MERCON

About MERCON

Mercon Coffee Group is a vertically integrated, global coffee supplier committed to delivering high-quality coffee while promoting sustainable livelihoods in coffee-growing communities.

&Green supports Mercon Coffee Group with an 8-year, USD 20 Million credit facility to promote forest protection in sustainable coffee supply chains. This initiative aims to enhance livelihood opportunities for smallholder farmers and improve farm management practice.

Transaction Summary

NAME

Mercon

Jurisdiction

Vietnam

Sector

Coffee

&Green Investment

USD 20 Million

Investment Term

8 years

Financial Structure

&Green provided an 8-year senior unsecured loan

Impact Targets

Approximately 63,000 hectares of forest in the supply chain landscapes

Over 15,000 coffee suppliers engaged in Landscapes

Climate resilient agriculture, knowledge sharing with other farmers, community engagement

*2022 Key Performance Indicators data Not available given the transaction was closed end December 2022

INVESTMENT RATIONALE

Mercon will use the loan from &Green to create a blueprint of a climate-resilient and deforestation-free coffee production in Vietnam: improved livelihood opportunities for smallholders and enhanced farm management efficiency.

Mercon will pilot two models: an NDPE approach which aims to mitigate deforestation risks in exports; and LIFT to enhance climate resilience and livelihood impacts in sourcing operations. The NDPE ensures no coffee is sourced from deforestation regions, protecting around 63,000 hectares. LIFT focuses on commercially viable sourcing regions for the company.

The &Green Facility enables Mercon to shift from a fragmented system of farm-level capacity building and compliance management to a comprehensive approach. This approach prioritizes climate resilience and forest conservation and may include reforestation activities.

MERCON’s Landscape Protection Plan targets*, developed with &Green:
*Targets will be refined in 2023.

Forest Protection in Vietnam: Mercon aims to source deforestation-free coffee by 2027. To achieve this, they will implement a traceability system, engage stakeholders, and establish MRV mechanisms expecting to conserve approximately 63,000 hectares of forests.

Climate Resilient Agriculture: In LIFT geographies, model farms owned by influential local farmers will showcase climate-smart and deforestation-free agriculture, raising awareness and demonstrating practical benefits. These farms will also monitor climate resilience.

At Mercon, we are very excited to partner with &Green. Their investment will support our strategic integrated business approach in Vietnam. We will commit to contributing to the eradication of deforestation, among other issues, by creating value for producers through our LIFT* platform’s landscape interventions. Together, we will continue to build a better coffee world, thus creating a circle of prosperity for all!

GIACOMO CELI

Group Sustainability Director – Mercon Coffee Group

LOOKING FORWARD TO 2023

FORESTS & BIODIVERSITY IN MERCON’S LANDSCAPES

Mercon will map its landscapes and explore the forests to baseline their condition and exposure to deforestation risks. This will allow high risk landscape and priority identification in the supply chain management strategy.

CLIMATE RESILIENT AGRICULTURE

Mercon will conduct a study to assess potential climate risks in its landscapes of current and potential interest, focusing on how they may impact production patterns. The study will identify opportunities to enhance climate resilience of agricultural practices within the supply chains.