Sustainability Challenges and Opportunities for Smallholders in the Malaysian Palm Oil Sector: A Systematic Review

The Malaysian palm oil sector is increasingly focusing on sustainability in environmental, economic, and social aspects. Companies are adopting environmentally friendly practices and aligning with recognised sustainability frameworks and certification programmes. One key initiative is the Malaysian Sustainable Palm Oil (MSPO) standard, which is mandatory for all oil palm producers and aims to address sustainability challenges in the industry. This review explored how independent smallholders respond to the mandatory adoption of the MSPO and the factors influencing their willingness to comply. A systematic literature review was conducted using 40 scholarly articles from four databases (Scopus, ScienceDirect, PubMed, and Web of Science), covering studies published between 2017 and 2024. The review examined key sustainability indicators, certification schemes, and frameworks, considering their relevance to the conditions of smallholders. It also evaluated smallholders’ adoption rates, perceived benefits, and challenges within certification programmes. Major challenges identified include issues of affordability, accessibility, and scalability. This review paper will offer recommendations to improve smallholder integration into sustainable palm oil practices. By addressing current gaps, policymakers, researchers, and stakeholders can support more inclusive and effective sustainability efforts that ensure smallholders' active participation and fair benefits while advancing environmental and social goals.