Market transformation investing in Better Cotton
New Delhi-August 2014
In the next 40
years, more food
and fibers will be
produced than so
far in the history of
mankind
Business has great leverage
Top 200 multinationals15 key commodities 35 most threatened regions
Sustainable cotton: 3% of world production
Data over 2012. Source: State of Sustainability Initiatives Review (2014)
Coffee Cocoa Palm oil Tea Cotton Bananas Sugar Soy0%
5%
10%
15%
20%
25%
30%
35%
40%
Sustainably produced Sustainably produced and sold
BCI: young initiative with high growth rates
2008-9 2009-10 2010-11 2011-12 2012-13 2013-140
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
Organic Organic and Fairtrade FairtradeCmiA BCI
1.0%1.4% 1.2%
2.1%
3.8%
4.5%
71% of the sustainable cotton in the world market is Better Cotton
Second generation standard
• Based on performance metrics and continuous improvement
• Benchmarking leads to scale, for instance: o Brazil: 7% world productiono Australia BMP: 2%o USA: 14%o XPCC: 3%
• Ownership by national associations and government (Turkey, Mozambique, Brazil)
There is a scalable investment vehicle
Better Cotton Fast Track Fund
BETTER COTTON FAST TRACK FUND(€50-60 million over 5 years)
Goal: 1.5 million MT Lint of Better Cotton by 2015
“By 2018 the adidas Group has committed to using 100% ‘Sustainable Cotton’ in all its brands.”
“By 2020, the company wants all of the cotton used in its products to come from sustainable sources.”
“IKEA hopes to be using Better Cotton exclusively
by 2015.”
“5% of the cotton in the two million pairs of jeans shipped to the stores this fall was grown using sustainable methods. We want that number to rise to 20% by 2015.”
“We signed on to the BCFTP in 2011 with the commitment to source 100 % more sustainable cotton by the end of FY20”
There is a scalable investment vehicle
• So far we have invested around €22 million, now reaching 1,4 million MT and 553,000 farmers. Over the years we brought down cost levels from 44 € /MT in 2009 to 4 € /MT in 2014
• Target is to reach 9 million MT and 5 million farmers in 2020, roughly equivalent to 30% of world production
• Approximately €70 million needed for the transition, of which 25-30 million from B&R (compare that to annual USD 100 million into cocoa certification in Cote d’Ivoire only)
This investment helps you protect your brand and shareholder value
This investment helps you create value towards to consumer?
CEO
Still Have Questions ?
Contact:Pramit Chanda, IDH
[email protected]+91 98111 09022
“By 2020, one-third of the world’s cotton production will be sustainable !”
Thank [email protected]