Our world is faced with dire global water challenges. A major contributing factor to these challenges is agriculture, which accounts for 70 percent of the world’s water withdrawals. Sugar, a critical ingredient in many food and beverage products, including ours, is a highly thirsty crop and one of the most complex. While the sugarcane sector is a major provider of jobs in rural areas where work is often scarce, these jobs are typically low paid, seasonal jobs, and associated with poor working conditions. As buyers of sugarcane, our industry has an increasing obligation to sustainably source sugar and transparently communicate about our actions to do so to consumers.
With sugar a major commodity for The Coca-Cola Company and SABMiller, we must work together as active participants in supporting more sustainable sugar supply chains. This calls for us to set new expectations of our suppliers, revise our procurement policies, enter into long-term contracts, co-invest with value chain partners to improve the environmental and social impact of sugar production, and other important measures. We believe that significant change is needed in sugar production and procurement for the sector to be sustainable, and we are taking actions to advance it.
One of the ways we’re championing this direction is through our support of, “Collaborating for Change in Sugar Production: Building Blocks for Sustainability at Scale.” The report, released this week by Harvard Kennedy School and Business Fights Poverty, emphasizes the need for stakeholders to work together to achieve a higher level of environmental, social and financial performance from the sugar industry, and outlines the actions needed to bring about real change in the sector.
Incentives are not yet sufficiently strong or aligned across the value chain to drive more sustainable production and procurement practices at scale. The report identifies six building blocks necessary to align the incentives of growers, mills, refiners, traders, and buyers in favor of greater sustainability at scale. There’s a critical role for all stakeholders to play.
At Coca-Cola, for example, substantial commitments in sustainable agriculture have been made, with a system-wide goal to sustainability source 14 key agricultural ingredients by 2020, representing 90 percent of the Company’s agricultural spend. Coca-Cola has also developed and is working to implement Sustainable Agriculture Guiding Principles, which articulate expectations, and set criteria for human and workplace rights, environmental stewardship and farm management. And, the Coca-Cola system has recently been awarded Bonsucro® Chain of Custody Standard certification, taking shipments of Bonsucro®-certified sugar in 2015 as the system builds momentum toward 2020 goals.
SABMiller announced its ambition to source all of its sugar from sustainable sources by 2020 as part of ‘Prosper,’ a companywide strategy that includes supporting responsible, sustainable use of land for brewing crops as one of five imperatives. Azucarera del Norte, “Azunosa,” the sugar mill in Honduras owned by SABMiller, has become the first Bonsucro®-certified cane sugar producer in Central America and the Caribbean. The company’s efforts to optimise water, contribute to the eradication of child labour in the sugarcane industry and to promote the growth of formal small holder farmers with secure access to land have been recognised by Bonsucro®.
While we are proud of Azunosa’s industry leading commitments and actions, and mindset of continuous improvement, there’s a long road ahead toward sector transformation. The merging of sustainability and financial accounting remains just a conversation, though the conversation is getting louder. The report by Business Fights Poverty and Harvard Kennedy School’s CSR Initiative makes very clear that policy engagement will be key to sector change, with governments essential in facilitating more sustainable production.
For both Coca-Cola and SABMiller, during our sustainability journey, we have learned that translating commitments into reality requires both partners who can work with us across markets, like WWF, Solidaridad and TechnoServe, and local partners who understand the local context inside and out. To achieve real progress on sugar, and have an impact on the greater global challenges sugar production contributes to, engagement from all stakeholders is required. Together, we must be committed to making a difference that not only minimizes impact but brings economic and social value for the communities we serve.