The European Union Deforestation Regulation (EUDR), effective December 30, 2025, requires companies to ensure that imported cattle, cocoa, coffee, palm oil, rubber, soya, and wood—along with their derivatives—do not originate from recently deforested land or contribute to forest degradation.
While this regulation is a significant step toward environmental sustainability, it presents substantial challenges for organizations, particularly in gathering critical supplier data to demonstrate compliance.
The Supply Chain Transparency Challenge
A recent report titled “Data-Enabled Supply Chain Transparency” highlights a significant gap between organizations’ aspirations for supply chain transparency and their current capabilities. The report reveals that while 77% of organizations consider supply chain transparency critically or highly important, only 31% are satisfied with their current visibility into their supply chains.
This disparity underscores the difficulties companies face in obtaining accurate and comprehensive supplier information.
Specific Challenges in Supplier Data Collection
The challenges in collecting supplier data are multifaceted:
· Limited Visibility Beyond Tier 1 Suppliers: While 59% of organizations have visibility into 80% or more of their top-tier suppliers, a mere 7% can say the same for their suppliers’ immediate vendors. This lack of insight into lower-tier suppliers hampers the ability to fully assess compliance with regulations like the EUDR.
· Data Quality and Accessibility Issues: Over 80% of procurement professionals identify data quality and accessibility as moderate or severe challenges to achieving greater transparency. Inadequate data can lead to misinformed decisions and increased risk of non-compliance.
· Slow Rate of Digitization: More than half (51%) of procurement and supplier management processes remain undigitized, limiting the ability of procurement teams to focus on strategic tasks and make swift, informed decisions.
The Need for a Strategic Approach and Technological Solutions
To overcome these challenges, organizations must adopt a strategic approach that includes:
1. Digitizing Procurement Processes: Transitioning from manual to digital processes can streamline operations, reduce inefficiencies, free up resources for strategic initiatives, and streamline sustainable procurement workflows.
2. Collaborating with Suppliers: Developing strong partnerships with suppliers encourages transparency and facilitates the sharing of necessary compliance information.
3. Enhancing Data Quality: Improving data accuracy and accessibility via structured information systems and automated checks ensures that procurement decisions are based on reliable information, reducing the risk of non-compliance.
4. Investing in Emerging Technology: Implementing advanced data analytics, artificial intelligence, and machine learning can enhance data processing capabilities, providing deeper insights into supplier practices and facilitating compliance monitoring.
The implementation of the EUDR presents both challenges and opportunities for organizations. By acknowledging the current gaps in supply chain transparency and proactively investing in technological solutions and strategic collaborations, companies can not only comply with new regulations but also strengthen their overall supply chain resilience and sustainability efforts.
Should you need support with EUDR, please contact us here and one of our EUDR consultants will be in touch.
