Add the sugar and water to a large pan over medium heat. Stir for 1-2 minutes until the sugar has fully dissolved.
Bring it to a boil. Once it’s boiling, stop stirring and let it bubble for about 7-8 minutes, until it turns a rich amber colour. (If using a thermometer, aim for 160-180°C.)
Remove the pan from the heat and whisk in the vegan butter until melted and combined.
Slowly whisk in the coconut milk (it will bubble up), then whisk in the vanilla extract. Keep whisking until smooth and glossy.
Let the sauce cool for 5 minutes before serving - it thickens as it cools but should stay pourable.
Pour into an airtight jar once slightly cooled.
Notes
Storage: Keep in the fridge for up to 2 weeks in an airtight container.Reheating: Warm gently on low heat (or microwave in short bursts), stirring until smooth.Coconut milk tip: If your can separates, scoop from the top of the can for extra creaminess.Salted version: Add sea salt at the end to taste for a salted caramel sauce.