In the palm oil industry, ensuring compliance with ESG standards is a complex challenge due to its vast, fragmented supply chain and evolving regulatory requirements. A data-driven approach is essential for accurately tracking sustainability metrics, from deforestation rates to carbon emissions, across every stage of production.  

At the recent conference organized by HCLTech, industry leaders gathered to discuss the future of sustainability in the palm oil sector. Kingsley Tam, Head of Global Sales at MioTech, emphasized the complexities faced by the palm oil industry, particularly in the context of regulatory requirements and supply chain challenges. “For the palm oil industry, the stakes are exceptionally high given the regulatory landscape and the complexities of the supply chain,” says Tam, while highlighting the importance of data collection and engagement with the entire value chain — from suppliers to downstream participants — as essential components for effective ESG (Environmental, Social and Governance) compliance.  

"A lot of companies want to do more to track their data, but it’s incredibly hard without the right tools. At MioTech, we leverage our expertise in sustainability data to help clients manage data efficiently through technology platforms," he shares. Without the use of technology, companies risk being bogged down by manual processes that hinder scalability and accurate data tracking. By leveraging digital tools and platforms, companies can collect, analyze and report real-time data, enabling greater transparency and accountability. This not only helps meet international compliance standards but also builds trust with stakeholders by demonstrating a genuine commitment to sustainable practices.  

ESG compliance: The challenges and solutions 

The pressure to comply with ESG standards is mounting for companies in the palm oil industry, with new regulations constantly emerging. "One thing that we see is that the regulatory pressure has just kept coming. There are more and more standards that we have to align with," explains Tam. As companies strive to keep up, the complexity is compounded by the ambiguity surrounding these regulations.  

For instance, while standards like the Corporate Sustainability Reporting Directive (CSRD) and the European Sustainability Reporting Standards (ESRS) provide a framework, they also bring uncertainties. "When a new standard comes out, like the Taskforce on Nature-related Financial Disclosures (TNFD), we're discussing how to quantify something as complex as the impact of a loss of a species," he notes. 

For many in the industry, navigating these complexities boils down to understanding the data. Tam emphasizes, "The key point is to figure out what data to collect, what exact indicators we should be looking at and then the reporting standards." The challenge lies in not just gathering the right data but also in aggregating it in a way that meets reporting requirements without falling into the trap of greenwashing.  

Companies must focus on clarity and accuracy in data collection and reporting, ensuring their sustainability claims are credible and verifiable. By addressing these challenges, companies can better align with evolving ESG standards and maintain their commitment to sustainable practices. 

Emerging technologies for ESG compliance and sustainability  

Tam highlights the pivotal role of both traditional and emerging technologies in promoting sustainability in the palm oil industry. While established technologies, such as IoT and digital platforms, are essential for effective data collection, newer methodologies are beginning to play a critical role in enhancing carbon calculations. “For smallholders, calculating carbon emissions is challenging because their primary focus is daily operations. However, we can use available data — like production amounts and energy usage — to estimate emissions,” he explains. This innovative approach allows companies to bridge the gap between operational realities and sustainability goals. 

Looking to the future, Tam believes that data will become even more integral to sustainability practices in the palm oil sector. "The trend will definitely involve greater participation across the value chain and more granular data collection that aligns with international standards," he predicts. To achieve this, he talked about the need for clearer regulatory guidelines to avoid confusion and ensure that compliance efforts are aligned with global expectations. 

Tam’s insights reveal that the path to sustainability in the palm oil industry will increasingly depend on the effective use of both data and technology. As regulatory frameworks continue to evolve, the ability of organizations to adapt, innovate and accurately report their sustainability efforts will determine their success in achieving true environmental impact.