Here, you will find an overview of the regulations, frameworks, and initiatives regarding environmental impacts across all product categories applicable in the European Union.
Regulation within the EU Green Deal
It aims to enforce a carbon tax on importers of specific goods, equivalent to the weekly EU-ETS price
Scheduled to take effect in its final form from 2026, with the current transitional phase spanning from 2023 to 2026
Currently relevant for cement, iron and steel, aluminum, fertilizers, electricity, and hydrogen
Determining fair prices for CO2 emissions in the production of certain carbon-intensive goods imported into the EU, aiming to promote cleaner industrial production in non-EU countries
EU regulation under the EU Green Deal
Use digital solutions to reduce product lifecycle impacts and advance EU industrial policy goals for sustainable goods
Introduces new responsibilities and rights for various stakeholders, including manufacturers, importers, distributors, repairers, recyclers, consumers, and regulatory bodies.
sets mandatory green public procurement criteria within the values and principles advocated by the circular economy
EU regulation to promote circularity
Regulation to improve energy- and resource efficiency of products
Requirements for eco-design of energy-related (consuming) products, including reduction approaches
EU law proposal 03/2023
Companies need to substantiate their environmental claims with science-based and verifiable methods.
Green claims must be specific and relate directly to the environmental aspect being promoted.
Encourages the use of third-party verification or certification schemes to substantiate green claims.
Adopted in 03/2020 as one of the main building blocks of the European Green Deal
Targets product design and promotes circular economy practices, promotes sustainable consumption, and strives to minimize waste while maximizing resource retention within the EU economy
Emphasizes sectors with substantial resource usage and significant potential for circularity,
It includes electronics and ICT, batteries and vehicles, packaging, plastics, textiles, construction and buildings, food, water, and nutrients
Implements a combination of legislative and non-legislative measures to achieve its objectives
Overarching EU legislation regulating unfair commercial practices that occur before, during and after a business-to-consumer transaction has taken p
Established by the European Union to regulate B2C commercial practices
Enable national enforcers to curb a broad range of unfair business practices
The DCGT Directive, adopted in February 2024, significantly advances previous EU legislation on green claims by imposing strict limitations on sustainability claims for products, which will substantially affect product advertising.
Implications:
The directive restricts the use of sustainability labels to those based on certification schemes or established by public authorities, effectively banning self-certification.
This aims to empower consumers by ensuring the credibility of green claims.It will be prohibited to display unreliable voluntary sustainability logos.
Additionally, vague environmental claims, such as declaring a product 'green' or 'environmentally friendly' without scientific proof, will be forbidden.
Enhanced Consumer information: The directive ensures consumers receive more harmonized information on product durability and reparability. According to Didier Reynders, Commissioner for Justice, "Empowering consumers for the green transition means giving European citizens the tools to make informed choices and preventing practices such as greenwashing and early obsolescence from being used in the single market."
Scope of application: applies to all non-mandatory sustainability claims made to consumers relating to a product, service, company or brand in any medium and in any form, including brands, product names, and marketing materials
Implementation timeline: The European Council adopted the directive on 20 February 2024, setting 27 September 2026 as the date by which member states must apply the new rules, allowing a two-year transition period for necessary adjustment
EU proposal for regulation
It aims to create transparency about the supply chain and identify human and environmental risks.
Members of the European Parliament still have to vote on the regulations until 04/2024.
The scope of application currently includes companies with 1,000 employees and a turnover of at least EUR 450 million
It mandates preventing, identifying, and mitigating negative impacts on human rights and the environment within global value chains.
Provisional agreement for more sustainable, repairable, and circular products
Regulatory framework established by the EU to promote eco-design principles and integrate environmental considerations into the design of products placed on the EU market
Products complying with ESPR requirements are granted access to the EU market, while non-compliant products may face restrictions or penalties, incentivizing manufacturers to improve their environmental performance
ESPR requires manufacturers to comply with specific eco-design requirements, such as energy efficiency standards, material efficiency targets, recyclability criteria, and the use of environmentally friendly materials and technologies
French law
The goal is to end the marketing of single-use plastic packaging by the year 2040. To achieve this, reduction, reusability, and recycling goals will be established by decree
Next steps:
01.01.2024: Ban on the sale of medical products containing microplastics
01.01.2025: 100% recycling of single-use plastic packaging
31.12.2025: 100% reduction in "unnecessary" single-use plastic packaging
31.12.2025: Reduction of single-use plastic packaging by 20%
01.01.2026: Ban on the sale of rinse-off cosmetic products containing microplastics
01.01.2028: reducing the number of single-use plastic bottles by 50%
EU regulation for companies with more than 500 employees
Encourage transparency and accountability by requiring companies to sustainability reporting at regular intervals and outline their specific policies on them
Companies that are obligated to comply with the NFRD must provide information on both their non-financial disclosures and operations and any third parties that contribute to their supply or value chain
Applies to all companies subject to the Corporate Sustainability Reporting Directive (CSRD)
Cover the full range of environmental, social, and governance issues, including climate change, biodiversity and human rights
Take up existing frameworks such as GRI, SASB and TCFD and set new standards for mandatory reporting
Companies will have to disclose how material ESG impacts, risks, and opportunities are identified and managed, including policies, targets, action plans, and others
Comprehensive legislative framework aimed at combating climate change and enhancing societal resilience
Sets ambitious targets for reducing greenhouse gas emissions across various sectors of the economy
Promotes the transition to renewable energy sources and the implementation of energy efficiency measures
Mandates regular reporting and monitoring of progress towards climate goals, ensuring accountability and transparency in implementation
Next steps:
end of 2024:
Flights are prohibited if there is an alternative by train in less than 2.5 hours (with the exception of flights that are mainly operated by passengers with a connecting flight to a more distant destination)
2025
Create low-emission zones in urban areas with more than 150,000 inhabitants
Rental of the least insulated thermal filters (classification G) prohibited
2028:
Rental of the least insulated thermal filters (classification F) prohibited
Advertising for the most polluting vehicles prohibited
2030:
Ban on the sale of cars that emit more than 95 g CO2/km
20% of the space in large stores (businesses with more than 400 m² of sales area) is reserved for mass sales
German law since 01/2023
For more than 3000 employees, 01/2024 for more than 1000 employees
Regulation about human rights risks in the supply chain
Aims to create transparency about the supply chain, identify risks for humans and the environment
supports the objectives of the “European Green Deal”
PEF is a standardized methodology developed by the European Commission for assessing the environmental impact of products throughout their life cycle.
Category rules (CR) provide specific guidelines for applying the PEF methodology to a particular product category, ensuring consistency and comparability between different assessments within the same product category.
It is aligned with the principles of LCA.
PEF has gained international recognition as a leading methodology for assessing product environmental footprints, with the potential for global adoption and harmonization
Applies to: All companies and sectors, rules are sector-specific (Apparel & footwear, Chemistry based final products, Construction products, Electronics, Food & Beverage products (including products not for human consumption, Energy production and transmission etc.)
German Standard
Includes a set of 20 criteria covering areas such as sustainability strategy, environmental impact, social responsibility, and corporate governance
Companies that adopt the DNK are required to report on their sustainability performance using a set of standardized indicators that align with these criteria -> make sustainability reporting more transparent, comparable, and credible
A consistent and specific set of rules to calculate the relevant environmental information of the organizations belonging to the sector in scope
Requirements: System boundaries shall include organizational boundaries (direct) and organization environmental footprint boundaries (indirect) --> specification of supply chain stages, all indirect (upstream and downstream) activities
You might feel like you need clarification on the overwhelming number of regulations, proposals, and frameworks for measuring, reporting, and mitigating your environmental impacts. These can range from directives like the European Green Deal to international frameworks addressing carbon accounting and eco-labeling.
Understanding these standards is essential for businesses that meet compliance requirements and promote sustainable practices globally.
Let's dive into them and uncover the wide range of frameworks, regulations, and initiatives that impact decision-making and environmental awareness across all sectors.
Here, we provide a list of the regulations and frameworks.
Let's learn about the most pressing regulations and, as a next step, examine the frameworks that can be used as the background methodology.
As the last piece, we introduced some initiatives that can be beneficial for working with your peers collectively.
EU law, replacing NFRD by establishing more concrete reporting guidelines
It includes SMEs and non-EU companies if they generate over EUR 150 million on the EU market.
Companies will have to transparently disclose the impacts they may cause on climate in a detailed way
Implies the mandatory measurement of GHG emissions (Scope 1-3) and the provision of a full environmental footprint of the company, including various impact categories.
Reports must be according to European Sustainability Reporting Standards (ESRS)
Disbanded in 2023
Enhance and improve the disclosure of financial information related to climate change
Guidelines crafted to aid companies in comprehending and addressing the financial risks and opportunities linked with climate change while providing investors with necessary information for informed investment choices
International Standard
It provides a framework for conducting life cycle assessments (LCA) to evaluate the environmental impacts of products and services.
It requires a clear definition of the goal and scope of the LCA study, including the functional unit, system boundaries, and impact categories to be assessed.
Involves compiling an inventory of inputs (e.g., materials, energy) and outputs (e.g., emissions, waste) associated with each product's life cycle stage.
It evaluates the potential environmental impacts of the inventory data, considering factors such as resource depletion, global warming potential, and human health effects.
It is applicable to various sectors and industries, enabling organizations to assess and improve the environmental performance of their products and processes.
It involves interpreting the LCA study's results and considering uncertainties, limitations, and sensitivity analyses to ensure robust decision-making.
International Standard
Provides specifies principles, requirements, and guidelines for quantifying the product's carbon footprint throughout its life cycle
Provides guidance on effectively communicating carbon footprint information to stakeholders, such as consumers, investors, and policymakers.
Applicable to various types of products, helping organizations assess and manage their environmental impacts more effectively.
International standard
Provides guidelines for quantifying and reporting greenhouse gas emissions associated with the life cycle of products
It covers emissions from all stages of a product's life cycle (raw material extraction, production, distribution, use, and end-of-life disposal or recycling) and separates them into different Scopes (1-3)
It is based on LCA principles, requiring the use of consistent methodologies and data sources for conducting emissions assessments across different product categories
International Standard
Developed by the British Standards Institution in 2008
Provides guidelines for measuring and reporting the carbon footprint of a product
Covers the entire life cycle of a product
Provides guidance on allocation methodologies for attributing emissions to different products or co-products within a system where necessary
Operates in accordance with the ISO 14025, TS/14027, 14040, and other standards
Reports comparable, objective and third-party verified data that shows the environmental performance of a company’s products and services
EPD needs to be verified by an approved independent verifier before being registered and published at the International EPD System
Supports organizations to understand, improve and communicate the environmental impact of their products and services
ISO 59040 provides a comprehensive methodology for implementing, operating, monitoring, reviewing, and maintaining a Product Circularity Data Sheet (PCDS) when acquiring or supplying products. It is designed for any organization aiming to adopt circular economy-based practices in their supplier or acquirer relationships.
General methodology: Offers a general methodology for implementing and maintaining a PCDS, ensuring consistent practices across organizations and sectors.
Improved communication: Provides standardized information that can be easily shared by manufacturers across every sector, improving the efficiency of circularity data sharing. This facilitates a mutual understanding of the PCDS approach and associated needs and expectations by offering guidance and requirements for exchanging product information that supports the circular economy.
Established framework: for reporting and exchanging information about the circular economy aspects of products when supplying or acquiring them. This framework helps encourage improved product circularity performance.
3 tier system based on picking list:
Minimum Set of Circular Statements: Essential statements required to establish a solid base.
Additional Optional Statements: Statements that can be made required based on specific needs.
Free Form Addition: Allows for supplemental information linked to a statement or additional information.
(more information)
International framework
It is a widely used accounting tool developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD).
It provides a framework for businesses and governments to measure, manage, and report greenhouse gas emissions.
The GHG Protocol categorizes greenhouse gas emissions into three scopes:
Scope 1: Direct emissions from sources owned or controlled by the reporting entity, such as emissions from the combustion of fossil fuels in owned vehicles or facilities.
Scope 2: Indirect emissions associated with generating purchased electricity, heat, or steam consumed by the reporting entity.
Scope 3: Indirect emissions that result from the reporting entity's activities but originate from sources not owned or controlled by the entity. This includes emissions from business travel, employee commuting, upstream and downstream supply chain activities, and waste disposal.
International Standard
Specifies the principles and procedures for developing Environmental Product Declarations (EPDs), which are Type III environmental declarations.
EPDs provide standardized and transparent information on products' environmental performance, facilitating comparisons between products in the market.
EPDs are developed based on Product Category Rules (PCR), which define the specific requirements and methodologies for conducting LCAs and preparing EPDs within a particular product category.
Aims to harmonize EPD development and reporting globally, promoting consistency and facilitating international trade by ensuring EPDs are developed according to standardized procedures.
EPDs may be required by legislation or voluntary initiatives, and they can also help companies meet market demands for transparency and sustainability.
PACT takes a holistic approach to sustainability assessment, considering economic, environmental, and social impacts across the entire life cycle of products and services
Encourages stakeholder engagement throughout the assessment process, allowing for the incorporation of diverse perspectives and priorities into sustainability decision-making
Aims to develop a consistent, international sustainability reporting standard for companies
Emphasizes efficiency in standard development to facilitate global reporting to investors
The ISSB has set out four key objectives:
to develop standards for a global baseline of sustainability disclosures;
to meet the information needs of investors;
to enable companies to provide comprehensive sustainability information to global capital markets and
to facilitate interoperability with jurisdiction-specific disclosures and/or aimed at broader stakeholder groups.
International Framework
Detailed guidelines on how to report and communicate ESG topics in a sustainability report
Provide a sustainability reporting standard
It is widely recognized as being credible and reliable
Aims to drive ambitious corporate climate action by providing a framework for setting science-based targets (SBTs) aligned with the goals of the Paris Agreement
Collaboration between CDP (formerly the Carbon Disclosure Project), the United Nations Global Compact, the World Resources Institute (WRI), and the World Wide Fund for Nature (WWF), supported by a broader group of stakeholders
SBTi provides criteria and guidelines for companies to set SBTs that are in line with the latest climate science, ensuring that emissions reduction targets are sufficiently ambitious and contribute to global climate goals
Promotes transparency and accountability in corporate climate action by publicly disclosing validated targets and progress reports, enabling stakeholders to track companies' emissions reduction efforts over time
A non-profit organization committed to establishing and enforcing industry-specific standards aimed at assisting companies in disclosing financially relevant sustainability information to investors and other financial stakeholders.
Serve as an ESG framework and identify sustainability issues
International non-profit organization that aims to drive companies and governments to disclose their environmental impacts
CDP collects environmental data from thousands of companies worldwide through annual disclosure requests, encouraging transparency and accountability in environmental reporting
Guides companies on how to measure, report, and manage their environmental impacts
Evaluate companies and cities by assessing the information they provide during the annual reporting process, scoring them according to their progress in disclosure and their strides toward environmental leadership
Helps companies to provide accurate and credible sustainability information about their products
Developed by the United Nations Environment Programme (UNEP) and the International Trade Centre (ITC) in collaboration with stakeholders from governments, industry, academia, and civil society
Aim to empower consumers to make informed purchasing decisions by providing clear, understandable, and easily accessible product sustainability information, enabling them to choose products aligned with their values and preferences
Corporate sustainability initiative that calls companies to adopt sustainable and socially responsible policies regarding ESGs
24219 participants in 167 countries
Companies can join the compact and thereby commit to integrating principles into their corporate strategies. It provides support and guidance and is not legally binding, just voluntary
ISO 59004 is the first standard to provide an international definition of the circular economy and identifies six complementary and interconnected principles: systems thinking, value creation, value sharing, resource management, resource tracking, and ecosystem resilience.
International definition: Establishes a global definition of the circular economy, creating a unified understanding and framework.
Six Principles:
Systems Thinking: Understanding the interdependencies within the circular economy.
Value Creation: Generating sustainable value through circular practices.
Value Sharing: Equitably distributing value among all stakeholders.
Resource Management: Efficient use and reuse of resources.
Resource Tracking: Monitoring resource flow to ensure circularity.
Ecosystem Resilience: Enhancing the ability to withstand environmental, social, and economic shocks.
Guidance for implementation:
Provides practical guidance for implementing circular economy principles and defines key terminology to ensure clarity and consistency.
Offers actionable steps towards achieving sustainability goals, making the transition to a circular economy more manageable.
Benefits of Adopting ISO 59004:
Sustainable Solutions: Enables the delivery of more sustainable and ambitious solutions.
Stakeholder Relationships: Improves relationships with stakeholders by promoting transparency and collaboration.
Fulfillment of Obligations: Facilitates the effective and efficient fulfillment of voluntary and legal obligations.
Climate Change Mitigation: Contributes to efforts in mitigating and adapting to climate change.
Resilience: Increases resilience against resource scarcity and other environmental, social, and economic risks.
The Product Circularity Data Sheet (PCDS) is an initiative launched by Luxembourg’s Ministry of Economy in collaboration with 50 companies. It aims to standardize data on the circular aspects of products, raising awareness and providing reliable information about a product's circular life. It helps businesses to build circular business models + reduce virgin material consumption by providing data on product level circularity info, e.g. recycled content, repairability, harmful chemicals, etc.
aims to facilitate circular business models by supplying manufacturers with standardized format for communication between suppliers and manufacturers, machine readable, open code and auditable
Establishes a standard data source for all stakeholders to assess the circularity of a product, enhancing the transparency and reliability of circular economy data.
Sets up an audit system based on the data produced, ensuring the credibility of the information through a three-fold system:
Data Template: Contains standardized and trustworthy statements on product circularity.
Third-Party Verification: Validates the content of the PCDS through an independent verification process.
Standardized Data Exchange Protocol: Uses decentralized data storage to facilitate secure and efficient data exchange.
Benefit: Open Data and open source: The PCDS serves as an official standard for communicating data on the circular economy properties of products, described as follows:
Ensures accessibility of PCDS data to all relevant stakeholders, including platforms, suppliers, customers, and third-party verifiers.
Facilitates efficient data exchange throughout the supply chain.
Maintains the integrity of the data through a decentralized solution.
Every country and region has advanced in pursuit of sustainability by setting key milestones tailored to their unique priorities.
Here is a list of the regulations and framework specified to each region.
Here, you will find an overview of the regulations, frameworks, and initiatives regarding environmental impacts across all product categories applicable in the US.
Requires major Federal contractors to publicly disclose their greenhouse gas emissions and climate-related financial risks and set science-based emissions reduction targets
Depending on the significance of the contractor, more information must be disclosed
Federal suppliers impacted by this rule can start moving toward compliance while achieving business wins by taking three actions:
Measure current GHG emissions
Identify and quantify climate risk
Set emissions reduction target(s) through SB
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Regulations aimed at improving and unifying climate-related disclosures within public companies and during public offerings.
The rules mandate registrants to disclose:
Significant climate-related risks and corresponding strategies for mitigation or adaptation.
Insights into the board's supervision of climate-related risks and the involvement of management in addressing these risks.
Details regarding any substantial climate-related objectives or milestones affecting the registrant's operations, outcomes, or financial status.
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California regulation
Starting in 2026
Applicable to all companies that do business in California and whose annual revenues in excess of $1 billion
The law that states that Scopes 1, 2, and 3 GHG emissions for the prior fiscal year must be disclosed by reporting to emissions reporting organization
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California regulation
Applicable to all companies that do business in California and whose annual revenues in excess of $500 million
Climate-related financial risks under Task Force on Climate-related Financial Disclosures (TCFD) & measures taken to mitigate/adapt to these risks
Prepare and publish a publicly available report on the company’s internet webs
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Here, you will find an overview of the regulations, frameworks, and initiatives regarding environmental impacts across all product categories applicable in the UK.
UK regulation similar to EU Green Claims Directive
Set of guidelines to provide businesses with clear advice on how to make accurate and truthful environmental claims and prevent misleading or deceptive green marketing practices in their advertising and marketing
Provides clarity on what constitutes a valid green claim and the substantiation required to support it
Covers various aspects of environmental impact, including energy efficiency, carbon footprint, resource conservation, and waste reduction
The GCC is based on six overarching principles. Environmental claims must:
Be truthful and accurate
Be clear and unambiguous
Not omit or hide important information
Be substantiated,
Consider the product or service's entire life cycle, and
Comparisons must be fair and meaningful
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UK regulation
The Consumer Protection Regulations make it unlawful for a business to engage in "unfair commercial practices."
The term is defined broadly but includes making misleading statements about a product or service (including by omitting material information) if it is likely to affect consumers’ purchasing decisions.
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Here, you will find an overview of the regulations, frameworks, and initiatives regarding environmental impacts across all product categories applicable in Japan.
