ESPR: New playing rules for retail

Anyone wishing to sell products on the European market in the future will have to provide significantly more information than before. With the Ecodesign for Sustainable Products Regulation (ESPR), the European Union is establishing a new framework for more sustainable products and greater transparency throughout the entire value chain.

For retailers, this means much more than just a new sustainability requirement. The regulation places greater emphasis on product data, supply chain information, and digital processes. The Digital Product Passport (DPP) plays a key role in this, as it is intended to make information on materials, repair options, origin, and recycling potential digitally accessible in the future.

The ESPR took effect on July 18, 2024, and is gradually replacing the previous Ecodesign Directive. While earlier regulations focused primarily on the energy efficiency of specific product groups, the new regulation considers a product’s entire life cycle.

The EU’s goal is to make products more durable, easier to repair, and more resource-efficient, while simultaneously strengthening the circular economy. To this end, requirements may be defined in the future, such as those related to:

• Durability and service life
• Repairability
• Reusability
• Recyclability
• Use of recycled materials
• Energy and resource efficiency
• Transparency regarding ingredients and materials

Another key provision of the regulation: Certain companies will no longer be allowed to simply destroy unsold consumer goods, particularly textiles and shoes. This is intended to reduce waste of resources and promote the reuse of products.

In principle, the ESPR will apply to almost all physical products placed on the EU market in the future. Only a few sectors, such as food, animal feed, and pharmaceuticals, are exempt.

Since the specific requirements will be introduced gradually, the European Commission has initially defined product groups that are considered particularly relevant. These include:

• Textiles and clothing
• Furniture
• Mattresses
• Tires
• Iron and steel products
• Aluminum products
• Electronics and ICT products

Many of these product categories are of central importance, especially for the retail sector. Fashion retailers, furniture retailers, electronics retailers, and companies with complex international supply chains will be particularly affected.

A key tool of the ESPR is the Digital Product Passport (DPP). In the future, comprehensive product information will be made available via a QR code or a comparable digital identifier. This may include, for example, details on:

• Material composition
• Origin of components
• Repair and maintenance options
• Replacement parts
• Environmental impacts
• Recycling options
• CO₂-related product information

This information is not only intended for consumers. Retailers, logistics service providers, repair shops, recyclers, and regulatory authorities should also be able to access data relevant to them. The Digital Product Passport is thus supposed become a central information interface throughout the entire value chain.

Even though manufacturers and importers bear the primary responsibility for compliance with product requirements, the ESPR will have a significant impact on the retail sector.

In particular, product data requirements are increasing significantly. In the future, retailers must ensure that relevant information is available, up-to-date, and accessible through various channels, both online and in stationary stores.

The most important areas of focus include:

• Product data management and master data quality
• Integration of the Digital Product Passport into e-commerce and omnichannel systems
• Transparency throughout the supply chain
• Collaboration with manufacturers and suppliers
• Verification and documentation requirements
• Sustainability communication at the point of sale

At the same time, new opportunities for customer communication are emerging. Information about durability, repairability, or material use could become just as commonplace in the future as price or product information.

Implementing the ESPR will be virtually impossible without digital processes. Many retail companies are already investing in Product Information Management (PIM), Master Data Management, RFID technologies, or solutions for supply chain transparency. The Digital Product Passport could further accelerate these developments.

The ESPR demonstrates that sustainability and digitalization are progressively merging. Anyone wishing to provide sustainability information in the future will need robust data structures and a seamless digital infrastructure. For many retailers, the regulation will therefore not only be a compliance issue but also a driver for modernizing their data and process landscapes.

Many detailed regulations have yet to be finalized. Nevertheless, it is already becoming clear that the ESPR could go far beyond traditional environmental requirements.

For retailers, issues such as product transparency, data quality, and digital information systems are coming into sharper focus. The Digital Product Passport could become a central interface between manufacturers, retailers, and customers.

Those who address the requirements early on and establish the necessary data and process structures will not only lay the groundwork for future compliance. This will also create new opportunities to highlight sustainability and strengthen customer trust.

Source: MyProductPassport, Umwelt Bundesamt, EUR-Lex, Circularise, Renoon