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

The European Union is introducing new, rigorous ecodesign regulations under the Sustainable Products Regulation (ESPR (EU) 2024/1781) aimed at radically improving the environmental impact of unsold consumer products. These rules represent a landmark step in integrating sustainability into the ‘E’ (Environmental) of ESG criteria by enforcing transparency and banning destruction of unsold goods.

Key Highlights of the EU Ecodesign Regulation for Unsold Products

• Scope and Applicability: The rules apply to all consumer products placed on the EU market, regardless of whether companies are based inside the EU or abroad. This broad applicability ensures global enterprises selling into the EU market must comply.

• Effective Dates:

  • Audited disclosure requirements begin in 2026, based on 2025 data.
  • A ban on destruction of unsold consumer products becomes effective from 19 July 2026.
  • Medium-sized enterprises’ disclosure obligations start from 19 July 2030. – Objective: The regulation targets the growing environmental problem of the systematic destruction of unsold consumer goods, which results in wasted economic and natural resources. It also harmonizes rules across Member States to prevent market distortions caused by varying national laws.

Transparency Obligations — Article 24 ESPR

Enterprises must annually disclose detailed data on unsold products they dispose of, covering:

• Quantity: Number and weight of discarded products, broken down by product categories.
• Reasons: Justifications for discarding, including any applicable legal exceptions.
• Waste Treatment: Data on the share of products sent for reuse, recycling, recovery, or final disposal.
• Prevention: Measures taken or planned to avoid future destruction of unsold items.

Disclosure Format and Verification

• Disclosures must be made either on an easily accessible webpage or within the company’s sustainability report as per EU Accounting Directive requirements.
• Large companies already producing sustainability reports will need to obtain a limited assurance opinion from statutory auditors or accredited assurance bodies verifying the disclosed data’s accuracy.
• A standardized reporting format is mandated to ensure clarity and comparability across enterprises and sectors.

Ban on Destruction and Exceptions — Article 25 ESPR

Alongside transparency, the ESPR enforces a destruction ban for unsold consumer products to curb wasteful practices. However, a delegated act will specify justified exceptions, addressing practical cases where destruction might still be permitted.

Regulatory Timeline and Enforcement

• The EU Commission plans to adopt the detailed implementing and delegated acts by Q3 2025.
• Member States will transpose these rules nationally, with enforcement backed by penalties. For example, Germany’s previous Ecodesign Directive allowed fines up to EUR 50,000 per infringement, potentially higher if profits stemmed from non-compliance.

Practical Implications for Enterprises

• Global Reach: Any company selling into the EU must comply, including non-EU businesses.
• Planning and Reporting: Enterprises need to prepare for early data collection, reporting transparency, and mandatory audits starting 2026.
• Risk Management: Avoiding destruction bans and adhering to disclosure requirements is critical to reduce legal and reputational risks.
• Process Changes: Firms must reconsider inventory management, waste handling, and sustainable product lifecycle strategies.

Conclusion

The EU’s new Ecodesign rules under ESPR mark a significant evolution in driving sustainable consumption by addressing the serious issue of unsold product waste. By combining transparency, verified disclosures, and a destruction ban, the regulation enhances environmental responsibility for businesses in the EU market and beyond. Companies should begin aligning their practices promptly to meet the upcoming obligations and contribute to the circular economy goals embedded in the EU’s sustainability agenda.

For businesses and sustainability professionals, staying ahead on EU ecodesign compliance not only mitigates risks but also positions brands as leaders in responsible product stewardship.

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