This paper examines the regulatory potential of EU legislation to push forest-dependent companies to transition from causing forest degradation towards ecologically sustainable forest management. Such a transition is urgent because industrial logging of primary forests.1 remains a structural part of the forest economy, contributing to ecosystem degradation and climate instability Using institutional theory, this study explores how EU regulation may shape such companies’ behaviour and their business models. We apply the Lessig model (1998)2 that argues that law can regulate, directly or indirectly, social and cultural norms (‘norms’), market dynamics (‘market’), and the physical environment (‘architecture’). From this perspective, we analyze the potential of the EU Taxonomy Regulation (TR), the EU Corporate Sustainability Reporting Directive and the European Sustainability Reporting Standards (ESRS), the EU Corporate Sustainability Due Diligence Directive (CSDDD), the European Omnibus package, the EU Deforestation Regulation (EUDR), and the EU Nature Restoration Law (NRL) to urge forest-dependent companies towards new business models. Findings indicate that effective legislation has the potential to reconfigure industrial architecture from primary forest logging towards ecologically sustainable forestry. However, current EU regulation does not explicitly mandate companies to adopt biodiversity transition plans (norms), nor effectively protect existing European primary forests (architecture). Nonetheless, it is argued that climate transition plans also require forest-dependent companies to shift from forest degradation practices to ecologically sustainable forest management. This transition is essential because forests play a crucial role in absorbing carbon emissions and in providing climate stability.
Lambooy et al. (Fri,) studied this question.