Dive Brief:
- The European Union formally adopted two pieces of wide-ranging sustainability and labor regulation in May, the Ecodesign regulation and the Corporate Sustainability Due Diligence Directive, according to recent official statements.
- The Ecodesign regulation will introduce sustainability requirements related to durability, a product’s environmental footprint, and ease of repair, reuse, and upgradability. The regulation also requires products to have a digital product passport embedded with information on how the product was made, according to the statement.
- The CSDDD requires large companies to watch for and remedy negative impacts to the environment and human rights caused by their own activities or that of business partners along the supply chain, and makes companies liable for such impacts, according to the statement.
Dive Insight:
CSDDD and Ecodesign are the latest in a group of EU laws seeking to curb the environmental impacts of consumption, such as the Deforestation-free Products Regulation and Packaging Waste Regulation.
Ecodesign specifically revises a 2009 law covering a smaller range of products and creates the legislative framework for implementing the EU Strategy for Circular and Sustainable Textiles, which states that, by 2030, all textile products placed on the European market should be long-lasting, repairable, recyclable, largely made of recycled materials, free of hazardous substances and “produced in respect of social rights and the environment.”
“With the ecodesign regulation we create the right incentives for the industry to think circular from the very design conception of the products they plan to produce and sell in the EU,” Pierre-Yves Dermagne, Belgian Deputy Prime Minister and Minister of the Economy and Employment, and one of Belgium’s representatives to the European Council, said in the statement.
When it comes into force in two years, Ecodesign will allow the European Commission to set specific design and reporting requirements for almost all products sold on the European market, according to the statement. Companies will then have 18 months to comply with these requirements, per the statement.
The Ecodesign regulation also “introduces a direct ban on the destruction of unsold textiles and footwear,” applicable within two years for large companies and six years for medium enterprises. The latter are defined by the EU as enterprises that employ between 50 and 250 people and have an annual revenue of 10 million to 50 million euros.
The new regulation also requires companies to create a digital product passportcontaining information about a product’s environmental sustainability with the goal of helping consumers “make informed choices” and to facilitate repairs and recycling, according to a European Union informational page.
Meanwhile, the CSDDD will apply to EU companies and parent companies with more than 1,000 employees and more than 450 million euros in annual revenue, or approximately $480 million at current exchange rates, as well as non-EU companies with the same amount of EU revenue.
Now that the regulations have been signed, EU countries have two years to write national laws that enforce the directive. According to a European Parliament press release, countries are also responsible for “naming and shaming” companies that don’t comply and imposing penalties of at least 5% of worldwide annual revenue for serious breaches.
