Roundtable on Sustainable Palm Oil

And in Indonesia, you have the ISPO, the Indonesian Sustainable Palm Oil.

But you also have the voluntary certification, which are things like the RSPO, which is the Roundtable for Sustainable Palm Oil.

And usually you will find that the voluntary certification is of higher standard than the compulsory one.

And this is the variation within the industry right

The real question is, do those labels actually hold? So you might have a policy, but is it actually doing what it's meant to be doing? Is it regulated? Is it actually doing good to the ecosystems that you find yourself within?

Yeah, so this is a sort of, it's a very difficult question to answer because if you look on paper, the certification standards, they look good, right? So everything is there, everything is accounted for.

So for example, RSPO, they cover things from land use to fertilizer use to chemical use to even the PPE that you wear, everything is there.

But in terms of whether it's really followed or not, Of course, the RSPO has a system where they have independent auditors to come in and check.

At the heart of this story, of course, is SD Guthrie, formerly Sime Darby Plantations, and before that, Guthrie Corporation Limited.

Today, it's one of the world's largest producers of palm oil, accounting for roughly 12% of global RSPO certified supply.

Bringing it to today, SD Guthrie is coming off a record 2025, when net profit hit 2.5 billion ringgit on revenue of just under 21 billion.

And while first half of 2026 net profit jumped another 44% to just above 1.55 billion ringgit, the composition of those earnings is shifting, reflecting an underlying change, potentially, at the company.

BFM 89.9, welcome back to the Breakfast Grill.

I'm Roshan Kannasan.

Joining us today is Mohd Ar- Hariz Mohd Arshad, President and Group CEO of SD Guthrie, one of the world's largest producers of palm oil, accounting for nearly 12% of global RSPO certified supply.

Um, Hariz, CPO prices have been relatively supportive, I think one can say, uh, but this is also a business exposed to commodity prices that can be quite volatile.

Super interesting.

You mentioned the RSPO, which is the Roundtable on Sustainable Palm Oil.

Yes.

how effective has that sustainability drive, that certification scheme, been at reducing the impacts on the ecosystems there?

Mm-hmm.

Well, the most important organization is the Roundtable for Sustainable Palm Oil, RSPO, which was created in the early 2000s.

And it was a collaborative effort between plantation companies, palm oil consuming industries, mostly in Europe, as well as environmental organizations and human rights organizations.

And the goal was to create a system to certify sustainable palm oil and sustainable both ecologically as well as socially in

terms of labor practices and human rights issues.

This has been a mixed project, right? One of the major failings of the RSPO to date has been the inability to convince industry at large to pay more for certified sustainable palm oil.

The premise of the RSPO is that certification will allow producers to charge more for this certified oil.

But the whole point of palm oil for many industries is that it's cheap.

Palm oil can be okay, but palm oil is also responsible for a lot of deforestation.

So there's some companies that are doing it responsibly and there's the, is the RSPO foundation responsible or something, palm organization.

So I don't want to like blanket say palm's bad.

If it doesn't have a little happy orangutan on the back, maybe don't buy it.