Certification schemes have become one of the most popular mechanisms for establishing market preference for sustainable goods. They verify that an organisation has achieved a certain standard, whereas a standard itself can be set independently without the added validation of an independent third party.
Over the past decade, certification schemes have grown in popularity as a mechanism for encouraging and enforcing the sustainable production and sourcing of key commodities, such as soy, timber, and fish. Initiated by civil society and business leaders nearly two decades ago, certification schemes have expanded to include a range of products, including seafood (e.g. MSC), chemicals (e.g. Interk), electronics (e.g. IECEE CB Scheme), and forest products (e.g. FSC). The number of commodities undergoing certification has also risen significantly; for example, 20% of world banana exports are now certified and 7% of wild fish landings have undergone some form of certification.
The certification schemes themselves take different forms, one of the most popular and successful models being multi-stakeholder roundtables, such as the RTRS for soy. Some schemes may be designed to facilitate adherence to specific legislative standards, such as ISCC, while others, such as FSC, are intended to reassure consumers that the products they are purchasing have been produced to the highest ethical and environmental standards.
Most certification schemes are founded on a set of principles to which all bodies certified under the scheme must adhere. These principles are then broken down into subcategories, or ‘criteria’, with specific guidelines and reporting requirements. Different certification requirements are often necessary for different stakeholders based on their role in the supply chain; for example, the standards for palm oil growers are different to those for retailers.
What are the key certification schemes for palm oil?
Palm oil can be certified under a number of different agricultural certification schemes. These vary in their origins but all address key sustainability issues.
In the palm oil sector, two certification schemes currently dominate: the Roundtable on Sustainable Palm Oil (RSPO) and the International Sustainability and Carbon Certification (ISCC) system. The RSPO is the main certification standard for the use of palm oil and its fractions in food and oleo-chemicals. It uses a multi-stakeholder, business-to-business model to encourage the adoption of sustainable practices by members (particularly producers) and promotes the uptake of certified sustainable palm oil internationally.
The ISCC is based on the European Union’s Renewable Energy Directive (RED) and German sustainability ordinances (BioNachV) and is the predominant certification scheme for palm oil used as a feedstock for biofuels. It includes a rigorous carbon accounting mechanism, which documents energy inputs and greenhouse gas outputs to ensure that biofuels are truly sustainable.
In 2009 the Indonesian Government launched the Indonesian Sustainable Palm Oil (ISPO) standard. Based on existing Indonesian legislation, it is designed to ensure that all Indonesian oil palm growers, not just those exporting to foreign markets, conform to higher agricultural standards. It is the first national standard of its kind, and other countries have now begun to consider implementing similar standards to ensure sustainable practices among all palm oil producers.
The Malaysian Sustainable Palm Oil (MSPO) Certification Scheme is the national certification scheme in Malaysia through which oil palm plantations, independent and organised smallholdings, and palm oil processing facilities are certified by accredited Certification Bodies against the requirements of the MSPO Standards (MS 2530:2013 series). The MSPO Standards contain seven principles that cover: management commitment and responsibility; transparency; compliance to legal requirements; social responsibility, health, safety and employment conditions; environment, natural resources, biodiversity and ecosystem services; best practices; and development of new plantings.
Other standards available to companies in the palm oil arena include the Sustainable Agriculture Network (SAN) and the Roundtable on Sustainable Biofuels (RSB). Global GAP, Fairtrade, and Organic are all commonly used for agricultural commodities and focus their efforts on key topics, such as labour rights and the use of chemicals in agriculture. By comparing and contrasting the different principles and mechanisms used by certification schemes, we can better understand their strengths and weaknesses. This allows consumers to make more informed decisions and identifies areas requiring improvement for industry stakeholders and certification scheme members.
For more detail on these and other standards, visit our Standards page.
What are the challenges for standards and certification?
With certification schemes on the increase, questions are being raised as to their impact and true value, particularly given that consumers place a great deal of faith in the credentials of these schemes. In other words, how sustainable is ‘sustainable’?
Globalised markets, for example, often make quality control difficult and there are limited mechanisms to quantifiably measure the impacts of these schemes on the ground. Studies have shown evidence of economic, environmental, and social improvements, although these tend to be case specific and therefore it is impossible to generalise about their impacts. Sustainability standards work best as part of a suite of integrated private and public sustainability measures. They complement regulation by filling gaps and introducing mechanisms for adaptation. They can also introduce rapid changes in production when companies encourage suppliers to improve performance and practices.
Careful design and implementation of certification schemes is essential for them to work successfully, and stakeholders must increase their participation in their development to improve effectiveness. Many industry stakeholders are realising the importance of incorporating sustainability into their business models and are developing their own set of private standards that are incorporated into their brand image.
Corporate sustainability initiatives
Corporate sustainability initiatives have emerged gradually over the last decade, especially in the West. This is due in part to mounting pressure from civil society organisations as well as an increasing awareness and acknowledgement from business that their corporate goals are inseparable from the societies and environments within which they operate. This movement has also been driven by standards such as ISO 140001 and EU law, which has pushed for companies, particularly manufacturers, to integrate sustainability into company operations.
These initiatives incorporate elements of Corporate Social Responsibility (CSR) and the ‘Green Agenda’. A number of large multinationals have developed their own strategies to limit the negative social, cultural, economic, and environmental impacts their operations may have. Because these schemes are driven internally they can, in some instances, go above and beyond the requirements of certifications schemes and may be implemented more systemically within the organisation. However, there is little or no third-party monitoring or accountability.
- Case Studies
- Further Information
- How does GreenPalm work for independent growers and smallholders?
- International Sustainability and Carbon Certification
- Rainforest Alliance: Standards for Sustainable Agriculture
- RSPO Certification
- RSPO PalmTrace
- RSPO Principles and Criteria for the Production of Sustainable Palm Oil 2013
- Toward Sustainability: The Roles and Limitations of Certification
- UTZ Certified: Better Farming, Better Future
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