Trends Palm oil 3/3


place that investing in sustainably certified products is the future. A report by WWF, Profitably and Sustainability in Palm Oil Production, offers a stark sanity check to the debate and hope to the many producers, manufacturers and retailers that are yet to come on board. The new report is a first time study that examines the financial costs and benefits of producing sustainable palm oil under the guidelines set out by the RSPO. It is good news: the economic benefits outweigh the financial costs of pursuing sustainable palm oil operations, says the WWF.


The environmental charity argues that companies considering adopting RSPO and selling CSPO should not underestimate the benefits to their businesses beyond premiums. All of the producers analysed for the study entered the system with this top-line motivation, and yet they ultimately discovered operational benefits that they had not anticipated and which exceeded expectations. “In many cases, the effects of the RSPO better management and agricul- tural practices were transformational for the business,” says the report. The study also talks to the investment


community which plays a “key role” in the palm oil supply chain. “RSPO should stand as both a reputational and business risk management tool,” says WWF.


“The reputational risks of unsustaina- ble palm oil production are well-known. Business risks include loss of market share, costly social conflicts, underperforming agricultural practices, and weak or absent company documentation.” More than three billion people will be joining the human species by 2050, at which time 70% to 80% of the population will be living in cities and consuming more edible oils and fats.


Standing at the nexus of these changes, the agricultural sector is facing unprecedented scrutiny from governments, regulators, NGOs, investors, and consumers regarding how its business practices impact the environment and the wider world. And palm oil continues to be at the forefront of these environmental and reputational challenges.


The RSPO’s certification process has made good head way and will be a crucial tool in ensuring a long-term sustainable supply of palm oil in the future. There is still a long way to go.


How does CSPO work?


If palm oil producers are to achieve CSPO they must adhere to a number of standards. They consist of eight principles, which are:


1. Commitment to transparency; 2. Compliance with applicable laws and regulations;


3. Commitment to long-term economic and financial viability;


4. Use of appropriate best practices by growers and millers;


5. Environmental responsibility and conservation of natural resources and biodiversity;


6. Responsible consideration of employees and of individuals and communities affected by growers and mills; 7. Responsible development of new plantings; and


8. Commitment to continuous improvement in key areas of activity;


The Principles and Criteria have been interpreted to account for local conditions, resulting in national standards that reflect local laws, regulations and best practices.

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