EU regulations such as the Corporate Sustainability Due Diligence Directive (CSDDD), the EU Deforestation Regulation (EUDR), and the Carbon Border Adjustment Mechanism (CBAM) set ambitious expectations. From a practical standpoint, what aspects of these frameworks pose the greatest implementation challenges for mid-sized importers with limited compliance resources?
The biggest challenge for a mid-sized importer like Millarco is definitely data management and integration. EU frameworks such as CSDDD, EUDR, and CBAM require huge amounts of verified data from product composition and traceability to supplier compliance and emissions.
For smaller or mid-sized companies, it’s not the ambition that’s the problem, it’s the systems. We often don’t have the resources to build advanced compliance databases or integrate ESG tools directly into our ERP systems.
That means many companies end up creating stand-alone spreadsheets or manual systems, which disconnect ESG and compliance from the core business. In the long run, this makes reporting reactive instead of strategic and it’s a real barrier to turning compliance into value creation.
Many mid-sized importers rely on multi-tier, globally dispersed suppliers with limited transparency beyond the first tier. How should SMEs realistically approach supply-chain due diligence where data availability, leverage, and visibility are constrained?
In my experience, open and transparent communication with international suppliers is the foundation for effective ESG collaboration. Building trust and dialogue, rather than simply sending compliance questionnaires, creates a stronger basis for collecting reliable data and encouraging progress.
However, even with good relationships, verified data requires structure and accountability. That is why Millarco is a member of amfori Business Social Compliance Initiative (BSCI) and Business Environmental Performance Initiative (BEPI). These frameworks give us access to standardised audit data, verified assessments, and capacity-building tools that improve our understanding of how our suppliers operate in their own facilities.
This approach helps us bridge the gap between limited visibility and credible due diligence. It allows us to communicate reliable, structured information to our customers and partners without disclosing sensitive business details or breaching supplier confidentiality.
Ultimately, due diligence for SMEs should be built on three pillars: relationships, structure, and credible external frameworks. This combination makes responsible sourcing both realistic and scalable.
Given the breadth of new obligations, how can importers adopt a risk-based approach to due diligence that satisfies regulatory expectations without attempting to map or audit every supplier simultaneously?
A risk-based approach to due diligence is essential for mid-sized importers not only to meet regulatory expectations, but also to make ESG management achievable with limited resources. Rather than attempting to map or audit every supplier at once, companies should start by segmenting their supplier base according to clear, measurable risk factors such as geography, material type, production processes, and audit history.
At Millarco, we combine data-driven prioritisation with trusted frameworks such as amfori BSCI and BEPI. This allows us to focus our efforts where the risk and the potential impact is highest, while still maintaining an overview across the full supply chain.
By integrating ESG due diligence into procurement and product workflows, rather than treating it as a separate project, we can monitor progress continuously and update our risk profiles dynamically. This structured, risk-based approach turns compliance from a reactive exercise into a strategic, iterative process – one that meets EU expectations for proportionality, transparency, and continuous improvement without overwhelming the organisation.
Regulations such as the EUDR and CBAM place heavy emphasis on traceability and emissions data. What practical steps can mid-sized importers take to improve data quality and verification while avoiding excessive cost or operational disruption?
Ultimately, traceability and emissions reporting are not just technical tasks, they are process disciplines. A step-by-step, structured approach builds both efficiency and trust, ensuring that compliance strengthens rather than slows down the business.
Improving data quality and verification under frameworks like the EUDR and CBAM requires a combination of structured systems, supplier collaboration, and incremental integration. For mid-sized importers, the key is not to collect more data, but to collect the right data in a consistent, verifiable, and scalable way.
At our organisation, we focus on building a clear internal data structure that defines ownership, formats, and update cycles for ESG and compliance data. This helps ensure that information from suppliers such as origin, certification, or emissions data can be validated and reused across multiple frameworks, rather than gathered separately for each requirement.
We also rely on recognised standards and third-party platforms, which reduce the need for costly on-site verification while increasing data credibility. By aligning with these frameworks and embedding data routines into existing systems, SMEs can gradually raise data quality without creating parallel compliance structures or disrupting operations.
For companies without significant bargaining power, engaging suppliers on sustainability, deforestation, or emissions reporting can be challenging. What strategies have you seen work in securing cooperation and improving compliance across the supply chain?
For smaller companies like Millarco, it’s true we don’t always have the power to demand compliance. So instead, we focus on building cooperation, not control. We start with open communication and transparency explaining why ESG data matters, not just what we need. When suppliers see that these requirements are tied to market access and long-term partnerships, they’re much more willing to engage.
We also use shared frameworks like amfori BSCI, BEPI, and the Forest Stewardship Council (FSC), which make expectations clear and consistent for customers. This takes some of the pressure off individual companies and helps suppliers work within a familiar structure.
And finally, we try to make it practical by sharing templates, examples, and feedback, so suppliers can improve step by step. It’s not about forcing compliance; it’s about creating mutual value and shared responsibility. That’s how you build sustainable partnerships even without big leverage.
Supply-chain due diligence often sits across procurement, sustainability, legal, and compliance teams. How should mid-sized organisations structure internal governance and workflows to embed due diligence into day-to-day operations rather than treating it as a standalone exercise?
For mid-sized organisations, the key to embedding due diligence into daily operations is to treat it as an integrated governance process rather than a compliance project. The goal is to make sustainability and due diligence part of how the company operates, not something it does once a year.
At Millarco, we’ve achieved this by creating a cross-functional ESG structure where procurement, quality control, and sustainability work together under a shared data and governance framework. Procurement owns supplier dialogue and contract data, while ESG defines the due diligence standards, and ensures consistency with frameworks. Quality and logistics teams contribute operational insights, ensuring data accuracy and practicality.
This collaborative model ensures that each department has clear responsibility, but shared accountability. Regular coordination meetings, common data templates, and version-controlled documentation keep information aligned and auditable. By embedding due diligence into existing decision-making such as supplier onboarding, product approval, and reporting cycles it becomes part of the business DNA. For SMEs, this is the most realistic way to achieve continuous compliance without adding new silos or administrative burden.
As EU authorities move from rule-setting to enforcement, what should mid-sized importers prioritise now to demonstrate good-faith compliance and reduce regulatory, financial, and reputational risk over the next two to three years?
As enforcement kicks in, the key for mid-sized importers is showing structure and progress – not perfection. Authorities want to see that you have control, accountability, and a plan, even if your systems are still developing.
So, the focus should be on three things. First, make governance clear, who owns ESG and due diligence, and how it’s managed. Second, make sure your data is credible, traceable, documented, and easy to explain if you’re asked. And third, be transparent about where you are on the journey. Use trusted frameworks like amfori BSCI or FSC to show consistency and good intent.
It’s really about maturity, proving that compliance is part of your business culture, not just a report you file once a year. For mid-sized importers, ESG compliance is no longer about ticking boxes, it’s about building structure, credibility, and progress. The real challenge lies not in ambition, but in managing data, collaboration, and governance with limited resources.
At Millarco International, we’ve learned that success comes from integrating due diligence into everyday operations combining supplier dialogue with clear internal ownership and reliable data systems. By working through trusted frameworks such as amfori BSCI, BEPI, and FSC, and focusing on transparency over perfection, SMEs can demonstrate good-faith compliance, reduce risk, and strengthen trust across the value chain.
Sustainability, when done right, becomes not a cost of doing business, but a strategy for long-term resilience and relevance in a changing regulatory landscape.
Cecilia Wright Berman is Head of Sustainability & ESG at Millarco International A/S, where she leads the company’s strategic approach to environmental, social, and governance performance. She oversees the integration of ESG principles across operations and the value chain, ensuring transparency, responsible sourcing, and alignment with EU sustainability frameworks such as the CSRD, EUDR, and the EU Green Deal. Cecilia holds a Bachelor’s degree in History of Ideas with a specialisation in Humanistic Organizational Development, and a Master’s degree in Human Security, where she conducted research on the EU Green Deal and its implications for SMEs. Her academic background gives her a unique interdisciplinary perspective combining policy analysis, ethics, and systems thinking – with hands-on experience in implementing ESG governance in a commercial context. At Millarco, Cecilia plays a key role in advancing sustainable business practices, strengthening supplier responsibility programmes, and developing credible, data-driven ESG communication. She is passionate about bridging the gap between EU regulation and practical business implementation, helping companies transform compliance into long-term value and resilience.
