In May 2023, the European Parliament adopted the EU Deforestation Regulation (EUDR), instituting a new rule that seven commodity products—including soy, beef, palm oil, wood, cocoa, coffee, and rubber—cannot be sold in the EU if sourced from areas affected by deforestation or forest degradation. As a key player in the rubber industry, Michelin, a global tire and rubber manufacturing company, is required to trace its natural rubber supply back to specific farms, providing geo-localization coordinates and proof of land legality. However, the challenge lies in the fact that over 85% of the world’s natural rubber comes from approximately six million smallholder farmers who often lack proper land titles, access to geo-localization coordinates, and the necessary resources to comply with the EUDR. With the regulation coming into effect on December 30, 2024, countries like Thailand have limited time to adapt to the new standards. Rozanne Henzen, former Sasin Researcher and Case Writer, currently External PhD Candidate at Vrije Universiteit Amsterdam collaborated with Michelin to write the teaching case as part of Sasin’s initiative to showcase businesses based in Asia, rather than on Western contexts. Henzen, under the supervision of Professor Ian Fenwick, Sasin’s Director, developed a compelling teaching case focused on the EUDR and the difficulties smallholder farmers face in meeting its requirements. This collaboration culminated in a successful teaching case that earned Sasin two 2023 EFMD (European Foundation for Management Development) Case Writing Competition awards in the Corporate Social Responsibility and Responsible Business categories. The case, titled “Driving Sustainable Transformation: Michelin’s Road to Natural Rubber Sustainability and Meeting the EU Deforestation Regulation,” has been recognized for its innovative contribution to management development. Henzen talks about her case-writing research journey and the process of writing the first winning Asia-based teaching case in Thailand at Sasin Research Seminar. Henzen stated that as a founding member of the Global Platform for Sustainable Natural Rubber (GPSNR), Michelin is committed to promoting best practices in the natural rubber industry. The company made a zero-deforestation public commitment in 2015, and since then, over 460,000 smallholder farmers have participated in capacity-building training programs focused on Good Agricultural Practices. The case reflects real events and strategies drawn from James Chang Wen Jie’s experience as Michelin’s Project Lead at Natural Rubber Sustainability department. Henzen emphasized the urgency of the case, noting the tight timeline between the EUDR’s passage and the compliance deadline at the end of 2024. During this period, Michelin must obtain geo-localization coordinates or boundary maps from their smallholder’s rubber farms, ensure proof of land legality, source rubber that is deforestation-free (produced on land not subjected to deforestation after December 31, 2020) and legally sourced from compliant farmers. The case development involved several key processes, including brainstorming sessions with Michelin to identify core issues, independent desk research on the challenges faced by smallholder farmers, and field studies through plantation visits in Sri Lanka and Thailand. Henzen also interviewed James Chang and regional communication managers at Michelin to understand the challenges they faced with compliance to the EUDR law. AI tools, such as Claude, served as a collaborative tool for brainstorming ideas and refining learning outcomes, contributing to the development of the teaching case. The challenges identified in the case were:

• Complex supply chains with numerous intermediaries.
• Lack of proper land titles affecting land legality.
• Inability to provide geo-localization coordinates or boundary maps.
• Due diligence costs are unaffordable for smallholder farmers.

Michelin faces a critical question: Does its approach reflect a decade-long commitment to impact-driven practices in response to EU compliance requirements? With 85% of rubber sourced from smallholder farmers, the challenge is significant, particularly because many lack the means to provide proof of land legality or comply with regulations. Non-compliance is not an option for Michelin, due to its prioritization of ethical business practices. Case format The analysis includes three mini-cases focusing on Environmental, Social, and Governance (ESG) aspects:

• Environmental: Michelin’s commitment to environmental sustainability.
• Social: Michelin cares for livelihoods
• Governance: Michelin’s governance structures and practices.

Henzen also went through 3 in-class tests with Professor Ragil Ratnam, Head of Business Development of Sasin Executive Education. The case was presented to Sasin students who were given four assignments in class, including:

• Review case resources
• Conduct a SWOT analysis for individual mini-cases
• Collaborate in-class to consolidate SWOT analyses
• Create a EUDR strategy for Michelin and participate in a roleplay and debate simulating a presentation to the Michelin Group’s Human Rights team.

Michelin’s transition from commitment to compliance, balancing smallholder livelihoods and environmental impact, is the central theme of this case. The case raises vital questions about accountability, influence, and the future of sustainability. With the deadline compliance set for December, Michelin’s need to focus on embracing capacity-building initiatives and financial support will be pivotal in empowering farmers and securing sustainable rubber sourcing.