Is the EUDR coming? You should answer this question now at the latest, because if you do not comply with the Deforestation Regulation, you face heavy fines and the loss of your reputation. You still have time to identify risks and close gaps. But to do so, you need to dig deep. This is the only way to find out how far you really are with implementation. Here’s how to proceed:
Get as complete a picture as possible of where your goods come from and what the supplier relationships look like on the ground. It is not enough to know your direct suppliers. You will also be held accountable if your business partners source goods from deforested areas from third parties. For functional EUDR reporting, you need information at the goods level that you can trace back to the cultivation area.
If you know the cultivated areas, you should obtain the GPS data. The EU specifies in detail how you must indicate the geographical coordinates of the plots of land. For fields larger than 4 hectares, individual data points are not sufficient. Instead, proof must be provided in the form of polygon data. This specifies the exact outlines or boundaries of cultivation and production areas. The aim is to prevent the areas from overlapping with deforested or protected areas. The legislator requires precise proof that all components of a product originate from areas that have not been deforested after 2020.
Unfortunately, checking the origin and geodata is not sufficient for EUDR compliance. Companies that use or trade in EUDR-relevant goods are also responsible for legal, environmental and social risks. They must prove that relevant laws of the country of origin have been complied with. Human rights, labour rights, tax regulations, anti-corruption, trade and customs regulations must also be complied with. There is no way around a very complex risk analysis, especially since corruption and government failure in the countries of origin also pose significant risks.
Based on your analysis of both the geodata and the risks, you can determine what further steps to take: if risks in individual countries or regions cannot be controlled, you may need to change suppliers. You can plan close monitoring, further audits or specific improvements.
Although you cannot rely on certificates alone, you should collect the available documents to check where you stand:
Check which documents are available and whether they are complete and up to date. Also determine how you will update the documentation.
As part of the audit, consider how you can organise your procurement so that all processes are EUDR-compliant. To do this, assign responsibility for individual areas – purchasing, compliance, sustainability – to employees and define approval and escalation processes.
Software specially designed for supply chain transparency already provides support during the audit. When implementing it, you reduce compliance risks and minimise the effort involved:
You should therefore select and implement a suitable solution by the time the audit takes place at the latest.
Sphera not only supports you with tailor-made applications, but also advises companies individually and proactively – from risk analysis to reporting. Get in touch with our compliance consultants.
