Luxury goods under EUDR check: Which products are affected?

From 30 December 2024, the EUDR will require European companies to make their supply chains deforestation-free. The regulation focuses on the following raw materials: rubber, coffee, cocoa, palm oil, soy, timber, cattle and several of their derivatives. The requirements of the EUDR are extensive, including the need to collect, process and analyse large amounts of data.   

As quality is an integral part of luxury, the highest standards of environmental and social performance must also be guaranteed. Many people see luxury and sustainability as opposites, but appearances are deceptive: luxury goods tend to have an above-average lifespan, thanks to high-quality materials, careful workmanship and timeless design.  

In short, luxury goods tend to be more sustainable than some everyday products. Now, the sustainability aspect should not only apply to the longevity of the products, but also to their manufacture, the materials used, and the supply chain. 

What are luxury goods?  

According to some definitions, luxury is a superficial form of consumption that defines people by their possessions and wealth.  Today, however, it is no longer the mere possession of things that counts, but the individual experience and emotional connection, as well as the quality and longevity of the product. A luxury good is more expensive than an everyday product because it has been designed with the intention of giving the buyer a sense of exclusivity. A visit to a luxury restaurant is not only about good food, but also about a unique experience in the right atmosphere. 

Challenges in the implementation process   

The change in the concept of luxury is also accompanied by a change in customer awareness of sustainability. Younger generations in particular are paying more and more attention to the sustainability aspect of products. The pressure on luxury companies to integrate sustainability into their strategy is growing. Companies need to ensure that no deforestation takes place in production areas. The problem is obtaining the relevant data, as the supply chains of luxury companies are complicated. A wide network of suppliers makes it challenging to trace raw materials.   

At the same time, luxury brands in the EU are facing this challenge. Companies that do not sell their products in the EU have a competitive advantage as they can still rely on cheaper and less regulated suppliers. 

EUDR-relevant products in the luxury goods industry  

The luxury industry comprises several sectors where products are covered by the EUDR. 

In the fashion industry, the main product processed is leather, which is widely used in the production of handbags, designer shoes and belts. Alternatively, leather can be made from cork, which is sustainably and regionally sourced from the bark of the cork oak tree. Rubber can also be used in high quality designer shoes and can be replaced by the guayule plant or the Russian dandelion, for example. Environmentally friendly jungle rubber, planted between other trees in Indonesia’s tropical forests, is also a good alternative.  

The food industry must also demonstrate that its supply chains are deforestation-free: raw materials relevant to the EUDR can be found, for example, in luxury restaurants (coffee, beef, cocoa, palm oil, soy) or in chocolate production, as well as in coffee from luxury coffee brands or soy in vegan or vegetarian delicacies.  

Less obviously, palm oil can also be found in the luxury sector. In the cosmetics industry, palm oil is used to produce hand and body creams.   

Other products affected by the EUDR include wooden furniture or luxury accessories in the furniture and furnishing industry, car tyres and rubber or leather interiors in the luxury car industry. 

osapiens’ software solution supports EUDR compliance  

The EUDR presents companies with challenges that are almost impossible to overcome manually. Software such as the osapiens solution for EUDR helps companies to implement the regulation efficiently and in compliance with the law. The osapiens platform solution, the osapiens HUB, offers companies several advantages for the implementation. They can implement different regulations on the platform to create synergies, as many data are relevant for several regulations. The osapiens HUB also provides an overview of the results of their risk analysis along the supply chain at a glance. This is based on the collection of supplier data and uses AI methods to assess the risk of deforestation. The osapiens HUB for EUDR solution also uses satellite imagery to determine whether the area is at risk of deforestation.   

In this way, processes are automated and digitized, minimizing data collection efforts for luxury companies and making it easier to implement sustainability into their strategy.  

Benefits of the osapiens solution for the luxury industry 

osapiens offers a holistic software platform that includes different solutions, such as the osapiens HUB for CSRD or the osapiens HUB for Due Diligence, for the implementation of ESG laws. The data collected e.g. for a risk analysis of the EUDR solution can also be used for the solution of another regulation.