers.
supply chains is of fundamental importance. To
ensure a positive impact along the entire production In 2024, illycaffè is committed to determinately
chain, it is essential to establish collaboration pursuing the objective of promoting the
with all the players that make it up, starting with development of social projects aimed at education
producers. and health in coffee-growing communities,
focusing in particular on Guatemala and Costa
In 2023, illycaffè supplemented its training offer to Rica. This initiative reflects illycaffè's commitment
its suppliers with topics related to gender equity. In to actively contribute to the improvement of
the same year, analytical work was undertaken on living conditions and training opportunities in the
how best to implement the practices identified in communities involved with the aim of generating a
this module to promote real gender inclusion along positive impact.

2023 results
Action Target Result

Stakeholder engagement dedicated Trial gender inclusion activities Goal achieved.

to gender inclusion. with learning-by-doing methodology
starting from the Brazilian supply chain.

2024 goals

Action Target

Promote the development of social projects aimed at the Implementation of actions aimed at education and health
education and health of coffee-growing communities. support in Guatemala and Costa Rica.

15
 illycaffè S.p.A.

Circular economy and regeneration of the biosphere

Goal 7

Minimising consumption of natural resources through production efficiency

and the transformation of renewable or recyclable raw materials.

illycaffè has always paid great attention to management system in order to enhance overall
monitoring and reducing its environmental impact. environmental performance.
Environmental value and the safeguard of natural In 2023, illycaffè built an LPG plant as an additional
resources are key factors within the company's methane gas energy vector for roasting. In addition,
overall approach, aimed at the protection and it continued with the replacement of traditional
sustainable development of the area in which lighting fixtures with low-consumption LEDs,
it operates, while respecting the rights of introducing an automatic lighting control system
communities and future generations. with motion sensors in the Trieste plant. The
introduction of home automation control systems
In line with this objective, since 2003 the company has also begun in the management offices in Milan
has implemented an environmental management and in some parking areas in Trieste. Finally, the
system compliant with the ISO 14001 standard. work to replace vacuum pumps with more efficient
The main objective is to limit environmental impact new generation models continues.
and continuously improve its environmental

16
 Impact Report as at 31 December 2023

The year 2024 will be dedicated to energy transition with the construction of photovoltaic plants in the Italian
production sites. During the year, the foundations will be laid for the construction of the new roasting plant at
the main site, efficiency improvement actions will continue with the replacement of vacuum pumps, windows
and roofs in the Trieste plant, and the relamping operation with low-consumption LED lamps will continue.

2023 results

Action Target Result

Efficiency and current environmental Electric mobility: installation Goal achieved.

performance improved. of electric recharging stations Installation of recharging stations
(Via Malaspina and Via Caboto, completed.
Trieste headquarters).

Energy transition. Tri-generation from methane gas The goal is postponed due to the
(eventually from renewable sources): scarcity risk and the uncontrolled
implementation of the executive increase in the price of the raw
project. material.

2024 goals

Action Target

Energy transition. Construction of the LPG system at the Trieste site.

Energy transition. Construction of a 500.17 kWp photovoltaic system

at the Robecchetto site.

17
 illycaffè S.p.A.

Goal 8

Counteracting all types of residues, such as greenhouse gases,

pollution, scraps and waste, by promoting regenerative agronomic practices
and balancing production and disposal processes.

As part of illycaffè's sustainability strategy, the The creation of a responsible supply chain plays
constant commitment to reducing any type of a fundamental role in the pursuit of illycaffè's
residue is expressed in every phase of its value strategic and sustainability objectives. Goals such
chain. Below are some of the activities set up by as climate neutrality can only be achieved through
the company in 2023 and the projects planned for effective collaboration and co-evolution.
2024: To this end, a multi-year project was launched in
2022, aimed at further strengthening the role played
Agriculture. In 2023, intense training activities by ESG issues in the selection and assessment of its
on European directives regarding environmental partners. In particular, the following activities were
sustainability involved over 420 people in different completed in 2023:
Tiers (exporters, large/medium-sized producers, Supplier ESG performance assessment (80% of
cooperatives, producer associations, small suppliers are involved on a cost basis): integration
producer groups) in the coffee supply chains in of sustainability in supplier qualification and
Brazil, Central America, Colombia, India, Ethiopia, assessment modules through the adoption of the
Rwanda and Vietnam. These activities involved the Synesgy platform;
public sector of various countries, national and Decarbonisation (80% of suppliers are involved
international institutions and, in some cases, the on an emissions impact basis on Scope 3 cat.
private sector. The issues addressed concerned Purchased Goods & Services [green coffee excl.]
the new European regulation (EU) 2023/1115 on of illycaffè):
deforestation and the practices to be adopted to – development of a module dedicated to the
mitigate this risk. quantification of the supplier pool's emission
In 2024, illycaffè intends to continue training impacts through the use of primary data;
activities in line with the issues promoted by the – training of suppliers on the concepts that revolve
European Union's Green Deal, focusing specifically around the issue of reducing the quantity of
on the Farm to Fork strategy. This will result in climate-altering gases in the atmosphere and
a focus on issues related to the correct use of the co-creation of improvement plans that act
agrochemicals and their possible replacement with in line with this objective.
lower impact products. The year 2024 will continue on the same trajectory,
stimulating suppliers to continuously improve,
Procurement (Suppliers of goods and services). training them on sustainability issues and launching,
In accordance with the principles of sustainability together, a path to improve performance.
and business ethics, illycaffè maintains mutually Eco-design of products: with a view to reducing
beneficial relationships with its suppliers of goods any type of residue, the principles of circular
and services, selecting them based on its values. economy and of LCA (Life Cycle Assessment),

18
 Impact Report as at 31 December 2023

focused on a design based on the efficient use – 3g format instant coffee: revision of the current
of resources and materials, guide the strategic packaging material and transition from plastic
choices along all phases of the illycaffè supply to compostable paper;
chain, from the procurement of materials to – “Latte Selection” version instant coffee: product
their disposal. Below are some projects, direct launch with recyclable packaging;
translation of the principles mentioned above – Keurig capsule for USA capsule development in
and classified as follows: compostable version.
Circularity of products: Capsule recycling programs:
– MPS &MPS.M capsule: in 2023, the – The "Alliance for the recycling of aluminium
"compostable industrial" version of capsules capsules", founded by Nespresso in 2021
pertaining to the portioned system intended in partnership with illy, saw the inclusion of
for offices was scheduled to be introduced Starbucks by Nespresso as a new member of
in the product portfolio dedicated to this the circular economy project.
channel. Unfortunately, due to some delays in – ReCap, an experimental project in the Friuli-
the certification on compostability, the launch Venezia Giulia region for the collection and
was postponed to 2024; subsequent recycling of plastic capsules,

19
 illycaffè S.p.A.

continues. The initiative was developed with Company waste disposal practices
the collaboration of the Region, the Regional – In 2022, illycaffè conducted a study on the
Environmental Agency (Arpa Fvg), Nestlé feasibility of using by-products deriving from
Italiana S.p.A. and three companies that coffee processing at the Trieste production
manage municipal waste in the region (Net plant as organic fertilisers. This research
S.p.A., A&T2000 S.p.A. and AcegasApsAmga produced positive outcomes. Thanks to these
S.p.A.). With the aim of starting to activate the results, it was possible to convert almost all
service in other Italian provinces, again in 2023, of illycaffè's organic waste into fertilisers for
the search began for an industrial partner that agriculture.
can manage recycling on a large scale. At the – The tests mentioned above have also shown
same time, illycaffè continues to be an active how organic coffee waste could have other
party in the promotion and creation of an Italian greater value-added uses. For this reason, in
consortium for the widespread management 2023 the exploration started of further possible
of this program. options (e.g. cosmetics, nutraceuticals, design,
– Circularcaps, a new system for recycling plastic etc.). These results have been so positive that it
and aluminium capsules that offers a network is assumed that these solutions will be applied
of 4,000+ collection points throughout Spain, in practice as early as 2024.
was added to the already operating recycling
projects.

20
 Impact Report as at 31 December 2023

2023 results

Action Target Result

Training of the green coffee Engagement of supply chains on Goal achieved.

supply chains on environmental the new European directives on Over 420 people were involved from
sustainability issues. environmental sustainability that have different coffee supply chains in
an impact on coffee supply chains. Brazil, Central America, Colombia,
India, Ethiopia, Rwanda and Vietnam.

Implementation of a new module Module applied to 50%+ of suppliers Goal achieved.

for the qualification and assessment on a cost basis. Suppliers engaged through the
of suppliers of goods and services Synesgy platform.
according to ESG criteria.

Introduction, in the portioned office Product launch by 2023. Goal not achieved.
range, of two capsules, MPS and Launch postponed to 2024
MPS.M, in “compostable” version. due to delays in the certification
of compostability.

Extension of the ReCap Project Establishment of a consortium with Goal not achieved.
launched in Friuli-Venezia Giulia. other players to extend the project. In light of the packaging regulation
currently under discussion in the
European Union, this activity's
timetable is subject to the outcome
of the vote on the regulation.

Adoption, in Spain, of a new system Adopted. Goal achieved.

for the recycling of plastic and Program activated in Q1 2023.
aluminium capsules (Circularcaps).

Extension of circular economy Implementation of at least one Goal achieved.

projects of the illycaffè plant also to project by 2023. Almost all of illycaffè's organic waste
high value-added chains. is now converted into agricultural
fertilisers.

2024 goals

Action Target

Introduction, in the portioned office range, of two Product launch by 2024.

capsules, MPS and MPS.M, in “compostable” version.

3g format instant coffee: revision of the current Product launch by 2024.

packaging material and transition from plastic
to compostable paper.

“Latte Selection” version instant coffee: Product launch by 2024.

product launch with recyclable packaging.

Keurig capsule for USA capsule development Product development by 2024.

in compostable version.

Upcycling of the by-product deriving from coffee Implementation of at least one project by 2024.
processing in the illycaffè plant, allocating it to a supply
chain bridging cosmetics, nutraceuticals or design.

21
 illycaffè S.p.A.

Goal 9

To promote the conservation of biodiversity and carbon sequestration

through regenerative agronomic practices and the renewal of ecosystems.

Respect for the environment, and in particular with a particular focus on Brazil. These initiatives
safeguard of the soil and biodiversity through the have made it possible to collect the first results on
adoption of the principle of regenerative agriculture, the most promising regenerative practices, such
represents the basis of illycaffè's approach to as the application of compost, grassing of the
coffee cultivation. Within this philosophy, an space between rows with different species and
essential component is the continuous search the replacement of synthetic pesticides with useful
for new cultivation methods and techniques, insects. Tests conducted in Central America showed
aimed at ensuring sustainable production from an the importance of applying humic and fulvic acids
environmental and social point of view. to the topsoil, especially in impoverished soils, to
improve nutrient absorption and increase plant
The main objective is to identify the most
growth and productivity. In addition, the crucial
promising regenerative practices both from an
role of genetics in the absorption of nutrients
environmental and social point of view, promoting
was highlighted, with varieties that require lower
their dissemination and trying to facilitate the
quantities of fertilisers while maintaining same
transition of companies from conventional
production levels.
practices to regenerative practices on a larger scale.
To achieve this objective, it is essential to define a Although important, these results underline
calculation methodology for the quantification the need to adopt personalised approaches,
of the impacts of these practices, estimating the considering the specific characteristics of each
potential reductions and elimination of emissions geographical area and grower. For this reason, it
and assessing their benefits also with regard to the is imperative to expand the number of solutions to
economic and social context. address the same agronomic problems, allowing
each farmer to find the solution that best suits
In 2023, agronomic projects were launched with
their needs.
producers affiliated with illycaffè's supply chain,

2023 results

Action Target Result

Screening of supply chain Verify the validity of innovative Goal achieved.
environmental improvement projects practices through an analysis The most applicable regenerative
and creation of an inventory of the of the health of the fruits. practices in different agronomic
most effective and scalable practices. contexts have been identified.

2024 goals

Action Target
Assessment of the impacts of the selected r Validate the regenerative practices identified, verify
egenerative models. possible scalability and identify any additional practices.

22
 Impact Report as at 31 December 2023

Climate neutrality
As already reported under Goal 1, the main objective for 2023 was to achieve a modelling of green coffee supply chains
by climate-changing gas classes and to define a scope 3 baseline devised on primary and non-inventory data. As this
is the area with the greatest emission impact, it was crucial for illycaffè to have a solid and scientific tool for both
reporting and designing an emission reduction plan based on activities with demonstrable effectiveness.

The vast amount of information generated thanks to the collection of primary data from all illycaffè suppliers has
enabled the company to improve its awareness of the areas in the value chain that require priority intervention and,
within these, identify individual activities with higher emission intensity. Thanks to this, in 2024, illycaffè plans a targeted
update of its decarbonisation roadmap, further focusing on investments and priorities.

At the same time, in order to consolidate illycaffè’s ongoing commitment to the fight against climate change and
reward the efforts made by the company’s management in this direction, in 2024 their incentive structure will be
supplemented with a KPI dedicated to decarbonisation. Valuing and incentivising each department’s commitment
to sustainability is fundamental to ensuring a healthy balance between economic, environmental and social
sustainability.

23
 illycaffè S.p.A.

Finally, the results of CO2 equivalent emissions reporting for the year 2023 are shown below.

GREENHOUSE GAS EMISSIONS (t CO2eq)

2023 2022*
Total Scope 1 emissions 7,047.7 8,229.0
Natural gas used for the production process 4,581.3 5,440.1
Heating fuels 684.6 812.9
Fugitive emissions 205.9 239.0
Company fleet emissions 1,576.0 1,737.0
Total Scope 2 emissions 1,203.5 3,100.0
Emissions deriving from electricity consumption (market-based) 1,203.5 3,100.0
Emissions deriving from electricity consumption (location-based) 6,205.8 6,670.0
Total Scope 3 emissions 233,758.2 244,337.2
Upstream: 204,659.9 212,895.7
Goods and services purchased 172,122.1 179,681.3
Activities related to fuels and energy not included in Scope 1 and 2 2,172.3 2,823.0
Upstream transport and distribution 26,016.6 26,052.5
Waste generated by operations 1,100.5 916.8
Business travel 527.9 300.0
Commuting by employees 2,720.4 3,122.1
Downstream: 29,098.2 31,441.5
Downstream transport and distribution 5,946.2 7,888.6
Use of products sold 5,499.1 7,115.0
End-of-life treatment of products sold 17,086.6 15,959.8
Downstream leased assets 566.4 478.0
Total 242,009.5 255,666.2

(*) In 2023, illycaffè signed an undertaking to reduce its emissions, joining the Science Based Targets initiative (SBTi), which requires compliance with
the methodology defined by the GHG Protocol for calculating corporate carbon footprint. In light of the requirements defined, it should be noted
that the values reported in the 2022 Management Report were aligned with the aforementioned methodology.

2023 results

Action Target Result

Modelling of green coffee supply chains Validation of the model on the Brazilian Goal achieved:
by CO2-equivalent emission classes. supply chain. updated Brazilian emission factor (EF);
clustered farms with uniform footprints.

2024 goals

Action Target

Update of the decarbonisation roadmap. Completion by 2024.

Integration of top management incentive scheme Inclusion of KPI on carbon intensity.

with specific target on decarbonisation.

24
 Impact Report as at 31 December 2023

Assessment of the impact generated

In compliance with Italian Law 208/2015 on Benefit Corporations and, specifically, for the purposes referred to in
paragraphs 376 to 384, in the report they prepare annually, Benefit Corporations include the assessment of the impact
generated using an external assessment standard. The score obtained by illycaffè using the standard developed by the
B Lab body and recognised by the aforementioned law is 90.4 with reference to the assessment areas identified by the
same standard, namely: Governance, Workers, Community, Environment, Customers.

This score was validated by B Lab following a rigorous verification process confirming the achievement of the BCorp®
recertification, which takes place every three years.

This recognition is exclusively awarded to organisations that are committed to high standards of social and environmental
performance, transparency and accountability, and which operate in a way that optimises their positive impact toward
employees, target communities and the environment.

The concept of “business as a force for good” is emerging as a priority for all companies and B Corps® are leaders in
translating this concept into practice through the rigorous measurement of the value they create.

B Lab score 90.4

25
 illycaffè S.p.A.

Conclusions
With this Report, illycaffè wanted to transparently report on the company's operations as a stakeholder company,
sharing the values, goals, results achieved and objectives for the coming years, oriented towards the pursuit, as a
Benefit Corporation, of the specific common benefit purposes expressed in the articles of association.

26
EDITED BY
illycaffè S.p.A.

GRAPHIC DESIGN
Red Point S.r.l.

PHOTOS
© illycaffè S.p.A.

illycaffè S.p.A.
Via Flavia, 110
34147 Trieste (TS)

Share capital Euro 50,000,000 fully paid-in

VAT Registration Number, Tax Code and Companies Register No. 00055180327
Economic and Administrative Index 21080
Date of incorporation of the company 24/07/1933
ILLY.COM