The EU Deforestation Regulation aims to reduce the European Union’s impact on global deforestation and forest degradation.
The goal is to restrict deforestation driven by certain products and their supply chains. The regulation covers products like beef, cocoa, coffee, palm oil, soy, wood, and rubber, which are considered major contributors to deforestation if not produced responsibly.
The regulation is part of the broader EU sustainability agenda (Green Deal), which seeks to achieve a climate-neutral Europe by 2050. At its core, the Green Deal is a growth strategy where sustainable development and the circular economy are key elements. The idea is that mitigating the climate crisis and sustainability deficit helps humanity—and thereby also the economy
The Regulation Supports the EU Forest Strategy
One of the key initiatives under the European Green Deal is the EU Forest Strategy for 2030, presented by the European Commission in July 2021. This strategy, based on the EU Biodiversity Strategy, aims to promote sustainable forest management across Europe and is a crucial part of efforts to reduce greenhouse gas emissions by at least 55% by 2030.
The due diligence obligations and reporting requirements of the Deforestation Regulation will come into effect in December 2024, with some exceptions. The impact on Finnish companies will vary depending on their industry and the scale of their operations.
What Does Due Diligence Mean in the Context of the Deforestation Regulation?
Due diligence is a central concept in the EU Deforestation Regulation, requiring companies to assess and mitigate risks related to their activities that might lead to deforestation. Companies must ensure that their products and supply chains do not contribute to deforestation or forest degradation. The practical responsibilities include:
- Data Collection: Gathering accurate and up-to-date information about products and the entire supply chain, including origin, manufacturing processes, and sourcing of raw materials.
- Risk Assessment: Assessing collected information to identify all potential deforestation-related risks, such as illegal logging or converting forests for agricultural use.
- Risk Mitigation: Once risks are identified, companies must take actions to mitigate them. This may involve changing supply chains, implementing certification systems, increasing transparency, or collaborating with local communities and authorities.
- Monitoring and Reporting: Due diligence also involves ongoing monitoring and reporting. Companies are required to regularly evaluate the effectiveness of their due diligence measures and report their findings to stakeholders and authorities.
- Continuous Improvement: Due diligence is an ongoing process that requires regular review and updates. Companies must respond promptly to new information and changing circumstances to ensure that their activities do not contribute to deforestation
This article was created with the help of Infine’s Deforestation AI Assistant.