Technology & Data

CBI Releases Guidance on EU Deforestation-free Products

The Climate Bonds Initiative (CBI) has unveiled guidance aimed at assisting corporates and financial institutions in meeting and surpassing the requirements set by the EU’s regulation on Deforestation-free Products (EUDR). Sean Kidney, CEO of the CBI, said: “This guidance serves as a compass for sustainable practices within global supply chains. Comprehensive due diligence and traceability are not just about compliance; they’re about spearheading a resilient, sustainable economy. This initiative aims to ignite a transformative approach to deforestation and land use.Deforestation is responsible for nearly 11% of all anthropogenic greenhouse gas emissions worldwide. The EUDR establishes stringent standards, effectively prohibiting the sale of agricultural commodities within the EU that come from land cleared after 31 December 2020. While the regulation does not presently encompass financial institutions, a review clause is anticipated to expand the regulatory coverage and introduce new obligations for FIs under the EUDR in the near future. The EUDR requires firms to achieve transparency within their supply chains, but there are currently few cost-effective solutions to meet the information requirements set forth by the regulation. The CBI is actively working on further developing agri-food transition frameworks to align with the EUDR. Transition finance acts as the catalyst in propelling our global shift from brown to green, stimulating both innovation and systemic transformation,” added Kidney. 

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