Companies must gain more insight to know whether their products lead to deforestation

It is good news that Europe has adopted a major package of measures to drastically reduce CO2 emissions. The new laws force companies to investigate where their products come from, how they were produced and whether deforestation has been involved.

It seems logical that companies are already doing this, but the reality is that this hardly ever happens. While we in Europe are major users of the products in question: cocoa, palm oil, soy, coffee and wood products, amongst others. Between 1990 and 2020, an area larger than the entire surface of Europe has been lost to forest. If we continue to cut down and consume at this rate, we will have no rainforests left within 100 years. Our children’s children will then only know it from images.

For companies, the new European measures mean that a lot of research is needed and that their administrative burdens will increase, just like those of the entire chain. All production chains must be transparent. For example, there are traceability requirements that mean that you must be able to designate the exact piece of land where production took place. Larger companies must provide a due diligence statement (a substantive risk assessment) for all products they sell. This does not apply to SMEs, but they still need to have the relevant data in order and store it.

It is expected to take effect at the end of 2024. This gives companies little time to meet these high requirements. The multinationals are fully committed to it. But how it will work out for, for example, small coffee shops, bookshops that sell coffee or small dairy farmers who have soy in their feed, is still difficult to oversee. Will they be ready on time and is it clear to them at all what requirements they have to meet?

Everyone should know their chain of raw materials. The European package of measures will force companies to accelerate the sustainability transition. And there will soon be more regulations in that area, such as the Corporate Sustainability Due Diligence Directive.

A major contribution is required from companies, we all have to do much more to find out the real impact of our consumer society in terms of CO2 emissions, deforestation and environmental damage, and then make appropriate adjustments.