Contribution of SLCA to Improve Social Performance in the Palm Oil Governance in Indonesia

Abstract

Assessing social risk to improve social performance of a business should be one of strategies to build a sustainable business, especially in a sector where social aspect plays critical role. This article will explore the added value of Social Life Cycle Assessment (SLCA) in assessing the salient social risk of Crude Palm Oil (CPO) production amid the existing standards on palm oil namely RSPO and ISPO based on the stakeholder’s group. SLCA can be used as a working framework to help companies implement the S component in the ESG criteria. The use of SLCA is expected to contribute to social welfare through a business operation. As a finding from this mixed method research, the SLCA has not been widely used by oil palm plantations company. Most of the salient social risks identified in this research are already addressed by the company in fulfilling the sustainability standards. However, SLCA is a strong working framework for the company in developing the social program that in the end can help to increase the company’s productivity through a sustainability strategy in line with the principles of sustainable development.