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Raizen: Evaluating the Return on Sustainability Investment

Raizen: Evaluating the Return on Sustainability Investment

Companies are increasingly under pressure to show they can create value while meeting the world’s economic, social and environmental needs. Putting a financial value on intangible benefits such as a safe workforce or sound environment practices can be very difficult, but as DNV GL’s project with Brazilian ethanol-producer Raízen showed, it can be done.

Raízen is the fifth largest company by revenue in Brazil, producing four million tons of sugar and two billion liters of sugarcane ethanol per year – enough to fuel a large portion of the nation’s road fleet. The company places great importance on responsible sourcing, and uses the widely-respected Bonsucro certification standard for third party verification of the sustainability of its supply chain.

The company was asked by shareholders and internal management to demonstrate the material benefits of this approach, and to help with this task DNV GL Brazil’s Sustainability Services team worked with Raizen to demonstrate the value of using the Bonscuro certification.

The Bonsucro standard covers a range of sustainability issues including legal compliance, respect for human rights, active management of biodiversity and continuous improvement of key business areas. We found that traditional return on investment methodologies were not able to assign a value to these sorts of risks and opportunities and the team therefore devised a ground-breaking new methodology which calculated the Return on Sustainability Investment (RoSI).

The RoSI methodology evaluated the impact of Raízen‘s use of the Bonscuro certification on areas such as brand and reputation, legal and regulatory compliance, organizational efficiency, human capital and access to markets. These were then linked with quantifiable metrics which enabled Raizen to align financial value and sustainability investment.

This complex process involved several Raizen corporate departments but for the first time allowed the company to clearly justify investment in sustainability certification to its shareholders.

 

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