A Complete Guide to Sustainable Palm Oil

August 6, 2023

Palm oil’s global demand is matched only by its controversy. As it happens, palm oil production is pretty nasty for the environment.

This controversy has led to a greater push for sustainable methods of palm oil production, with consumers and nongovernmental organizations (NGOs) alike calling for producers, retailers, and other companies to adopt sustainable production methods.

Whether sustainable palm oil is a reasonable alternative to standard palm oil cultivation isn’t up for debate. Environmental experts agree it’s not only possible, but effective. But what exactly is sustainable palm oil, and is there even a chance for a sustainable palm oil industry? 

What Is Palm Oil?

Before getting into sustainable palm oil, it’s worth looking at what palm oil actually is. A type of vegetable oil, it’s one of the healthier vegetable oils, though perhaps not as healthy as olive oil. It’s made from the fruit of African oil palm trees and is used in a wide range of products in the global market. In supermarkets, it’s included in up to 50% of packaged products, including pizzas, marshmallows, and even ice cream.

Palm oil’s popularity with food service companies is driven by its versatility and appealing properties. As an oxidation-resistant product, it has a long shelf life. It doesn’t have any odor or color, so it can be used in many different food products without affecting how it looks or smells.

Perhaps its most popular quality is how easy and cheap it is to grow compared to crops grown to make other vegetable oils. Farmers prefer it because it grows rapidly almost all year long while also needing less land per tonne than similar crops, leading to a steady income for farmers with smaller plantations.

Issues Facing the Palm Oil Industry

Over 73 million tonnes of palm oil is made every year, mostly in Malaysia and Indonesia. That’s an increase over previous years, with just under 60 million tonnes being produced during the 2012–2013 growing season alone. While that increase may have improved employment and economic activity in various regions, it also comes with a host of issues resulting from palm oil’s impact on the natural world, including the climate and forests, and on those who work in the industry.


With an exploding world population to feed, agriculture puts natural ecosystems at risk around the world. So it is with the African oil palm. Palm oil is one of the leading drivers of global deforestation, but especially in Southeast Asia. The palm oil supply chain is responsible for about 8% of deforestation between 1990 and 2008. Malaysia and Indonesia, the two largest producers of palm oil, have both allowed their forests to be decimated for the sake of placating oil palm growers. Shocking reports speculate that 98% of their forests will be gone by the end of 2022.

In turn, this leads to further loss of endangered species, with orangutans being the primary species at risk. Orangutan habitats are typically on top of, or close to, areas naturally high in oil palm trees, resulting in the destruction of their habitats as forests are cleared. As a result, there’s now fewer than 55,000 orangutans left in the wild.

Deforestation is a practice with many long-term consequences beyond the destruction of habitats. The uprooting of thousands of different plant species eliminates biodiversity essential to life on earth, and as those species are replaced with cash crop monoculture, essential nutrients and microorganisms disappear from the soil, preventing any potential future regrowth of the rainforest. When this degraded land is no longer capable of growing anything, the topsoil washes away, leading to erosion, landslides, and flooding.

Climate change

Rainforests are known to absorb greenhouse gases and convert them into oxygen. With the deforestation that palm oil fuels, however, these tropical forests are increasingly at risk. Fewer trees means less absorption of carbon emissions. 

Furthermore, rainforests are usually an area of “high carbon stock,” meaning that a great deal of carbon is stored deep within the soil in the form of both organic and inorganic materials. That’s especially true in Indonesia, where forests store more carbon in the soil than those in the Amazon. Deforestation releases these gases from the soil, and with nowhere else to go, these carbon emissions go straight into the environment, where they fuel an already-out-of-control climate change problem.

Indonesian oil palm plantations are responsible for between 2% and 9% of worldwide carbon emissions

Human rights abuses

The environment is far from the only victim of palm oil’s production. Across the palm oil supply chain, people suffer as well. 

The palm oil industry employs migrant workers from other countries within Southeast Asia. Because of Malaysia’s outsourcing requirements, migrants often have to pay bribes to “labor brokers,” only to then be paid less than a living wage and work in unsafe conditions, sometimes unable to leave those jobs because of the country’s migrant labor rules and the cost of emigrating again. 

Take the reported 72,000–200,000 children in Malaysia who are forced into slave labor conditions for the growing, harvesting, and refining of palm oil and its related products in the palm oil sector. These “workers” receive little to no pay and are treated to harsh conditions while working.

Indigenous communities have also fallen victim to the popularity of this ubiquitous vegetable oil. Land grabs—for which they are rarely paid—and the resulting deforestation have destroyed the ancestral homes of countless local communities across Indonesia. Indigenous peoples reportedly claim 40–70 million hectares of land, but the Indonesian government recognizes Indigenous possession of only one million hectares of that. 

Their villages are simply torn down and burned. In Borneo, the Dayak people were forcibly displaced from the lands they inhabited. When you consider that over 50 million people in Indonesia rely on the forests for food, shelter, and general livelihood, one can imagine the impact of losing 98% of the forests to vegetable oil for Western snack products. 

What Is Sustainable Palm Oil?

Sustainable palm oil, as the name implies, is palm oil produced sustainably, in a socially responsible and environmentally friendly way. It’s produced with a promise of No Deforestation, No Peat, and No Exploitation (NDPE) throughout production. The sustainable palm oil industry aims to reduce or eliminate the damage of standard palm oil production. Participating organizations implement measures across their supply chains, including eliminating waste, ensuring equitable working conditions, and minimizing carbon emissions in every way possible.

But oil palm growers don’t just get to call themselves “sustainable.” They must be certified. Sustainable palm oil certification exists to ensure that palm oil producers and retailers follow environmental best practices, with the Malaysian Sustainable Palm Oil (MSPO) and Roundtable on Sustainable Palm Oil (RSPO) certification being considered gold standards. Both organizations have strict criteria for certifying sustainable palm oil. 

Though other certification organizations exist, such as the Forest Stewardship Council, few of these focus specifically on palm oil, as the RSPO and MSPO do. Both organizations encourage sustainable palm oil production and develop standards for producers to meet in their own ways.

Part of this certification involves committing to a no deforestation policy, which typically entails growing on already degraded or open lands rather than cutting down trees for plantations. Genetically modified trees that grow faster could also mean needing less land for palm oil’s production while increasing yield per acre.

Malaysian Sustainable Palm Oil

Malaysian Sustainable Palm Oil (MSPO) certification naturally focuses on palm oil created and exported specifically from Malaysia, which produces 35 million tonnes of palm oil annually. As the world’s largest producer and exporter of the substance, its palm oil plantations span over nine million hectares. Oversight of such a large industry, which accounts for 2.7% of the country’s gross domestic product, by an international organization proved difficult, leading to the launch of the MSPO in 2014. Since then, partnered with nonprofits and NGOs across the country to create and implement an accreditation process.

To earn MSPO accreditation, sustainable palm oil producers must commit to principles across seven areas:

  • Management and responsibilities
  • Compliance to legal requirements
  • Social responsibility
  • Health, safety, and employee conditions
  • Environmental, natural resources, biodiversity, and fragile ecosystems
  • Best practices
  • Development of new plantings

MSPO certification also requires that palm oil producers and retailers view the above through the lens of social equity, economic progress, environmental protection, and management. Though the certification has looser qualifying criteria than the RSPO, it’s considered more streamlined and more practical to implement for local suppliers. As such, the MSPO aims to ensure 100% traceability by 2025. Since the organization was established, it’s since become mandatory for Malaysian palm oil producers to obtain it, with violators facing fines or having their licenses revoked.

The certification has had an impact, with 55% of palm oil plantations being certified sustainable within five years of the organization’s founding, resulting in 3.19 million hectares of oil palm plantations declared sustainable in 2019.

Roundtable on Sustainable Palm Oil

A nonprofit established by the World Wildlife Fund (WWF), the Roundtable on Sustainable Palm Oil (RSPO) develops and enforces sustainability standards across the industry, and works with the following palm oil-related parties:

  • Producers
  • Traders and processors
  • Retailers
  • Banks and investors
  • Manufacturers
  • Environmental and social nongovernmental organizations

With these organizations, the RSPO has developed a Certified Sustainable Palm Oil (CSPO) certification that—when properly applied—minimizes or avoids the impact of palm oil production on the environment and in communities. The certification “guarantees that there is no deforestation and that social requirements, such as a fair and decent wage for workers, are respected,” according to the organization’s senior manager for Europe (Market Transformation). 

To achieve this, the Roundtable on Sustainable Palm Oil continually monitors the environment and social impacts of palm oil producers and other companies on a global scale, concentrating on all aspects of the supply chain. It also engages third parties affected by its production, such as consumers and governments, and aims to educate them about the unsustainability of standard palm oil production and its environmental impact.

How effective this has been is debatable, however, with only 20% of global palm oil companies signing up to, and receiving, RSPO accreditation. As such, Greenpeace claims that there are still “problematic producers” in the industry continuing to fuel palm oil’s destruction of the environment. Though certified sustainable companies have a minimal impact on the environment, if any, they’re still the minority in the industry.

Cost is the main reason for this. Buyers of palm oil, those food manufacturers who are putting it in everything these days, are failing to make the switch from standard palm oil to its sustainable counterpart. And considering the expensive cost to produce sustainable palm oil, if palm oil plantation owners can’t sell it to anyone, they won’t want to grow it. Basically, manufacturers and retailers alike see it as a large investment for a small return.

Solutions for Sustainable Palm Oil Chances

Though there are potential regulations that focus on making palm oil’s supply chain more sustainable, these are rarely put into practice. That puts it onto the industry itself—and consumers—to make the change. There are more than a few ways this can be achieved.

What the industry can do

Palm oil producers can implement more than a few changes to make the industry more sustainable, with qualifying for RSPO and MSPO certification being the most notable. Retailers and others in the palm oil industry must also look through their entire supply chain to ensure they source products from sustainable and environmentally friendly suppliers. Additionally, organizations like the WWF expect companies that use palm oil and want to become sustainable to comply with the following regulations:

  • Source product from oil palm plantations that implement zero-deforestation initiatives and enforce replanting efforts
  • Monitor and improve environmental and social risk throughout the supply chain
  • Ensure commitments to sustainability across all areas of product development and production
  • Participate in initiatives that focus on reducing palm oil’s impact on the environment
  • Support policy action focused on sustainability efforts across the industry

What consumers can do

Companies that use palm oil aren’t the only ones that can fuel sustainability efforts. Short of boycotting palm oil altogether, which wouldn’t be that hard if you don’t consume processed, prepackaged foods, consumers can support sustainable palm oil, too, by solely picking sustainable palm oil products and minimizing overall consumption. Here are other ways consumers can help put a stop to the devastating environmental impact of palm oil:

  • Reaching out to palm oil-related brands and demanding sustainability
  • Informing friends and family how they can make more sustainable choices
  • Using the Palm Oil Buyers Scorecard, which you can find out more about below
  • Making palm oil in your own home using sustainable materials and ingredients
  • Choose whole foods cooked at home instead of prepackaged foods

Because all vegetable oils require agriculture, which naturally exploits land, water, and other resources, there is no one truly sustainable cooking oil for consumers to have on hand at all times. The best thing you can do is to buy only the most sustainable cooking oils. Look for alternative oils that are organic, fair trade, non-GMO, unrefined, and cold pressed.

Palm Oil Buyers Scorecard

The Palm Oil Buyers Scorecard was created by the WWF to assess retailers, manufacturers, and other companies that use palm oil to determine how sustainable and ethically responsible they are. Its goal is to add more transparency to the industry while educating consumers about the harm that palm oil production poses and the benefits of certified sustainable palm oil.

The Scorecard, which was first unveiled in 2009, also aims to show the industry the impact it’s having while educating companies about how they can change. It also tracks the performance of 227 companies around the world that use palm oil and make this information publicly available. Though the reports show some improvement within the industry, it also highlights that there’s still quite a ways to go before sustainable palm oil overtakes its harmful counterpart.

Brands That Use Sustainable Palm Oil

The following prominent retailers, manufacturers, and others have committed to only using sustainable palm oil:

Wrapping Up

Sustainable palm oil boasts multiple advantages compared to its harmful counterpart and virtually none of the negatives. Despite this, the industry has been slow to adopt environmentally friendly and sustainable practices, with only a fifth of the palm oil production industry being certified as sustainable by the RSPO.

Despite that, multiple options are available for both palm oil consumers and those within the industry. Consumers will need to push companies to make these changes while switching to sustainable alternatives. Without this, palm oil will continue destroying the environment.