What Other Sectors Can Learn from Palm Oil (and vice versa): 3 Observations from the Sustainable Palm Oil Dialogue 2023 through the eyes of a Sustainability Consultant.

When organizing a conference, bring an orangutan. Panelist Kamal Seth, Global Palm Oil Director at WWF, went on stage with his stuffed orangutan, showing that is the one he is accountable to. I found this a simple but powerful, visual, message, triggering other parts of our personality than just the ratio.

What else can we learn from palm oil? Their good practices, errors, innovations? Below are a few of my observations of the Sustainable Palm Oil Dialogue 2023.

On June 14th, 2023, I attended the Sustainable Palm Oil Dialogue 2023 in Frankfurt. It was organized by the Forum for Sustainable Palm Oil, IDH, INA, and, as always, the Roundtable for Sustainable Palm Oil (RSPO), the sector’s largest voluntary sustainability standard and driver of deforestation-free, responsible palm oil since 2004. Present were cosmetics companies like L’Oréal, oleochemical manufacturers (Kao, BASF), traders, processors and plantation companies, (Wilmar, Musim Mas, Golden Agri-Resources), NGOs (WWF, Solidaridad) and supporting organizations.

Here are a few of my key insights. Note: I explicitly intend to not write these for readers dealing with palm oil, but rather the opposite: for those active in coffee, cocoa, natural rubber, rice, tea, and other commodities. Because there is plenty to share cross-commodity.

What was the hot potato?

The sole topic of the conference was the EU Deforestation Regulation, which will enter into force in 18 months from now.[1] Complying with this regulation is not easy. Smallholder-dominated sectors such as palm oil (30% of total producers), coffee (80%) and natural rubber (85%) all express similar challenges, including getting full traceability to the farm; obtaining consent to share information such as geocoordinates; and obtaining legality of the farm.

For those truly willing to do their utmost, there still is significant space for cross-sector learning. Concretely: Multi-stakeholder partnerships such as the RSPO, GPSNR, RTRS, GRSB, WCF, GCP and others should share the rich risk-management solutions that are discussed by their partners in palm oil, natural rubber, soy, beef, cocoa, and coffee. National development institutes – often commodity-specific – in producing countries can join forces in facilitating geolocation and traceability solutions to companies. NGOs and supporting organizations can play a key role in harmonizing data frameworks and company guidance. At the risk of focusing solely on becoming ‘compliant’, these learnings should go beyond just deforestation and cover other priorities as well.

Which topics were not discussed?

And that brings me to the topics that were conspicuous by their absence. Conferences should prioritize, as should companies – however, it is key to recognize the importance of these topics in the longer-term sustainability journey. Not only for palm oil, but also (if not more) for other sectors.

  • Living Income and Living Wage (LI, LW). Although article 6.2.6. of the RSPO Principles & Criteria states that ‘a Decent Living Wage is paid to all workers (…)’, it was not discussed at the event. I can only stress the obvious that reaching a LI/LW is a key lever for de-risking your supply chain. In coffee, this is recognized through the work of the Coffee Public-Private Task Force. In tea, Living Wages are increasingly recognized as a key priority. The RSPO is taking it seriously through its LW Task Force where the first priority is to better understand prevailing wages.
  • Regenerative agriculture, as an alternative means of producing food that can reach net positive environmental and social impacts through soil restoration, was not on the agenda. Currently, a fraction of global agricultural land is considered ‘regenerative’. Whereas it can have significant benefits. If all land currently used for agriculture were converted to regenerative agriculture, experts state we could sequester over 100% of current annual CO2 emissions at best, or store 14.5-22 gigatons CO2 by 2050 at worst. Perennial crops – in contrast to annual crops – such as oil palms (but also: natural rubber trees or coffee plants) are especially well suited for regenerative practices. Practices such as the 10-year long study on how regenerative agriculture can benefit palm oil sustainability, launched by Musim Mas, Danone, l’Oréal, Mars the Livelihoods Funds and SNV, are promising and would benefit from incorporating lessons from other sectors.
  • Producer and farmer representatives were absent from the panel discussions. It is nothing new, but key to remember: farmers need to be involved in the discussion. Decision-makers speak about them, but often not with them in such settings as these conferences. Luckily, more and more mechanisms are created to involve farmer representatives structurally in the discussion. But challenges remain. This is true for all sectors.

What can other sectors learn from palm oil?

Finally, let me share some key lessons in palm oil that other sectors can learn from.

First, RSPO is taking a leadership role in bringing the sector along in the jungle of EU DR compliance. It actively converses with EU policymakers on using its standard to comply, adapts its PalmTrace tool to ensure traceability capacity is in line with requirements, and continuously informs its members on updates from the EU front. I can only say, well done RSPO. This is a call for those multi-stakeholder partnerships in other sectors: take up this leadership. This is how you truly add value to your members.

Second, landscape initiatives such as the RSPO’s Jurisdictional Approach, IDH’s SourceUp, LandScale or others, have the potential to be a key accelerator to scaling sustainability and complying with upcoming regulations. But only if they are designed well, seeking active cooperation with (local) governments within jurisdictions and not just any landscape to ensure real, institutionalized change. Palm oil actors are well on their way via jurisdictional pilots in Sabah, Aceh, Central Kalimantan and Ecuador, although these have presented their own challenges. Other sectors are encouraged to learn about the good, the bad, and the ugly of these initiatives; join them (if they source from similar areas) or set up their own to scale sustainability.

Feel free to add, react or comment. Or reach out to me: joost.backer@newforesight.com.

[1] Read more about the exact requirements of the EU DR here.

About NewForesight

NewForesight drives transitions towards sustainable economies. We believe that sustainable transitions can be managed and offer many business opportunities. You can benefit from these opportunities while making a credible impact.

Palm oil is one of NewForesight’s focus sectors. In 2022, IDH, RSPO and EPOA commissioned us to write the 2022 report Sustainable Palm Oil: Europe’s Business. In 2019-2020, RSPO and NewForesight developed the Jurisdictional Approach as one of today’s key landscape models to sustainability.

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