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Navigating Environmental Regulations: How the European Green Deal Affects the Fashion Industry

As you know, on the European level a lot of laws and regulations on Environmental & Social Governance are being adopted. This is a part of the European Green Deal and the efforts of Europe to reduce Greenhouse Gas emissions to zero by 2050, amongst other things. A part of the European Green Deal is the EU Strategy for Sustainable and Circular Textiles. This strategy contains different measures, such as the Green Claims Directive, Ecodesign Directive, and Extended Producer Responsibility. Are you still with me? Maybe this graphic helps:



These rules, regulations, and directives are meant to shape the 'green transition', ensuring that all companies are aligned on the collective actions that need to be achieved to meet the climate targets. The aim of the European Green Deal is to transform the EU into a modern, resource-efficient, and competitive economy.


So what does this mean for fashion brands and textile companies? We have summarized the most important Directives and Regulations that are coming up. And, as you have come to expect from us, we included clear actionable steps for each of them. To help you to understand which rules apply to your company, and what you need to do to ensure that you comply.


We cover the following Regulations and Directives:


Key insights

 
  • Learn which regulations and directives will significantly impact the fashion industry's operations, including product design, transparency, waste management, and sustainability reporting within the upcoming years.


  • Discover which steps you need to take to be compliant and when to take them.


 



Ecodesign Directive/ Ecodesign for Sustainable Products Regulation (ESPR)


The Ecodesign Directive aims to make products placed on the EU market more sustainable. It focuses on enhancing the durability, reliability, reusability, upgradability, repairability, ease of maintenance, refurbishment, and recyclability, as well as the energy and resource efficiency of products within the EU. The proposal builds on the existing Ecodesign Directive, which currently only covers energy-related products.


Key requirements and timelines for this directive will be published by the end of 2023. However, it is highly likely that these requirements will center around creating more durable, recyclable, and energy-efficient products. A significant aspect of this directive is the right to repair, which obligates sellers to offer repair services unless replacement is more cost-effective.


Another significant part of the Ecodesign Directive is the Digital Product Passport (DPP). This passport will need to provide detailed information on the product's origin, material composition, repair options, and disassembly methods. The fashion industry is expected to implement this by 2026. To prepare yourself for these regulations you can start by mapping your entire value chain, including raw material, production processes, product performance, environmental impact, and social impact. Conducting Life Cycle Assessments (LCAs) can also help you to be prepared to implement a DPP.


When does it take effect?

  • Key requirements and timelines will be published by the end of 2023. The ESPR could then start applying in 2024.

Who needs to comply?

  • The initial list of identified products for the first working plan includes textiles, furniture, mattresses, tires, detergents, paints, and lubricants.

  • More information on who needs to comply will follow by the end of 2023.

What steps are needed?

  • The design of products will need to be reviewed to address ecodesign requirements. These requirements will follow by the end of 2023.

  • New transparency requirements for the destruction of unsold goods, will also follow until the end of 2023.



Green Claims Directive


Something we talk about a lot at The Sustainability Club are the in March 2023 proposed rules on making sustainability claims in the EU. The Green Claims Directive gives clear rules on how to communicate about sustainability and it protects consumers from greenwashing. These rules are then formulated into guidelines by 'watchdog' organizations from the different EU member states, such as the Authority Consumer and Markets (ACM) in the Netherlands.


When does it take effect?

  • Started from June 2023 in the Netherlands

Who needs to comply?

  • All companies selling goods or services within the European Union that have annual revenue exceeding EUR 2 million and have more than 10 employees.

What steps are needed?


All consumer-facing sustainability claims need to follow these guidelines:

  • Sustainability claims need to be accurate, clear, specific, and complete

  • Claims need to be accompanied by facts

  • Comparisons with other products or competitors need to be fair

  • Future sustainability ambitions need to be concrete and measurable

  • Visual claims and labels need to be helpful and not confusing

If you want more information on how to comply with the rules on making sustainability claims, have a look at our article on greenwashing, download our greenwashing checklist, or book a greenwashing training with us.



Waste Shipment Regulations


The waste shipment regulations have already been in place since 2021 and are regulating EU waste exports. These regulations simplify the transportation of waste for recycling or reuse within the EU and introduce measures to combat illegal waste shipments. These rules are relevant to all companies shipping waste across borders, including unsold stock or excess material. Companies must register the type and destination of the waste they ship within the different EU member states affected. Additional information on waste shipment registration affecting The Netherlands can be found on the Dutch government's website here.


When does it take effect?

  • It was adopted by the Commission on the 17th of November 2021.

Who needs to comply?

  • All EU companies that export or import waste out of the EU or between member states.

What steps are needed?

  • The register procedures for waste transport depend on the type of waste, the way it is being processed, the country of origin, the transport route, and the destination country.

  • The Dutch registration can be found here.



Extended Producer Responsibility (EPR) and the Waste Framework Directive (WFD)


EPR and the Waste Framework Directive shift the responsibility for a product's lifecycle to the producer. It is already in effect in several EU countries including Germany, France, and The Netherlands, and is expected to be implemented by all EU countries by the end of 2024.


On the 1st of July 2023, the Dutch Extended Producer Responsibility Textiles Decree (Besluit Uitgebreide Producenten Verantwoordelijkheid Textiel/ EPR System) came into force. This means that all textile producers are responsible for what happens to their products after use. Depending on your company's size, you must establish an appropriate collection, recycling, and reusing system. By 2024, you must register and report the volume of textiles you place on the market. Starting in 2026, report the volume of textiles you reuse and recycle. From 2025, ensure that an increasing percentage (by weight) of your textile products are prepared for reuse or recycling, beginning with 50% in 2025 and reaching 75% in 2030. Find more information here.


When does it take effect?

  • On the 1st of July 2023 in the Netherlands

Who needs to comply?

  • The decree covers all newly manufactured textile products in the categories of clothing and household linens, which are first put on the European market. Shoes and bags are not (yet) included.

What steps are needed?

  • From 1 July 2023, register with the according national European government.

  • From 2024, report the volume of textiles they sell in the Netherlands.

  • From 2026, report the volume of textiles they reuse and recycle.



REACH Revision


REACH, or the Registration, Evaluation, Authorization, and Restriction of Chemicals that enter the European Union, is undergoing revision. New restrictions are expected for substances such as microplastics, skin sensitization, bisphenol A, PFAs, and PFHxA. The revision is currently expected to enter into force between 2025 and 2027. We recommend checking if your products are currently REACH compliant and preparing for upcoming restrictions by revising your product portfolio.


When does it take effect?

  • The revision is currently expected to enter into force between 2025 - 2027.

Who needs to comply?

  • All articles, mixtures, and substances placed on the EU/EEA market.

What steps are needed?

Based on the current information, the REACH Revision could result in the following new duties:

  • New registration requirements for certain polymers of concern

  • Update of existing registration dossiers to reflect enhanced information requirements/scrutiny

  • Chemical Safety Report in all tonnage bands (incl. 1-10 tonnes per year)

  • Stricter requirements for intermediates

  • Electronic formats for Safety Data Sheets (SDSs)

  • Update SDSs and Exposure Scenarios, incl. as a result of new Mixture Assessment Factors

  • Compliance with broad REACH restrictions, especially group-based

  • Reporting to ECHA by downstream users of Candidate List substances

  • Response to tightening enforcement – “Zero Tolerance Approach to Non-Compliance”



Corporate Sustainability Reporting Directive (CSRD)


This EU law, which came into force on January 5, 2023, mandates that all large and listed companies disclose information about the risks and opportunities related to social and environmental issues, as well as the impact of their activities on people and the environment. The new rules will apply for the first time in the 2024 financial year, with reports published in 2025.


When does it take effect?

  • Went into force on the 5th of January 2023. The first companies will have to apply the new rules for the first time in the 2024 financial year, for reports published in 2025.

Who needs to comply?

Will be phased in, in four different stages. The obligation to report according to the new standards will apply to:

  • Companies already covered by the NFRD as of fiscal year 2024

  • Large companies that meet two of the following criteria, from fiscal year 2025

    • turnover exceeds €40 million per year

    • a balance sheet total of more than €20 million

    • more than 250 employees (average over one year)

  • Listed SMEs as of fiscal year 2026

  • Non-EU companies as of fiscal year 2028

What steps are needed?

  • The CSRD requires companies to publish what sustainability strategy they have formulated, what goals are associated with it, what the policies and measures are to achieve those goals, and how progress is monitored and reported.



Corporate Sustainability Due Diligence Directive (CSDDD)


The CSDD are new rules that will ensure that businesses address the adverse impacts of their actions, including in their value chains inside and outside Europe. The CSDD will make Due Diligence mandatory. This means you will need to identify, prevent, or mitigate, and ultimately terminate, the impacts of your corporate activities on human rights and the environment. The formal adoption of this directive is not expected before 2024 and will certainly first be applicable only to very large companies and then be slowly extended to smaller ones.


When does it take effect?

  • Once the CSDDD has been formally adopted – not expected before 2024 – Member States will have two years to implement the CSDDD into national legislation.

Who needs to comply?

The CSDDD will also be implemented in several stages. Starting with very large companies with more than 1,000 employees and a worldwide net turnover of EUR 300 million (or non-EU companies with EUR 300 million turnover in the EU). Within three years after the entry into force of the CSDDD, Groups 1 and 2 will follow.

  • Group 1: 500+ employees and net EUR 150 million+ turnover worldwide.

  • Group 2: Companies in high-impact sectors. - 250+ employees and net EUR 40+ million turnover worldwide, and operating in defined high-impact sectors, e.g. textiles, agriculture, extraction of minerals. For this group, the rules start to apply two years later than group 1.

What steps are needed?

  1. Integrate due diligence into policies.

  2. Identify actual or potential adverse human rights and environmental impacts.

  3. Prevent or mitigate potential impacts.

  4. Bring to an end or minimize actual impacts.

  5. Establish and maintain a complaints procedure.

  6. Monitor the effectiveness of the due diligence policy and measures.

  7. Publicly communicate on due diligence.


A lot to prepare for but we are also happy to see that we are getting guidelines and milestones for our work! Finally, something that we can hold onto and implement together as an industry.


Do you need help ensuring that your organization is up-to-date with the newest regulations and is taking in preparation for upcoming ones?


Plan a call and see if we can help you!





Note: We do not offer legal advice, but we help companies to adopt guidelines, and to develop sustainability roadmaps that are compliant with upcoming legislation.


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