EU Adopts Major Regulations to Curb Consumption's Environmental Impact
The European Union has adopted two significant regulations aimed at curbing environmental impacts of consumption. The Corporate Sustainability Due Diligence Directive (CSDDD) and the Ecodesign regulation were officially adopted in May 2024 and will affect companies of various sizes across all industries.
The CSDDD applies to both EU and non-EU companies with over 1,000 employees and €450 million in annual revenue. It requires these large companies to monitor and mitigate environmental and human rights impacts along their supply chain, making them liable for such impacts. EU countries have two years to write national laws enforcing the CSDDD, including 'naming and shaming' non-compliant companies and imposing penalties of at least 5% of worldwide annual revenue for serious breaches.
The Ecodesign regulation introduces sustainability requirements for product durability, environmental footprint, and reparability. It mandates a digital product passport and allows the European Commission to set specific design and reporting requirements for almost all products sold in the EU. The regulation also introduces a ban on the destruction of unsold textiles and footwear for large companies within two years and medium enterprises within six years. It aligns with the EU Strategy for Circular and Sustainable Textiles, aiming for all textile products to be long-lasting, repairable, and recyclable by 2030.
These regulations, joining other EU laws like the Deforestation-free Products Regulation and Packaging Waste Regulation, aim to significantly reduce the environmental footprint of consumption. Companies must begin adhering to these requirements according to specific deadlines, with significant compliance expected by 2024-2025 and onward for full implementation.
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