Episode 12 - Roll for Credits: Understanding RSPO Independent Smallholder Credits with WWF and Nestlé

Did you know that when you buy products with the ‘RSPO Credits’ label, you can directly support smallholders through the purchase of RSPO Independent Smallholder (ISH) Credits? 

These ISH Credits have benefited thousands of farmers globally—opening up market opportunities, encouraging sustainable practices, and strengthening rural livelihoods. But their impact goes further: ISH Credits help build resilient farming communities, foster environmental responsibility, and support smallholders on their path to long-term sustainability.

In this latest episode of The Palm Pod, listen to host Fara Rom talks to Kamal Seth, Global Palm Oil Director from World Wildlife Fund -WWF and Nadine Stueber, Global Responsible Sourcing Lead for Palm Oil from Nestlé joins us to explore why ISH Credits are one of the most effective tools for empowering smallholders and advancing sustainability in the palm oil sector. 

Tune in to discover how your everyday choices can influence producers to make better choices and drive real change.

Learn more about sustainable palm oil at www.rspo.org.

*The views and opinions expressed on The Palm Pod are solely those of the speaker and do not necessarily reflect those of The Palm Pod or the Roundtable on Sustainable Palm Oil (RSPO).

Transcript

SPEAKER_02 0:02

You are now listening to the palm pod, brought to you by RSPO, a global partnership to make palm oil sustainable. Hi, I'm Farah Rome, and you're tuning into the Palm Pod where we host engaging discussions, expert insights, and industry updates on sustainable palm oil, guiding consumers and businesses to make better choices for the planet. Did you know that there are about 7 million smallholders around the world that rely either fully or partially on palm oil cultivation for their livelihoods? These small holders are typically divided into two groups, which is scheme smallholders who are generally connected to mills through formal agreements and they receive support. And also, the other type would be independent smallholders or ISHs for short, who run their farms on their own and make independent decisions about how and where to sell their crops. So while both groups can get certified by the roundtable on sustainable palm oil or RSBO, the route to certification is a lot more challenging for independent smallholders. It can take anywhere from three to five years just to get certified. And that's why RSBO has created specific tools to support them, including one called RSBO Independent Smallholder Credit or RSBO ISH credits. The topic for today is on smallholders and RSBO ISH credits. And these credits offer a market-based incentive for sustainable practices, and over time, they've been shown to improve productivity and yields too. So while ISH credits aren't the only way to support smallholders, they've proven to be an effective and impactful mechanism so far. But like many sustainability tools, their value and challenges can look different depending on where you stand in the supply chain. So that's why in this episode, we are joined by two guest speakers, each representing a different part of the palm oil supply chain, bringing unique perspectives to help us unpack what our SEO independent smallholder credits are and how they are driving real support for smallholders on their path to sustainability. So in the first segment, we will touch on ISIS credits, support smallholder sustainability journey, and I would like to welcome Kamal Seth, the global palm oil director from Worldwide Fund for Nature, or better known as WWF. Welcome to the palm part, Kamal.

SPEAKER_00 2:15

Thanks, Farah. Glad to be here and happy to be a part of this very important discussion.

SPEAKER_02 2:19

Can you briefly share with the audience your role in WWF?

SPEAKER_00 2:23

Sure. We play a multifaceted role in supporting independent smallholder farmers to benefit from the RSPO independent smallholder standard and, of course, the credit mechanism that we have. I can outline a few ways on how WWF contributes to this important priority of the network. So, in terms of capacity building and training, we do a lot of work on developing and sharing best case practices for palm oil cultivation with the smallholders, supporting them with the legal land registration process, training materials, and so on and so forth. We also work a lot with them in terms of creating a market for the buyers who would be uh who are appreciative of the hard work done by the farmers to produce the fresh food bunches sustainably. So we also look at market access and the economic incentives that come from the ISH credits market. So we are talking about almost like a buyers coalition or buyers downstream of the palm oil who are happy to buy the ISH credits because they see real impact on the ground by supporting smallholders to get certified and then stay certified. We also work a lot with the independent smallholder cooperatives around the world to work on continuous monitoring and improvement plans so that everyone is learning from each other. So if you're working with X number of cooperatives in Indonesia, we make sure that they also come together and visit each other in terms of knowledge sharing and otherwise. And to do all of that, we of course have dedicated uh sustainable palm oil teams in our target countries like Malaysia, Indonesia, who make sure that on a day-to-day basis, through our field offices, they're fully involved and very hands-on at the ground level. So, so yeah, that's just a few ways on how we work with the standard as well as the credits work with the farmers.

SPEAKER_02 3:55

From your experience uh in the field of sustainable palm oil and also your work with smallholders. So, RSBO has created this support tool, which is the RSBO SH Credits. In your perspective, do you see it as a transitional tool, or would you say it as a long-term solution for smallholders and why?

SPEAKER_00 4:16

That's a very good question. And I would answer that in a way that it depends on the landscape, the geography, and the location we are talking about. Whereas in some places it might be easier for smallholders to find a certified mill in the in the local vicinity. Uh, and therefore they are able to sell their certified fresh food bunches to a RSPO certified mill, but that's not the case in many, many places. And therefore, whether the credit mechanism is transitional or long term is a question of how many certified mills are available, where the smallholders are and their farms are. And if the if the answer to that question is yes, it's very easy to get mills RSPO certified, and therefore their ability to buy the certified FFBs, then it is a transitional mechanism that in the short term you might want to still use the credits mechanism till uh you know the mills are up and running and they are certified and they're happy to pay the premiums to the farmers. Whereas there are cases in which, despite the best efforts, it's not possible for those smallholders to travel a long distance and to certify, supply certified FFBs to a certified mill. In that case, it's much more practical that they're able to find a buyer uh who recognize the additional efforts that goes into you know producing and selling certified FFBs. So while they might sell the FFBs to a conventional mill, which might not be certified, they would then receive a premium in the form of ISH credits uh from a buyer anywhere in the world.

SPEAKER_02 5:32

Just to clarify for the audience, uh FFB means fresh fruit bunches. Correct. So that's the produce that we get from the oil pump. Yeah. Okay, so um I think you've mentioned several challenges that smallholders face uh in terms of getting certified. And I think I want to look at your experience in working in this sector, uh, working with smallholders who have uh gone through the RSCP or certification process and also benefit from the RSP or RSH credits. So can you share a little bit about real life examples that you've seen where RSH credits have contributed to improved livelihoods and maybe empowerment among the smallholder communities? And if possible, can you share the ones that you've encountered personally in your work?

SPEAKER_00 6:21

Absolutely. And there are lots of stories, but in the interest of time, I would focus on the ones that we have seen make the maximum impact of our work in Malaysia and Indonesia. So let me start with the larger figure in terms of what is the impact of the smallholder standard and the credits. So, you know, since 2017, more than 850,000 independent smallholder credits have been sold in the global market, generating about 21 million US dollars of income for the smallholders. So that's the scale we are talking about in the last uh eight to ten years. Now, within that, where WWF comes in, is that we have worked with uh very dedicated uh groups of smallholders and helped them form cooperatives. So I'll just name a few from Indonesia. Mitra Bersama is one of the cooperatives based in uh West Kalimantan, and they are supported by WWF Indonesia as well as uh corporate partners like Biasdorf and Ivanik from Germany. And the aim here is to get the first few hundred smallholders certified, and in terms of the benefits, they obviously you would imagine that as you explained at the beginning, it's uh it's not a very easy process for smallholders to get RSPO certified in the first place. It takes anywhere between three to five years. So, what we are trying to do here is to ease the path or the lower the barrier of intrigue by working on the management side of things to making sure that all the documentation is in place, that they are getting ready for certification. Once they are registered on the RSPO platform, then the work is mainly to connect them with the buyers who appreciate the efforts that they have taken to get certified. And that's the impact that we are creating. So it creates a stable income for those communities for that cooperative. And the reason in this case, Mitra Bersama got certified is because they got inspired by another cooperative, Rimbaharapun, which is in the Sintang list. Yeah, so one of the reasons the cooperative I was talking about, Mitsra Bersama got even interested in getting RSPO certified was because they got inspired by another cooperative called Rimbaharappan. We are supporting in Sintang. Uh, and they saw the benefits that that community had in terms of their livelihoods, stability of their income, being recognized for the additional efforts they're putting in to stay certified, and which helps them obviously in terms of you know their uh local communities, uh, in terms of schools, hospitals, lots of things that a cooperative like them could do. So I think that just a few examples from Indonesia. In terms of Malaysia, we also have a combination of work that happens with smallholders, but also medium-sized growers. So we have created a few cooperatives there in Sabah, for example, with the first few hundred smallholders who have got certified, in which we are looking at working with them uh to find the buyers. And one of them is Unilever, in which they recognize the efforts put by the smallholders from Sabah and is a consistent purchase of credits that happens uh in the market. So we want to inspire a lot more companies, a few I have mentioned to make sure that they recognize that it might not always be possible to source physically certified sustainable power supplies because the logistics might not be there and lots of other factors are there. So, in that case, they should consider, like the companies I mentioned, on buying ISH credits because it directly incentivizes the smallholder cooperatives and improves their livelihood.

SPEAKER_02 9:10

I think you mentioned uh a few interesting points where you were saying that the smallholder groups were inspired by other smallholder groups that did pretty well um in cultivating sustainable palm oil. I think it's really inspiring. Also, there's one trip that I went to for Jum in Jambi where I see actually they were sharing with us like what do they use the premium from the credits for? And it's for women empowerment, for the children's education, and also for conservation activities uh in their land. So I think it's a really great look from what I've also personally observed. When you were saying that there's some maybe some challenges for people to source uh a physical sustainable palm oil, do you think there are risk of greenwashing when companies opt for RSP or ISH credits instead of sourcing sustainable palm oil physically? And if so, how can this risk be managed?

SPEAKER_00 10:06

That's a very good point. And I must say on the previous point that one of the best ways for NGOs like us to support this is a word-of-mouth marketing, and that's what we're talking about, right? So companies should talk to each other so that we don't have to spend a huge digital marketing campaign to talk about this, right? And obviously, thanks to the RSPS secretariat for organizing this podcast series. So I think the point is the good work has to be shared. We need more companies in the market, and at the same time, we need more cooperatives who are inspired to get certified. Now, on the point of greenwashing, definitely that risk exists because people who don't understand the complex supply chain of palm oil might get the impression that an NGO or a company is trying to promote something to offset a damage being done on the other side. So I just want to clarify that while there is a certain risk, that risk is only for companies when not transparently, publicly talking about why they are doing it, why they are buying independence monolith credits, how are they buying it, where is the money going to, who's the receiver of the money, who's the beneficiary eventually? So I would say that this risk of greenwashing primarily exists with companies which are not talking enough about it publicly, and in which case uh they should become more transparent, put it in the sustainability report, put it in the you're reporting to stock exchanges, go to your investors and talk about it, make it part of your strategic communications campaign. So if all those things are done in a very transparent manner, use videos, articles, blogs, uh you know, different comms formats, then the world knows the rationale as to why the company is buying a combination of certified sustainable physical palm oil and then independent smallholder credits, but it should be a combination. I don't think this is a case in which a company could say, I buy zero tons of physical certified material and it's 100% ISH credits. So my advice would be anyone looking at this or hearing this should consider a combination approach, in which case, only a X percentage should be ISH credits because in almost no geography, it's like you can buy zero tons of certified sustainable palm oil. And so it should be done in a combination that avoids the risk of greenwashing as well.

SPEAKER_02 11:58

I see. I think we've reached the end of this segment. From the challenges that you mentioned earlier and from your experience, what would an ideal support system for smallholders look like, in your opinion? And where do RSP or RSH credits fit into that vision?

SPEAKER_00 12:15

Sure, I can outline a few ideal support systems that we have seen in real life that work at the ground level. So one is capacity building and technical assistance. So, as I said, the training on good agriculture practices, access to agronomic advice, digital tools for farm monitoring and record keeping can all be done by supporting partners like WWF, because to expect smallholders and the cooperatives to do that, I think is asking for too much. And that's where it becomes a collaboration. The second is on financial inclusion, so making sure that there is affordable credit and insurance schemes which are tailored to smallholders, making sure that there are subsidies or grants for certification cost and infrastructure, because that's not something you would expect a cooperative to you know identify a huge grant that we could apply for. So that's another part of this discussion as well. The third is on market access and fair trade. So creating direct linkages to mills and buyers is a very important role that we see. Group formation of the cooperators, making sure there are legal entities that can sell the credits in the market, recognizing them through certification, of course, making sure at places like the RSP Anal Conference at RT, we are recognizing the smallholders who are working with NGOs, like and then the last couple of them are more on the legal and land tenure support. So sometimes there's a struggle on documentation. So then we work with the local authorities who have those requirements for documentation requirements to be met. And then there is the social empowerment side of thing in which you're looking at gender-inclusive programs, you know, including women in the supply chain and the at the farm level as well as beyond. Looking at youth engagement as well and making sure that there are enough young people who are continuing the good work being done for sustainable production practices. And to last, which is not the least, of course, is the environmental safeguards. So making sure that we are training the smallholders and the cooperatives on zero burning practices, biodiversity conservation, and having a healthy buffer zone. So if all of that is done, we could expect a future in which there is enough support for even reforestation and agroforestry initiatives. And that's the ambition that we have as WWF that if smaller cooperatives are doing RSPU certified production and getting the benefits from ISH credits, we should now think next and look at even reforestation and agroforestry initiatives so they have additional sources of income coming in as well.

SPEAKER_02 14:16

I believe that sums up the support that we can do for smallholders pretty comprehensively. Thank you so much, Kamal. And we have explored how ISH credits empower smallholders on their sustainability journey by providing financial incentives, recognizing their efforts, bridging market access gaps, and it also allows them to link with other smallholders and also learn from what other success stories are, right? And Kamal also highlights about the opportunities and challenges smallholders face and shares real life impacts from the ground and reflects how RSPO ISH credits can be a stepping stone toward the long-term sustainable practices and improved livelihoods. Thank you so much, Kama, for gracing the palm pod. We really appreciate your perspective and we hope the Blood Bluff can continue the great work that you're doing for smallholders.

SPEAKER_00 15:02

Thank you so much for an RSPO for inviting us to be a part of this discussion and happy to scale up her work and hopefully this will create more awareness to whoever is listening to provide more ways to support smallholders around the world.

SPEAKER_02 15:13

Amazing. We will come back and move on to the next segment on business shortly after this break. So now we're shifting gears to explore the business case for RSVO ISH credits from a buyer's perspective and why they matter to companies and how they fit into the broader strategy of sourcing sustainable palm oil. So to help us unpack this segment, we're joined by Nadine Stuber, Global Responsible Sourcing Lead for Palm Oil from Nestle. Welcome, Nadine.

SPEAKER_01 15:51

Hello, thank you very much uh for having me.

SPEAKER_02 15:54

Okay, so of course, as usual, uh we will want to know you and your role in Nestle. Can you share a little bit about yourself?

SPEAKER_01 16:02

Sure. Um, so uh yeah, I'm uh Nadine Stuber. I'm the responsible sourcing lead for palm oil at a global level. So essentially that means that my role is about making sure that the palm oil that we buy for all the factories that we have at a global level at Nestle is produced in a way that respects people and protects the environment. So essentially I work very closely with our procurement team on their procurement strategy linked to palm oil, but also a lot with our suppliers and external partners and um NGOs on a variety of topics such as environmental in terms of traceability and assuring that there's no deforestation, but also on human rights topics and human rights due diligence. And so um it's great to be here today with you to talk about uh independent smallholder credits, uh, which of course also make up a part of our strategy um for palm oil.

SPEAKER_02 16:55

Just to share with the audience why we have uh Nadine um representing Nestle today is because Nestle is one of the biggest companies that continues to support smallholders to the purchase of RSP or ISH credit when procuring sustainable palm oil. So let's get into it. So, Nadine, what are the key drivers behind Nestle's decision to support independent smallholders through the purchase of credits? And can you share a bit of the timeline? When does it start? And also what inspired the decisions? Was it compliance per se, or is it CSR, or is it just a good business decision?

SPEAKER_01 17:31

So, as I was saying, uh independent small holder credits make up a big part of uh the responsible sourcing strategy uh for Palm Oil at Nestle. And at Nestle, we have uh this commitment to responsibly source 100% of our key ingredients, high 2030. And this means, as I was explaining before, with my role, about making sure that this is produced in a way that respects people and protects the environment. And as we heard in the previous section, um smallholders actually make a big part or make up a big part of the volumes that are produced globally in the palm oil um industry. And so independent smallholder credits are a way that we can incentivize smallholders and cooperatives that are producing um palm oil that is in line with our responsible um sourcing core requirements, which are, for example, making sure that they are not linked to deforestation, the the plant the farms are managed in uh a sustainable way through good agricultural practices and um are so in line with uh certain um human rights um requirements. And so by purchasing independent smallholder credits, we can make sure that we have a direct uh contact and can incentivize these cooperatives that are already producing palm oil in this sustainable um manner. And I would say we started this in around 2020 when we first started buying some independent smallholder credits. At that point, the amounts were still smaller, around 10,000 credits per year. And now, as we are integrating this more and more into our responsible sourcing strategy, we have uh increased this to almost 64,000 credits in 2024. And the idea is really that throughout this time, we started by supporting a small amount of uh cooperatives by purchasing a percentage of their credits. And now we've really scaled this up uh in some cases and buying 100% of their credits, which allows them to also um increase their volume and integrate more um smallholders and more members to their cooperatives. And the idea is really just also to um support the smallholders that are linked to um our supply chain where we physically source, but potentially might not have that access to an RSPO um certified mill as we had heard in the last section. And so for us, I think it's might have started a little bit more from a CSR perspective, but the idea is really to make sure that in the long term there is enough palm oil that is produced, you know, responsibly. And so it really is also a um long-term investment into responsible palm oil uh supply chain and ensuring that there are volumes um that align with our uh sourcing requirements.

SPEAKER_02 20:06

Let's talk a bit about the numbers because I think this is quite interesting. Can you share how many RSPO RSH credits that Nestle has purchased over the years and perhaps highlight some of the most significant impact these purchases have had on smallholder communities? And maybe you can share the ones that you've heard from the smallholders themselves, uh, the ones that you've experienced on the changes that RSPO ISH credits have done to the smallholders that you are engaged in.

SPEAKER_01 20:32

Sure. Um so as I was saying, we've uh really increased uh this amount a little bit. We started with about 10,000 in 2020 and increased this um every year to almost 64,000 now in 2024. Um we are buying the smallholder, independent smallholder credits from various different cooperatives. But I think the one thing that's um really interesting when we buy independent smallholder credits in comparison to maybe other ways that we also um support smallholders is that we can make sure that um the financing reaches the cooperatives directly and they have the decision-making power to decide how they want to implement they want to implement, which make most sense on the ground for them. Um and so in this way we see that uh there are some similarities, especially when we look at different um cooperatives and in Indonesia that we have supported. Many of them decide to, for example, also use some of their um financing to improve their roads, which can have an impact on the transportability of their palm oil, but also on um their quality of life in general. Um, some of them have given their members the opportunity to make sure that they're linked to uh the national social security system. Access to loans tends to be something that is also quite often an advantage of being part of a cooperative and coming together and therefore kind of re risking their financial um points of view. And then um women. Is actually something that we see quite a lot as well across different um cooperatives. And then maybe more specifically, it's also interesting to see a little bit what how things are different. So, like we're saying, of course, we purchased a lot from Indonesia, which is one of the biggest producing countries, but um there are also smallholders in Mexico or in Peru or in Brazil, where the context might differ slightly. So in those areas, we also saw the importance of how independent smallholder certification, exactly smaller um farmers who might not have full-time workers all the time, where they come together and then they can these workers to no longer be casual workers and also um evaluate aspects such as you know, how many bathrooms are there across different um farmers and then finding ways to implement these together to improve also the healthcare systems that are there for those workers that work with these uh smallholders together.

SPEAKER_02 22:57

Just FYI for our listeners. So globally, there's less than 1% of independent smallholders that are RSPO certified, and even though they manage significant oil palm assets in their respective countries, while certification rates are slowly increasing, one of the key mechanisms that currently is helping smallholders on their sustainability journey is the RSP or ISH credit system. And as Nadine mentioned earlier, that you can see there's it's sort of empowering the smallholder to decide for themselves on where the resources be allocated, and it's actually a sort of empowerment for them compared to the the usual initiative, right? There's like a certain rules and regulation on how the budget or the sponsorship uh certain companies give. And through Nestle's involvement or decision that Nestle has made by buying RSP or SH credits, personally, have you seen any ripple effect in terms of internally in Nestle itself, maybe in terms of employee pride or consumer trust or sustainability benchmarked due to Nestle's decision in supporting RSP or ISH credits? And has the purchase of the credits helped your brand brand in any way?

SPEAKER_01 24:09

Sure. So I think um one of the key points with independent smallholder credits is that it kind of puts the narrative back on the smallholders in a commodity which is often focused on, you know, large plantations. And by focusing on these smallholders and looking a little bit more also at the human aspect, I think we can find a side that uh is that many people are can more easily connect to as well and see that behind you know, um, palm oil that can sometimes be a complex commodity, there are also aspects of livelihoods behind it. And I think so the independent smallholder credits can really um help support this. And um, as I was mentioning, although of course we buy small or we buy volumes, palm oil volumes from Indonesia and Malaysia, two of the main producing regions, we also actually buy a lot of some volumes for our local factories in Latin America, in Peru, for example, and Mexico and Brazil. And making that connection specifically to the independent smallholders, and this is actually also correct for Indonesia, can be quite empowering for our employees, but also for consumers to see that, you know, this um palm oil has been produced in their own country and that um these independent smallholder credits are supporting um these farmers that uh tend to be the most vulnerable within the supply chain. And so independent smallholder credits, as you were saying before, is really interesting because, yeah, as Neste, we can make sure that the money that we um give to them is given to them directly and we don't depend on, for example, maybe um a third party like a supplier or even an NGO who we also support in other ways um that sometimes just uh provide good agricultural practices uh to the farmers, which is great as well, but is a different way that uh the farmers can have a decision-making power.

SPEAKER_02 25:51

So I would like to also ask you in a different angle. So some businesses perceive RSPO independent small holder credits as expensive and it's not considered, quote unquote, not a sound business decision. How would you respond to that perspective?

SPEAKER_01 26:08

So I think when you look at it first, it can potentially seem as something that uh is a cost, but I think it should really be seen as an investment and a long-term investment into a responsible supply chain or a responsible industry. Because the idea behind it, right, is to make sure that there is a long-term production of homel volumes that are produced sustainably in alignment with the human rights and environmental requirements. And I think also with the new regulations coming in, such as Csearchable D or CSRD, it can also help to address those kinds of um requirements whereby uh we need to make sure that we address, you know, our human rights risks or any due also um environmental due diligence and address them. So um independent smallholder credits might not be a way to directly address the physical volumes um that we purchase. As we've seen in the past, sometimes the smallholders don't have access to RSPR-certified mills, but it's a way to address these risks almost at a landscape level or at an industry level in that sense. So it's really about kind of future-proofing um the supply chain, I would say.

SPEAKER_02 27:15

I think this is really important perspective for even the consumers to hear, and it's uh a really admirable direction that Neste is going towards because understandably a lot of businesses prioritize the pricing, the you know, um, the convenience, what's at their convenience? And it's beautifully put, as you mentioned, that purchasing RSP or SH credit is actually an investment for future-proof supply chain. And if it's not from the businesses themselves, who else will be supporting independent smallholders? I guess I would like to know what would be your message. So, Nestle can be considered one of the business leaders that take a positive direction in supporting smallholders to RSPY credits. What would be your message or pitch to the other fellow procurement leaders that is like in in maybe in the same industry who are trying to navigate the volatile market? And why should they actually consider purchasing credits?

SPEAKER_01 28:14

It's a good question. I would say, yes, volatility might be part of it, but um be very honest, I think uh volatility nowadays is part of uh almost any conversation that especially a procurement team is having. So I don't think it's very specific to um independent smallholder credits. But as I was saying, I think the um, well, first of all, the cost of inaction is probably uh more expensive um than investing in these smallholder credits. So in the long term, this probably um makes most sense. Um as I mentioned, it's also a way to reduce risk within the supply chain in regards to deforestation, land rights, but also labor conditions, which are topics that specifically um companies that are based in the EU have to um address uh more based on regulatory requirements as well. And I think it's also a direct way that um companies can um contribute, like I was saying, to the most vulnerable um on the ground. And so having that direct contact can make sure that the um the contribution that uh companies are making actually reach those uh cooperatives and farmers and that they can decide how they want to implement it. And I think it's also a way to incentivize farmers, like you were saying, getting certified can be quite an administrative um procedure. It takes a lot of time, it's a lot of work for the smallholders, and so sometimes it can also be questionable for them to decide why they should implement all these requirements that make it even more difficult to produce um their palm oil. And so it's also a way to um provide that incentive from uh brands like Nestle that otherwise don't have that um direct contact to um these farmers um directly.

SPEAKER_02 29:51

Okay, if we're looking at the regulations that we've been hearing about, although there's a postponement in EUDR yet again, but it still lingers in the minds of smallholders how it might restrict them from continuing to supply sustainable palm oil and to get to continually uh getting support through our R Square SH credits. Um, with these regulations, how do you think R Square SH credits stay relevant? How should actually companies approach smallholders or supporting them through credit in this context? Um, because it might also put businesses in the backseat and making them lose the competitive edge in certain markets.

SPEAKER_01 30:33

So instead of looking at it as uh taking you know away a competitive edge, I think it's also about aligning that everyone has the same or similar um requirements, which I think kind of lifts the bottom line um a little bit. And I think, like you were saying, potentially independent smallholder credits aren't um directly linked to EUDR requirements, where maybe the RSPO segregated um system is more applicable. But I do believe uh independent smallholder credits can support smallholders to prepare for this, right? It helps with making sure that they have all their land rights requirements, it can help with the polygon GPS tracking, um, it can help with making sure that they have the human rights and due diligence assessment. Probably the one point where it is missing is that sometimes these smallholders might not have that um traceability to MIL or to a specific supplier, but it um already sets the base for them being able to integrate into EUDR. But I think beyond this, maybe some topics like I was saying before, CSR Triple D or CSRD are ones which also focus on um the importance of human rights due diligence or the importance of supporting the most vulnerable actors within a supply chain. And there, of course, these are smallholders. So independent smallholder credits can be a way that companies can uh show that they're contributing towards this and are taking action within their supply chain and that independent smallholder credits are a way um to uh do this.

SPEAKER_02 31:56

I guess we've reached the final question, Nadine. Um, I think it's such a refreshing take from business, I believe. I might be biased, but I'm really passionate about the conversation of RSPO and RSH credits, and it's really endearing to see a business that actually cares about the supply chain in the way that Nestle is taking the direction of. Uh, you know, even though RSPO ISE Credit can be seen as a bit more expensive than uh the usual route in sourcing palm oil, but I believe this, the step that Nestle is taking, will continue to support smallholders and it will be copied by other businesses as well. Thank you so much, Nadine, uh, for being in the palm pot.

SPEAKER_01 32:37

Thank you very much uh for having taken time. It was a pleasure to be fear. And um, yes, I um completely agree with you. I have to say personally, I'm also um quite a big fan of the independent smallholder credits. I really like this idea that as a big brand, it allows us to have that more closer connection to um these cooperatives and also see how um they decide to implement this and how this has um a direct impact on um their livelihoods. So um, and it's something that um I would like to see more and more as well to kind of bring the smallholders uh a little bit more into the center of the conversation that um surrounds uh Palmwell in general.

SPEAKER_02 33:12

Excellently put. So with that, um we are at the end of our special episode of speaking about RSBO, ISH credits, and a big thank you to both of our guest speakers for joining us on the palm pot and sharing their insight, experience, as well as perspective on ISH credits and how they support the sustainability journey of independent small holders. Don't forget to rate, review, and subscribe to the palm pot on your favorite podcasting platforms. Feel free to share your feedback for our next episode. I was speaking to both of our guests, Kamal Seth from WWF and Nadine Stuber from Nestle. I am Fararom and this is the Palm Pot.