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Uncertainty and 'bad signal': Investors react to EUDR rollback risk

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By illuminem briefings

· 3 min read


illuminem summarises for you the essential news of the day. Read the full piece on Responsible Investor or enjoy below:

🗞️ Driving the news: Investors are expressing deep concern over the mounting political pressure to roll back or significantly dilute the EU Deforestation Regulation (EUDR), warning that such moves introduce uncertainty and send a “bad signal” to markets
The scrutiny on reforms, such as an expanded “no-/negligible‑risk” country category and further delays, is undermining investor confidence just months ahead of the regulation’s December 2025 enforcement date

🔭 The context: Originally adopted in 2023, EUDR mandates that imports of key commodities — including cocoa, coffee, soy, beef, palm oil and wood — must be deforestation‑free and traceable
Its enforcement was delayed to December 2025 for large operators and June 2026 for smaller entities
Proposals from several member states, backed by moves in the European Parliament’s ENVI Committee, seek to introduce a new “negligible risk” classification that would exempt products from certain transparency and geolocation requirements

🌍 Why it matters for the planet: A weakened EUDR could open loopholes for forest‑linked commodities to enter EU supply chains, undermining biodiversity conservation and climate objectives
Reduced due diligence risks fostering bad-faith sourcing behavior and could embolden non‑compliant actors, diluting global efforts to curb deforestation
 

⏭️ What's next: Within the coming weeks, the European Commission is expected to release an omnibus simplification package that may formally encompass EUDR reforms
A decision on whether to reopen or delay implementation remains uncertain. Investor groups — representing over €6.6 trillion — are urging policymakers to preserve regulatory integrity, stressing the need for legal clarity to channel capital toward green investments
Opposition from civil society and legal experts is mounting and may shape the final text before December's enforcement milestones

💬 One quote: “Further attempts to delay the application of the regulation or to undermine its well thought through architecture will damage the credibility of the EU…” – Together4Forests campaign

📈 One stat: EUDR aims to address the estimated 10% of global deforestation linked to EU consumption of imported goods

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illuminem's editorial team, providing you with concise summaries of the most important sustainability news of the day. Follow us on Linkedin, Twitter​ & Instagram

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