New EU deforestation regulation as an opportunity

The EU Deforestation Regulation (EUDR) is a major step by the European Union to combat global deforestation and promote sustainable supply chains. Originally planned for the end of 2024, the entry into force of the regulation has been postponed until the end of 2025 due to significant challenges, particularly for small and medium-sized enterprises (SMEs).

The EU Deforestation Regulation (EUDR) places high compliance requirements on Swiss exporters to ensure the required deforestation-free supply chains. (Image: www.depositphotos.com)

SMEs would even have until June 2026 to prepare for the extensive requirements. From the date of entry into force, companies that import raw materials such as palm oil, cocoa, soy, wood and rubber into the EU or sell them within the EU will have to provide strict proof of the origin of their products. Swiss companies that export their products to the EU are also affected and must prove that their raw materials and products do not violate the EUDR. This increased need for information presents supply chain management with a complex task. This is because the collection and maintenance of such data significantly increases the administrative requirements and demands the introduction of digital tools and processes to efficiently ensure compliance and documentation.

Increased compliance requirements and risks for Swiss exporters

The EUDR places high compliance requirements on Swiss exporters in order to ensure the required deforestation-free supply chains. Companies must not only provide geographical evidence down to the raw material source, but also ensure that their suppliers meet the EUDR requirements. "The new regulation poses considerable challenges for SMEs in particular, as they are often dependent on compliance and the provision of precise evidence by their foreign suppliers," emphasizes expert Patrick Sommer.

This can be particularly risky for Swiss companies that source raw materials from third countries, as they are dependent on their foreign suppliers providing precise evidence. This is because violations of the EUDR could result in sanctions and possible exclusion from the EU market - a significant risk for SMEs that rely on exports to the EU. The documentation and control effort also increases considerably, which ties companies to new human and financial resources. Integrating these requirements into existing processes is therefore a challenge that requires not only efficient monitoring solutions, but also data collection.

SAP Ariba: An integrated solution for implementing EUDR requirements

In order to meet the complex requirements, many Swiss companies specifically rely on IT systems such as SAP Ariba. "SAP Ariba is a powerful tool that supports companies in digitizing their entire supply chain and systematically documenting the origin of raw materials. The platform helps to capture the necessary geographical data and implement automated processes that simplify management and compliance with regulations," explains the Head of Consulting at CNT Management Consulting.

In addition, integrated risk analyses offer the opportunity to identify potential violations at an early stage. SAP Ariba's comprehensive supplier database enables companies to carefully select suppliers and check their sustainability standards. In this way, companies can ensure that they meet both the new legal requirements and the expectations of their customers.

EUDR as an opportunity for sustainable market positioning

Although the strict requirements of the EUDR present Swiss companies with challenges, they also offer strategic opportunities to position themselves as sustainable and responsible partners. "By using SAP Ariba, companies can strengthen their credibility in terms of environmental and social responsibility. At the same time, the platform makes it possible to efficiently manage parallel regulatory requirements and avoid duplication of effort," explains the expert. The combination of digital transparency and sustainability not only strengthens positioning in the market, but also leads to greater customer loyalty and a long-term competitive advantage. This turns the implementation of the EUDR from a challenge into an opportunity that companies can use to optimize their processes and achieve sustainable market positioning.

Source: www.cnt-online.com

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