In just 1.5 years, three European Union (EU) acts have significantly impacted the regulatory landscape. The introduction of the EU Deforestation Regulation (EUDR), the Corporate Sustainability Due Diligence Directive (CSDDD), and the European Union (EU) Forced Labour Regulation (EUFLR) reflect a growing concern regarding environmental degradation and human rights violations through trade. These regulations join similar initiatives, such as the U.S. Uyghur Forced Labor Prevention Act (UFLPA).
As a result, EU organizations — and those doing business in the EU — face new challenges in conducting due diligence across corporate operations. In particular, organizations must balance these mandates against the reality of limited resources.
While the objectives of these regulations are unique, there is commonality that can help organizations realize efficiency in their response to requirements. This post offers a summary of each regulation, discusses where their requirements overlap, and outlines how organizations can use technology to meet new due diligence requirements.
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At a Glance: the EUDR, CSDDD, and EUFLR
| EUDR | CSDDD | EUFLR | |
| Focus | Targets products coming from deforested land. | Targets broad spectrum of human rights and environmental impacts, with a focus on due diligence across corporate operations. | Targets forced labor in global supply chains; applies to any product linked to forced labor, regardless of industry or region. |
| Timeline | Entered into force on June 29, 2023. Applicable to medium and large operators and traders on December 30, 2025 and to small and medium-sized enterprises (SMEs) on June 30, 2026. | Entered into force on July 25, 2024. “Stop the clock” directive delays the date by which Member States will have to transpose the CSDDD into national law and the first wave of application by one year to July 26, 2028. | Entered into force on December 13, 2024. Will begin to apply on December 14, 2027. |
| Objective(s) | Bans seven commodity products that are major drivers of deforestation — palm oil, cattle, soy, coffee, cocoa, timber, rubber, and products derived from these commodities (such as beef, furniture, or chocolate) — from being sold in the EU if sourced from areas affected by deforestation or forest degradation practices. | Requires organizations to conduct due diligence on human rights and environmental impacts in their operations and across their global supply chains. | Enhances the EU’s legislative framework against forced labor by banning products made with forced labor from the market. |
| Impacted | Applies to all operators and traders. Operators are those who first place a relevant product on the EU market or export these products. Traders buy or sell relevant items that are already on the market. | Applies to large EU companies with:> 1000 employees and> €450M worldwide net turnoverAlso applies to non-EU companies with > €450M net turnover in the EU. | Applies to all products imported into or produced within the EU. |
| Requirements | Companies must demonstrate that their supply chains are not linked to deforestation or forest degradation. | Companies must establish a corporate due diligence duty and regularly report and assess risk across their operations, subsidiaries, and, where related to their value chains, those of their business partners. | Companies must ensure they have robust due diligence frameworks to comply with the ban on forced labor. |
| Enforcement | Non-compliance can result in corrective actions, including preventing the product from being placed on the market or recalling the product. | Supervisory authorities can carry out investigations and impose sanctions and fines. | Violations can result in a prohibition to place the product on the EU market, removal of the product from the market, or an order to dispose of the product. |
| Learn more | Understanding and Preparing for the European Deforestation Regulation (EUDR) | CSDDD, EUFLR, UFLPA: Developing a Coordinated Response to Global Supply Chain Regulations | CSDDD, EUFLR, UFLPA: Developing a Coordinated Response to Global Supply Chain Regulations |
What the EU regulations have in common
Many organizations are subject to more than one of these three regulations. While these regulations have different objectives, one requirement underpins them all: organizations must have a solid understanding of their operations’ impact on the environment and human rights. To achieve this, organizations must conduct due diligence across their operations and value chains.
To streamline compliance operations and avoid separate one-off initiatives, organizations should adopt a holistic and proactive approach to help meet global compliance needs. By collaborating across legal, compliance, procurement, and risk management departments, organizations can work toward integrating the requirements of multiple regulations into a cohesive strategy.
As part of this strategy, organizations are increasingly elevating their know-your-supplier efforts from a country or division level to a company-wide approach. With such an approach, efforts to address the requirements of one EU regulation can support another. For example:
- Supply chain traceability is key to ensuring compliance with the EUDR and EUFLR. Processes and technology used to achieve traceability can be applied across both regulations.
- The data compiled to address EUDR requirements, which is likely more granular and specific than that required by the CSDDD, could be simplified and incorporated into CSDDD reports.
- Due diligence performed for CSDDD compliance would naturally help companies avoid enforcement under the EUDR and EUFLR.
Supply chain risk management solutions are a key enabler of this company-wide approach.
How Sayari supports due diligence across regulations
Organizations need to achieve an enhanced level of sub-tier supply chain visibility to meet these regulations’ requirements — a task that is easier said than done. The complexity of modern supply chains can make it difficult to trace a product’s chain of custody back to the point of origin.
Sayari helps organizations get visibility into supply chains by integrating and analyzing publicly available information from a variety of global sources, including real trade data. Sayari collects information on more than 730 million companies in more than 250 jurisdictions to shed light on the ownership, operations, and risk exposure of companies across supply chains.
Specifically, Sayari maps an organization’s sub-tier supply chain for a comprehensive picture of inputs and their potential exposure to risks such as forced labor and deforestation. With Sayari, organizations can look beyond direct suppliers to see who their suppliers – and their suppliers’ suppliers are – to better determine risk.
Request a personalized demo of Sayari to learn how you can screen for risk to ensure compliance with the EUDR, CSDDD, and EUFLR.
