Fitting the Pieces of the Puzzle: Making sense of sustainability due diligence regulations across the globe

With increasing demand from companies to uphold environmental, social, and governance standards, the regulatory environment around sustainability is becoming increasingly complex. There is growing recognition that more needs to be done to hold companies accountable for their social and environmental impact. While this is a step in the right direction for promoting responsible and sustainable business practices, it is important that we ensure this doesn’t come to the detriment of developing countries and small and medium sized enterprises, who face greater challenges with compliance.

To help make sense of this evolving landscape, we carried out an analysis of a selected set of regulations, including the European Union (EU) regulation on deforestation/free products (EUDR), the German Supply Chain Act, the UK Modern Slavery Act, and the EU Corporate Sustainability Due Diligence Directive. 

This online event unpacks commonalities between these regulations and look at how tools like sustainability standards can help support compliance, exploring if they can work together more effectively.

Speakers

  • Matthew Hogarth, Senior Policy Advisor to Lara Wolters MEP
  • Valentina Bolognesi, Senior Advocacy and Engagement Advisor at Amfori
  • Rémi d’Annunzio, Forest Officer, Food and Agriculture Organization
  • Christopher N.H.Schwarz, Global Associate Director, Agricultural Value Chains team, South Pole
  • Patrick Owusu, General Manager, Asunafo Cocoa Farmers

Key Takeaways

Information gap for smallholders and lack of support: Many smallholder farmers lack awareness and understanding of sustainability due diligence regulations like the EU Deforestation Regulation (EUDR), hindering their ability to comply. Comprehensive education and outreach are essential for all farmers, particularly those outside organized cooperatives. Clear guidance, financing instruments, and support structures are necessary to help farmers navigate new regulations and understand their responsibilities within compliance frameworks, enabling them to adapt more effectively without compromising their livelihoods. 

Perception of compliance as burden: Compliance with sustainability due diligence should not be perceived as an additional financial burden or punishment. Given the already precarious financial situation of farmers, new regulations must be designed to avoid imposing extra costs. There is a need to understand the interoperability among various measures and how data and compliance mechanisms of one instrument can support compliance with the other.- This webinar presents our first preliminary analysis on the same and IISD aims to continue this work to bridge the gap and support smallholders.  

Collaboration among stakeholders: Effective implementation of sustainability due diligence regulations requires collaboration among all stakeholders, including cooperatives, civil society, and government bodies. Everyone in the value chain must be engaged to support farmers effectively. The discussions underscored the need for a level playing field in implementing sustainable agricultural practices globally. 

Need for transparency and equity: There is a strong demand for transparency in how revenues and premiums are shared among producers. Farmers should receive equitable treatment compared to those in more developed regions to foster compliance and motivation. 

Data is the new commodity: Access to reliable, transparent data is key for proving compliance. For EUDR, for example, geospatial information which is crucial for monitoring deforestation and land use, enabling accurate plot-level assessments that align with regulatory requirements. Tools like FAO’s WISP leverage multiple data sources to provide consistent, accessible insights that help farmers, cooperatives, and other stakeholders adhere to standards without incurring prohibitive costs. The industry can support fair, inclusive compliance by ensuring that data remains open-source and publicly available, fostering accountability and trust throughout the supply chain.