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

The European Union is advancing its sustainability agenda through updated Ecodesign Regulation for Sustainable Products (ESPR) (EU) 2024/1781, focusing on reducing environmental harm caused by the destruction of unsold consumer goods. These developments underscore the increasing importance of the ‘E’ (Environmental) pillar in ESG (Environmental, Social, Governance) frameworks.

Key Highlights of the New EU Rules

• Applicability and Scope:

  • The rules apply to all consumer products placed on the EU market, extending obligations to both EU-based and non-EU enterprises.
  • Large enterprises must comply starting in 2026 (reporting on 2025 data).
  • From July 19, 2026, the destruction ban on certain unsold consumer products comes into force.
  • By July 19, 2030, medium-sized enterprises will also be subject to disclosure requirements.

• Objectives:

  • Prevent systematic destruction of unsold products, which wastes valuable resources and contributes to environmental degradation.
  • Harmonize rules across member states to avoid market distortions from differing national laws addressing product destruction.

• Transparency and Disclosure (Article 24 ESPR):

  • Enterprises must annually disclose detailed data on the quantity (number and weight), reasons for disposal, types of waste treatment (reuse, recycling, other recovery, disposal), and prevention measures regarding unsold products.
  • Disclosure must be made either on an easily accessible webpage or integrated into sustainability reports under the EU Accounting Directive.
  • Consolidated disclosures by parent companies are allowed to optimize reporting.

• Destruction Ban and Exceptions (Article 25 ESPR):

  • A ban on destruction applies to unsold products, with specific exceptions defined by upcoming delegated regulations.

• Standardization and Assurance:

  • The EU Commission’s draft implementing act, expected by Q3 2025, mandates standardized formats for disclosures to ensure comparability across enterprises.
  • Reporting will be categorized by product classifications based on the Combined Nomenclature system.
  • Enterprises subject to sustainability reporting must obtain limited assurance opinions from auditors or accredited verifiers to validate disclosed data.

Context and Compliance

• The ESPR has been effective since July 18, 2024, though many requirements hinge on the forthcoming delegated and implementing legislation set to finalize by Q3 2025.
• Member States will enforce compliance through national penalty regimes; for example, Germany’s prior laws allowed fines of up to €50,000 per incident, with potentially higher penalties tied to profit gains from non-compliance.

Implications for Businesses

• Enterprises marketing products in the EU should prepare for early compliance with transparent reporting requirements to avoid penalties.
• Strategies to minimize unsold product destruction—such as improved inventory management and circular economy initiatives—will become critical.
• The standardized disclosure approach enhances accountability and fosters trust with consumers and stakeholders prioritizing sustainability.

Conclusion

The EU’s new ESPR rules mark a significant step in curbing wasteful practices and promoting environmental sustainability in product lifecycles. Businesses across sectors and geographies supplying the EU market must strengthen their sustainability data management and proactively implement destruction prevention measures. These regulations exemplify how environmental responsibility is becoming a core business imperative under ESG.

Sources: EU Commission draft implementing acts for ESPR (2024/1781), Freshfields Bruckhaus Deringer LLP analysis by Jonas Köster and Tobias Klatt (October 2025)

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