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

Authors: Jonas Köster, Tobias Klatt
Date: October 21, 2025
Source: Freshfields Sustainability Insights

Overview

The European Union is intensifying its commitment to sustainability through the upcoming implementation of the EU Ecodesign Regulation for Sustainable Products (ESPR, Regulation (EU) 2024/1781). This regulatory framework aims to curb the environmental impact of unsold consumer products by introducing stringent transparency and destruction ban rules that apply across the entire EU market, affecting both EU-based and international enterprises.

Key Elements of the New Regulations

Application and Timeline

• Scope: Applies to all products placed on the EU market, regardless of where the company is headquartered.

• Deadlines:

  • Audited disclosure requirements start in 2026, based on 2025 data.
  • Destruction ban for certain unsold goods takes effect from July 19, 2026.
  • Medium-sized enterprises must comply with disclosure obligations by July 19, 2030. ### Main Objectives

• Prevent the systematic destruction of unsold consumer products, particularly driven by e-commerce growth.

• Harmonize legislation across EU Member States to avoid market distortions caused by disparate national laws on product disposal.

• Preserve valuable economic resources and reduce environmental waste.

Transparency and Disclosure Requirements (Article 24 ESPR)

Large enterprises are mandated to annually disclose detailed information about unsold consumer products they discard:

• Quantity: Number and weight of discarded products by type/category.
• Reasons: Justifications for disposal, including any legal exceptions applied.
• Waste Treatment: Breakdown of products recycled, reused, recovered, or disposed.
• Prevention: Existing and planned measures to prevent future destruction.

Disclosure Methods:

• Information must be published either on an accessible section of the company’s website or within its sustainability report, per EU Accounting Directive rules.
• Parent companies may provide consolidated disclosures covering subsidiaries.

Draft Implementing Act Highlights

The EU Commission’s draft implementing act, expected to be finalized by Q3 2025, provides additional specifications:

• Standardized Disclosure Format: Reporting is divided into organizational info, product data including reasons for discard, waste treatment details, and prevention measures.
• Product Categorization: Reporting follows product classifications based on the Combined Nomenclature to enhance clarity and comparability.
• Verification Requirements: Entities already reporting sustainability data under EU accounting regulations must secure limited assurance on their disclosures from auditors or accredited providers.

Destruction Ban and Exceptions (Article 25 ESPR)

The regulation bans the destruction of unsold consumer products with limited justified exceptions. The EU Commission is preparing a delegated regulation detailing permissible derogations, balancing environmental goals with practical business needs.

Enforcement and Penalties

• Member States must incorporate penalties for non-compliance into national law.
• Example: Germany previously imposed fines up to €50,000 per incident under related Ecodesign rules, potentially higher if profits from non-compliance are considered.

Implications for Businesses

• Businesses selling products in the EU market must quickly adapt to these regulations to avoid fines and enhance sustainability credentials.
• Transparency and traceability in inventory management and waste disposal will become critical.
• The regulations emphasize the "E" (Environment) in ESG, encouraging enterprises to proactively reduce waste related to unsold merchandise.

Conclusion

The EU’s enhanced Ecodesign rules represent a significant move towards sustainable product life cycles by targeting the environmental harm caused by unreasonably destroying unsold goods. This unified approach not only aligns with EU Green Deal ambitions but also helps level the playing field for enterprises operating across Europe.

Enterprises involved in manufacturing, retail, and e-commerce should prepare for rapid compliance with detailed reporting and robust waste prevention strategies, marking a new era of accountability in sustainable business practices.

For further details, legal advisors and sustainability officers should monitor the final texts of the delegated and implementing acts expected later in 2025.

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