French dairy giant Danone has been around for more than a century and operates across more than 55 countries, producing everything from yogurt and milk to protein drinks and baby formula. It did $28.9 billion in sales last year, maintaining its spot as the world’s top dairy producer. But to make all that happen, the company needs a complex operation of paper products, soy, palm oil and cocoa — much of it sourced from countries with vulnerable rainforests like the Amazon.

With the European Union’s deforestation-free products regulation (EUDR) set to go into effect at the end of 2025, Danone and other companies that deal in cocoa, soy and other commodities tied to deforestation are facing extra scrutiny as they prepare to meet some of the most rigorous environmental trade restrictions ever implemented.

The EUDR requires companies importing cocoa, cattle, rubber, soy, wood, palm oil and coffee into the EU to demonstrate their products weren’t grown on land deforested after Dec. 31, 2020. It’s proven to be a significant challenge even for companies with relatively strong environmental track records, like Danone. Tracking the impacts of sensitive commodities requires advanced technology and strong relationships with suppliers, but can still ultimately fall short for huge corporations that work across multiple countries.

“Voluntary practices are not enough for the magnitude of the challenge [combating deforestation and forest conversion], and public policy such as the EUDR helps bring additional transparency, due diligence and collaboration across the value chain as a few good actors and a few good projects will not solve this alone,” Danone said in a September statement.

The company has set itself several important conservation goals for the next few years. By 2025, it wants “clean supply chains,” with all products verified as free of deforestation and land conversion in accordance with the Accountability Framework Initiative, a coalition that helps companies monitor forest-risk commodities. By 2030, it plans to support landscape projects that protect and restore vital ecosystems.

In an April shareholders’ meeting, the company said it aims to reduce greenhouse gas emissions by 42% by 2030 compared to 2020 levels in several sectors of its operation, including transport and distribution and goods and services. Also by 2030, it aims to reduce greenhouse gas emissions from forest, land and agriculture by 30.3%.

Danone works in palm oil, cocoa, soy and paper, all commodities subject to the EUDR. In general, the company’s oversight has been better than most, according to outsider observers.

“They’re a rather progressive company,” said Klervi Le Guenic, a campaign manager at Canopée, a French environmental NGO. “They’re one of the leaders on palm oil.”

Last year, the company reported the purchase of 61,000 metric tons of palm oil from Brazil, Colombia, Costa Rica, Gabon, Ghana, Guatemala, Indonesia, Côte d’Ivoire, Malaysia, Nigeria and Papua New Guinea — all countries that could be considered at “high risk” of deforestation under the EUDR benchmarking system.

Around 95% of the palm oil was certified as deforestation- and conversion-free by the Roundtable on Sustainable Palm Oil (RSPO), an organization that sets sustainable production standards for the industry. It was kept separate from ordinary palm oil throughout the supply chain.

Another 3% was certified deforestation- and conversion-free but was mixed in with other palm oil throughout the supply chain. The company said the remaining 2% was “conventional” palm oil sourced from Africa.

Danone said it’s working to close the “remaining non-RSPO volumes” in its purchases, according to its 2023 forest update.

The RSPO is the world’s largest certifier of ethical palm oil, but some studies have questioned the effectiveness of its certification, with some experts even calling it “meaningless.” In some cases, plantation owners have purchased land deforested by someone else and then earned certification for not expanding further.

There have also been concerns about bias. Companies pay for their certification and the RSPO has an incentive to provide its clients with a positive result, critics say.

“You have an interest in having more clients,” Le Guenic said, “so you don’t have an interest in saying [a product] is linked to deforestation, or that you won’t be able to certify it. The company is paying you.”

Danone didn’t respond to a request for comment for this story. But the RSPO told Mongabay that it recently introduced revised standards that give the industry greater clarity and auditability.

“Innovation is central to RSPO’s commitment to continuously evolve and improve upon our systems and processes by addressing emerging challenges to meet the future demands of the sector,” a spokesperson said in a statement.

When it comes to other commodities, Danone faces much bigger challenges. The company purchased 8,195 metric tons of cocoa last year, but only 79.2% of it was certified as deforestation- and conversion-free. More than 20% was considered “noncertified or unknown.”

Danone’s cocoa comes from Cameroon, Ghana, Côte d’Ivoire, Ecuador, Indonesia, the Dominican Republic, Peru, Sierra Leone, Uganda, Republic of Congo, Liberia and Tanzania. It uses Rainforest Alliance certification, one of the world’s largest programs of its kind. But the Rainforest Alliance’s deforestation risk assessment tool — which uses AI remote sensing forest data to create deforestation maps — doesn’t guarantee EUDR compliance. Instead, it provides supporting evidence for companies doing their own risk assessments, the organization said.

Rainforest Alliance has faced similar criticism as the RSPO, with a class action lawsuit earlier this year alleging inadequate oversight of deforestation and conflicts of interest with cocoa companies.

To ensure it meets EUDR standards, Danone said it’s working with sustainability consulting group 3Keel to improve its traceability efforts outside of the certification process. Last year, it sent a questionnaire to its suppliers to better understand cocoa traceability. It’s also working with its top three suppliers to develop an action plan for reducing carbon emissions by 30% by 2030.

“We will collaborate closely with our suppliers over the coming years to implement these action points, enabling us to meet our commitments for 2025 and ensure compliance with upcoming regulations including EUDR,” Danone said about cocoa in its 2023 report.

Danone also needs thousands of tons of soy each year, a commodity that caused 30,031 hectares (74,208 acres) of deforestation in the Amazon between September and December 2023. The company uses it in animal feed as well as soy milk, tofu and other plant-based dairy alternatives.

It sources soy for dairy products from the U.S., Canada, Italy and France, countries that are at low risk of deforestation and land conversion. Around 80% of that soy is traceable back to the farm and certified by ProTerra, which helps organizations comply with sustainability regulations like the EUDR. But some of the soy for animal feed comes from Brazil, posing greater challenges to maintaining a clean supply chain.

When the EUDR was originally scheduled to go into effect at the end of 2024, Danone reportedly considered halting all soy production in Brazil in favor of Asian markets, leading some observers to question whether the company was ready to meet EUDR standards. A month later, around the time officials said the EUDR would be delayed by a year, the company announced it was staying in Brazil after all.

“Danone works actively with the dairy farmers, to ensure that the soy is sourced from sustainable and verified deforestation-free sources, regardless of geographical origin,” it said in a statement. “We also actively encourage the dairy farmers to purchase feed only from traders who respect their commitments or hold credible certifications.”

Another commodity group subject to the EUDR, paper and wood, will require Danone to improve its relationship with suppliers and upgrade technology for monitoring the supply chain in countries at high risk of deforestation.

Last year, the company purchased 509,000 metric tons of paper, 71% of it recycled, from Argentina, Brazil, Mexico, India and Indonesia, among other countries. Around 95% of the paper products were certified as deforestation- and conversion-free by the Forest Stewardship Council (FSC), a certification group for the timber industry.

Like other certifiers, the FSC has been criticized for failing to prevent deforestation as advertised, and even helping launder trafficked wood. The FSC didn’t respond to a request for comment for this article.

Danone said it prefers FSC certification because it’s the “most robust certification” available. But also uses the Programme for the Endorsement of Forest Certification (PEFC) and Sustainable Forestry Initiative (SFI) in North America. In some cases, Danone also asks suppliers for additional information not always included in the certification process, including the percentage of recycled content, paper mill locations and certificate numbers.

Ahead of the EUDR going into force, the company is aiming for 100% verified deforestation-free commitments from paper suppliers and plans to implement satellite monitoring in high-risk areas to ensure that sourcing practices aren’t associated with deforestation.

“We must and will continue building relationships with land managers and key traders who are closer on the ground with farmers, to progress on our shared ambitions,” Danone said in a statement. “This includes the need to collectively work on supporting smallholder farmers with access to technology that will help them in the traceability efforts.”

Banner image: Soybean plantations in the Cerrado. Image © Marizilda Cruppe/Greenpeace.