EU Sustainability Regulations: Your 2025 Compliance Roadmap¶

The European Union's Green Deal is transforming how businesses operate. With multiple regulations now in effect or coming soon, understanding the landscape is essential. Here's your comprehensive guide to what's changing and when.

The Big Picture: EU Green Deal¶

The European Green Deal aims to make Europe climate-neutral by 2050. To achieve this, the EU has introduced a wave of regulations that touch nearly every aspect of business operations:

graph TD
    A[EU Green Deal] --> B[CSRD<br>Reporting]
    A --> C[ESPR<br>Product Design]
    A --> D[CBAM<br>Carbon Border]
    A --> E[CSDDD<br>Due Diligence]
    A --> F[Green Claims<br>Marketing]

    B --> G[Digital Product Passports]
    C --> G

Key Regulations Explained¶

1. CSRD - Corporate Sustainability Reporting Directive¶

What it is: Mandatory sustainability reporting for companies meeting certain thresholds.

Who it affects:

Key requirements:

• Double materiality assessment
• Disclosure according to ESRS (European Sustainability Reporting Standards)
• Third-party assurance
• Digital tagging (XBRL format)

2. ESPR - Ecodesign for Sustainable Products Regulation¶

What it is: Product-level requirements for sustainability, circularity, and information disclosure.

Key elements:

• Digital Product Passports - Mandatory digital records for covered products
• Ecodesign requirements - Minimum durability, repairability, recyclability
• Destruction ban - Prohibition on destroying unsold consumer goods

Timeline:

• 2024: Regulation entered into force
• 2025-2026: First delegated acts for specific product categories
• 2027+: DPP requirements begin (batteries first, then textiles, electronics)

3. Green Claims Directive¶

What it is: Rules to prevent greenwashing in consumer-facing environmental claims.

Key provisions:

• All environmental claims must be verified before use
• Generic claims like "eco-friendly" or "green" prohibited without evidence
• Carbon offsetting claims heavily restricted
• Sustainability labels must be based on certification schemes

Timeline: Expected to apply from 2026

4. CSDDD - Corporate Sustainability Due Diligence Directive¶

What it is: Mandatory human rights and environmental due diligence across value chains.

Who it affects:

• EU companies with 1,000+ employees AND EUR 450M+ turnover
• Non-EU companies with EUR 450M+ turnover in EU

Requirements:

• Identify and assess adverse impacts
• Prevent, mitigate, and remedy impacts
• Establish complaints mechanisms
• Report publicly on due diligence

5. CBAM - Carbon Border Adjustment Mechanism¶

What it is: Carbon pricing for imports of carbon-intensive products.

Products covered (first phase):

• Iron and steel
• Cement
• Aluminium
• Fertilizers
• Electricity
• Hydrogen

Timeline:

• 2023-2025: Transitional period (reporting only)
• 2026: CBAM certificates required for imports

Compliance Timeline at a Glance¶

2024 ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
      │ CSRD (large PIEs)
      │ ESPR enters force
      │ CBAM transitional reporting

2025 ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
      │ CSRD (large companies 250+)
      │ Battery Regulation DPP
      │ First ESPR delegated acts

2026 ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
      │ CSRD (listed SMEs - optional)
      │ Green Claims Directive
      │ CBAM certificates required
      │ CSDDD begins

2027 ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
      │ Textile DPP requirements
      │ Additional ESPR product categories

2028+ ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
       │ Electronics DPP
       │ CSDDD fully applicable
       │ Expanded product categories

What This Means for SMEs¶

While many regulations have size thresholds, SMEs are affected through:

1. Supply Chain Requirements¶

Large companies must report on their value chain. This means:

• Requests for emissions data
• Questionnaires about sustainability practices
• Requirements for certifications
• Due diligence questionnaires

2. Product Requirements¶

If you manufacture or import products, requirements apply regardless of company size:

• Digital Product Passport data
• Ecodesign compliance
• Substantiation for marketing claims

3. Market Access¶

Sustainability credentials increasingly determine:

• Tender eligibility (especially public procurement)
• Shelf space with major retailers
• Partnership opportunities with larger companies

Practical Steps to Prepare¶

Immediate Actions (2025)¶

1. Assess your exposure

   • Map which regulations apply directly
   • Identify which customers are covered by CSRD
   • Review product portfolio against ESPR scope

2. Start collecting data

   • Carbon footprint (Scope 1, 2, and key Scope 3 categories)
   • Supply chain information
   • Product composition data

3. Review marketing claims

   • Audit all environmental claims
   • Document evidence for each claim
   • Prepare for Green Claims compliance

Medium-term Actions (2025-2026)¶

1. Build systems

   • Sustainability data management platform
   • Supplier engagement processes
   • Documentation management

2. Obtain relevant certifications

   • ISO 14001 for environmental management
   • Product-specific certifications
   • Carbon footprint verification

3. Train your team

   • Basic sustainability literacy
   • Regulation-specific requirements
   • Data collection procedures

Resources¶

• EU Green Deal overview
• ESPR regulation text
• CSRD reporting standards

Key Takeaways¶

1. Regulation is accelerating - Multiple major regulations are now in effect or imminent
2. No company is isolated - Supply chain requirements extend coverage beyond direct thresholds
3. Data is foundational - Nearly every regulation requires sustainability data you should be collecting now
4. Early movers gain advantage - Companies that prepare now will be better positioned competitively

Navigating EU sustainability regulations shouldn't require a legal team. Sustalium helps SMEs understand and comply with certification and reporting requirements. Learn more about our approach.