Sustainable Palm Oil: A New Paradigm in Global Trade and Innovation — An Exclusive Interview with Sandeep Bhan
Sustainability Standards and Innovations
Given your experience in overseeing the marketing of Certified Sustainable Palm Oil (CSPO) and other sustainable palm products, what innovative approaches are you seeing in the industry to make palm oil production more sustainable? Could you share some risk management strategies that could be beneficial in ensuring sustainability?
There has been some significant sustainability approaches and tools developed for the palm oil industry. Most notably, the availability of a robust sustainability certification standard, the Roundtable on Sustainable Palm Oil (RSPO). The RSPO standard is a comprehensive set of sustainability principles and criteria that enshrines what it means to be a sustainable palm oil company. This is coupled with an independent third party verification system. It is worth noting that the RSPO standard was developed, and is maintained, by a multi-stakeholder community that includes industry players, traders, consumer goods manufacturers, retailers, financiers and civil society organisations. There is also an accreditation requirement for third party verifiers, to ensure that the verification process remains robust.
The clearest risk management strategy to ensure a sustainable supply chain is to buy sustainable palm oil, where available, and to work with suppliers to improve their sustainability practices. Approximately, 65% of Sime Darby Oils supplies currently originate from an RSPO certified plantation and we also have engagement programmes with our third party suppliers. This includes 60,000 smallholder farmers, 50% of whom we have helped to achieve RSPO certification.
Tech-Driven Sustainability
The industry is increasingly adopting technology for better yield and efficiency. In your role overseeing refineries and crushing plants in Malaysia and Indonesia, what technological innovations have you found most impactful in enhancing sustainability?
Knowing your supply chain, is a key component of sustainability. We call this traceability. An example of a technological innovation that we have employed for traceability is our online mapping platform, called Crosscheck.
Crosscheck is an open-access digital tool that tracks and maps the origin of our palm oil supplies. Crosscheck users can explore:
‣ Our supply chain, including refineries and crushing plants, mills, plantations, and smallholders
‣ Detailed profiles of Sime Darby Plantation and third-party supplier mills, including Global Forest Watch risk ratings and summaries of grievances (where applicable)
‣ Forest and peat areas, and our conservation projects in high-value landscapes.
Crosscheck’s enhanced transparency is an industry first and a significant step towards a deforestation-free supply chain. The information available has given us a powerful analytics tool to better understand the scope and complexity of our supply chain and the interconnections between the actors within it.
**Crosscheck is accessible via this link: **Crosscheck
Global Trade and Sustainability
You play a crucial role in exporting palm oil to global markets. How do you ensure that sustainability standards are maintained in international trade? Are there any innovative trading strategies that you think could promote sustainability on a global scale?
We help build sustainable palm oil supply chains to facilitate the availability of sustainable palm oil in various markets. This includes established sustainability markets (such as Europe and the United States), as well as, developing sustainability markets (such as South East Asia and India). This helps our customers to make better choices and supports the adoption of sustainable practices on the ground.
The demand and uptake of sustainable palm oil is crucial to drive sustainability practices. Currently, about 19% of global palm oil production is certified to the RSPO standard. Only half of this, is being bought as RSPO certified. This mismatch between supply and demand needs to be addressed to promote the adoption of sustainability at the plantation level.
