The complexity in the global trade of commodities presents a major obstacle to understanding how supply chains are linked to undesired outcomes, such as environmental degradation and poor working conditions. Greater transparency in the flow of commodities from production areas to traders, processors and finally to consumers, can help supply chain actors better understand and address the risks they are exposed to.
Earlier this year, the European Commission published its Sustainable Corporate Due Diligence legislative proposal. This Directive aims to “foster sustainable and responsible corporate behaviour and to anchor human rights and environmental considerations in companies’ operations and corporate governance”. It will set out requirements that large companies conduct due diligence to ensure that adverse impacts from their operations are addressed and minimised.
An analysis of subnational trade data for three major agricultural commodity markets reveals strong market connections between producing regions and the EU, despite the EU’s declining share of the export markets. Identifying these strong market relationships is key for promoting sustainable supply chains.