This article first appeared in The Edge Malaysia Weekly on September 14, 2026 - September 20, 2026

For years, the palm oil sector has been at the centre of global sustainability debates, facing scrutiny over its environmental and social impacts. In response, the sector has invested significantly in improving sustainability performance and demonstrating progress through certifications and reporting. The challenge that the sector is facing today is to connect this sustainability progress to the financial lens through which financial decision-makers assess risk, resilience and financial performance.

Since the mid-2000s, sustainability reporting has played an important role in helping palm oil companies articulate their sustainability progress to stakeholders, while providing greater transparency on how they manage key issues such as wildlife-human conflict, deforestation, supply chain traceability, labour rights and native customary rights. Many companies that began their sustainability reporting journey early have used impact-driven frameworks such as the Global Reporting Initiative Standards to demonstrate transparency and accountability.

The role of sustainability reporting is now evolving. What was once largely a voluntary exercise to demonstrate sustainability credentials is becoming an increasingly regulated and mandatory part of how companies engage with investors and capital markets. As of August 2026,  some 40 jurisdictions are in the process of adopting or have otherwise adopted the International Financial Reporting Standards Sustainability Disclosure Standards (IFRS SDS) on a voluntary or mandatory basis.

As this shift gains momentum globally, financial stakeholders are looking beyond sustainability performance to how sustainability-related risks can affect a company’s bottom line, future performance, resilience and value-creation. In short, this shift begs the question of how sustainability issues ultimately affect a company’s financial performance and long-term value.

For the palm oil sector, this marks the next chapter in its sustainability journey as companies are increasingly expected to not only demonstrate sustainable practices, but to also communicate how those practices strengthen risk management, support business resilience and create long-term value.

As one of the earliest sectors to develop a comprehensive sustainability certification scheme, the palm oil industry is uniquely positioned for this transition. For the Roundtable on Sustainable Palm Oil (RSPO) and its members, much of the groundwork is already in place through the RSPO Principles and Criteria (P&C), which set requirements for sustainability performance that members must meet through certification. In doing so, compliance with the RSPO P&C generates a range of verifiable environmental, social and governance information, which can be leveraged to communicate evidence of sustainability performance to stakeholders.

Recognising the value of this shift, RSPO, with support from PwC Malaysia, has become the world’s first sustainability certification scheme to develop formal guidance linking certification evidence to IFRS SDS. The document, titled “Leveraging RSPO Principles & Criteria for IFRS Sustainability Disclosure Standards”, shows members how existing certification evidence can support alignment with IFRS SDS reporting requirements. Developed by the International Sustainability Standards Board and designed in alignment with financial materiality and expected linkages with financial statements, IFRS SDS establishes a global baseline for sustainability-related financial disclosures that support the information needs of investors and other financial stakeholders.

This evolution matters on both sides of the table: for palm oil producers seeking to prove sustainability credentials, and for the banks, insurers and investors who allocate capital to the sector; both now share a common language for evaluating sustainability performance.

The technical guidance answers a practical question that is increasingly relevant for RSPO-certified companies: How can companies leverage RSPO certification to help meet the requirements to provide investor-grade disclosures?

This was the driving force behind the guidance, as it demonstrates how information from RSPO certification can support reporting aligned with IFRS SDS. The intention is to help members connect existing sustainability practices with the information increasingly sought by financial stakeholders without creating another reporting framework or introducing additional requirements for RSPO-certified companies.

Instead, it shows how the existing evidence already embedded within RSPO certification can serve as a foundation for IFRS SDS reporting while reducing duplication of effort. For example, RSPO-certified growers already map flood-prone areas and implement and monitor water management plans as part of certification. Under IFRS S2, that same data becomes the evidence base for disclosing physical climate risk, such as how prolonged heatwaves and flooding could affect fresh fruit bunch yields, crude palm oil quality and revenue.

The guidance helps bridge the gap between how sustainability is implemented and measured within an organisation, and how that information is used to inform investment and financing decisions.

Beyond reporting, the guidance represents an important step in the continued evolution of the RSPO certification in response to changing market expectations — it reinforces the value of it as more than a tool to demonstrate sustainable practices.

The journey does not stop there; there will be discussions and workshops targeted at palm oil companies and the financial sector at RSPO’s Annual Roundtable Conference 2026 (RT2026), which will take place in Jakarta, Indonesia, on Nov 3 and 4. Additionally, RSPO will also continue to identify solutions to support members as they turn guidance into practical implementation, for example, explore the development of quantification methods specifically related to key sustainability-related risks and opportunities in the palm oil context.

As sustainability-related financial disclosures become more widely adopted, the financial sector is seeking more than just policies, commitments and high-level sustainability targets. They need decision-useful information that helps them understand how companies are managing their sustainability-related risks and opportunities, and what this may mean for long-term business performance.

The influence of the financial sector on the future of commodity industries, such as palm oil, is already evident. The sector is increasingly incorporating sustainability-related risks into financing assessment processes. According to Global Canopy’s Forest 500 assessment, finance providers are increasingly screening and monitoring clients in the forest-risk commodity sector, while others have escalation processes in place for companies that fail to meet sustainability expectations. As access to capital becomes more closely linked to sustainability performance, companies that can provide credible sustainability-linked financial disclosures will be better positioned.

During the development of the IFRS guidance, Andrew Chan, partner and sustainability leader at PwC Malaysia, spoke about the shift towards measuring sustainability through a financial lens and why the RSPO guidance was indeed timely. He explained, “The conversation around sustainability is changing. Investors are looking beyond what companies are doing and seeking to better understand how sustainability plans and actions contribute to business resilience and value creation.

“Through this guidance, RSPO has shown that sustainability certification can play a practical role in helping companies communicate their story. In doing so, it creates a stronger link between sustainability performance and the information that the financial sector needs to make informed decisions.”

Significantly, this development is not unique to palm oil. Across industries, organisations are grappling with a similar question: How can years of sustainability efforts be translated into information that is more meaningful to finance providers? As disclosure requirements continue to evolve globally, RSPO offers a valuable example for other sectors navigating a similar transition. The next phase will focus on translating certification metrics into quantifiable financial insights, further strengthening the link between sustainability performance and business value.

Essentially, this is about strengthening the connection between sustainability performance and the stakeholders who rely on that information to make decisions. Organisations will increasingly be expected to demonstrate not only what they have done, but also why it matters to long-term business performance. In this respect, RSPO is helping to pioneer the next phase of sustainability, where certification, financial disclosures and access to capital become increasingly connected.

For RSPO members, this strengthens the value proposition of certified sustainable palm oil. Beyond demonstrating compliance with recognised sustainability standards, RSPO certification can help signal future-readiness and resilience in a rapidly evolving business environment.

At RT2026, members will have the opportunity to explore how certification data can be applied in practice to support IFRS SDS-aligned disclosures and, over time, generate more financially relevant sustainability insights. This reflects a broader evolution in the role of sustainability certification, as organisations increasingly seek ways to connect sustainability-related information with insights that can support business, investment and financing decisions. The ambition is not simply better disclosure, but better information for better financial decisions.

Joseph D’Cruz is CEO of RSPO

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