Without a due diligence statement confirming due diligence has been conducted with no risk of deforestation or non-compliance, products cannot be sold in, exported from, or imported to the EU market.

Certification schemes cannot be relied on as an equivalent to compliance but can support companies in their compliance. In particular, information from certification schemes can be used to support companies in their risk assessment as part of due diligence.

As reported in the FAQ (question 53) document of the commission, the internal organisation and due diligence policy of a group of companies (a mother company and its subsidiaries) is not governed by the Regulation. The operator or trader that places or makes available on the market or exports a relevant product, is responsible for the compliance of the product and for the overall compliance with the Regulation. Hence, it is its name that shall figure in the due diligence statement and it shall retain the full responsibility under the Regulation.

Upstream producers who do not directly place relevant commodities or products on the EU market do not have explicit obligations under the regulation, but practically speaking will be required to provide information to operators so they can fulfil their due diligence obligations. If producers cannot provide the information operators need, operators will not be able to import the products into the EU and therefore operators are likely to consider sourcing products from elsewhere. Operators remain ultimately responsible for the accuracy of the data, and need to verify and prove the data is correct.

An organisation’s response to the EUDR can have synergies with its response to other pieces of EU sustainability regulation especially in regard to data processes and management, stakeholder engagement, reporting and strategy development:

• There are links with the Corporate Sustainability Due Diligence Directive – CSDDD, which also imposes a due diligence requirement on supply chains. Companies who fall within the scope of the CSDDD should be able to fulfil their EUDR reporting obligations by including the required information when reporting under the CSDDD.
• Similarly, for the Corporate Sustainability Reporting Directive (CSRD), significant investment and resource need to be channeled into data collection, reporting and assured.
• Companies can also consider links with new anti-greenwashing-related regulations - the Green Claims Directive and Empowering Consumers Directive, which are pushing companies to develop a more rigorous approach to their environmental marketing, with all claims underpinned by robust data and supplemented with verification. Companies will not be able to frame compliance as a differentiator because it is a legal requirement.
• Additionally, the Ecodesign for Sustainable Products Regulation – ESPR – requires companies to collect more data about their products’ environmental footprint.

Technology plays a key role. It is an enabler for collecting and integrating data along the value chain, e.g., blockchain and to effectively fulfil the EUDR requirements. Technology will be essential also for identifying geo-plots and coordinates (key requirement to prove deforestation-free). Consolidated end to end solutions to respond to all the requirements are under development on the market.