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

Introduction to ESPR and Its Goals

The European Union is strengthening its environmental regulations under the EU Ecodesign Regulation for Sustainable Products (ESPR, Regulation 2024/1781). This includes new mandatory rules targeting the systematic destruction of unsold consumer products, a growing environmental and resource-wasting issue intensified by the proliferation of online sales. Adopted on 18 July 2024, ESPR aims to harmonize rules across EU Member States to prevent market distortions and enforce consistent standards for economic operators both inside and outside the EU.

Key Components of the New Rules

The EU Commission is expected to finalize two major regulations by the third quarter of 2025:

• Implementing Act on Disclosure Requirements (Article 24 ESPR)
• Delegated Regulation on Exceptions to the Destruction Ban (Article 25 ESPR)

These legal acts will detail transparency obligations, standardized disclosure formats, and justified exceptions to the destruction ban. Member States will then enforce penalties for non-compliance — for example, Germany previously imposed fines up to €50,000 per incident under similar ecodesign directives.

Who Is Affected?

• Large enterprises must comply starting in 2026, reporting on 2025 data.
• By 19 July 2030, medium-sized enterprises (per EU Commission Recommendation 2003/361/EC) will also fall under these obligations.
• The rules apply to all products placed on the EU market, regardless of whether the company is based in the EU or internationally.

Detailed Transparency Requirements (Article 24 ESPR)

Enterprises must annually disclose information about unsold consumer products they discard. The disclosure must include:

• Quantities discarded (number and weight), broken down by product category.
• Reasons for discarding, including any applicable derogations.
• Waste treatment methods, such as reuse, recycling, recovery, or disposal.
• Prevention measures taken or planned to avoid future destruction.

Disclosure can be made via:

• An easily accessible page on the enterprise’s website, or
• Inclusion in sustainability reports under the EU Accounting Directive (Articles 19a or 29a).

Parent companies may provide consolidated disclosures referencing subsidiaries to increase efficiency and transparency.

Draft Implementing Act Details

A draft Commission implementing regulation (expected by Q3 2025) expands on the disclosure framework:

• Standardized Format for comparable data:
  1. Organization and reporting period
  2. Product information, discard reasons, and waste treatments
  3. Preventive measures against destruction
• Product Categorization based on Combined Nomenclature codes for clarity and consistency.
• Verification: Enterprises already subject to sustainability reporting must secure limited assurance from auditors or accredited providers to verify disclosure accuracy.

Implications for Sustainable Business Practices

These rules underscore the EU’s commitment to sustainable consumption and production by pushing companies to:

• Increase transparency in unsold product management.
• Foster innovations in waste prevention and resource efficiency.
• Align with broader ESG commitments, enhancing corporate responsibility and consumer trust.

Conclusion

The EU’s new Ecodesign rules constitute a significant step towards environmental sustainability by legally restricting the destruction of unsold consumer goods. Businesses active in the EU market must prepare for stringent transparency and compliance deadlines starting in 2026, ensuring they integrate proper reporting and waste prevention strategies. This regulatory shift highlights the growing importance of the ‘E’ in ESG and signals a robust move towards circular economy principles within Europe.

For enterprises, embracing these changes proactively can enhance sustainability credentials while mitigating risks associated with non-compliance penalties and reputational damage in the evolving green economy landscape.

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