12th February 2021
Bonsucro in South Africa is leading the Good practice, Better finance project funded by the Swiss State Secretariat for Economic Affairs (SECO) through the ISEAL Innovations Fund. The project aims to develop a new methodology to assess the sustainability performance of farmers by using existing voluntary sustainability standards.
The project uses Bonsucro for sugarcane production, the Better Cotton Initiative (BCI), for cotton production and the Alliance for Water Stewardship (AWS) for water management as guidance for sustainability practices. A key objective for the project is to develop a methodology and supporting data management and reporting tools that can inform decision makers at banks and possibly insurance agents on the sustainability profiles of their clients. The proposed innovation will put banks in a better position to offer incentives for sustainable business practices.
The project started in June 2019 and is a collaboration between financial institutions, cotton and sugarcane producers, an RCL sugar mill and the three voluntary sustainability standards, namely Bonsucro, BCI and AWS.
In November 2020, the pilot phase of the project began. In this period, a data collection tool was tested with sugarcane and cotton farmers. The tests were to ensure that the technology worked and that the farmers understood the questions.
The questions for sugarcane farmers are mostly aligned to the Bonsucro Production Standard. The questions cover areas such as water management, chemical usage and labour practices. The methodology also covers broader, external risks to the farm and questions include the impact of crime, climate change and regional water governance on the long-term sustainability of the farm.
The second stage of the pilot will take place in March and April this year. In this time, a database will be populated for analysis and reporting.
The results will be shared with the farm in a sustainability dashboard which the farm can share with a bank or insurance company to support negotiations and deals. The project has already created sincere interest in South Africa amongst several banks.
The project will run until November this year when the outcomes will be shared with all stakeholders.