How contracts can transform deforestation regulation into climate action

We recently published a new guide on ensuring deforestation-free supply chains and navigating EU law on deforestation-free products (EUDR). Since publication, it’s attracted over 2,500 website views, making it one of our most visited pieces of content.

This interest reflects the commitment and expertise of the multidisciplinary working group who helped us translate the EUDR’s climate, legal, commercial and user needs into practical guidance. Through cross-industry collaboration, we turned complex regulation into a template for high-ambition action.

Its popularity may also speak to the uncertain and political nature of the topic. Shortly after publishing the guide, the European Commission proposed another delay to the EUDR’s implementation, which major businesses warned would “risk the preservation of forests worldwide”. Although the 12-month delay was dropped,  the Commission has proposed new measures to simplify the regulations,  risking the benefits of the EUDR on forests, climate, nature and biodiversity.

It’s critical that this uncertainty does not cloud the overarching problem for companies. Deforestation is a key driver of the climate and nature crises, resulting in destabilised economic activity like disrupted supply chains, increased costs and reputational damage. This makes deforestation a significant business risk that requires proactive management – with or without ambitious legal frameworks. And as we know, legal professionals are uniquely placed to help mitigate these risks.

Using design thinking to understand content needs

We identified and developed this legal content in response to a need. As part of our work in the food and agriculture sector, we attended events such as the Innovation Forum’s Future of Food and Beverage conference, where we heard first-hand about the challenges in aligning business operations with EUDR. This included operational matters, like board-level decision-making, procurement processes, supplier relationships, and the contractual and legal documentation that govern these.

Speaking to users across our network, we also heard frustration about the sector’s preparedness ahead of the initial December 30, 2024, deadline. We explored opportunities with industry coalitions like The Retail Soy Group to understand what deforestation-aligned contracting might look like – and what value it could bring to the market ahead of the EUDR’s implementation.

The need was clear, but other considerations were important too: were we already meeting this need? What impact would it have? How might we develop the content?

While we host deforestation-related content, for example, our Deforestation and Land Use Change Clause and Questionnaire, this material is specific to the US legal system, doesn’t reflect legal developments like the EUDR, and is in clause format. We needed something more universal: educational, practical and principles-based.The potential impact also made sense. The EUDR is an EU-wide regulation with extraterritorial reach, focusing on global supply chains and requiring compliance from high-emitting companies. Its scope and significance reminded us of our decision to create guidance on how to deliver a climate transition plan to align with and go beyond emerging EU reporting and due diligence directives, and the need for a universal set of best practices that could be easily contextualised into local legal systems.

Collaborating with experts to develop deforestation guidance

We convened a working group of experts to help develop and review the content. This included lawyers in private practice, in-house counsel at food retailers, NGOs specialising in deforestation issues, as well as local coffee traders in Kenya. Over 20 people contributed across the project.

The group’s diversity of experience helped us navigate key challenges, such as:

• Balancing EUDR compliance with ambition for broader deforestation-free action
• Ensuring relevant stakeholders understood their role and obligations, for example, we created step-by-step guidance and a visual flow chart for operators and traders
• Developing contract approaches that promote responsibility while remaining fair to suppliers.

These insights shaped the guide’s structure, tone and practicality. We’re glad to have had the chance to work with these contributors to tackle deforestation and climate impacts in this way.

What the guide does to support deforestation-free supply chains

The guidance shows legal professionals, as well as sustainability, supply chain and procurement teams, how to use supplier engagement and commercial contracts to eliminate deforestation practices. Although the EUDR is the highest legal benchmark internationally, businesses must recognise and move beyond minimum obligations – especially amid uncertainty, simplification, and the business and legal risks associated with biodiversity loss.

Each stage of the guide helps businesses integrate due diligence frameworks into procurement and contract management processes. The key is to transform regulatory requirements into opportunities to mitigate risks such as supply chain shortages, reputational damage and production bans.

While policies and supplier codes of conduct are useful, contracts have the power to convert promises into enforceable provisions. Well-crafted contractual language, backed by a commitment to high-ambition action:

• Clarifies who must provide what data (for example traceability, geolocation, supplier declarations are essential data points for deforestation activity)
• Allocates verification costs and remediation responsibilities
• Creates operational triggers (for example, audit access, suspension, termination, conditional payments)
• Embeds due diligence into procurement cycles and contract management processes at the outset.

The guide pragmatically shifts users from “we aspire to be deforestation-free” to “we can prove, verify and enforce high-ambition action”.

Ensuring ambition and accountability through legal frameworks

Deforestation and conversion-free supply chains are essential to the global economy and how it functions. Our guide helps users lead with clarity, turning contracts into a mechanism for measurable climate action. We invite practitioners, businesses and NGOs to test the guidance, adapt it, share what works, and help us improve it too.

Collaboration made this content possible, and we believe design thinking and co-creation activities like this will be just as vital for EUDR’s implementation, as well as continued ambition across the legal landscape, for example, at COP30 in Belem. As we know, deforestation is a complex issue, and its regulatory response mirrors this reality. But by working in this way, we can re-configure legal frameworks so that they codify ambition and accountability – not only for deforestation, but the full range of climate and nature-related issues.

Give feedback on our ensure deforestation-free supply chains guide.