EUDR Risk Assessment & Risk Mitigation
Risk Management within European Union Deforestation Regulation
The EUDR Risk Assessment & Risk Mitigation requires operators to implement a due diligence system to avoid sourcing of products that are not deforestation-free. Operators need to conduct risk assessments, mitigate any non-negligible risks, and publicly report on their due diligence systems annually.
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EUDR Risk Assessment
Once companies have completed the data collection, they must undertake a risk assessment. Risk levels are determined by various factors, such as the presence of forests and deforestation, conflicts with indigenous communities, supply chain complexity, and socio-political aspects, like corruption and lack of transparency. This comprehensive analysis must be updated at least annually.
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EUDR Risk Mitigation
If the risk assessment concludes there is zero risk, no further action is required. But if risks are identified, companies must explore risk mitigation measures. They should collect additional data or conduct audits. The EUDR for Risk Analysis and Risk Management also introduces the concept of “reasonable doubt.” If there’s even the smallest uncertainty about the origins of a product or commodity, businesses will be obligated to conduct a comprehensive risk assessment.
