The EU has delayed measures on deforestation-free products. But business can start today

Forests act as essential carbon sinks, absorbing about one-third of global carbon emissions annually. However, agricultural expansion, infrastructure development, and illegal logging and extraction are causing severe damage to forest biodiversity and significantly adding to greenhouse gas emissions. This issue has further ripple effects on the global economy and society, putting in peril our food and water systems.

Addressing these drivers of deforestation requires a systemic shift in our economic system – one that provides the right incentives for a tree left standing to be worth more than a tree cut down.

Clear and robust deforestation compliance measures, such as the European Union Deforestation Regulation (EUDR), provide an example of how these policy measures can tip the scales to a transparent green transition. The mix of policy and regulation with technology, particularly traceability tools, can start to move the needle to a new economic model with people and planet at its heart.

The EUDR mandates that companies importing products into the EU prove they are deforestation-free, affecting industries like coffee, cocoa, palm oil and rubber; a highly significant step for the world’s second-largest importer of forest-risk commodities.

Non-compliant companies risk losing access to this vast market and reputation damage: 73% of European consumers avoid brands linked to deforestation, impacting brand loyalty and revenue. Offending businesses that fail to meet due diligence requirements may also face fines and legal action.

Conversely, businesses that adopt traceability solutions and ensure sustainable sourcing stand to gain a competitive advantage; the global sustainable products market is projected to exceed $150 billion by 2027. Compliance also helps ensure resilient supply chains, with better risk management and adaptability to evolving consumer and regulatory demands. Investors will also respond positively to companies that align with Paris Agreement goals.

Initially set to take effect by the end of 2024, the EUDR’s implementation has been postponed to 30 December 2025 for large companies, and 30 June 2026 for small enterprises. According to EU studies, this delay could result in an additional loss of 2,300 square kilometres of forest globally.

Several factors contributed to this postponement:

Regulatory compliance extends beyond meeting legal standards – it’s about embracing nature-based solutions (NbS) to protect forests and mitigate climate risks. Restoring degraded forests boosts biodiversity and acts as a buffer against extreme weather events like floods and droughts. With appropriate investment, NbS could create an additional 32 million jobs globally by 2030. By integrating NbS into business strategies, companies contribute to climate resilience, environmental conservation and economic growth.

The private sector and multistakeholder collaborations play a crucial role in driving compliance. Standard-setting corporations influence global supply chains by making deforestation-free sourcing the norm. Businesses can leverage blockchain, satellite monitoring and digital traceability solutions to ensure responsible sourcing. Meanwhile, NGOs and industry associations support smallholder farmers in complying with regulations, preventing their exclusion from markets. Effective monitoring, reporting and advocacy from the private sector ensure that regulations translate into meaningful environmental impact.

Technology plays a transformative role in achieving deforestation-free supply chains. Tools like blockchain and satellite monitoring enable real-time tracking and verification of product origins, ensuring sustainability. For instance, satellite images can monitor land use and detect illegal deforestation, while blockchain records every step of a product’s journey, creating a secure and transparent supply chain.

Platforms like TraceX and TrusTrace simplify compliance with the EUDR by providing end-to-end traceability. These tools enable businesses to collect geolocation data, assess risks and generate compliance-ready reports. By integrating such technologies, companies can reduce manual effort, avoid penalties and foster transparency.

Large data aggregators and analytics companies like Pivotal are also collecting and analysing biodiversity data at scale. Such naturetech startups can support biodiversity baselining to understand a company’s environmental footprint, risks and dependencies, providing data to begin to structure nature assets and mechanisms for participation in nature markets. They can also develop benefit-sharing mechanisms so farmers, indigenous peoples, local communities and others can benefit from the use of such tools.

Many UpLink Top Innovators have developed novel tools and technologies that put nature and people at the heart of their work. It is through engagement with an innovation ecosystem that startups, alongside policy-makers, corporates, investors and other key actors, can collectively work towards creating the broader innovation ecosystem needed for change to take root in our economies and society.

Deforestation compliance is more than a regulatory obligation – it is a strategic necessity to combat climate change and protect biodiversity. Early adoption of compliance measures positions businesses ahead of regulatory changes. Traceability technology makes this feasible by simplifying compliance, reducing operational risk and strengthening supply chain resilience. Companies that act now will gain market advantage, attract investors and future-proof their operations.

The EUDR delay is not a reason to wait – it is an opportunity to accelerate action and lead the transition toward a sustainable, deforestation-free economy. The time to act is now: businesses, governments and consumers must unite to safeguard our forests and our future.