Design Delight Studio

The ‘E’ of ESG: New EU Ecodesign Rules Target Sustainable Management of Unsold Consumer Products

Authors: Jonas Köster, Tobias Klatt, with contributions from Juliane Hilf and Sam Houshower
Date: October 21, 2025
Read Time: 7 minutes

Background: EU’s Sustainable Product Regulation (ESPR)

The European Union is advancing its environmental, social, and governance (ESG) agenda by enhancing sustainability standards for consumer products through the EU Ecodesign Regulation for Sustainable Products (ESPR, Regulation (EU) 2024/1781). A primary focus is the introduction of rules addressing the growing environmental concern related to the destruction of unsold consumer goods—a practice deemed wasteful and harmful to the circular economy.

Since coming into force on July 18, 2024, ESPR aims to enforce:

• Transparency obligations on unsold product disposal
• A ban on destruction of such products, except under defined exceptions
• Harmonized regulations to eliminate market distortions caused by inconsistent national rules

Key Provisions and Deadlines

• Scope: The rules apply to all enterprises placing products on the EU market, regardless of their physical presence within the EU.
• Disclosure obligations: Annual audited disclosures about unsold product quantities, reasons for disposal, waste treatment methods, and prevention measures.
• Destruction ban: Effective from July 19, 2026, prohibiting the destruction of unsold consumer products unless specific derogations apply.

Targeted Enterprises

• Large enterprises: Must comply first, starting with disclosures in 2026 based on 2025 data.
• Medium-sized enterprises: Inclusion from July 19, 2030, following definitions from Commission Recommendation 2003/361/EC.

Draft Legal Framework

The European Commission plans to finalize two implementing acts by Q3 2025:

1. Implementing Act on Disclosure Requirements (Art. 24 ESPR):

   • Standardizes the data to be reported yearly: product quantity (number and weight), reasons for disposal, waste treatment proportions (reuse, recycling, etc.), and measures to prevent destruction.
   • Requires disclosure on either a dedicated website page or within corporate sustainability reports under EU Accounting Directive 2013/34/EU.
   • Permits consolidated reporting across parent and subsidiary companies.
   • Mandates limited assurance verification by statutory auditors for entities already required to publish sustainability reports, ensuring transparency and credibility.

2. Delegated Regulation on Exceptions to the Destruction Ban (Art. 25 ESPR):

   • Defines justified exceptions to the destruction ban, providing clarity to businesses on permissible practices.

Rationale and Market Impact

• The EU identifies the systematic destruction of unsold consumer goods—exacerbated by rapid growth in online sales—as a major environmental issue and an inefficient use of resources.
• Previous Member State laws on destruction varied widely, leading to market distortions and uneven competitive conditions.
• ESPR establishes a uniform EU-wide legal framework to ensure sustainability, transparency, and responsible product disposal practices.

Penalties and Enforcement

• Individual EU Member States, like Germany, will implement national penalty regimes for violations.
• Historical precedent: Under the prior Ecodesign Directive, fines up to €50,000 per incident were possible, with potential increases based on profits derived from non-compliance.

Practical Implications for Businesses

• Firms marketing products in the EU must audit and report detailed data on unsold goods disposal starting soon—large companies by 2026 and medium firms by 2030.
• A destroy-for-profit model will become legally risky, with only specific exceptions permitted.
• Companies should invest in preventive strategies such as inventory optimization, resale, or donation channels to reduce waste and comply with ESPR mandates.
• Sustainable product lifecycle management aligns not only with regulatory compliance but also enhances corporate ESG credentials and consumer trust.

Conclusion

The EU’s latest regulations under ESPR represent a significant step toward embedding sustainability deep within product life cycles and supply chains. By establishing transparency and curbing the destruction of unsold consumer goods, the EU aims to safeguard valuable resources, standardize market practices, and stimulate a more circular economy. Enterprises engaging with the EU market must prepare promptly to meet these new stringent sustainability obligations.

For more detailed legal perspectives on the EU Ecodesign Regulation and sustainable consumer product practices, stay tuned to our blog.

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