Investing in oil palm: balancing investor objectives and concerns

Summary

Should investors and others concerned with supporting Sustainable Development Goals engage with oil palm cultivation, and if so, how? Voluntary Sustainability Standards (VSS) have played a pivotal role in improving social and environmental sustainability in the sector. However, risks and opportunities vary across regions, making their implementation challenging. Despite their importance in the oil palm sector, integrating and developing smallholder farmers within the supply chain remains difficult. Financial and other constraints make certification unattainable for most smallholders, requiring more scalable and flexible solutions guided by the principles underlying VSS. Investors must be aware of local realities and limitations, invest in safeguards, build local capacities, and enhance information flows and dialogue among sector stakeholders.