EU Adopts Major Sustainability Regulations: Ecodesign & CSDDD
The European Union has adopted two significant regulations aimed at promoting sustainability and curbing environmental impacts of consumption. The Ecodesign regulation and the Corporate Sustainability Due Diligence Directive (CSDDD) were approved in May 2024 and will have far-reaching effects on businesses and consumers alike.
The Ecodesign regulation introduces sustainability requirements for product durability, environmental footprint, and reparability. It also mandates a digital product passport, providing information on product origin and manufacturing. EU countries have two years to implement national laws enforcing the directive, with penalties of at least 5% of worldwide annual revenue for serious breaches. Notably, the regulation bans the destruction of unsold textiles and footwear, with varying timelines for large and medium enterprises.
The CSDDD, on the other hand, requires large companies to monitor and mitigate environmental and human rights impacts from their own activities and supply chain partners. This includes liability for such impacts. The directive applies to EU and non-EU companies with over 1,000 employees and 450 million euros in annual revenue, or approximately $480 million. Countries are responsible for 'naming and shaming' non-compliant companies. The CSDDD affects mainly large companies with at least 250 employees and a minimum annual turnover of at least €150 million globally or at least €40 million within the EU.
Both regulations align with existing EU laws such as the Deforestation-free Products Regulation and Packaging Waste Regulation, aiming to curb environmental impacts of consumption. Ecodesign, in particular, supports the EU Strategy for Circular and Sustainable Textiles, targeting long-lasting, repairable, and recyclable products by 2030.
The Ecodesign regulation and the Corporate Sustainability Due Diligence Directive mark significant steps in the EU's commitment to sustainability and environmental protection. With clear requirements and penalties for non-compliance, these directives will impact businesses and consumers, driving a shift towards more sustainable practices and products.
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