Ecommerce Business Guide To ESPR

The Ecodesign for Sustainable Products Regulation, part of the European Green Deal, seeks to normalize sustainable products on the EU market. Although it’s still in its beginning stages, and the first requirements aren’t expected to be published for a few months yet, it could carry ripple effects that set the standard for ecodesign around the world. Here’s what you need to know and how EcoCart can help you prepare.

What Is the EU’s Ecodesign for Sustainable Products Regulation (ESPR)?

The Ecodesign for Sustainable Products Regulation (ESPR) sets ecodesign and performance requirements for sustainable products sold on the EU market. Intended to promote circularity, improve resource efficiency, and promote energy efficiency, ESPR sets performance and information requirements for certain products. It expands on and will eventually replace the current Ecodesign Directive, which only details requirements for energy-related products.

As ESPR requirements will differentiate between groups of products with similar characteristics, some product types will be impacted before others. Priority will be given to high-impact items, priority products such as textiles, furniture, chemicals, and more. Although a timeline is not yet set, ESPR will eventually set conditions for all products on the EU market, covering the following:

The carbon footprint of a product
A product’s durability, reusability, and repairability
Requirements for unsold consumer products
The amount of recycled content a product contains
A framework for the Digital Product Passport that allows consumers to easily gain insight into a product’s materials and sustainability
Energy efficiency and resource efficiency
Whether a product contains materials that are not circular

Read more: The Ecommerce Business Guide to US climate change laws

Why Is the EU’s ESPR Important?

The Ecodesign for Sustainable Products Regulation has the potential to have big effects, even for companies that do not operate in the EU marketplace. In what is called the Brussels Effect, laws set by the EU often set a precedent for other similar laws, and ESPR could set the standard for what is considered sustainable design.

One of the main goals of ESPR is to standardize ecodesign and create a framework for companies to follow. A major challenge of sustainability is a lack of global standards. Regulations such as ESPR provide a science-backed roadmap for companies that are serious about product sustainability. Therefore, it offers some exciting opportunities for manufacturers and product designers who are interested in creating innovative and sustainable products.

Which companies need to comply with the Ecodesign for Sustainable Products Regulation?

ESPR applies to all companies that sell their products on the EU market, regardless of whether or not they were produced outside of the EU. This means that even US-based ecommerce businesses that operate in the EU must ensure that their products are compliant.

Companies that supply to businesses that sell their products on the EU market must also be aware of this sustainable products initiative. As part of ESPR, the EU will require a Digital Product Passport that provides detailed information about the product’s materials. Suppliers must be prepared to provide this information to their customers.

How will the Ecodesign for Sustainable Products Regulation affect companies?

If you sell products in the EU, it’s clear how ESPR will affect your company: you’ll need to ensure that your product design is compliant with the new law or pull your products from the EU market. However, laws such as these often have a trickle-down effect that may affect other ecommerce businesses, too.

Companies with plans to expand into the EU will need to take ESPR into account when designing their products.
Although the EU policies do not expand outside of its member states, historically, its rules tend to set a precedent for other similar pieces of legislation in other countries. For example, the General Data Protection Regulation, which set standards for data protection in the EU, ultimately carried ripple effects that changed data protection globally. ESPR has the potential to have similar global spillover as it sets requirements for all products on the EU marketplace, regardless of where it was produced. This could result in new expectations and standards in product design. Therefore, companies would do well to familiarize themselves with this law and integrate its policies into their products.
With ESPR will come the implementation of a Digital Product Passport. This will allow people to scan a product and gain insights into its materials, recyclability, sourcing, etc. This is an important consideration for suppliers who work with companies that sell their products on the EU marketplace. They will, therefore, need to provide pertinent information so that their customers can be compliant with this new regulation.

How to Prepare For ESPR

As this is an ongoing regulation and the first requirements haven’t been published yet, there are a few ways that businesses can prepare now. This is especially important for the fashion and textile industry, as textile products are among the first to undergo regulation. However, all ecommerce businesses should start taking key steps and financing sustainability initiatives now so that their products and supply chain can be compliant when specific requirements roll out for their sector.

We know that the conditions of ESPR will cover environmental impact, energy efficiency, circularity, repairability, the use of recycled content, and other similar considerations. Therefore, we can anticipate that ESPR’s provisions will cover these areas. For example, in December 2023, the EU introduced a provisional agreement for ESPR that banned the destruction of returned and unsold consumer products. This illustrates the types of rules that we can anticipate with the implementation of ESPR.

Here are some ways that you can prepare:

Conduct a Life Cycle Analysis: A Life Cycle Analysis (LCA) can be a great first step to understanding the environmental impact of your product from cradle to grave. This assessment will provide data-driven insights and highlight possible issues so that you can begin to redesign your products with sustainability and ESPR in mind.
Use ESG reporting software to understand your impact: Integrating sustainability reporting into your existing tech stack will allow you to gain real-time insights into your environmental impact so that you can view potential weak points as they come. This is essential as you create sustainability initiatives to improve your environmental impact, and it can help you stay compliant with other climate change laws, such as California’s SB 253 climate law.
Organize a sustainability audit: Conducting a sustainability audit can give you a snapshot view of your company’s environmental impact. While ESG reporting software provides real-time insights, an audit provides an overall view of your sustainability. Both can useful in their own ways.
Gain ESG certification: Although gaining ESG certification will not guarantee that you’re compliant with climate change laws, a high-level green certification will likely follow trusted frameworks that many of these laws are based on. Therefore, earning green business certification will place you on the right track toward compliance while gaining third-party proof of your sustainability to your stakeholders.
Familiarize yourself with the basics of ecodesign: ESPR draws from the Ecodesign Directive and established frameworks for sustainable design. By familiarizing yourself with ecodesign basics, you can be sure that your products will be on the way toward compliance.

Sustainability Reporting by Ecommerce Business Size

EcoCart offers a variety of tools to help businesses of any size track and measure their impact so that they can identify areas of improvement to remain compliant with ESPR and other climate change laws. Let’s take a look at the specific ways we can help your ecommerce business, no matter its revenue.

Up to $50K in total monthly revenue

Smaller businesses can conduct sustainability tracking in-house, as their impact is typically easy to track. With the help of sustainability software, like our carbon emissions dashboard, your team can gain valuable real-time insights into your carbon footprint, especially associated with shipping. From there, you can take necessary steps to reduce your carbon and environmental footprint, such as investing in carbon offsetting projects.

$50K-$100K in total monthly revenue

Mid-size businesses can also usually handle their sustainability management in-house, but with more robust sustainability software that integrates with existing tech stacks. We offer tools that provide detailed insights into your carbon footprint, environmental impacts and product sustainability. Check out our Product Detail Transparency tool that shows your customers the impact of your products, allowing you to market your sustainability initiatives in a way that resonates with your stakeholders.

Over $100k in total monthly revenue

Larger companies can benefit from a sustainability program customized to their brand. We offer services that build a comprehensive sustainability approach taking into account your specific needs and challenges. These offerings can be especially important at a time when new climate change laws are in abundance. If you’re struggling to keep up with new rules, we can work directly with your company to create a sustainability strategy that ensures compliance and helps you become a leader in sustainability within your sector.

Conclusion

The landscape of ESG legislation is changing, as illustrated by climate change laws like ESPR. Prudent decision-makers need to start gaining insight into their companies’ environmental impact now so that they can begin making science-backed changes for compliance with current and future climate regulations. EcoCart has the tools to help. Want to learn more? Reach out to our team for a demo today.