In response to increasing concerns around climate change and biodiversity loss, the UK and the EU have taken significant steps to address deforestation, a critical issue with substantial social and environmental ramifications. These efforts aim to safeguard the planet and encourage businesses to review their supply chains, as well as to encourage sustainability through the implementation of new regulations.
Why it matters
The origin stories of the products we use daily are often overlooked when we consider the global economy. The furniture you depend on, the chocolate you enjoy, or the cup of coffee you are currently holding may have unintentionally contributed to illicit deforestation. In addition to the environmental damage, these practices frequently endanger the livelihoods of indigenous peoples and local communities.
The EU Deforestation Regulation (EUDR) and the UK Forest Risk Commodity Regulation (UKFRC) are not simply regulations; they are a testament to our shared obligation to preserve the remaining forests. These initiatives require businesses to conduct a more thorough examination of their supply chains and to better align their practices with an environmentally conscious future. However, this is not simply about compliance; it is also about the legacy we leave for the generations to come and the importance of ethics.
The UK's commitment to UKFRC
The UKFRC is particularly focused on commodities such as palm oil, soy, and cocoa, which are often associated with illegal deforestation.
It is essential that larger companies conduct thorough due diligence to guarantee that their supply chains comply with local deforestation laws. Also, these organisations are required to submit annual reports that provide a comprehensive account of their discoveries, promoting increased transparency.
The UKFRC, in contrast to its EU counterpart, is focused exclusively on illicit deforestation. Although this restricted scope simplifies compliance, it raises questions about the UK's strategy for managing legal deforestation and its long-term environmental consequences.
EU ambition
The EUDR is more comprehensive in its approach, looking at deforestation associated with a variety of critical commodities, such as coffee, cocoa, meat, and timber. Distinctively, it establishes a global standard by mandating that all goods entering or exiting the EU are deforestation-free with a cut-off production date after 2020, irrespective of whether the deforestation was lawful in the country of origin.
One crucial concept introduced by the regulation is a geolocation data requirement. Businesses must annually declare their compliance with the precise origin of products and trace their supply chains. Failure to comply may result in significant fines and could mean restrictions on trade activities.
The EUDR marks a significant step forward in conservation and the establishment of deforestation-free markets, even though it has faced delays. It is now anticipated that the full implementation of the EUDR will be completed by the end of 2025 for larger companies. This postponement should not be perceived as a break by businesses – rather, it presents an opportunity to conduct careful preparations to be able to deliver by the new deadline.
Support and resources
It is never a simple task for businesses to navigate change, particularly when they are simultaneously managing costs, compliance, and global competition. Tailored advice and technical assistance are provided by organisations such as the Chartered Institute to help businesses in complying with the new requirements. Join today as a member and let us help you navigate those challenges, including via our Technical Helpline.
