Combatting Deforestation Through Consumption and Production

The European Union's Deforestation Regulation (EUDR) applies stringent rules to reduce global deforestation and forest degradation linked to EU consumption and production. The EUDR targets key commodities and then mandates robust due diligence to proves the commodities used in products do not originate from recently deforested land or contribute to forest degradation.

What does the EUDR Require?

The EUDR targets seven key commodities and their derived products:

1. Cattle
2. Cocoa
3. Coffee
4. Palm oil
5. Soya
6. Wood
7. Rubber.

Many beauty and personal care products contain ingredients derived from these commodities, such as palm oil, cacao, and various plant extracts. Under the EUDR, companies that use these commodities within the EU market, from export to product placement must ensure they are, “Deforestation-free”, meaning the commodities and products only contain or have been fed commodities produced on land not deforested as of 31 December 2020. These commodities will also have to be produced in accordance with relevant local legislation that is covered by a due diligence statement.

A Cacao Tree and harvested Palm tree kernels two commodities protected under the EUDR, whose raw products, such as cocoa butter and palm oil, comprise many health and beauty products

Due Diligence

Cosmetics brands and manufacturers must implement robust due diligence processes to comply with the EUDR. This includes:

1. Information Collection: Gathering exhaustive data on production, including geolocation of all plots of land and production dates.
2. Risk Assessment and Mitigation: Evaluating 14 assessment criteria covering the entire supply chain to ensure "no or only negligible risk" of deforestation.
3. Due Diligence Statement: Submitting a declaration confirming that due diligence has been carried out and that the products comply with the regulation.

Impact on Cosmetics Supply Chains

The EUDR will require cosmetics companies to have unprecedented visibility into their supply chains, potentially down to the farm or plantation level for certain ingredients. This may be particularly challenging for complex, multi-tiered supply chains common in the cosmetics industry. Companies will need to:

• Trace ingredients back to their source
• Verify that sourcing practices do not contribute to deforestation
• Potentially restructure supply chains to ensure compliance
• Invest in technologies and systems for improved traceability and data management

Timeline

The key compliance deadlines for cosmetics companies under the EUDR are: