New EU rules to remove deforestation from supply chains

Could EU steps towards due diligence help eradicate deforestation in supply chains?

The European Commission is to introduce new legislation to require companies to carry out due diligence to address environmental impacts in their supply chains.

The measures, announced by the European Commissioner for Justice Didier Reynders, could help reduce the impact on forests from European imports of cattle, soy and palm oil.

But Global Canopy Executive Director Niki Mardas warned that the devil will lie in the detail of the legislation, and that companies will need to improve monitoring of their supply chains for it to be effective.

On average an area of tropical forest greater than the size of the Netherlands is lost every year as forests are cleared for agriculture, with imports to the EU estimated to leave a footprint of some 300,000 hectares a year.

Companies have supported calls for new legislation, which they say would help level the playing field. A survey in the EU’s own study on due diligence found significant support from companies, who expressed a need for more legal clarity.

Commenting on the announcement Niki Mardas said:

“This is an important and welcome announcement. It is crucial that these measures recognise the environmental impact of tropical deforestation in company supply chains. Europe’s tropical forest footprint is devastating for the climate and for biodiversity, and leaving it entirely up to companies to fix this clearly isn’t working. Mandating them to assess and mitigate these risks is essential.

“But due diligence isn’t a panacea. One of the reasons voluntary commitments often fail is the lack of supply chain transparency and traceability. Companies need to know where their supplies come from, and this will mean investing far more in monitoring and reporting to improve supply chain transparency.”

The latest assessment by Global Canopy’s Forest 500 project found that 21% of the most influential companies in forest risk supply chains operating in Europe did not have policies in place to address the deforestation risks in their supply chain.

Mardas added that tools were available to support companies to do this, including the Trase platform – a joint initiative from Global Canopy and the Stockholm Environment Institute – which breaks new ground in mapping forest-risk supply chains, identifying which sourcing areas have a high deforestation risk.