The European Union Deforestation Regulation (EUDR) requires companies producing or selling products in the EU made or derived from 7 “relevant commodities” to perform supply chain due diligence and file a statement that finished products and sourced commodities do not originate from areas affected by deforestation or forest degradation. The EUDR also requires statements that goods are produced in compliance with source-country social and environmental laws. Products made of commodities such as cattle, cocoa, coffee, palm oil, rubber, soya and wood sold after December 31, 2024, will be subject to the EUDR. Due to the extremely broad applications of these commodities, the regulation will have a wide-reaching, cross-industry impact.
The EUDR prescribes due diligence actions, including:
- Collecting product and supply chain data indicating EUDR compliance
- Analyzing the risk of product non-compliance to the EUDR
- Following additional regulation guidance based on Country risk ratings
- Mitigating identified risks through use of documentation controls, audits, supply chain engagement and investment
- Sharing due diligence statements down the supply chain to ensure compliance prior to importing or selling affected products in the EU
Being prepared for the EUDR means understanding your value chain at an unprecedented level and will require 3 critical transformations:
- Processes: Supplier compliance must transition to Supply Chain compliance, increasing the number of suppliers and products requiring oversight.
- People: Tier-1 vendor management teams must transition into global supplier support and investment teams.
- Systems: Supply chain tools must transition from buyer-managed surveys and databases to a network model with native ability to connect and share data across tiers.
At Transparency-One, we are built to help buyers access and manage their networks of suppliers to not only comply with up-and-coming regulations but have more responsible sourcing practices and visibility to suppliers. Partner with Transparency-One and let us help support your value chain needs.
