Harmonizing sustainability certification standards: the Indonesian palm oil case

Abstract The Indonesian palm oil industry, a global leader, faces growing pressure for sustainability. Roundtable on Sustainable Palm Oil (RSPO) and Indonesian Sustainable Palm Oil (ISPO), while aiming for sustainable palm oil industry, have distinct differences that can hinder efforts to promote sustainability. To address these challenges, this study explores the potential benefits and challenges of harmonizing RSPO and ISPO to be a sustainability certification standard for sustainable palm oil industry. We employ a qualitative thematic analysis to delve into stakeholder perceptions of RSPO’s effectiveness and its potential for harmonization with ISPO. Through in-depth interviews with companies, lenders, and investors, and analyzing sustainability reports, we examine how these stakeholders view RSPO’s ability to promote sustainability and its potential for harmonization. By incorporating stakeholder and institutional theory, we acknowledge the complex interplay of interests and pressures shaping sustainability development in the Indonesian palm oil industry. Dual certification, RSPO and ISPO, complicates the industry. Some companies avoid RSPO due to its complexity. Harmonization is crucial for promoting sustainable palm oil industry and sustainability in Indonesia. RSPO could focus on large companies, while ISPO could concentrate on smallholders. Official collaboration is essential to reduce complexity and improve smallholders’ livelihoods. Both should strengthen its governance.