Trust is a non-negotiable for businesses, governments and societies in today’s political and economic climate. There’s no shortcut for earning that trust either. It comes from tangible actions and transparency. This authenticity is increasingly respected in today’s market where end-users continue to carry their political and social motivations into their purchases and lifestyle choices.
A study from GWI earlier in the year confirmed this, finding that British people are increasingly making a conscious effort to live more sustainably. However, 62% of consumers said they are only “a little” trusting of brands that say they will adhere to environmental pledges, with 22% of those surveyed saying that they don’t trust brands at all.
This fear that businesses aren’t ready to make the necessary changes for a greener industry was also highlighted in a recent report by iov42, which found that 74% of Timber Importers across Europe are unprepared for the upcoming changes in regulations – with the new European Union Deforestation Regulation (EUDR) soon to replace the European Union Timber Regulation (EUTR).
This new regulation aims to curb deforestation and forest degradation in supply chains, by requiring more due diligence and risk assessments of timber products coming in and out of the EU. Its effects on commodities like soya, cocoa, palm oil, coffee and beef mean that the regulation will have far-reaching effects on businesses’ sustainability strategies. With this, huge changes are needed as 15-30% of all wood traded worldwide is logged illegally, and 15% of human-caused greenhouse gas emissions come from deforestation.
Technology, like Distributed Ledger Technology (DLT), provides an opportunity for businesses to enable better transparency across complex supply networks and help meet new due diligence requirements. It will also ensure businesses, consumers and governments can build bonds of trust caused by a fragmented industry.
Slow systems mean slow change
As the implementation of EUDR approaches, there is increased pressure on businesses in the timber industry to better implement processes that can trace the journey of their timber products. Without technology like DLT, this has proven to be an incredibly tedious task. According to iov42’s research, 83% of Timber Importers spend half or more of their working hours tracking down information requested by customers. This valuable time currently devoted to administrative tasks can be freed up, supported by cryptographically secure platforms that enhance the digital data recording processes for companies and help to optimise the auditing process. These platforms also ensure that data integrity is upheld.
A lack of seamless and efficient systems in supply chains, like timber, can make it harder to address issues like corruption, exploitation of regulation gaps, missing audit chains, manipulation of data and misleading environmental claims.
Implementing due diligence and accessibility
Recording supply chain information in a united information system can facilitate instant accessibility that allows interested (and vetted) parties to take part in their own due diligence on a product’s history. This means that businesses and their partners can gain insights from verified information that can be traced back right from the forest to the final product.
This opportunity to implement authentic participation through digital traceability can aid in simplifying what continues to be a complex global market. The technology’s ability to provide irrefutable trust, accountability, and compliance for businesses to investigate the journey of their products means that they can better comply with regulations, like EUDR, and those to come.
creating the foundation for the change
However, with 72% of Timber Importers claiming they are in fact keen to get ahead of regulations businesses need to embrace a well-needed shift to more digitalized and transparent processes. The accessibility and immutability of DLT platforms are what make them such a key solution for achieving the collaboration and partnership that international businesses need to get there.
As the complete requirements of the EUDR are yet to be released, industry players, like those in the timber market, will need to remain united in their vigilance against unexpected regulatory changes. Businesses need to be ready to adapt now rather than react later – particularly as so many continue to struggle to meet current regulations.
Creating a society that consumers and businesses can trust to shift to greater sustainability means that companies need to adopt the right technology. Deploying pioneering tech like DLT is an essential step in aiding the global transition to a fully sustainable future, whilst staying profitable.