EU regulations such as the Corporate Sustainability Due Diligence Directive (CSDDD), the European Deforestation Regulation (EUDR), the EU Forced Labour Regulation (EUFLR) or the Digital Product Passport (DPP) share common goals and themes aimed at enhancing sustainability, traceability, and accountability across various industries. Here are the key commonalities:
Traceability and Transparency: These regulations emphasize the importance of traceability and transparency in supply chains. They require companies to trace the origins and pathways of their products and raw materials, ensuring compliance with environmental and social standards.
Corporate Accountability: They hold businesses accountable for their environmental and social impacts. Companies are required to conduct extensive due diligence to identify, prevent, and mitigate adverse impacts on the environment and human rights.
Compliance and Enforcement: They establish mechanisms for monitoring, reporting, and enforcing compliance. This includes regular assessments, audits, and penalties for non-compliance to ensure that businesses adhere to the regulations and contribute to broader sustainability goals.
Consumer Information and Protection: By providing consumers with clear, accessible information about the sustainability and environmental impact of products, these regulations empower consumers to make informed choices and promote sustainable consumption patterns.
What does it mean for your traceability strategy?
Companies need to integrate due diligence into their organizational practices by collecting and monitoring operational data from business operations, suppliers, subsidiaries, and partners to identify and analyze supply chain risks. Compliance will require maintaining this data across the supply chain, and establishing transparency to address the burden of proof by ensuring the data is readily accessible to all stakeholders, including brands, consumers, and public authorities through digital tools.
Adopting digital traceability systems will allow for comprehensive monitoring of the entire value chain and analysis of data to uncover vulnerabilities and environmental implications.
Moreover, as most companies are subject to multiple regulations, streamlining the implementation of compliance and avoiding numerous "one-off" projects is possible by choosing a traceability solution with the necessary capabilities for the progressive establishment of global compliance. Such a solution will allow businesses to capitalize on the data collected in their value chain and the resources implemented, to gain global visibility, control, and continuous strategic coherence.
Handbook: 15 key traceability-related regulations worldwide
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