Sustainable Coffee Exchange Launches to Help Vietnamese SMEs Meet ESG and EUDR Requirements

The Sustainable Coffee Exchange has launched as a new initiative to help Vietnamese micro, small and medium-sized enterprises, cooperatives and other non-state actors strengthen their environmental, social and governance performance. The programme responds to growing pressure on coffee businesses to demonstrate responsible production, transparent supply chains and readiness for European sustainability requirements, including the EU Deforestation Regulation.

The Sustainable Coffee Exchange, also known as SCE, is being implemented over 36 months from February 2026 to January 2029. It operates in Lâm Đồng and Sơn La, two important but distinct coffee-producing provinces representing major Robusta and Arabica supply landscapes in Vietnam.

The project is funded by the European Union, with additional support from JDE Peet’s and other partners. It is implemented by SNV and the Management and Sustainable Development Institute, bringing together experience in sustainable agriculture, responsible business conduct, civil-society engagement and climate finance.

Vietnamese SMEs face expanding sustainability requirements

Vietnamese coffee exporters increasingly compete in markets where price and physical quality are no longer the only purchasing criteria. International buyers may also assess deforestation risk, greenhouse gas emissions, labour practices, community engagement, business governance and the reliability of supply-chain data.

Large exporters and multinational companies often have dedicated compliance, sustainability and information-technology teams. Smaller enterprises and cooperatives may face the same buyer requests without having comparable financial resources, technical staff or data-management systems.

The cost of mapping farms, improving recordkeeping, training suppliers and introducing ESG controls can be substantial for smaller organisations. Limited access to green credit and investment can make it difficult to finance improvements even when businesses understand their commercial importance.

SCE is designed to address this gap by converting broad sustainability expectations into practical tools, measurable actions and potential financial incentives. Its objective is not only to explain regulations but also to help enterprises integrate environmental and social performance into everyday business management.

EUDR readiness remains an immediate market concern

The EU Deforestation Regulation requires covered commodities and products placed on the European Union market to be deforestation-free and produced legally in the country of origin. Coffee businesses supplying European customers may therefore need to support the collection and transfer of farm geolocation, production and legality information.

The Regulation begins applying from 30 December 2026 for large and medium-sized operators and from 30 June 2027 for most micro and small operators. Although the principal legal responsibility may rest with operators placing products on the EU market, Vietnamese suppliers will frequently be asked to provide the underlying information needed by European customers.

For smaller Vietnamese exporters, the challenge is not limited to obtaining coordinates from farms. Plot information must remain connected with suppliers, harvests, purchasing records, processing batches, warehouse lots and export shipments.

Businesses must also identify incomplete, conflicting or high-risk information before coffee is allocated to a European contract. A list of farm coordinates without supporting commercial and production records may not provide sufficient evidence for a buyer’s due diligence process.

A Finance-First ESG approach links improvement with commercial value

The Sustainable Coffee Exchange uses a Finance-First ESG approach intended to make sustainability adoption commercially rational for participating enterprises. Measurable improvements may help businesses strengthen their readiness for green credit, sustainable investment and sourcing relationships with companies that reward verified performance.

This approach recognises that regulation alone may not provide smaller companies with enough resources to change their operations. Enterprises are more likely to maintain new practices when environmental and social improvements are connected with financing opportunities, market access or stronger buyer relationships.

The programme therefore combines regulatory pressure with commercial incentives. EUDR, corporate sustainability requirements and buyer expectations create the need for improvement, while investor matchmaking, potential sourcing premiums and public recognition create additional reasons for companies to continue implementation.

However, access to finance will still depend on the quality of each business plan, financial position and proposed investment. Participation in the project does not automatically guarantee credit, investment or preferential purchasing terms.

An ESG Scorecard will help businesses establish a baseline

A central project tool will be a co-designed ESG Scorecard adapted to the realities of Vietnam’s coffee sector. The scorecard is intended to help MSMEs and cooperatives assess their current performance, identify priority gaps and develop practical improvement plans.

Environmental indicators may examine issues such as land-use risk, water and energy efficiency, waste management, fertiliser practices, emissions and the traceability of coffee origins. The exact priorities may differ between a cooperative purchasing cherries from smallholders and an exporter operating warehouses or processing facilities.

Social indicators can address working conditions, occupational health and safety, gender equality, inclusion, community relationships and mechanisms for receiving concerns or complaints. These issues are increasingly relevant to international buyers conducting broader responsible-sourcing reviews.

Governance indicators may evaluate internal responsibilities, documented policies, supplier controls, record retention, risk management and the accuracy of sustainability claims. Strong governance is necessary because environmental information loses value when a business cannot demonstrate who collected, verified or approved it.

Individual coaching will support practical implementation

Participating enterprises and cooperatives are expected to receive individual advisory support rather than relying only on general training sessions. One-on-one coaching can help organisations translate scorecard findings into actions appropriate to their size, products, suppliers and target markets.

A small cooperative may need to begin by standardising farmer lists and plot records, while an exporter may need to connect supplier information with warehouse and shipment codes. A processor may focus on energy use, wastewater, occupational safety and the traceability of incoming raw materials.

Tailored action plans can also help businesses separate urgent market-access issues from longer-term sustainability goals. EUDR-related data may require immediate attention, while investment in renewable energy, advanced waste treatment or low-emission processing may be implemented over a longer period.

Progress will need to be supported by evidence. Policies, training records, invoices, photographs, maps, inspection results and production data may all contribute to demonstrating that an improvement has been implemented rather than merely planned.

The ESG Resource Hub will provide practical materials

SCE plans to establish an ESG Resource Hub containing tools, templates and guidance for coffee enterprises, cooperatives and supporting organisations. This resource can reduce the need for every small business to design policies, checklists and monitoring systems from the beginning.

Useful materials may include ESG assessment guidance, reporting checklists, supplier questionnaires, improvement-plan templates and information explaining the role of business associations and civil-society organisations. Tools will need to be understandable and proportionate to the capacity of smaller enterprises.

The Resource Hub can also help distinguish between different sustainability concepts. ESG management, EUDR compliance, certification, carbon accounting and responsible sourcing overlap in some areas but are not interchangeable.

A company can improve its ESG score without automatically satisfying every EUDR requirement. Similarly, holding a sustainability certificate does not necessarily remove the need to provide plot-level information and product-specific traceability requested by an EU operator.

Civil society and communities receive a larger role

The Sustainable Coffee Exchange is not limited to direct support for companies. It also aims to strengthen the role of business associations, civil-society organisations, community groups and other non-state actors in responsible coffee-sector development.

These organisations can help identify local environmental and social risks that may not be visible in company-level reports. Community participation can provide information about land use, water pressure, labour conditions and the effects of agricultural or processing activities.

The project plans to support community-generated data and more meaningful participation in ESG processes. By the third year, it aims for 40% of MSMEs and cooperatives using the scorecard to involve civil-society or community representatives in their ESG activities.

Meaningful participation requires more than inviting stakeholders to a meeting. Enterprises need processes for recording concerns, evaluating evidence, responding to problems and communicating how decisions were made.

Twelve multi-stakeholder platforms will support dialogue

SCE will work through 12 multi-stakeholder platforms across Lâm Đồng and Sơn La. These platforms are intended to bring together government agencies, businesses, cooperatives, civil society and community actors to discuss ESG challenges and responsible business practices.

Six platforms are expected to be used by the second year and a further six by the third year. The discussions can help place practical coffee-sector concerns on provincial and national policy agendas.

Smaller enterprises may use these platforms to explain barriers that cannot be solved by an individual company, such as fragmented farm data, inconsistent technical guidance, financing constraints or limited coordination between local institutions.

The project aims for 70% of participating non-state actors to become active contributors to multi-stakeholder dialogue by the third year. This would represent a shift from receiving information passively to contributing evidence and proposed solutions.

Lâm Đồng and Sơn La provide different learning environments

Lâm Đồng is one of Vietnam’s most important coffee-producing provinces, with extensive Robusta production and recognised Arabica areas around Đà Lạt. Its supply chains include smallholders, cooperatives, traders, processors and exporters serving both domestic and international markets.

Sơn La is a major northern Arabica origin where coffee production is closely connected with mountainous communities, diverse ethnic groups and smallholder farming systems. The region has different climate, land-use and market conditions from the Central Highlands.

Working in both provinces can help the programme test whether ESG tools remain practical across different farm structures, coffee varieties and community contexts. A model suitable for a large Robusta supply chain may require adjustment before being applied to smallholder Arabica production.

The experience can also help individual Vietnamese coffee origins develop clearer environmental, social and commercial profiles. Buyers increasingly want origin information supported by traceable data rather than broad national claims.

Investor matchmaking may support implementation

The project plans investor matchmaking activities and practical investor-readiness support for participating MSMEs and cooperatives. Enterprises may receive guidance on presenting business plans, explaining ESG improvements and preparing information commonly requested by lenders or investors.

Potential investments could support traceability systems, efficient processing equipment, renewable energy, wastewater treatment, farm-level improvements or working capital connected with verified sustainable sourcing. The appropriate investment will depend on the enterprise’s business model and identified ESG gaps.

Investors will need evidence that proposed improvements can produce measurable operational or commercial results. Companies may therefore be asked to connect requested finance with targets such as lower energy use, improved data coverage, reduced waste or access to a defined buyer market.

An ESG Leadership Awards programme is also planned to provide public recognition for measurable progress. Recognition can help successful enterprises demonstrate commitment, although awards should not be presented as formal regulatory approval or certification.

The project builds on earlier climate-finance experience

SCE builds on experience from the Café-REDD and Dutch Fund for Climate and Development programmes in Sơn La and Lâm Đồng. These earlier activities helped establish a model connecting sustainable coffee production, deforestation-free traceability and access to climate finance.

The programmes mobilised approximately EUR 4.6 million in climate finance. SCE seeks to expand that finance-linked sustainability approach across a broader group of coffee businesses, cooperatives and supporting organisations.

This background is important because many ESG projects struggle to continue after external technical assistance ends. Connecting improvements with investable business models may help practices survive beyond the project period.

Long-term success will still depend on whether enterprises can maintain records, finance recurring costs and respond to changing buyer requirements after direct programme support has concluded.

Measurable improvement is a central project target

By the end of the project, SCE aims for 75% of participating MSMEs and cooperatives to improve their results compared with their initial ESG Scorecard baseline. Performance will be examined across factors such as location, organisation type, gender, ethnicity and disability.

This target focuses on improvement rather than expecting every participating business to begin from the same level. A small cooperative with limited documentation may demonstrate significant progress by creating reliable supplier records and governance procedures, even if it does not reach the same capacity as a large exporter.

Baseline measurement will be critical to the credibility of the results. Enterprises need clear starting data so that later changes can be assessed consistently and improvements are not based only on self-declared achievements.

The project will also need to avoid encouraging businesses to focus only on indicators that are easy to score. Material risks involving land, workers, communities or supply-chain integrity should receive attention even when they are more difficult or costly to address.

Participation does not replace EUDR due diligence

The Sustainable Coffee Exchange can help enterprises develop systems and practices that support EUDR readiness, but it is not an official EUDR certification body. Participation in training, use of the scorecard or receipt of an award does not automatically prove that a particular shipment complies with the Regulation.

EUDR assessment remains product and supply-chain specific. European operators must evaluate the information connected with the coffee they place on the market and follow the legal procedures applicable to their role.

Vietnamese suppliers should therefore continue to maintain plot information, purchasing records, processing data and shipment-level traceability. These records should be incorporated into structured quality and compliance procedures rather than stored as a disconnected sustainability file.

Suppliers must also ensure that information shared with buyers is accurate and consistent. Incorrect coordinates, duplicated farms, incompatible quantities or unclear land documentation can create compliance risk even when the company has participated in a recognised support programme.

Exporters can use ESG improvements commercially

Stronger ESG systems can support more than regulatory compliance. They may help exporters respond faster to buyer questionnaires, prepare more reliable sustainability reports and demonstrate how coffee was sourced and processed.

Clear governance and traceability can also reduce commercial disputes. When suppliers can connect contracts, approved lots, quality records and production information, buyers have greater confidence that delivered coffee matches the agreed origin and specifications.

Enterprises should align ESG data with processing schedules, customs information and export procedures. Product descriptions, quantities, supplier records and shipment documents need to remain consistent across internal and customer-facing systems.

The Sustainable Coffee Exchange represents a broader shift in Vietnam’s coffee sector from treating sustainability as a separate project toward integrating it with management, finance and market access. Its impact will depend on whether participating organisations convert training and tools into durable operational changes.

International buyers seeking Vietnamese coffee with defined specifications, origin information, ESG documentation and traceability support can submit a wholesale inquiry based on their product, volume, destination and compliance requirements.