Why “deforestation-free” is no longer enough: operational, reputational, and supply-chain risks for Italian companies

The EUDR is not a “green label.” It is a legal obligation for due diligence and traceability on commodities and derived products linked to deforestation and forest degradation, including risk assessment and submission of a due diligence statement in the EU system. This immediately affects procurement, legal, quality, and IT functions, because data must be consistent, version-controlled, and defensible in audits and at customs. Source: Council of the EU.

The timeline has been updated, and what matters here is the difference between “in force” and “applicable.” The regulation already exists, but application has been postponed: end of 2025 for large operators and mid-2026 for micro/small enterprises. In practice, however, buyers start asking for evidence before the deadlines because they need to “close out” their own supply-chain risks, and because collecting geodata and cleaning supplier master data is not quick. Source: European Parliament.

“Deforestation-free” does not cover everything that creates risk today. Issues such as conversion of non-forest ecosystems, habitat fragmentation, impacts on soil and water, and pressure on protected areas remain outside scope (or in any case are not solved by the claim alone). And above all, there is the risk of displacement along the chain: if you tighten controls on one link without visibility on the next ones, the problem can migrate elsewhere. In long supply chains, without geolocation of plots and lots, the risk also becomes a risk of operational blockage. Source: Council of the EU.

Operational risk is real and day-to-day. We are talking about customs delays, non-compliant lots, supplier replacement, higher auditing costs, and the need to integrate data across ERP, supplier systems, and geodata. Contracts matter too: compliance clauses, right-to-audit, and a remediation plan to manage non-compliance without stopping production. In other words: business continuity and supplier enablement, not just sustainability.

Reputational risk has changed direction. The market no longer accepts “zero deforestation” as a synonym for overall sustainability, because pressure on biodiversity and disclosure is increasing. A useful signal is TNFD adoption: over 400 organizations have stated they are adopting TNFD, raising expectations even for downstream players such as suppliers. Source: TNFD.

What nature-positive really means in a company: objectives, metrics, and boundaries (beyond CO2 alone)

“Nature-positive” becomes credible only if it is operational. That means combining impact reduction, restoration, and regeneration, within clear boundaries: site, supply chain, or landscape. Without boundaries, targets remain vague and become easy to challenge. The logic to keep in mind is: avoid, minimize, restore, offset (only as a last resort), with concepts such as no net loss or net gain stated and measurable.

TNFD is useful because it provides a common language for nature-related risks and opportunities. The point is not to “do TNFD” as a box-ticking exercise, but to use the structure to understand dependencies (water, pollination, soil) and impacts (land-use change, pollution, water withdrawals). The keywords that keep coming up are: LEAP assessment and location-based materiality. Source: TNFD.

Metrics work when they are few and tied to decisions. In general, it is better to choose 2 or 3 per sector and link them to geographic hotspots, because many measures are location-based. Practical examples (to be adapted to the company context):

  • Agricultural supply chains (food, textiles, rubber): habitat integrity/condition near sourcing areas, pressure indicators (fertilizer and pesticide use), and water stress in cultivation areas.
  • Utilities/real estate: quality and continuity of local ecosystems, proximity to sensitive areas, and management and restoration plans.
  • Chemicals: focus on water (withdrawals and stress) and pollutants, with attention to basins and water bodies.

This approach is consistent with ESRS E4, which pushes companies to think in terms of biodiversity-sensitive areas and disclosures that are not “company averages” but aggregations by clusters of sites and hotspots. Source: EFRAG ESRS E4.

“CO2 = nature” is a shortcut that today creates more problems than benefits. Climate-positive is not nature-positive: a reforestation project can have climate value, but it does not automatically equate to an improvement in biodiversity or habitat quality. The biodiversity crisis context, with a high risk of extinction at a global scale, is one of the drivers behind stakeholder and regulatory pressure. Source: TIME (popular summary of global estimates).

Upcoming EU rules and practical impacts: CSRD, ESRS, and due diligence on forests and nature in the supply chain

CSRD changes the game because it turns sustainability into mandatory reporting with auditable data. Compared with voluntary reports, the leap is threefold: double materiality, traceable processes, and data quality. Companies enter “in waves,” and the first ones started with reporting periods from 2024 and publication in 2025, depending on the category. For thresholds and the implementation logic, a concise legal reference is helpful. Source: Dentons.

ESRS E4 is the one that, from the buyer side, translates into very concrete requests. It is not enough to say “we care about biodiversity.” You need elements such as a biodiversity transition plan, mapping of impacts, risks, and opportunities, metrics and targets, and above all attention to location and sensitive areas. The operational keywords to keep handy are transition plan, MDR-T, and disclosure of metrics (for example those referenced in ESRS E4-5). Source: EFRAG ESRS E4.

EUDR is the “hard” part of supply-chain due diligence because it requires specific evidence. For procurement this means: geolocation, proof of origin and legality, risk classification, and supplier onboarding and management with repeatable processes. The European Commission has also launched the information system for submitting declarations, so this is not theoretical: it is a data flow that must be designed and governed. Source: European Commission.

“Nature” in reports and controls goes beyond deforestation. Even if EUDR is focused on forests and specific commodities, disclosure and risk-management expectations include ecosystems and impacts on water, soil, and pollution. TNFD, while not (yet) mandatory, is becoming a framework used to structure disclosure and dialogue with banks, insurers, and large customers. Source: TNFD.

The typical buyer question is simple: “What evidence will you need from us as suppliers?” A realistic checklist includes:

  • site data and coordinates (or polygons) for plots and production units
  • lot traceability and linkage to origin documents
  • certifications where relevant, without using them as the only proof
  • evidence of remediation and non-compliance management
  • data governance: versioning, audit trail, controls, and internal responsibilities

Carbon and biodiversity credits: when they help, when they are not enough, and how to avoid misleading claims

Carbon credits help when they are treated as a complementary tool. The correct sequence remains: first reductions and efficiency, then management of nature impacts in the value chain, and only after that high-integrity credits to finance additional actions. Using them to cover poor performance, or to make absolute claims, is the fastest way to end up under scrutiny.

For quality in the voluntary market, a concrete reference is the Core Carbon Principles (CCP) of ICVCM: a set of criteria that assesses additionality, permanence, MRV, and project governance. Using them as a baseline checklist for credit selection reduces the risk of indefensible claims. Source: ICVCM.

Claims governance is the piece many companies underestimate. The (updated) VCMI Claims Code is useful for building a pathway for responsible claims: baseline criteria, transparency on reductions and the role of credits, and the distinction between a contribution claim and “offsetting-style” claims. Source: VCMI.

If you talk about “carbon neutrality,” you need an internal policy consistent with recognized standards. ISO 14068-1:2023 provides rules on quantification, reduction, and the use of credits, and requires you to clarify boundaries, vintage, retirement, and timelines. It is useful because it turns a claim into a controllable process. Source: ISO.

Greenwashing risk in the EU is increasing because the direction of travel is toward tighter restrictions and stricter enforcement on generic and unsubstantiated claims. In B2B, this translates into something very practical: a ready substantiation dossier, with methodologies, data, third-party checks, and specific claims. Saying “we financed habitat restoration” is easier to defend than “we are climate neutral,” if you have evidence and clear boundaries. Source: CMS (legal update on Green Claims).

A forest credit with “biodiversity co-benefits” is not proof of impact on species or habitats. If you want to communicate nature-positive outcomes, you need an approach based on layered evidence: carbon credits where appropriate, plus ecological indicators (for example indicator species or habitat condition) and independent MRV. This is also the point that emerged in the debate: stacking carbon + biodiversity can help MRV, but it does not automatically mean markets have stable standards, governance, and pricing for “biodiversity credits” comparable to carbon.

12-month operational roadmap: governance, data, suppliers, on-the-ground projects, and KPIs to demonstrate nature-positive results

In the first 2 months you need governance that can withstand impact. Appoint a Nature/Forest risk owner with procurement, sustainability, and legal at the same table. Set up an EUDR-ready supply-chain policy, a claim policy (marketing and legal), and a data committee. Expected outputs: RACI, risk appetite, and escalation procedures for non-compliance.

Between months 2 and 5, data wins—not slide decks. Run hotspot screening by commodity, country, and supplier. Collect geodata (coordinates or polygons) and map Tier-1 and, where needed, Tier-2. Define a nature baseline on habitat, water, and soil, and clarify boundaries for ESRS E4 and TNFD. Source: EFRAG ESRS E4.

Between months 4 and 8, the supplier work is where the game is won or lost. Set a “minimum data package” for supplier engagement: geolocation, lots, agricultural or forestry practices, and supporting documents. Update contracts with EUDR clauses, targeted audits, and CAPA plans. Integrate the flow of the due diligence statement and the evidence needed for customs and market access. Source: European Commission.

Between months 6 and 10 you need on-the-ground projects that can stand up to verification. Build an “insetting + landscape” portfolio with interventions such as restoration of wetlands and riverbanks, agroforestry, improved soil management, and ecological corridors. If you use credits, choose projects with robust MRV and integrity criteria, and make conservative claims aligned with ICVCM and VCMI. Source: ICVCM.

Between months 9 and 12, close with auditable KPIs and disclosure that is ready to publish. Useful KPIs for buyers and CSRD include: % of volumes traceable with geolocation, % of high-risk suppliers with active remediation, hectares restored with habitat-quality indicators, water and soil indicators, and risk KPIs such as incidents, blockages, and non-compliance. Prepare an “evidence pack” for ESRS E4 with a transition plan, metrics, and targets. Source: EFRAG ESRS E4.

Typical buyer questions should be anticipated with processes, not storytelling. The four most common are: (1) how much of the supply chain is covered by geolocation, (2) how you manage non-compliance, (3) what claims you make and with what evidence, (4) what local benefits you measure beyond CO2. If you have governance, data, and controls, you can answer simply and verifiably.