Report: With EUDR Looming, One in Three Businesses Still Lack Deforestation Commitments

Why It Matters

The findings highlight a significant compliance gap that could expose a large portion of supply chains to hefty EU fines and reputational risk, accelerating pressure on companies to adopt verifiable deforestation‑free practices.

Key Takeaways

• One‑third of assessed firms lack any deforestation commitments.
• Beef is the only commodity where traceability declined.
• Only 4% of companies are classified as deforestation leaders.
• Non‑compliance fines start at 4% of EU market turnover.
• EU Deforestation Regulation enforcement begins late 2026 for large firms.

Pulse Analysis

The EU Deforestation Regulation (EUDR) represents the most comprehensive policy to curb forest loss linked to commodities such as beef, cocoa, coffee, palm oil, rubber, soy and wood. Effective from the end of 2026 for large importers, it requires that products entering the EU market be deforestation‑free and legally produced, shifting the compliance burden onto global supply chains. Companies that fail to demonstrate traceability risk fines of at least 4% of their EU turnover, a penalty that can quickly erode profit margins and damage brand equity. This regulatory push aligns with broader European Green Deal objectives and signals a tightening of sustainability standards worldwide.

Global Canopy’s latest Forest 500 analysis reveals a mixed picture of corporate readiness. Across eight high‑risk commodities, most firms have upgraded traceability tools, yet beef remains an outlier where progress stalled. The report flags that 33% of the surveyed companies still lack any formal deforestation commitments, and many of those with policies exclude key sectors like leather and pulp and paper. Only a handful—such as Procter & Gamble, UPM Timber and Nippon Paper Group—meet the criteria for ‘leaders’, showcasing transparent reporting and measurable targets. This gap underscores the challenge of translating policy intent into actionable supply‑chain reforms.

For investors and business leaders, the data signals both risk and opportunity. Firms lagging behind may face sudden cost spikes from fines or from retrofitting supply chains to meet EUDR standards, while early adopters can leverage compliance as a competitive differentiator. Stakeholders are likely to scrutinize ESG disclosures more closely, demanding third‑party verification of deforestation‑free claims. As the deadline approaches, we can expect heightened collaboration between NGOs, governments and industry groups to develop standardized metrics and digital traceability solutions, accelerating the shift toward sustainable sourcing across global markets.