According to a study by Chain Reaction Research (CRR), a non-profit that scrutinises deforestation risk in supply chains, compliance costs for palm oil companies that help smallholders with traceability efforts could be as much as 3.5 per cent of revenues.
That cost is small, given that firms that do not comply could lose up to US$14.3 billion in reputational value, CRR concluded.
Eco-Business
A new law designed to uproot deforestation from European supply chains has been bitterly opposed by palm oil producer countries Malaysia and Indonesia who say it will marginalise smallholder farmers unable to meet high sustainability standards. But Indonesia’s smallholders’ union has welcomed the new law and appealed for help from companies, governments and donors to meet the requirements.
