SD Guthrie leads sustainable palm oil production, offering traceable, EUDR-compliant solutions for businesses navigating stricter regulations

Palm oil production has been a significant driver of deforestation, particularly in Southeast Asia. It is reported that between 1990 and 2005, 55-60% of oil palm expansion in Indonesia replaced virgin forests.

However, recent data shows a declining trend in palm oil-related deforestation. In 2021, deforestation in Indonesia, Malaysia and Papua New Guinea fell to its lowest level since 2017. 

Palm oil plantations on peatland contribute between 16.6% and 27.9% of total greenhouse gas emissions from Malaysia and Indonesia. The industry also impacts water quality, as palm oil mills generate significant effluent that can pollute freshwater sources. 

Despite these negative impacts, sustainable palm oil production practices are being developed to mitigate environmental damage

SD Guthrie Bhd (SDG) leads the way in sustainable palm oil production, setting industry benchmarks for responsible sourcing, environmental conservation and ethical supply chains.

With full control over its palm oil value chain, from plantation to distribution, SDG is able to leverage full traceability and quality at every stage.

At the core of its sustainability strategy is the Beyond Zero framework, which aims to eliminate negative environmental impacts while actively restoring ecosystems and improving community livelihoods.

Built around three key pillars—Zero, Restore and Transform—Beyond Zero reflects SDG’s commitment to a deforestation-free, fully traceable supply chain.

It aligns with global regulations such as the European Union Deforestation Regulation (EUDR), ensuring businesses that source from SDG stay ahead of compliance challenges.

“For businesses navigating an increasingly regulated landscape, SDGI’s fully traceable, EUDR-compliant CSPO offers a future-proof sourcing solution,” comments Dr Shariman Alwani, the company's CEO. 

The role of SDGI in responsible procurement
While SDG champions sustainability, its downstream arm, SD Guthrie International (SDGI), translates these commitments into practical sourcing solutions for businesses.

Through its Not All Palm Oil Is Created Equal campaign, SDGI educates buyers on the advantages of Certified Sustainable Palm Oil (CSPO), differentiating itself in a competitive market.

Launched in 2023, the campaign has already strengthened SDGI’s brand perception by 39% in Europe, with further expansion into the Asia Pacific region.

The initiative helps businesses make informed sourcing decisions, ensuring compliance with environmental and ethical standards without compromising on quality.

Key benefits of sourcing from SDGI include:

• Regulatory compliance – SDGI’s EUDR-compliant palm oil mitigates legal and reputational risks for businesses.
• Advanced traceability – Digital tracking systems provide transparency, allowing buyers to verify sourcing origins.
• Science-Based Targets Initiative (SBTi) validation – SDGI’s net-zero targets position it as a leader in ESG (environmental, social and governance) sourcing.

With global regulations tightening, SDGI is already ahead of the curve, having delivered its first fully EUDR-compliant shipment from 17,357 smallholders in Papua New Guinea and the Solomon Islands. This ensures businesses can access sustainable palm oil that meets evolving compliance requirements.

The future of palm oil sourcing
To support businesses in responsible procurement, SDGI operates Innovation Centres in South Africa, the Netherlands and Malaysia.

These facilities develop bespoke palm oil formulations that cater to evolving consumer and regulatory demands, including stringent EU and halal certifications.

By partnering with global food brands, SDGI helps companies create high-quality, sustainable products while ensuring the palm oil is sourced without illegal land clearing, is developed to meet client specifications and meets ethical and regulatory standards.

The palm oil sector is undergoing rapid transformation, with compliance and sustainability shaping the future of sourcing.

SDG and SDGI are positioning themselves as the go-to suppliers for responsible palm oil, offering traceable, regulation-compliant solutions that safeguard businesses from financial penalties and reputational risks.

As global demand for sustainable products continues to rise, SDGI’s CSPO enables businesses to stay competitive while making environmentally responsible choices.

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SD Guthrie is leading on sustainable palm oil production, offering traceable, EUDR-compliant solutions for businesses navigating tightened regulations

Palm oil production has long been subject to scrutiny as a result of the environmental degradation that follows alongside it.

In places like Southeast Asia or the Amazon rainforest, palm farming has been the cause of huge amounts of deforestation, which is decried by environmentalists and the general public alike.

In Indonesia, the trend was particularly chronic. Between 1990 and 2005, palm oil farming expanded by around 60%, with virgin forests being cut down to make way for these projects.

However, recent data seems to indicate a change in tune.

In 2021, deforestation levels fell to their lowest levels since 2017 in Indonesia, Malaysia and Papua New Guinea.

Despite these green shoots, the palm oil industry will still face huge pushback from environmentalists in this part of the world, with peatland plantations in Malaysia and Indonesia accounting for roughly 16.6% to 27.9% of their total greenhouse gas emissions.

Then there's the palm oil mills, which contribute substantial pollutants that deteriorate the quality of freshwater bodies.

In response to these ecological threats, sustainable practices in palm oil production are increasingly being embraced to mitigate adverse impacts on the environment.

SD Guthrie and supply chain sustainability
Central to these sustainable endeavours is SD Guthrie (SDG), an organisation that's setting benchmarks across the industry for responsible sourcing and ethical supply chains.

By maintaining complete oversight from plantation through to distribution, SDG is achieving a traceability that is near enough unrivalled in the supply chain management sector, whilst also maintaining high-quality standards throughout the production process.

SDG's sustainability agenda is set out in the company's Beyond Zero framework, designed to not only negate detrimental environmental impacts in operations, but also to actively improve ecosystem restoration and community livelihoods.

This initiative pivots around three foundational pillars: Zero, Restore, and Transform, which collectively underscore SDG's commitment towards a zero-deforestation and fully traceable supply chain.

Such rigorous standards ensure adherence to international regulations like the European Union Deforestation Regulation (EUDR), positioning businesses sourcing from SDG at the vanguard of regulatory compliance.

“For businesses navigating an increasingly regulated landscape, SDGI’s fully traceable, EUDR-compliant CSPO offers a future-proof sourcing solution,” states Dr Shariman Alwani, CEO of SDG.

'Not All Palm Oil Is Created Equal'
SDG extends its commitment to sustainability through its downstream arm, SD Guthrie International (SDGI), which implements the group's ethical sourcing standards into practical solutions for global businesses.

SDGI shines a spotlight on the merits of Certified Sustainable Palm Oil (CSPO) with its campaign titled Not All Palm Oil Is Created Equal, which launched in 2023 and has since boosted brand perception by 39% in Europe while expanding its influence in the Asia Pacific region.

This campaign educates companies on sustainable sourcing benefits, harmonising environmental and ethical standards with uncompromised quality.

Key benefits of sourcing from SDGI include:

• Regulatory compliance – SDGI’s EUDR-compliant palm oil mitigates legal and reputational risks for businesses.
• Advanced traceability – Digital tracking systems provide transparency, allowing buyers to verify sourcing origins.
• Science-Based Targets Initiative (SBTi) validation – SDGI’s net-zero targets position it as a leader in ESG (environmental, social and governance) sourcing.

Then, by delivering its first EUDR-compliant shipment of CSPO from over 17,357 smaller landholders in Papua New Guinea and the Solomon Islands, SDGI benchmarked future compliance, allowing client businesses seamless access to responsibly sourced palm oil.

SDGI also supports stringent consumer demands and regulatory requirements through Innovation Centres located in South Africa, the Netherlands, and Malaysia, developing customised palm oil solutions that adhere to rigorous EU and halal standards.

By collaborating with global food brands, SDGI aids them in crafting high-quality, sustainable products, thereby ensuring the palm oil utilised meets all legal, ethical and quality benchmarks.

Amidst tightening regulations and a heightened consumer priority for sustainability, SDG is offering businesses the option to navigate supply chain management more sustainably.

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Op-ed by Leena Ghosh, Head of Human Rights and Social Standards at the Roundtable on Sustainable Palm Oil.

The palm oil industry’s record on human rights is far from exemplary. With most plantations located in remote areas, their migrant workforces – both those who have crossed borders and internal migrants – may be isolated. This leaves them open to abuses like unfair pay and working conditions, or even forced labour. 

A recent study by the Overseas Development Institute found that Indonesian migrant workers in Malaysia’s palm oil sector must work long hours for low pay with inadequate safety protection. Plantation owners regularly deduct money from their salaries – purportedly to cover costs like accommodation – meaning they often spiral into debt.

Moreover, in 2022, the Human Rights Commission of Malaysia found that eight out of every 1,000 workers in the country’s palm oil plantation sector were subjected to forced labour. 

Meanwhile, there have also been numerous sector issues around the land rights of Indigenous people and local communities. For example, research found that in Latin America, land tenure concentration and violence against Indigenous communities were higher in oil palm municipalities.

If not done in a way that respects worker’s rights, oil palm expansion can cause community conflict, with potentially severe consequences.

A just and sustainable sector
Considering that palm oil is the most commonly used vegetable oil in the world and is found in half of all supermarket products – including everything from bread and pizza to pet food and cosmetics – these kinds of injustices must be addressed.

Despite the inherent complexity of palm oil supply chains, the only way to build a viable, sustainable and resilient sector is by ensuring the protection of workers’ and communities’ rights in and around every single plantation, mill and processing facility around the world.

That’s why on this UN World Day of Social Justice, on 20 February, we are calling on palm oil producers globally to go further and faster on human rights by committing to the newly revised Standards adopted by the Roundtable on Sustainable Palm Oil (RSPO) Members.

Co-created with stakeholders from every step of the supply chain – including producers, processors and traders, consumer goods manufacturers, retailers, banks, investors and NGOs – the standard has been enhanced to address the gaps identified between the 2018 RSPO Principles and Criteria (P&C) and the International Labour Organization 11 indicators of forced labour. 

For the first time, the RSPO P&C requires that companies conduct human rights due diligence to identify existing and potential impacts on their own operations and those of their direct suppliers. They must then develop an action plan to tackle them.

When it comes to workers, it addresses issues of isolation, restriction of movement and excessive overtime. It also has new requirements to prevent and remediate forced labour and people trafficking. To assist, RSPO is developing supporting guidance for RSPO Members to implement human rights due diligence within their operations in alignment with evolving market and regulatory expectations. 

Free, Prior and Informed Consent remains strongly embedded in the Standards, which protects the legal and customary rights of Indigenous peoples and local communities, while also respecting local rights-holders through creating equitable agreements between communities and plantations.

These new standards are based on the principle that transparency is key. Businesses need to be open about the hard-to-monitor working conditions in agriculture supply chains that crisscross continents. The only way forward is by being honest about their current challenges, so areas where it’s difficult to see what’s happening on the ground can be pinpointed and addressed.

A force for good
Despite its mixed reputation, palm oil can become a force for good. When done sustainably, the production of oil palm can help protect employees, communities, the environment and wildlife. The reality is that substituting palm oil with other vegetable oil crops is not a sustainable solution.

Oils like sunflower, soybean or rapeseed would create even bigger environmental and social challenges. The precise reason palm oil is so ubiquitous is because it’s so efficient. Globally, it produces about 35% of all vegetable oil on less than 10% of the land allocated to oil crops. 

591,830 workers are currently represented under the RSPO P&C Certification; ensuring companies uphold these workers’ labour rights during recruitment, during work and in their living conditions. These standards are upheld by a variety of mechanisms.

For instance, the RSPO has an impartial and transparent Complaints System process that provides stakeholders with an avenue to address grievances and this process has provided remedy to upholding the rights of Indigenous and local communities. Ensuring opportunities for workers to report instances of workplace violations in an impartial way allows for better transparency across the supply chain.

Companies can change for the better. For example, Malaysian palm oil giant SD Guthrie, formerly known as Sime Darby Plantation, faced controversy a few years back due to allegations of forced labour at some of its plantations, which resulted in the US banning its imports. The company subsequently embarked on an in-depth assessment of its operations to find the problems and address them, as detailed in its Modern Slavery and Human Trafficking Statement.

Examples from SD Guthrie of the tangible improvements made include RM82.02 million ($18.5 million) set aside to repay “debt bondage” recruitment fees to current and past foreign workers. The company reviewed and tightened existing controls relating to foreign worker recruitment to ensure workers’ rights were protected.

Additionally, they created social dialogue platforms where workers elect representatives from every nationality to meet with estate management fortnightly and the introduction of controls for monitoring working hours through a process automation system to track the clock-in and clock-out time of workers. 

An ethical future
Due to a history marred by instances of malpractice and consequent mistrust around how their operations impact workers and local communities around the world, oil palm growers need to transform their approach to human rights.

In such a labour-intensive sector that employs millions of workers and impacts so many Indigenous and rural communities, it must meet the highest social standards. With investor and consumer expectations around sustainability increasing and the ESG regulatory context tightening, it’s not only morally right but a key component of making the industry commercially viable into the future.

Learn more about the Roundtable on Sustainable Palm Oil here.

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Guest: Dr Shariman Alwani, CEO, SD Guthrie International

How are major palm oil players ensuring smallholders in their supply chain comply with evolving sustainability regulations? We hear from Dr. Shariman Alwani, CEO of SD Guthrie International about the company’s support for smallholders under its Beyond Zero Framework that was launched last year as well as efforts to make sustainable palm oil more mainstream.

Presenter: Shazana Mokhtar, Wong Shou Ning, Philip See Producer: Shazana Mokhtar

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As palm oil demand surges, there is a need for yield improvement through sustainable practices to address the potential demand and supply imbalances.

This according to industry leaders who attended the Bursa Malaysia 36th Annual Palm and Lauric Oils Price Outlook conference and exhibition on Tuesday.

Currently, the Malaysian palm oil industry’s average yield per hectare stands at a mere 3.7 tonnes per hectare.

In a panel discussion, Harish Harlani, vice-president & global leader of P&G Chemicals cautioned that without strategic intervention, the industry may face a supply shortfall amid the potential surge in palm oil demand. 

According to him, the key to addressing this yield improvement issue lies in an emphasis on replanting and sustainable farming practices. He called for plantation firms to adopt a regular replanting schedule, regardless of fluctuations in palm oil prices. 

Meanwhile, Tan Sri Lee Oi Hian, executive chairman of Kuala Lumpur Kepong Bhd (KL:KLK) pointed out that there is significant room for yield improvement, particularly for larger plantation land. 

While acknowledging the critical role of labour in the sector, he said there has been a growing focus on innovation and automation as part of operational improvements.

Similarly, Dr Shariman Alwani Mohamed Nordin, chief executive officer of SD Guthrie International (SDGI), emphasised the importance of investing in automation and innovation to develop tools and mechanisms that could eventually lead to automated harvesting. 

“We are not far off from achieving the holy grail of harvesting automation,” he remarked, noting that with adequate investment in resources, the industry could significantly reduce its reliance on manual labour. 

SDGI is the downstream arm of SD Guthrie Bhd (KL:SDG).

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