{"id":4487,"date":"2021-06-14T01:04:18","date_gmt":"2021-06-13T17:04:18","guid":{"rendered":"https:\/\/www.ukm.my\/jem\/?post_type=article&#038;p=4487"},"modified":"2021-09-09T12:29:55","modified_gmt":"2021-09-09T04:29:55","slug":"the-effect-of-sustainability-certification-for-export-on-operational-profitability-of-malaysian-palm-oil-companies","status":"publish","type":"article","link":"https:\/\/www.ukm.my\/jem\/article\/the-effect-of-sustainability-certification-for-export-on-operational-profitability-of-malaysian-palm-oil-companies\/","title":{"rendered":"The Effect of Sustainability Certification for Export on Operational Profitability of Malaysian Palm Oil Companies"},"content":{"rendered":"<p><span class=\"fontstyle0\">Malaysia is the world\u2019s second largest palm oil producer with 17.4 million tonnes palm oil produced in 2016. The production is for both domestic and export which contribute towards country\u2019s income and economic growth. Despite the significant contribution to the economy, being one of the plantation sectors, Malaysian palm oil has been criticized by the western communities for causing environmental problems such as deforestation and open burning. Hence, it is important for the palm oil companies to ensure sustainable operation and production. The introduction of certified sustainable palm oil (<\/span><span class=\"fontstyle0\">CSPO<\/span><span class=\"fontstyle0\">) or sustainability certification, for instance, Roundtable on Sustainable Palm Oil (<\/span><span class=\"fontstyle0\">RSPO<\/span><span class=\"fontstyle0\">) and Malaysian Sustainable Palm Oil (<\/span><span class=\"fontstyle0\">MSPO<\/span><span class=\"fontstyle0\">), encourages the sustainable practices by the industry players. Recently, the government had announced the mandatory <\/span><span class=\"fontstyle0\">MSPO<\/span><span class=\"fontstyle0\">-certification in Malaysia by end of 2019. At present, there are only 43.6% Malaysian palm oil companies with at least one certification. The mandatory certification had raised concern among companies on additional costs of adoption which eventually will affect profitability. Moreover, sustainability certifications will only benefit the exporting companies for international market penetration. The question is how important does this certification to the exporting companies as compared to others? This study will analyse the effect of sustainability certification on operational profitability of Malaysian palm oil exporting companies. This study employs<br \/>\ngeneralised least square (<\/span><span class=\"fontstyle0\">GLS<\/span><span class=\"fontstyle0\">) estimation on 17 listed palm oil companies in Bursa Malaysia from 2009 to 2015. The result shows that there is no significant difference in operating profitability due to sustainability certification between the palm oil exporting than the non-exporting companies. The findings indicate that sustainablity practice through <\/span><span class=\"fontstyle0\">RSPO <\/span><span class=\"fontstyle0\">or\/and <\/span><span class=\"fontstyle0\">MSPO <\/span><span class=\"fontstyle0\">motivates Malaysian palm oil companies to produce certified palm oil for international and domestic markets, which in line with sustainable development goal (<\/span><span class=\"fontstyle0\">SDG<\/span><span class=\"fontstyle0\">) no. 12 (Ensure Sustainable Consumption and Production Patterns) by the United Nations (<\/span><span class=\"fontstyle0\">UN<\/span><span class=\"fontstyle0\">).<\/span><\/p>\n","protected":false},"template":"","tags":[724,726,728,725,727],"jel-code":[],"article-type":[1329],"class_list":["entry","author-jem","post-4487","article","type-article","status-publish","tag-cspo","tag-mspo","tag-performance","tag-rspo","tag-sdgs","article-type-normal-article"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.8 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>The Effect of Sustainability Certification for Export on Operational Profitability of Malaysian Palm Oil Companies | Jurnal Ekonomi Malaysia<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ukm.my\/jem\/article\/the-effect-of-sustainability-certification-for-export-on-operational-profitability-of-malaysian-palm-oil-companies\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Effect of Sustainability Certification for Export on Operational Profitability of Malaysian Palm Oil Companies | Jurnal Ekonomi Malaysia\" \/>\n<meta property=\"og:description\" content=\"Malaysia is the world\u2019s second largest palm oil producer with 17.4 million tonnes palm oil produced in 2016. The production is for both domestic and export which contribute towards country\u2019s income and economic growth. Despite the significant contribution to the economy, being one of the plantation sectors, Malaysian palm oilContinue Reading\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.ukm.my\/jem\/article\/the-effect-of-sustainability-certification-for-export-on-operational-profitability-of-malaysian-palm-oil-companies\/\" \/>\n<meta property=\"og:site_name\" content=\"Jurnal Ekonomi Malaysia\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Jurnal-Ekonomi-Malaysia-JEM-104142808087485\" \/>\n<meta property=\"article:modified_time\" content=\"2021-09-09T04:29:55+00:00\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:site\" content=\"@EkonomiJurnal\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"1 minute\" \/>\n<script type=\"application\/ld+json\" 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