Climate Bonds Initiative today released pivotal guidance on the European Union's Regulation on Deforestation-Free Products. This comprehensive guide equips corporates and financial institutions to meet and exceed the EUDR’s requirements, advancing global sustainability standards.
"This guidance serves as a compass for sustainable practices within global supply chains. Comprehensive due diligence and traceability are not just about compliance; they're about spearheading a resilient, sustainable economy. This initiative aims to ignite a transformative approach to deforestation and land use," said Sean Kidney, CEO, Climate Bonds Initiative.
Key Facts:
- Deforestation accounts for nearly 11% of all anthropogenic greenhouse gas emissions.
- The EUDR sets stringent standards, prohibiting the sale within the EU of agricultural commodities on land cleared after December 31, 2020.
- While the Regulation does not currently target financial institutions (FIs), there is a review clause that is foreseen to expand the regulatory coverage and impose new obligations on FIs under the EUDR in the near future.
Implementation Insights:
- The EUDR presents an opportunity for companies to acquire full supply chain transparency, satisfying EU sustainability reporting mandates.
- Challenges lie in the need for cost-effective solutions to meet information requirements.
Key Recommendations:
- Voluntary Certification: Showcases due diligence.
- Structured Transition Plans: Help eliminate deforestation from supply chains.
- Robust Reporting: Essential for risk assessment and mitigation.
- Go Beyond Compliance: Adopt best practices for climate resilience.
Climate Bonds Initiative is further developing agri-food transition frameworks to align with the EUDR. Our guidance transcends regulatory minimums, promoting broader sustainability goals. In essence, this initiative places businesses and investors at the helm of the global green transition.
Transition Finance serves as the catalyst in propelling our global shift from brown to green, stimulating both innovation and systemic transformation. Members of the press are cordially invited to the Climate Bonds Global Conference in London on Nov 9 - 10, 2023 to delve into this pivotal instrument with industry leaders and policymakers. Register online. For In-person attendance please get in touch.
