A new era for sustainability consumer products: the EU’s new Ecodesign for Sustainable Products Regulation (ESPR)

On 18 July 2024 the ESPR entered into force setting a framework for new ecodesign rules in the EU. It will have significant impacts for retailers and consumer brands selling products in the EU. It will introduce new minimum ecodesign requirements for specific product categories (with an initial focus on textiles), make digital product passports mandatory and set rules on the destruction of unsold products. Companies face the risk of fines, consumer claims and reputational damage for non-compliance.

Why does it matter?

The ESPR is the cornerstone of the EU’s 2020 Circular Economy Action Plan which aims to accelerate the EU’s shift to more environmentally sustainable and circular products. The ESPR’s new rules will apply to a broad range of actors involved in the product lifecycle including manufacturers, importers, distributors and retailers who will need to verify products’ compliance with new sustainable design and transparency requirements. 

Minimum ecodesign requirements: 

The ESRS introduces a new framework for setting minimum ecodesign requirements for products placed on the EU market to improve their sustainability. Specific ecodesign requirements for different product categories will be outlined by the European Commission through secondary legislation with textiles (specifically clothing and footwear) flagged as a priority product. For example, new requirements could include minimum or maximum thresholds for a product’s durability, recycled content, water use, carbon footprint or use of certain chemicals. The European Commission will publish a working plan by 19 April 2025 setting out further details and timelines for the new product requirements. 

Digital product passports: 

The ESPR will introduce mandatory digital product passports (DPP) for products entering the EU market, to increase transparency and help consumers make more informed choices. The DPP will act as a digital identity card for products storing detailed information about a product’s environmental impact which must be accessible to consumers, eg through a QR code on the product. The specific DPP information requirements will be set out in secondary legislation, but this could include information about the materials used and their origins, the product’s energy efficiency and disposal guidelines.

Rules on the destruction of unsold discarded products: 

Retailers will also need to report yearly on the number and weight of unsold discarded products (including those returned by customers), the reasons for discarding these, and the proportion directed towards reuse, remanufacturing, or recycling. This information must be publicly available on the retailer’s website. 

The ESRS also introduces an outright ban on the destruction of unsold apparel, clothing accessories and footwear in the EU from 19 July 2026. For medium sized companies (ie those with 50-250 employees and €10-50m annual turnover) this ban will take effect from 19 July 2030. There is an exemption for small and micro companies.

What action should you consider?

Many of the ESRS’s requirements will be introduced through secondary legislation and will then need to be transposed in the national Member State law, giving businesses some time to adjust their product design, operations and supply chains accordingly.

However, proactive preparation will be important. To stay on top of developments and prepare for the changes, retailers and consumer brands should:

• take time to familiarise themselves with the new rules now
• look for opportunities to input to consultations to help shape the new rules. The EU is setting up an ‘Ecodesign Forum’ to consult stakeholders on the development of rules under ESPR, with an open call for membership applications. Businesses should consider applying, or otherwise sharing their views via industry associations
• ahead of the ban on unsold apparel, clothing accessories and footwear, look for ways to reduce the volume of unsold products – for example investing in more sophisticated supply chain and forecasting solutions, or offering consumers more tailored product size recommendations or the use of ‘virtual fitting rooms’ to reduce the number of returns
• review existing design, procurement, and quality control processes to ensure these are sufficiently robust to verify manufacturers’ compliance with the new ecodesign rules once in force. Commercial agreements should also provide for enforcement mechanisms that can be realistically and quickly implemented against non-compliant suppliers.

Nearly 80% of 16-24 year olds bought clothes, accessories and shoes online in 2022; young adults (aged 18-24) have the highest rate of return of any age group. The return rate for online products is up to three times higher than in-store products, with one in every five pieces of clothing being returned.

Explore Retail Compass Autumn 2024