Sustainable sugar: Coca-Cola and BP signed up but will it go mainstream?

Few commodities have a darker history than sugarcane. A labour-intensive monocrop that once relied on slavery, it has more recently encompassed child labour, land-grabs and the displacement of communities (pdf). A notoriously “thirsty” crop, it depletes aquifers and pollutes seas with chemical fertiliser and pesticide run-off. The common practice of burning fields accounts for 20% of the crop’s CO2 emissions.

Sugarcane cultivation grew globally from 19m hectares in 2000 to nearly 24m by 2010 (pdf): the same as palm oil and cocoa combined. With the world’s increasingly sweet tooth and demand for sugar-derived ethanol, this expansion is set to continue.

Fairtrade, Rainforest Alliance and the IFOAM Organic have long been trying to clean up the sugar trade, yet account for less than 1% of the global sugar market (pdf).

Since 2008, however, Bonsucro – formerly the Better Sugarcane Initiative, supported by WWF – has been courting a more mainstream market. It already accounts for 3.66% of global sugarcane, with a goal of 20% by 2017. Its membership includes Coca-Cola, the confectioner Ferrero Group, and oil companies BP and Shell. These “end users”, many of whom sit on its board, aim to drive sustainability by being business-facing rather than consumer-led.

“The Bonsucro standard addresses environmental and social impact”, explains its acting CEO and head of engagement, Natasha Schwarzbach. “Farmers, millers, brands and NGOs got together and said look, we need to do something. They wanted one standard that could... drive change within the industry.”

Since setting its standards in 2011, 203 members have signed up and 38 mills have been certified according to standards on land rights, “enterprise resilience”, labour rights, climate change and biodiversity. An independent review (pdf) by IUCN of a certified mill in Maracaí, Brazil, found a 20% reduction in inorganic fertiliser application and a four-fold reduction in acidifying gases emissions.

Bacardi, a founder member, has committed to source 100% sustainable sugar by 2022. Ferrero and Coca-Cola followed suit, promising to do so by 2020.

However, it has not all been plain sailing. In 2012, former Bonsucro CEO Nick Goodall expected certification to account for 5% of the world’s sugarcane within two years. Now more than two years on, 3.66% is someway short and makes 20% by 2017 seem unlikely. Tate & Lyle resigning its membership this year following a row over land-grab allegations in Cambodia, arguably didn’t help.

Sugarcane is grown in 102 countries while Bonsucro has certified mills in just two: Brazil and Australia, two of the more developed sugarcane producing nations with relatively established good practice. Schwarzbach says that new revised standards will be launched at this month’s AGM, and ten priority markets are now being targeted, including Thailand, India, Indonesia, Pakistan, Mexico, Fiji and Central America.

“We have an extensive engagement programme within each of those countries”, she says. “Some countries are at the very earliest stage of even learning about sustainability... they want to ensure there [will be] someone at the end of their supply chain.”

There are others that believe 3.66% market share from a standing start is too fast to be credible. Jason Potts, co-author of the International Institute for Sustainable Development’s The State of Sustainability Initiatives Review, assessing sustainability standards across ten commodities sectors, including sugar. He argues that mainstream initiatives buddying up to big brands tend to have low barriers to entry.

“The very positioning of Bonsucro as a mainstream initiative I think established it as looking for minimum requirements rather than cutting edge or leading requirements”, he says. “The way I would read it is these are minimal hurdles for entering into global supply, and a minimal assurance that some degree of sustainable supply management is being undertaken.”

That said, he concedes, “the real shift in the way a market operates is through business-to-business decisions... when we see a real growth in adoption rates [of sustainability standards], it’s because companies have decided they are going to source, rather than consumers.”

As Bonsucro attracts more big industry members, it can exert considerable influence on suppliers. The policy of certifying sugar mills rather than farmers also lends itself to rapid growth. A mill typically receives cane from many different farms, all of which must meet the Bonsucro standards for the mill to be certified. Potts questions whether this is simply a “cost-cutting measure”, allowing Bonsucro to shirk the leg-work with farmers that Fairtrade does. But it is also a canny way of leveraging a key link in the supply chain.

Dave Howson, global sustainability director of Bacardi, has seen this in action. “In Fiji... mills were literally causing a logistical backlog of farmers trucks waiting for a mill to crush their cane, with trucks sitting there for hours if not days at a time, their cane drying out.”

Howson is also a board member of Bonsucro. “There is real, tangible proof of mills and supporting farms who have achieved the Bonsucro standard who are more productive”, he says. Bonsucro research (pdf) shows that certified mills compared to the industry average use half the fertiliser, a third less pesticide, and significantly less water (9.92kg per kg of product compared with 23.67kg per kg), to improve yields by 44%.

However, Bonsucro’s own report concludes it is, “a young and evolving organisation” and the “research about its operations and results are still limited”. With a new set of standards that prioritise expansion, that evolution is set to go from niche to mainstream. Its ability to drive environmental and social change will soon attract recognition and scrutiny in equal measure.

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