Sugarcane

Sugarcane production has steadily increased over the past several decades, doubling over the last 20 years. Producing sugarcane places significant pressure on water supplies and leads to water pollution that impacts biodiversity and the functioning of healthy ecosystems.

This brief provides a summary of the main environmental and social factors that affect sugarcane production worldwide; however, it spotlights key players in the U.S. value chain, and provides examples of actions being taken by companies operating or headquartered in the U.S.

KEY TAKEAWAYS

Sugarcane production has steadily increased over the past several decades, doubling over the last 20 years in line with growing consumption of sweetened processed foods and drinks, and its use as a feedstock for producing ethanol.
Producing sugarcane places significant pressure on water supplies and leads to water pollution that impacts biodiversity and the functioning of healthy ecosystems.
The use of forced labor and child labor along with other human rights challenges in many sugarcane-producing countries present a business risk.
Investors should address business risks in the sugarcane supply chain through direct engagement with their portfolio companies and by supporting relevant policies and multistakeholder collaborations.

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Environmental and Social Factors that Drive Risks

Climate Change
Deforestation and Land Use Change
Soil Health and Biodiversity
Land Rights
Water Use and Pollution
Working Conditions

Climate Change

medium

Greenhouse gases are emitted when sugarcane fields are burned before manual harvesting of sugarcane.
Deforestation and Land Use Change

low

Sugarcane production has not been a major driver of deforestation.
Soil Health and Biodiversity

medium

Sugarcane production has not been a major driver of land use change. Water pollution can lead to biodiversity loss.
Land Rights

medium

Competition for land exploits communities and workers.
Water Use and Pollution

high

Water use contributes to over withdrawal from aquifers and surface water. Excessive application of fertilizer combined with poor irrigation practices can lead to nutrient pollution and algal blooms.
Working Conditions

high

Numerous violations of the International Labour Organization’s (ILO) core labor principles are linked to sugarcane production.

Commodity Background

In the US. the large majority of sugar consumed is produced domestically, with sugarcane accounting for about 45 percent of domestic sugar. This sugarcane is produced primarily in Florida and Louisiana with the remainder grown in Hawaii and Texas.

Top Production Regions

Brazil and India together account for about 60 percent of global sugarcane production.

Production Statistics, Trends, and Drivers of Demand

1,899 million metric tons:
Average global sugarcane production, 2011-2013

$88 billion:
Global production value

20 percent:
Proportion of global production exported (of raw cane and beet sugar)

Supply Chain

The sugarcane market is highly concentrated with a small number of players controlling refining and merchandising.

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Company Examples

General Mills

General Mills has committed to source 100 percent of its sugarcane by 2020 from responsible and sustainable regions that are in compliance with Bonsucro or comparable standards. It will independently verify any high impact countries.

PepsiCo

PepsiCo has committed to 100 percent sustainable sourcing of sugarcane by 2020, which will be achieved by gaining Bonsucro certification and implementing related sourcing plans.

The Coca-Cola Company

The Coca-Cola Company has set a systemwide goal to sustainably source 100 percent of its sugarcane by 2020, with Bonsucro certification as its preferred method. Fifteen of the company’s top bottlers (representing about 85 percent of the TCCC system’s sugar purchases) have also committed to their own plans to reach this target.

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