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

Overview of the EU Ecodesign Regulation for Sustainable Products (ESPR)

The EU is advancing its commitment to environmental sustainability with new rules under the EU Ecodesign Regulation for Sustainable Products (EU) 2024/1781, known as ESPR. These rules introduce stringent transparency and reporting obligations for enterprises regarding unsold consumer products, alongside a significant ban on their destruction.

Key Objectives

• Prevent systematic destruction of unsold products: The regulation addresses growing concerns over product waste especially fueled by increased online sales.
• Eliminate market distortions: Different Member State laws on product destruction created uneven competitive conditions, which ESPR aims to harmonize.
• Protect resources and environment: By curbing waste of valuable materials and reducing environmental impact.

Applicability

• The rules apply to all products placed on the EU market, irrespective of the location of the enterprise.
• Large enterprises face immediate obligations, with audited disclosures starting in 2026 based on 2025 data.
• The destruction ban comes into effect from 19 July 2026.
• By 19 July 2030, medium-sized enterprises also face disclosure duties.

Key Components of the New Rules

1. Transparency and Disclosure (Article 24 ESPR)

Enterprises must annually report on:

• Quantity: Number and weight of unsold products discarded, categorized by product type.
• Reasons: Justifications for product discard including any applicable exemptions.
• Waste Treatment: Breakdown of discarded products prepared for reuse, recycling, other recovery, or final disposal.
• Prevention: Existing and planned measures to avoid destruction of unsold products.

2. Disclosure Format and Verification

• Reports must be easily accessible either via an enterprise’s website or within their sustainability report as mandated under the EU Accounting Directive (2013/34/EU).
• Parent companies can consolidate disclosures for subsidiaries.
• A standardized format is required for comparability, outlined in draft implementing acts.
• Large enterprises must secure a limited assurance opinion from statutory auditors or accredited providers to verify report accuracy.

3. Ban on Destruction (Article 25 ESPR)

• From 19 July 2026, the destruction of specific unsold consumer products is generally prohibited.
• The EU Commission is preparing detailed delegated acts to specify legitimate exceptions and justified derogations.
• National authorities are tasked with enforcing penalties for non-compliance—Germany, for instance, may impose fines up to €50,000 or higher based on profits linked to infractions.

Timeline for Implementation

Practical Implications for Businesses

• Companies, especially larger ones offering products in the EU, must prepare for extensive data collection, auditing, and transparent public reporting on unsold products.
• Compliance will require collaboration between legal, sustainability, and supply chain functions.
• Enterprises should proactively implement measures to minimize unsold inventory and seek alternatives to destruction, aligning with ESPR’s sustainability goals.

Conclusion

The EU’s new Ecodesign rules under ESPR represent a significant regulatory step in driving the ‘E’ of ESG toward tangible environmental outcomes. By mandating detailed transparency, forbidding product destruction, and standardizing compliance across Member States, the EU aims to foster sustainable consumption and production patterns while protecting economic resources.

For further guidance on navigating the ESPR requirements and operationalizing compliance strategies, legal and sustainability advisors specializing in EU regulations can provide essential support.

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