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

Introduction to ESPR and Its Scope

The European Union is set to enforce new rules under the EU Ecodesign for Sustainable Products Regulation (ESPR) 2024/1781 aimed at enhancing sustainability in consumer products. The key focus is on reducing waste through preventing the systematic destruction of unsold goods. These measures will apply across the entire EU market to all enterprises, regardless of their location, including non-EU companies selling within the EU.

Key Objectives of the ESPR

The regulation targets the widespread environmental issue caused by the destruction of unsold consumer products, a problem exacerbated by the growth of online retail. It aims to:

• Preserve economic resources by preventing unnecessary destruction.
• Harmonize Member States’ laws, eliminating market distortions caused by varying national regulations.
• Create unified transparency and reporting standards for businesses within the EU market.

Implementation Timeline and Regulations

• ESPR has been effective since 18 July 2024.
• Deadlines for compliance are quickly approaching, especially for large enterprises, with audited disclosure obligations starting in 2026 (based on 2025 data).
• The destruction ban for unsold consumer products will be enforced starting 19 July 2026.
• Medium-sized enterprises will need to comply with disclosure requirements by 19 July 2030. The EU Commission plans to finalize two critical regulatory acts by the third quarter of 2025:

1. An implementing act on disclosure requirements (Article 24 ESPR).
2. A delegated regulation on exceptions to the destruction ban (Article 25 ESPR).

Transparency and Reporting Requirements (Article 24 ESPR)

Who Must Comply?

• Large enterprises initially, with medium-sized enterprises following in 2030.
• All businesses placing products on the EU market, including non-EU entities.

Information to Disclose Annually

1. Quantity: Number and weight of discarded unsold products, categorized by type.
2. Reasons: Justification for product discarding and relevant exceptions.
3. Waste Treatment: Breakdown of reuse, recycling, recovery, and disposal methods.
4. Prevention Measures: Actions taken and planned to avert future destruction.

Disclosure Format

• Businesses can report via a dedicated, easily accessible website page or within their sustainability reports as per Articles 19a or 29a of EU Accounting Directive 2013/34/EU.
• Consolidated disclosures by parent companies covering subsidiaries are permissible.
• A standardized reporting format is mandated to enhance data comparability across enterprises and sectors.

Verification and Assurance

• Enterprises subject to sustainability reporting under EU law must obtain limited assurance of the disclosed information by a statutory auditor or accredited provider.
• This verification ensures the accuracy and reliability of sustainability data.

Enforcement and Penalties

EU Member States will enforce penalties for non-compliance. For instance, Germany’s prior framework allowed fines up to €50,000 per violation, with potential increases depending on the economic benefits gained through non-compliance.

Practical Implications for Businesses

• Enterprises engaging with the EU market must prepare to meet strict transparency standards on unsold inventory management.
• Early adaptation will involve auditing and potentially redesigning supply chain and disposal practices to align with new sustainability goals.
• The introduction of a destruction ban challenges companies to find alternative ways to handle unsold goods, fostering circular economy practices.

Conclusion

The EU’s Ecodesign Regulation for Sustainable Products represents a critical step toward embedding environmental responsibility into business operations. By mandating disclosure and banning wasteful destruction of unsold consumer products, the EU aims to balance economic activity with sustainability imperatives. Enterprises currently trading in or planning to enter the EU market should begin preparing for these compliance requirements to avoid penalties and contribute to a sustainable future.

Sources and further reading:

• EU Ecodesign Regulation for Sustainable Products (ESPR) 2024/1781
• EU Accounting Directive 2013/34/EU
• Freshfields Sustainability Blog (October 2025)

For businesses and sustainability leaders, staying ahead of these regulatory changes is essential for long-term success and environmental stewardship.

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