PALMOILMAGAZINE, JAKARTA – The cost of achieving sustainability is a significant challenge, especially for independent smallholders in Indonesia’s palm oil industry. At the Sustainability MeetUp organized by Universitas Trisakti’s CECT Sustainability, industry leaders, NGOs, and financial institutions gathered to address the pressing issue of certification expenses, which remain a major barrier to the sector’s shift toward sustainable practices.
Obtaining certification under standards like RSPO (Roundtable on Sustainable Palm Oil) or ISPO (Indonesian Sustainable Palm Oil) can cost up to IDR 1 billion (USD 63,000) for a single smallholder group. This substantial financial burden has left many smallholders reliant on philanthropic support to meet certification requirements.
Irfan Bakhtiar, WWF Indonesia’s Program Director for Climate and Market Transformation, highlighted the disparity, stating, “Currently, 98% of certification funding comes from philanthropy, with only 2% covered through commercial financing and corporate supply chains,” said Irfan from the information received by Palmoilmagazine.com, on Monday 18 November 2025.
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The event, held at Universitas Trisakti’s Rectorate Building, drew over 100 participants from various sectors, including corporate leaders, government representatives, academics, and sustainability practitioners. Discussions focused on the urgent need for innovative green financing mechanisms to bridge this funding gap and promote inclusive sustainability.
Jenny Hadikusuma, Chief Sustainability Officer at UOB Indonesia, shared UOB’s solutions for the agribusiness sector. “Our green financing initiatives, including sustainability-linked loans, green loans, and green trade finance, incentivize companies to adopt responsible practices. We require our clients to achieve certifications like RSPO or ISPO and implement stringent environmental and social risk management policies,” she explained.
Prof. Kadarsah Suryadi, Rector of Universitas Trisakti, praised these initiatives as critical to driving sustainable business. “This reflects the financial sector’s commitment to creating a more responsible and inclusive palm oil industry,” he said.
Meanwhile, Gusman Yahya, Executive Director of Filantropi Indonesia, underscored the vital role of philanthropy in sustaining smallholder initiatives. “Philanthropic organizations currently carry most of the financial load for certification. However, we need stronger collaboration with commercial financing to ensure long-term support for smallholders,” he said, representing Filantropi Indonesia’s 225 members across individual, corporate, and faith-based organizations.
Looking forward, the Indonesian government’s upcoming green taxonomy for the palm oil sector, set to launch next year, promises to provide a framework for more sustainable practices. Setyo Budiantoro, from the National SDGs Secretariat, emphasized the importance of inclusivity. “To transform the palm oil industry, smallholders must have access to adequate financing to adopt sustainable practices. This requires mobilizing innovative funding and integrating diverse financial resources,” he noted.
The Sustainability MeetUp concluded with a strong call to action: addressing the high cost of certification is essential for Indonesia’s palm oil sector to achieve its sustainability goals. By combining the efforts of financial institutions, philanthropic organizations, and government policies, smallholders can transition to more sustainable practices, ensuring the sector’s long-term resilience and growth. (P3)
