Is RSPO certification becoming irrelevant?

Mondelez and Danone have announced they are using additional requirements to their sustainable palm oil, such as protecting peatlands and reduced greenhouse gas emissions, and more will be following in their footsteps as companies battle to become ‘sustainability leaders’, says Rabobank. In fact, a Rabobank report entitled The Many Flavours of Sustainable Palm Oil predicts that by 2020 half of all palm oil used by manufacturers who purchase RSPO-certified oil will be sourced with criteria that go above and beyond the current RSPO standards. “This growing demand for more stringent criteria could potentially undermine the relevance of RSPO-certified palm oil to buyers, negatively affecting demand,” says Rabobank analyst Pawan Kumar. But Danielle Morley, RSPO’s European director of outreach and engagement, told FoodNavigator the RSPO welcomes any initiative aimed at improving sustainability performance. “ Policies adopted by private food manufacturers that go beyond the RSPO principles & criteria are in line with our aspirations of continuous improvement and should be seen as the successful outcome of the journey started some ten years ago by RSPO.” She said the proposed RSPO Next programme would seek to keep criteria attractive to branded manufacturers by expanding the standards. Designed for growers who wish to make additional commitments rather than buyers, the voluntary addendum will only be available to growers who can demonstrate that they have fully implemented the RSPO principles & criteria as well as additional policies. If adopted, Morley said that the addendum would allow growers who have decided to move faster to better communicate and implement their sustainability practices. “It will allow the RSPO standard to remain representative of the industry as a whole and to continue in its ambition of transforming the entire industry from the bottom to the top. “Through the inclusion of all players, including those with advanced commitments to sustainability, the RSPO standard will continue to improve its credibility and accountability,” she said. More opportunities for niche Meanwhile, these stricter interpretations of what sustainable sourcing means is making a complex market even more complicated – but also creating opportunities for niche players. Kumar says: “ The trend towards sustainability is an opportunity for niche players and dedicated suppliers with vertically integrated supply chains who specialise in highly traceable palm oil. Niche or small volumes will prevent economies of scale and result in premiums for sustainable palm oil with more stringent criteria.” But it will also create increasingly complex supply chains. “For many suppliers, creating, maintaining and controlling different certified and traceable supply chains remains an inventory challenge, and the focus will therefore be on efficiency: making sure all purchased palm oil matches client interests.” RSPO-certified palm oil accounted for 20% of the global palm oil supply between 2008 and 2014, but total demand is still only half of global supply. Suppliers and traders in the US and Europe currently account for 80-90% of certified palm oil but demand in Asia is rising. Rabobank predicts that other global commodity markets, such as soy and sugar, could see the same sustainability drive as palm oil in coming years.

Is RSPO certification becoming irrelevant?

Companies are increasingly demanding certified palm oil using criteria that are stricter than current RSPO standards – does the mean the RSPO certification is in danger of becoming irrelevant?

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