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

The European Union is advancing its Environmental, Social, and Governance (ESG) agenda with robust new regulations targeting unsold consumer products. The recently enacted EU Ecodesign Regulation for Sustainable Products (ESPR) 2024/1781 introduces stringent transparency and destruction bans aimed at fostering sustainability and resource efficiency.

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

Effective since July 18, 2024, ESPR seeks to prevent the systematic destruction of unsold consumer goods—a growing environmental concern exacerbated by the expansion of online sales. The regulation imposes coordinated obligations across all EU Member States, eliminating fragmented national laws that created market distortions. It mandates uniform rules and enforcement to inhibit wasteful destruction while promoting circular economy principles.

Key Regulatory Requirements on Unsold Products

1. Audited Transparency and Disclosure (Article 24 ESPR)

• Scope: Initially targets large enterprises placing products on the EU market, extending to medium-sized businesses from July 19, 2030. This applies equally to companies inside and outside the EU selling within the market.
• Disclosure Content: Companies must annually report detailed data on discarded unsold products, including:
  • Quantities (number and weight) by product category,
  • Reasons for discarding products and any applicable legal exemptions,
  • Waste treatment methods such as reuse, recycling, or disposal, and
  • Preventive strategies implemented or planned to avoid future destruction.
• Format: Reports can be published on a dedicated section of the enterprise’s website or included in sustainability reports aligned with the EU Accounting Directive. Parent companies may consolidate disclosures for subsidiaries.
• Verification: Enterprises subject to such reporting must secure a limited assurance opinion by an accredited auditor, ensuring the accuracy and integrity of disclosures.

2. Ban on Destruction and Exceptions (Article 25 ESPR)

• A direct prohibition on destroying certain unsold consumer products will take effect from July 19, 2026.
• The EU Commission is set to define justified exceptions through delegated regulations, allowing flexibility under specific conditions.
• Member States will impose penalties for non-compliance; for example, Germany’s past fines reached up to EUR 50,000 per incident, with higher penalties possible depending on profit impact.

Timelines and Next Steps

• Implementing Acts: The EU Commission aims to finalize two crucial regulations by Q3 2025:
  1. An implementing act detailing disclosure obligations.
  2. A delegated regulation setting out exceptions to the destruction ban.
• Enterprises should prepare for immediate compliance as audited disclosures begin in 2026 based on 2025 data.

Implications for Businesses

• Compliance with ESPR will require robust tracking of inventory, unsold goods management, and environmental reporting systems.
• Companies offering products in the EU market must enhance transparency and adopt sustainability strategies to reduce waste.
• Standardized reporting will improve data comparability and market accountability.
• Early adaptation is crucial to avoid penalties and align with evolving sustainability expectations across global supply chains.

Authoritative Insight

Jonas Köster and Tobias Klatt from Freshfields Bruckhaus Deringer provide expert legal analysis on ESPR’s impact, helping enterprises navigate these pivotal sustainability mandates. Their guidance underscores the EU’s decisive action to embed environmental responsibility deeply within commercial practices.

For businesses committed to sustainability and regulatory compliance, the EU’s Ecodesign Regulation marks a substantial shift towards transparency and waste reduction in unsold consumer products—a cornerstone for greener markets in 2026 and beyond.

Design Delight Studio curates high-impact, authoritative insights into sustainable and organic product trends, helping conscious consumers and innovative brands stay ahead in a fast-evolving green economy.