EUDR risk management: Ensuring deforestation-free supply chains

What is EUDR risk management?

The European Union Deforestation Regulation (EUDR) requires market participants to implement a robust due diligence system to avoid sourcing products that are not deforestation-free. This process includes assessing risks, addressing identified issues, and publishing annual reports on their due diligence systems.

EUDR risk assessment: Identification of potential risks

After completing the required data collection, companies must conduct a risk assessment. This includes an analysis of

• The presence of forests or deforestation in the supply chain.
• Conflicts with indigenous communities.
• Complexity of the supply chain.
• Socio-political factors, such as corruption and transparency issues.

This analysis must be updated at least annually to reflect any changes in the supply chain or regulatory environment.

EUDR and the concept of reasonable doubt

The EUDR introduces the concept of reasonable doubt. When there’s uncertainty about a product’s origin or compliance, companies must act by conducting a comprehensive risk assessment to address those doubts.

EUDR risk mitigation: Taking Action on Risks

If a risk assessment determines that there is no risk, no further action is required. However, if risks are identified, companies need to take risk mitigation actions, such as

• Collecting additional data to resolve uncertainties.
• Conducting supply chain audits to ensure compliance.
• By following these steps, companies can effectively address risks and ensure compliance with EUDR requirements.