41 Prologue Dear Reader No one ever goes to the supermarket thinking Today I want to indulge myself at the expense of harvesters on the other side of the globe who pick apples while aeroplanes spray deadly poi sons directly above their heads Those would be the thoughts of a psychopath Rather the com monly held belief that Life is good here and the world is bad stems from a fundamental flaw in the system Everything has to be cheap no matter the cost But this competition is haunted by the spectre of external effects The true costs of cheap production never get paid because no one ever sends a bill for the exploitation of na ture and people Yet there are indications that the rules of the game are changing International auditors have issued a profit warning for the brewery sector in India because clean water is becoming scarce there BlackRock the largest investment com pany in the world has added sustainability cri teria to its credit assessments And the Allianz insurance company has determined that over fertilisation leads to crop losses and supply dis ruptions Lack of sustainability may have reached the point of becoming a cost factor in the business world If you don t work sustainably your costs are going to rise And conversely by implement ing sustainable measures we avoid uncontrolled cost increases During Lebensbaum s pioneer ing phase sustainability came intuitively to me as a matter of course Today sustainability is a management issue and is therefore the crux of our corporate strategy which is geared towards long term success Experts from Soil More and Ernst Young have analysed our value chain They investigated how much we consumed natural resources water soil biodiversity in the cultivation of our raw materials and es timated the costs in euros They weighed these costs against the positive impact that we have on nature in the production of tea coffee and spic es One example is the Ambootia tea estate There carbon is permanent ly stored in the soil in a special way through tea cultivation More CO 2 is removed from the atmosphere than the amount that is produced by pro duction and transport You may now be thinking That s all very well but must we really place a monetary value on services provided by na ture I believe that doing so fundamentally changes something Any thing that can be quantified in terms of money can also be managed and comprehended Moreover this enables us to better grasp potential risks to our business and see where wise investments in sustainability would have a maximum effect Transparency deeper understanding As a whole this sustainability report is not just meant to serve our public image but also transparency deeper understanding and the sustainable stewardship of our complex value chain Direct sourcing as a matter of principle also contributes to transparen cy It lets us know the situation on the ground including local conditions for organic agriculture and the practical skills of our cultivation partners Through direct sourcing we have found cultivation partners around the world who have the competence to maintain or even improve local agri cultural systems over the long term According to their region they devel op very different strategies Here are two examples At the Finca Irlanda in the south of Mexico 600 000 new coffee trees were planted in recent years The trees are particularly resistant to coffee rust a widespread fun gus And in Egypt professional compost management has turned desert land into fertile soil It s striking how often good manufacturing practice corresponds with taking responsibility for local communities In order to gain a better pic ture of the social performance of our partners over the past three years we have further developed the classification and monitoring of social ac countability standards and other sustainability issues in our purchasing of raw materials This was timely consumer expectations have soared regarding the verifiable protection of human rights and compliance with social accountability standards throughout international supply chains Foreword

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