8 Essential Steps to Prepare for EUDR Requirements

The European Union's Regulation (EU) 2023/1115 (EUDR) is a critical piece of legislation that mandates businesses placing certain commodities or products derived from them on the EU market to prove that their supply chains are deforestation-free. This regulation targets key deforestation and forest degradation commodities, including cattle, cocoa, coffee, oil palm, rubber, soya, and timber. With the global push to eliminate deforestation from supply chains, compliance with the EUDR is not just a regulatory requirement, but a vital step toward sustainability.

1. Understand the Scope and Your Role in EUDR Compliance

The first critical step in EUDR compliance is fully understanding the regulation’s scope and how it impacts your business. The EUDR applies to specific commodities and products derived from them that are placed on the EU market. To ensure compliance, it’s essential to know whether your products fall under these categories.

Key Tips:

• ‍Stay on Top of Annex I: Annex I of the EUDR lists the commodities that are subject to the regulation. This list can evolve, so it’s important to stay updated on any changes. You can do this by setting up Google Alerts or subscribing to EU industry newsletters. These will provide real-time updates on any regulatory changes.
  ‍
• ‍Identify Your Product Lines: Start by mapping out your entire product portfolio. It’s not enough to only focus on raw materials; products that contain derived ingredients, such as processed cocoa or palm oil, are also subject to the regulation. If your company processes or sells products made from any of the commodities listed in Annex I, then you are directly impacted by the EUDR.
  ‍
• ‍Clarify Your Role: The EUDR distinguishes between “operators” (those placing products on the EU market) and “traders” (intermediaries). Understanding your role will determine your responsibility in data collection and reporting. Operators are responsible for ensuring the traceability of their products, while traders rely on suppliers for traceability data. Make sure you clearly understand where your company fits into the supply chain to assign the appropriate level of responsibility.

For example, a chocolate bar manufacturer that uses cocoa sourced from different regions must ensure that each batch of cocoa is deforestation-free. Even if the company processes cocoa and doesn’t handle the raw cocoa beans directly, it’s still an “operator” and needs to collect and verify data from suppliers.

Sustainability leader: "EUDR is evolving rapidly with new data points coming in every day. We need technology to help us bridge data gaps and stay on top of things."

2. Build the Right Team and Processes for EUDR Compliance

Successfully navigating the EUDR requires a well-organized team and defined processes. Compliance is not a one-person job; it requires a coordinated effort from various departments, including legal, procurement, sustainability, and IT. Assigning clear roles and responsibilities is essential for ensuring that compliance is maintained at every step.

Key Tips:

• ‍Appoint a Compliance Officer or Team: The first step is to designate a compliance officer or team who will oversee the entire EUDR compliance process. This person/team will be responsible for managing data collection, coordinating with suppliers, conducting risk assessments, and submitting the Due Diligence Statement (DDS). Having a dedicated person ensures that the compliance process is streamlined and consistent.

Designating a compliance officer is just the first step. The challenge comes in managing and making sense of the massive volume of data that needs to be collected and stored. With Passionfruit, you can securely store and organize all your compliance data in one place, ensuring it’s accessible whenever you need it.‍

• ‍Develop a Standardized Compliance Process: Establishing a standardized, step-by-step compliance procedure is essential. This should include clear guidelines on how data will be collected, analyzed, and reported, from the initial product identification phase to DDS submission. Having a well-documented process ensures that all team members are on the same page and that tasks are consistently carried out.

With Passionfruit’s workflow automation, your team will stay organized, and every step of the compliance process will be tracked. This eliminates the confusion and ensures that nothing falls through the cracks.

• ‍Ongoing Training and Updates: Given the dynamic nature of compliance, it’s crucial to ensure that your team is continuously updated on changes in the EUDR and its impact on your business. Organize regular training sessions to keep everyone informed and prepared for any regulatory updates.

For large, multinational organizations, it may make sense to have local compliance officers in different regions who are responsible for their respective markets, while still following a central, standardized process to ensure consistency across all regions.

3. Collect, Organize, and Monitor Product Data

Accurate and organized data is the foundation of EUDR compliance. To comply with the regulation, you’ll need to gather extensive data on each product, such as product names, countries of origin, supplier information, and geolocation data.

Key Tips:

• ‍Centralize Your Data Storage: Centralized data storage is essential for ensuring that information is easily accessible, reducing the risk of errors and increasing efficiency. A cloud-based platform, for instance, can store all product and supplier data in one place, ensuring that you always have up-to-date information at your fingertips. This centralized approach also makes it easier to track data and generate reports when needed.
  ‍
• ‍Prioritize High-Risk Products: Some products may pose a higher risk of non-compliance due to their origin or supply chain complexity. Products sourced from high-risk regions or those with less transparent supply chains should be prioritized. Make sure that you have a clear process for regularly monitoring and verifying the data for these products.
  ‍
• ‍Integrate with Existing Systems: Many companies already use enterprise resource planning (ERP) or supply chain management systems. Make sure your EUDR compliance platform integrates with these systems so that data flows seamlessly, reducing the manual work required. Integration will also help ensure that your data is always accurate and up-to-date.

A food company sourcing cocoa from various regions might use a digital dashboard to track product origins, certifications, and compliance status in real-time, ensuring they can quickly assess whether their suppliers are compliant.

Passionfruit makes compliance data management simple by centralizing all your product and supplier information in one easy-to-use platform. If you’re already using other systems, no worries—Passionfruit integrates seamlessly with your existing tools, keeping everything up-to-date and synced automatically. It’s like having a personal assistant handle the heavy lifting while you focus on more strategic tasks.

4. Engage and Educate Suppliers on EUDR Requirements

Suppliers are essential partners in ensuring compliance with the EUDR, so it’s critical to educate them about the regulation and the information you require from them. Many suppliers may not be aware of the detailed requirements, so clear communication is key.

Key Tips:

• Start Early and Communicate Clearly: Contact your suppliers early and inform them of the EUDR’s requirements. Be clear about the data you need, such as product origin, HS codes, and geolocation details. Make sure they understand the importance of compliance and that they are responsible for providing accurate data.
  ‍
• Formalize Data Requirements: In your supplier contracts, include specific data-sharing requirements. This should cover product origin, certifications, and confirmation that their supply chains are deforestation-free. Make it clear that failing to comply will impact their ability to do business with you.
  ‍
• Provide Support and Resources: Some suppliers may face difficulties in meeting the data requirements, particularly when it comes to providing origin or geolocation data. Offer support by helping them connect with third-party traceability services or providing templates to make the process easier.

For example, a cocoa supplier in West Africa might struggle to provide geolocation data. In this case, the buyer can help facilitate compliance by partnering with a technology provider that specializes in collecting geolocation data.

5. Obtain and Verify Origin Information

The EUDR requires that businesses have detailed information on the origin of their products, including geolocation data. This ensures that the commodities in question were not sourced from deforested land.

Key Tips:

• Ensure Geolocation Data Availability: One of the most important aspects of EUDR compliance is geolocation data. Suppliers must provide data proving where their products originated. If they’re unable to provide this information, you may need to consider finding alternative suppliers or using technology like satellite tracking to verify the product’s origin.
  ‍
• Leverage Technology for Traceability: To ensure that the information you receive is accurate and transparent, consider using traceability technologies like blockchain or third-party certification systems. These platforms help track the movement of goods throughout the supply chain and provide verifiable proof of origin.
  ‍
• Track Every Step in the Supply Chain: Full transparency is essential for EUDR compliance. Document every stage of the supply chain, from the raw material source to the final product, to ensure that your claims of deforestation-free products are legitimate.

For example, a timber company that sources wood from Southeast Asia might use FSC certification to track and confirm the origin of every piece of timber, ensuring that it adheres to deforestation-free standards.

6. Conduct a Comprehensive Risk Assessment

A thorough risk assessment is essential to identify potential threats to your compliance. By analyzing risk areas within your supply chain, you can proactively address any issues before they escalate.

Key Tips:

• Utilize Satellite Monitoring: Satellite services can track deforestation patterns and help monitor supply regions for potential risks. This technology is invaluable for identifying issues before they become significant compliance concerns.
  ‍
• Focus on High-Risk Regions: Regions like Southeast Asia, South America, and West Africa are often linked to deforestation. It’s crucial to monitor suppliers in these areas more frequently to ensure that they remain compliant with the EUDR’s deforestation-free requirements.
  ‍
• Review Historical Data: Look at historical deforestation incidents within your supplier network. If a supplier has had issues with deforestation in the past, there’s a higher likelihood they may be a risk in the future.

For example, a palm oil supplier in Southeast Asia can be monitored using satellite data to ensure that no deforestation is occurring on or near their plantations, which is a key requirement for EUDR compliance.

7. Prepare and Submit the Due Diligence Statement (DDS)

The DDS is the final submission that demonstrates your company’s efforts to comply with the EUDR, including the data you’ve collected and the risk assessments you’ve conducted.

Key Tips:

• Use the Official Template: Ensure that the DDS is completed using the prescribed template. This template ensures that all necessary information is included, making the submission process smoother and helping you avoid penalties for incomplete reports.
  ‍
• Check Data Accuracy: It’s critical to ensure that all data included in the DDS is accurate and up-to-date. Incorrect or outdated data could result in fines, audits, or even loss of certification.
  ‍
• Automate the DDS Process: Automating data collection and DDS generation ensures that the final report is accurate and submitted on time. Using software tools like Passionfruit to manage and automate these processes reduces human error and ensures compliance deadlines are met.

For example, a global retailer might use an automated system to compile data and generate the DDS, ensuring that it accurately reflects their entire supply chain and is submitted without delay.

8. Submit DDS and Maintain Records

Once your DDS is prepared, it must be submitted to the EUDR Information System. It’s essential to also maintain records for a minimum of five years to ensure compliance and to be prepared for future audits.

Key Tips:

• Set Compliance Deadlines: Make sure your team is aware of all deadlines related to EUDR compliance. Utilize automated reminders or task management systems to avoid missed deadlines and ensure timely submission of the DDS.
  ‍
• Review Data Regularly: Continuously review your data to ensure it remains accurate and up-to-date. If there are any changes in your supply chain or product lines, update your records accordingly.
  ‍
• Secure Document Storage: Store all compliance-related documents securely in a reliable, accessible system to ensure easy retrieval for audits or inspections. A cloud-based solution ensures that your documents are safe, yet easily accessible when needed.

For example, a large food manufacturer could use a centralized, cloud-based digital repository to store all compliance records, ensuring that they’re ready for inspection whenever required.

How Passionfruit Can Help You with EUDR

As EUDR gears up for large public companies this year, the deadline is fast approaching, and time is of the essence. But with Passionfruit, you can navigate compliance with ease and confidence. Passionfruit transforms the way you handle compliance questionnaires, using advanced automation and intelligent data analysis to deliver the most accurate and relevant answers every time.

By seamlessly analyzing your policies, documents, and historical responses, Passionfruit ensures your submissions are not only fully compliant but also consistent across all inquiries. Here’s why Passionfruit is a game-changer for managing ESG, quality, and safety requirements:

1. Auto-Answer: Save Time with Smart Automation

Passionfruit automatically generates responses to compliance questionnaires based on your stored data and previous answers. This ensures consistency across submissions and eliminates the need to start from scratch for every request.

• How It Helps with EUDR: Automates responses about supply chain traceability, geolocation data, and certifications for commodities like cocoa, coffee, or palm oil.
  ‍
• Example in Action: A chocolate manufacturer can quickly generate accurate responses for a retailer’s EUDR questionnaire on cocoa sourcing, saving hours of manual work.

2. Verify: Keep Compliance Data Accurate and Up-to-Date

Passionfruit ensures that all compliance data and approved answers are verified and current. This reduces the risk of errors and helps maintain trust with regulators and stakeholders.

• How It Helps with EUDR: Keeps certifications like Rainforest Alliance, FSC, or RSPO for your suppliers updated, ensuring every response reflects the latest information.
  ‍
• Example in Action: A coffee importer can verify that the geolocation data of their suppliers matches deforestation-free zones, providing solid proof of compliance.

3. Search: Access Trusted and Recent Information

Passionfruit allows you to search and retrieve the most recent and reliable information from your database or trusted external sources. This feature ensures you always have the right data at your fingertips.

• How It Helps with EUDR: Quickly locates supplier certifications, sourcing policies, or deforestation reports when completing a compliance questionnaire.
  ‍
• Example in Action: A palm oil supplier can instantly retrieve proof of RSPO certification and geolocation data for plantations through the platform’s search functionality.

5. Actions: Automate Repetitive Tasks and Approval Workflows

Passionfruit streamlines repetitive compliance tasks and manages approval workflows, ensuring efficiency and consistency across teams.

• How It Helps with EUDR: Automates the collection of supplier data, the generation of Due Diligence Statements (DDS), and internal approval processes.
  ‍
• Example in Action: A global retailer uses Passionfruit to automate DDS preparation, ensuring timely submissions with accurate supplier data and certifications.

6. Any Format: Flexible Responses for Customer Needs

Passionfruit allows you to respond to customer or regulatory requests in any required format, whether it’s a PDF, Word document, or Excel file.

• How It Helps with EUDR: Generates compliance reports or questionnaires in the format required by EU regulators or specific customers.
  ‍
• Example in Action: A dairy producer submits geolocation data and supplier certifications for soya sourcing in a detailed PDF format, meeting the exact specifications of their customer’s request.

Conclusion

Complying with the EUDR is an involved and ongoing process, but by breaking it down into clear, manageable steps, staying organized, and leveraging the right technologies, your company can ensure full compliance. Start by understanding the scope of the regulation, educate your suppliers, collect accurate data, and streamline the reporting process. By prioritizing transparency and sustainability, your business can not only meet the EUDR requirements but also contribute to the global effort to reduce deforestation and support sustainable supply chains.