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Beginning Your EUDR Journey: The First Steps to Compliance
Here's a handy guide to making your business ready for the requirements of EUDR
Published November 26, 2024
Asharita D'Silva
Coffee experts@Era of We
The EUDR law is a complex and extensive regulation that poses significant organisational challenges for businesses in the EU.
EUDR introduces strict requirements for businesses to ensure that selected products sold within the EU are not linked to deforestation or forest degradation. It impacts multiple industries, including agriculture, forestry, and manufacturing, and companies must adopt sustainable practices and enhanced traceability to comply with these regulations.
The deadline for EUDR compliance is likely to be postponed to December 2025. Despite the timing and scope of EUDR still being under scrutiny, this is the perfect time for businesses to build robust systems to prepare for the expected regulation. Our experience is that it takes up to a year to implement the EUDR requirements to its full extent. In this article, we will explore how to get started on the path to EUDR compliance.
How To Conduct a Supply Chain Audit
The first step for many organisations will be to conduct a robust and thorough supply chain audit that is geared towards analysing the risk and impact of deforestation. A supply chain audit is essential to understand the sourcing practices, transparency, and sustainability of your suppliers. Different regions around the world pose varying degrees of risk for deforestation and companies must have a plan to manage no, low, medium, and high-risk origins.
A comprehensive supply chain audit will involve the following steps:
1. Map your entire supply chain:
It is vital for businesses to be familiar with their supply chain from end to end. Start by mapping the entire supply chain, from raw materials to finished products. Identify all suppliers and sub-suppliers involved, as well as their geographical locations. This will help you pinpoint where the risk of non-compliance is highest.
This will help ensure full traceability of commodities back to their origin. For instance, if you deal with coffee, know the farms or plantations from where the coffee is sourced.
2. Assess Supplier Risk:
Not all suppliers pose the same level of risk. Classify suppliers based on factors like geographic location, product type, and past compliance history. For example, suppliers located in areas with high deforestation rates may require stricter monitoring.
Check if your suppliers follow sustainable land-use practices. Prioritize those who have been certified by credible sustainability programs such as Rainforest Alliance, FSC (Forest Stewardship Council), or RSPO (Roundtable on Sustainable Palm Oil).
3. Gather Evidence:
Collect detailed documentation from suppliers, including land-use records, sourcing practices, and environmental certifications. Use satellite data and digital tools to verify land-use changes and ensure that sourcing practices align with EUDR guidelines.
4. Engage with Suppliers:
Conduct training sessions and workshops for suppliers to ensure they understand the EUDR requirements. Establish clear expectations for transparency, documentation, and ongoing compliance.
By following these steps, businesses can develop a thorough and effective supply chain audit process to ensure compliance with EUDR. Each step helps reinforce the due diligence system and ensures that any risks of deforestation are minimized in the supply chain.
How To Establish a Due Diligence System
After conducting a supply chain audit, businesses must then focus on building a due diligence system that is compliant and focused on the requirements of EUDR. Due diligence statements play a central role in complying with EUDR, as they are key documents that demonstrate a business’s commitment to preventing deforestation in its supply chain.
A due diligence system will help identify and mitigate the risk of non-compliance in your supply chain. Implementing a system tailored to EUDR can help ensure ongoing adherence to the regulation and improve accountability.
The due diligence statement must include the following:
- Risk Assessment Summary: An overview of the risk assessment conducted, including the methods used to evaluate potential deforestation risks in sourcing areas.
- Supply Chain Mapping Details: A description of the supply chain, including supplier information and sourcing areas, particularly for high-risk areas associated with deforestation.
- Verification and Evidence: Details about the evidence gathered to confirm compliance, such as land-use data, certifications, or remote monitoring tools.
- Compliance Confirmation: A statement affirming that, to the best of the company’s knowledge and based on the evidence obtained, the products comply with EUDR and are not linked to deforestation.
Here are the key steps to building a due diligence system for EUDR:
1. Establish Compliance Goals and KPIs:
Define what compliance means for your business, including the specific products and raw materials covered under EUDR. KPIs for compliance can include metrics such as the percentage of traceable suppliers or audit completion rates.
2. Risk Assessment and Mitigation:
Create a detailed map of all suppliers, sub-suppliers, and intermediaries involved in sourcing, production, and distribution. This will help identify where deforestation risks might be introduced. Mitigation strategies can involve recording the geographic origin of all materials, with a special focus on sourcing areas with higher deforestation risks. For example, areas within or near tropical forests may need more scrutiny.
3. Verification and Monitoring Systems:
Ask suppliers for certifications, land-use records, or deforestation-free declarations that demonstrate sustainable practices.
Consider using satellite monitoring, blockchain, or other management software like Era of We to track sourcing locations and verify land-use patterns over time.
4. Documentation and Record Keeping:
Create a centralized documentation system and store all due diligence records in a centralized digital system that is accessible and secure. This includes audit reports, supplier certifications, verification documents, and compliance updates.
EUDR requires traceability, so make sure your documentation allows you to track products to their origin. Use supply chain management software like Era of We to link documentation with specific materials or suppliers.
5. Develop Due Diligence Statements and Reports for Authorities:
Document your compliance efforts in an official due diligence statement. This should include your risk assessments, supplier information, verification processes, and conclusions on EUDR compliance. Submit these statements to relevant EU authorities as required, ensuring they are complete, accurate, and up-to-date.
Era of We can enable businesses to centralize documentation, automate data collection, and monitor supplier performance.
Conclusion
Building a robust due diligence system for EUDR compliance is essential for businesses aiming to eliminate deforestation risks from their supply chains. This involves developing clear compliance policies, mapping the supply chain, conducting risk assessments, and implementing rigorous monitoring and verification processes. Engaging suppliers through training and transparent communication ensures they understand and uphold EUDR requirements, while maintaining meticulous documentation and traceability builds accountability and supports regulatory reporting.
By adopting these practices, businesses can go beyond mere compliance, positioning themselves as leaders in sustainable sourcing. Leveraging supply chain software also enhances visibility and strengthens compliance efforts. Ultimately, a well-structured due diligence system and comprehensive supply chain audits not only aligns businesses with EUDR standards but also promotes long-term sustainability, transparency, and resilience across the supply chain.
About the author
Asharita D'Silva
Join me in discovering the wonderful world of coffee! As a writer, coffee is my fuel and newfound passion. I love writing about new coffees, sustainability, and coffee culture around the world. I'm always discovering new things about coffee and the industry, which I share with the great community here at Era Of We.
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