EU law to reduce deforestation is on a knife’s edge, will leaders act? (commentary)

We are now in a make-or break-moment for the landmark law to halt imported global deforestation into the European Union.

Global forest defenders watch with bated breath as in the next few days, the President of the European Commission Ursula von der Leyen will either decide to support the EU Deforestation Regulation (EUDR), or to hollow out this vital law.

This is happening while recent developments in Brussels threaten the EU Green Deal at its core. Brussels’ current political climate is taking an unprecedented turn against EU environmental policies, including first to withdraw the proposals for a pesticides law by the Commission, second the blockage of the Nature restoration law in the Council, and third the reopening of the Common Agriculture Policy to withdraw environmental provisions. A fourth threat looms now: a few elements in the coffee lobby, soy and other industries activated Austria and a few other agricultural ministries in EU member states to weaken the EUDR. These companies and ministries are lobbying to delay and water down the EUDR, though the regulation was already adopted and entered into force in June 2023.

Many NGOs who are standing firm to defend the EUDR have tried to convince von der Leyen that this recent wave of corporate whinging should be balanced against the thousands of corporate leaders who have spoken out repeatedly for the EUDR over the years.

Indeed, investors worth $6 trillion supported such regulation in Europe, whilst a consortium of investors with assets under management worth close to $3 trillion came out for US deforestation-free regulation.

Investors supporting forest-saving laws? Is this a ‘Man bites dog’ scenario?  Well, investors tell us that they lose money because of deforestation and ensuing climate change. It’s as simple as that. They’re tired of losing money. They’re fed up with having to juggle a chaotic package of divergent voluntary initiatives as the planet bakes, storms, and burns their investments into a crisp. They want predictability and zero deforestation laws, period. Don’t take it from tree huggers. Take it from the money guys.

But it’s not just investors. Thousands of companies in the regulated commodities have spoken out for the EUDR and laws like it, over, and over again. Businesses galore have publicly endorsed similar or related legislation across the pond like the US FOREST Act, and the UK Environment Bill Schedule 17. Such corporate support should reassure von der Leyen that the EUDR is good for business! To be more specific, the EUDR will strengthen the EU’s economy, because it is good for good business.

By speaking out for forest-protection laws and human rights due diligence laws, thousands of companies helped build momentum for the EUDR to create a level playing field, where rogue operators can no longer take advantage of wild west situations to sell deforestation- or slavery-tainted products at lower prices than more ethical competitors. Companies already committed to ending deforestation and zeroing out their carbon can benefit from ensuring entire high-forest-risk industries are compelled to match such commitments, by law.

In the pulp and paper industry, IKEA is notable for its repeated strong support for the EU legislation on Mandatory Human Rights Due Diligence. Hardly a muumuu-wearing, hippy-dippy, niche micro-market, Ikea is the largest furniture retailer in the world. Indeed, together with 11 companies from the Nordic Business Network for Human Rights, IKEA signed a joint statement supporting EU legislation on mandatory human rights due diligence regulation. Stora Enso, a leading global provider of packages, biomaterials, wooden construction and paper, joined 41 other companies in asking the Swedish government for robust legislation to require respect for human rights.

See related: Cambodia’s garment sector is fueled by illegal logging

In the fashion industry, which drives deforestation for leather, rubber, and fabrics from trees, major brands spoke out for deforestation-free and due diligence regulation, including Nike, ASOS, Swiss Textiles, Varner, New Look, H&M, Primark, Marks & Spencer, Adidas, to name a few. Primark’s statement is particularly special, coming as it did in a letter massively endorsed by other UK companies. Inditex, the biggest fast fashion group in the world, joined Adidas and 26 other companies in a joint statement calling for EU-wide, cross-sectoral mandatory human rights and environmental due diligence legislation.

The coalition assured that “mandatory legislation can contribute to a competitive level-playing field, increase legal certainty about the standards expected from companies to respect human rights and the environment, clarify legal consequences for when responsibilities are not met, promote engagement and impactful actions between supply chain partners and, above all, trigger and incentivize impactful and effective actions on the ground. We therefore welcome the European Union and its member states’ efforts to introduce new mandatory human rights and environmental due diligence legislation, as an integral part of the move to build back a more resilient economy that works for all.”

H&M came out swinging especially strong: “We undertake human rights due diligence, in line with the United Nations Guiding Principles on Business and Human Rights (UNGPs), in order to identify, prevent and address risks to people. We want to see others doing the same. That’s why we’re comfortable when we see more and more governments around the world proposing mandatory measures that can help crystallize the expectations on human rights due diligence into laws, but we recognize the urgent need for alignment of these various mandatory measures, for example at EU level.”

The automotive industry also chimed in for the EUDR, which is especially valuable because of both rubber & leather deforestation risks embedded in car tires and seats: BMW, Daimler and Volkswagen supported EU regulation. The world’s largest rubber trader, Halcyon, which trades 12% of the world’s natural rubber (most rubber goes into car tires), likewise spoke out crystal clear for EU regulation.

In the food space, Nestle, Danone, Unilever, Mars banded together in the Sustainable Food Policy Alliance companies just weeks ago to endorse the US FOREST Act. Tesco UK, the third-largest retailer in the world measured by gross revenues, manifested its support for UK regulation along with other UK retailers and supermarkets such as John Lewis, Waitrose, The Body Shop, and Princes Group.

Then, the world’s 6^th largest employer and the leader in food and support services management, Compass Group, joined 32 companies from 8 different economic sectors in speaking out in favor of national legislation in Luxembourg for due diligence on human rights and the environment. Arla Foods, a Danish multinational cooperative and the largest producer of dairy products in Scandinavia, supported EU legislation on mandatory human rights due diligence as part of a bigger Nordic Business Network on Human Rights statement. McDonalds also spoke for deforestation regulation, as did Pepsico, Coca Cola, Unilever, and other major palm oil players like Jardine Matheson – and the Roundtable on Sustainable Palm Oil especially supported the US FOREST Act.

However impressive this showing from the food and beverage industry, cocoa companies put all other food and agriculture actors to shame, and deserve special credit. Nearly every major cocoa player has spoken out for EUDR and other related regulation, often multiple times. From Ferrero to Mars, Mondelēz, Nestle, Tony’s Chocolonely, Barry Callebaut, Hershey’s and beyond, to the biggest cocoa industry groups, cocoa has been a bulwark for the EU to regulate deforestation. Even certifiers in the cocoa space like Fairtrade International and Rainforest Alliance fought tooth and nail for EU legislation.

It’s not every day that such a broad bench of companies encourages environmental and human rights regulation, and this thousands-strong corporate movement is worth celebrating. Von der Leyen can take heart in knowing she can act courageously for global forest protection, whilst maintaining considerable corporate support.

Even though of late some rogue industry voices have spoken out at the 11^th hour, doubtlessly hoping that by speaking last they can befuddle EU leadership into forgetting that they are merely a vocal minority of outlier malcontents incapable of living up to industry best practice, the truth is that we should be listening to their more savvy, sophisticated competitors who are able to do good and do well.

Etelle Higonnet previously served as Senior Advisor at the National Wildlife Federation with a focus on curbing deforestation, and before that as campaign director at Mighty Earth, focusing on advocacy for zero deforestation with an emphasis on cocoa, palm oil, rubber, cattle, and soy industries.

Banner image: The Matopiba region of Brazil helps make the country the world’s leading exporter of soybeans. Image © Fernanda Ligabue/Greenpeace.

See related coverage:

Forests in the furnace: Cambodia’s garment sector is fueled by illegal logging

Snack giant PepsiCo sourced palm oil from razed Indigenous land – investigation

Article published by Erik Hoffner

Commentary, Commodity Roundtables, Conservation, Corporate Responsibility, Corporate Role In Conservation, Corporate Social Responsibility, Deforestation, Drivers Of Deforestation, Environment, Forests, Global Trade, Governance, Government, International Trade, Palm Oil, Rubber, Soy, Trade, Tropical Forests

Europe, European Union, Global

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