Summary
Financial impacts continue to be a pivotal issue in encouraging independent smallholders to adopt the sustainability standards of the Roundtable on Sustainable Palm (RSPO). Departing from past studies, which leveraged on a single-point average estimate, this study examines, through a probabilistic view, independent smallholders' financial costs and benefits that are associated with their RSPO certification. Using the Monte Carlo approach, with backtracked information that treated 2019 as the base, a range of net present values was estimated. In comparison with "to-be-certified" (prospective) and non-certified independent smallholders, our findings indicate that certified independent smallholders are associated with a higher range of net values at a 95% confidence level. Such relative overperformance has high likelihood of persisting, even under scenarios of a self-funding model and/or a removal of any price premium. Conceptualizing the financial impacts associated with RSPO certification along a continuum may help to move advocacy in a more productive direction by emphasizing the financial risks and growth opportunities. Such an approach allows for greater consideration of smallholder variable conditions and needs.(c) 2021 Institution of Chemical Engineers. Published by Elsevier B.V. All rights reserved.