For years, ESG (Environmental, Social, and Governance) reporting was largely voluntary, a way for companies to signal values to investors and customers without much obligation to prove anything. That era is ending. A new generation of regulations is making supply chain due diligence a legal requirement, not a marketing choice.
For brands that source wild-harvested or agricultural products, this shift has significant implications. Here's what's changing and how traceability helps you stay ahead of it.
The Key Regulations You Need to Know
EU Deforestation Regulation (EUDR)
Effective from 2023, the EUDR requires companies placing certain commodities on the EU market, including many botanicals, wood products, soy, cocoa, and cattle, to prove their products are not linked to deforestation. Crucially, companies must provide verifiable geolocation data for the land where commodities were produced. A supplier's word is not sufficient, you need data.
EU Corporate Sustainability Due Diligence Directive (CSDDD)
The CSDDD extends due diligence obligations to human rights and environmental impacts across a company's entire value chain, including upstream suppliers and, in some cases, downstream operations. Large companies must identify, prevent, and account for adverse impacts. Failure to comply carries civil liability and fines.
Business Responsibility and Sustainability Reporting (BRSR), India
SEBI's BRSR framework mandates sustainability disclosures for India's listed companies, including supply chain transparency metrics. This is increasingly relevant for Indian exporters supplying global brands.
What These Regulations Actually Require
Across these frameworks, the common thread is evidence. Regulators are not asking companies to make better promises, they're asking for verifiable documentation:
- Geographic origin of raw materials (GPS coordinates, not just "India" or "forest region")
- Evidence that sourcing practices don't cause deforestation or ecosystem degradation
- Records of labour conditions and fair compensation for workers and harvesters
- Audit trails that can be accessed and verified by third parties
For wild-harvested products in particular, where sourcing is distributed across vast, informal networks, meeting these requirements without a digital traceability system is extremely difficult.
How Blockchain Traceability Helps
A blockchain-based traceability system like WyldTrace captures and stores supply chain data in a way that is permanent, tamper-proof, and independently verifiable. Specifically:
- GPS-tagged harvest logs provide the geolocation data required by EUDR
- Digital transfer records at each handoff create the audit trail required by CSDDD
- Quality and sustainability data captured at source supports BRSR disclosures
- Automated reporting means compliance documents can be generated from existing records rather than compiled manually
The Cost of Non-Compliance
Under the EUDR, non-compliance can result in fines of at least 4% of EU-wide annual turnover and confiscation of products. Under CSDDD, companies face civil liability for harm caused by supply chain failures. The cost of implementing traceability is significantly lower than the cost of getting it wrong.
More importantly, companies that build traceable supply chains now will have a structural advantage as regulations tighten further , which, based on current trajectory, they will.
Sources:
European Commission. "EU Deforestation Regulation." 2023. Link
European Commission. "Corporate Sustainability Due Diligence Directive." 2024. Link
SEBI. "Business Responsibility and Sustainability Reporting Framework." 2021. Link