news - FMO Study: Sustainable palm oil is good for business

New joint study from FMO, CDC and WWF shows economic benefits of sustainable palm oil

Production of certified sustainable palm oil is also good for the bottom line, according to a ground-breaking new report released today. 

Profitably and Sustainability in Palm Oil Production is a first-time study that comprehensively examines the financial costs and benefits of producing sustainable palm oil under the guidelines set out by the Roundtable on Sustainable Palm Oil (RSPO). 

Produced jointly by FMO, the Dutch development bank; the World Wildlife Fund (WWF), and CDC, the UK’s development finance institution, the report shows that the business benefits gained from achieving RSPO certification typically outweigh the costs of implementation—in many cases significantly—yet often through unexpected and indirect channels.

For example, while many firms were initially attracted to RSPO for the price premiums commanded by certified sustainable palm oil, the larger financial gain often turned out to be resulting improvements in operations, documentation systems, labour relations, and other internal factors.  In fact, each major category of benefits was itself capable of outweighing RSPO implementation costs, according to the report.

The study shows that many firms who switched to producing sustainable palm oil – which is good for people and the environment – reaped significant return on their investments. In some cases, switching to sustainable production was economically transformative for the business.  Producers, buyers, and investors should see sustainable palm oil as a serious business opportunity.

Desmond Fortes, from FMO’s Sustainability Development Team and a co-author of the report said:  “This important report draws on direct operational experience of eight major palm oil producers to demonstrate how improvements to sustainability performance and financial returns go hand-in-hand. FMO aims to demonstrate the bottom line benefits of sustainable business and this research does just that by showing how sustainable practices, even in a high impact industry like palm oil, can result in net financial benefits to producers—providing gains for people, the planet and the bottom line.

You can find the report here