The ESG Shifts Reshaping UK and EU Business: What to Prepare for Now
The UK and EU are entering a new phase of sustainability regulation. From 2026 onwards, a range of new rules will begin moving from policy discussions into real-world requirements, changing how products are designed, marketed and managed.
This blog highlights some of the key regulations behind this shift and what they mean in practice. Not all of these will apply directly to every business, but they clearly signal the direction of travel and how expectations of businesses are changing.
Individually, these regulations can feel technical and complex. Taken together, however, they point to a clear shift in expectations. Sustainability is moving away from voluntary commitments and marketing language towards practical, measurable business practices.
For companies operating across UK and European markets, the challenge is no longer understanding each regulation separately, but recognising the overall direction and preparing systems, supply chains and decision-making accordingly.
The End of Vague Sustainability Claims
One of the most immediate changes relates to how sustainability is communicated to customers, with regulators increasingly targeting greenwashing.
In the EU, the Empowering Consumers for the Green Transition Directive (ECGT) introduces stricter rules for environmental claims made when selling or marketing products to EU consumers. Broad terms such as “environmentally friendly”, “green” or “sustainable” will no longer be allowed unless supported by clear evidence. The Directive also introduces new requirements to provide clearer information on product durability, repairability and spare parts availability, helping consumers compare products using reliable information rather than broad claims.
Alongside this, sustainability labels will need to be based on recognised certification schemes and independently verified, increasing scrutiny around how certifications and environmental labels are used in marketing.
The ECGT applies to all businesses marketing products or services to EU consumers, including non-EU companies selling into the EU. Rules will apply from 27 September 2026 to both new and existing products on the market.
While new EU legislation is coming into force, it is important to note that environmental claims are already regulated in the UK under the Competition and Markets Authority’s Green Claims Code, which applies to Any business making environmental claims in the UK, including claims on websites, product packaging, marketing materials and advertising.
The Green Claims Code sets out six principles for environmental claims, requiring claims to be truthful and accurate, clear and unambiguous, and supported by robust evidence. Claims must consider the full lifecycle of a product and must not omit or hide important information.
In the UK, enforcement powers are also strengthening. Under the Digital Markets, Competition and Consumers Act 2024, the Competition and Markets Authority will be able to issue significant fines for misleading environmental claims, with enforcement expected to increase from 2026 onwards.
Implications for businesses
Sustainability claims must be clear, specific and evidence-backed
Generic claims and vague language create regulatory risk
Internal sign-off processes for sustainability claims will become essential
Marketing, product and legal teams will need closer collaboration
Trust is becoming regulated rather than assumed
Product Design Becomes a Regulatory Issue
A key shift in EU regulation is moving responsibility earlier in the product lifecycle, focusing on design rather than waste at end-of-life alone.
The Ecodesign for Sustainable Products Regulation (ESPR) creates a framework for introducing requirements around durability, repairability, recycled content and material use across different product categories.
Rather than addressing environmental impacts after products are discarded, regulation is increasingly aiming to prevent those impacts at the design stage, embedding circular economy principles directly into product requirements.
ESPR will apply to manufacturers, importers, and non-EU businesses placing products on the EU market. Product-specific requirements will be introduced gradually, with priority categories including textiles, furniture, and consumer goods from 2026 onwards, with broader implementation continuing into the late 2020s.
Digital Product Passports (DPPs) will support this transition by introducing digital records containing information on materials, origin, repair options and end-of-life handling. Requirements will be introduced on a phased basis by product category and will apply to all businesses placing affected products on the EU market, with priority sectors such as textiles, furniture and electronics expected to be among the first affected from 2027.
The forthcoming EU Circular Economy Act is expected to reinforce these changes by strengthening demand for secondary materials and improving the functioning of recycled material markets. The proposal is expected to focus on improving material recovery, reducing reliance on virgin materials and supporting circular business models. It is anticipated to be published in 2026, with implementation timelines to follow.
Implications for businesses
Product information becomes a compliance requirement
Design decisions increasingly affect regulatory risk
Companies will need better visibility of materials and components
Sustainability is shifting upstream into product development
Packaging Moves from an Operational Issue to a Financial Risk
Packaging is quickly becoming one of the most regulated aspects of product systems across both the UK and EU.
The EU’s Packaging and Packaging Waste Regulation (PPWR) introduces rules around packaging design, recyclability and waste reduction. All packaging placed on the EU market will need to be recyclable by 2030, with minimum recycled content requirements introduced for certain plastic formats. A harmonised EU labelling system will also standardise how disposal information is communicated to consumers.
At the same time, Extended Producer Responsibility schemes are being strengthened across the globe, shifting financial responsibility for packaging waste management onto producers.
The UK is moving in a similar direction through economic incentives. From 2026, packaging EPR fees will be modulated according to recyclability, meaning harder-to-recycle formats will incur higher costs. The Plastic Packaging Tax will also increase to £228.82 per tonne for plastic packaging containing less than 30% recycled content.
Implications for businesses
Packaging choices will directly influence the bottom line
Accurate material data becomes essential
Packaging moves from being a logistics decision to a strategic priority
Supply Chain Transparency Becomes Mandatory
Regulation is increasingly addressing environmental risks within global supply chains, not just company operations.
The EU Deforestation Regulation (EUDR) requires businesses placing certain products (including timber, leather, rubber, cocoa, palm oil and soy) on the EU market to prove they are not linked to deforestation. Companies will need to gather location data, assess risks and submit due diligence statements before products can be sold in the EU.
EUDR will apply to any business placing in-scope products on the EU market, including UK companies exporting to the EU. It applies to medium and large companies from 30 December 2026, and micro and small enterprises from 30 June 2027.
Alongside this, chemical regulations under the EU’s REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals) continue to tighten, including new limits on formaldehyde emissions affecting furniture, textiles and coated materials entering the EU market from August 2026 which will apply to manufacturers, importers, and non-EU businesses placing in-scope articles on the EU market, including UK exporters.
Implications for businesses
Supplier engagement becomes essential for compliance
Documentation and traceability requirements increase
Exporting to the EU requires stronger supply chain oversight
Materials traceability moves from best practice to legal expectation
Climate and Energy management is strengthening in the UK
While EU regulation focuses strongly on products, UK policy is placing greater emphasis on operational performance and disclosure.
ESOS Phase 4 strengthens the UK’s mandatory energy assessment scheme by requiring organisations to report total energy consumption, energy intensity metrics and progress against previously identified efficiency opportunities. Companies must also produce formal action plans outlining how improvements will be implemented.
Alongside this, disclosure expectations are evolving. The UK Sustainability Reporting Standards (SRS) have recently been finalised and will require listed and large UK companies to disclose sustainability risks, opportunities and governance arrangements in a more consistent and decision-useful way, with mandatory reporting anticipated to commence in 2027.
In parallel, the UK’s Streamlined Energy and Carbon Reporting (SECR) framework has, since 2019, required large UK companies to report their energy use, Scope 1 and Scope 2 emissions, and energy efficiency actions annually within their financial filings. While SECR applies to large companies, emissions data is increasingly being requested across supply chains, meaning many smaller businesses are also being asked to measure and report their carbon emissions.
Implications for businesses
Energy performance requires ongoing monitoring
Efficiency actions must demonstrate measurable progress
Carbon reporting is becoming standard business practice
Climate considerations are moving into governance and strategy
Reporting expectations align more closely with financial disclosures
Responsibility Extends Across the Product Lifecycle
Across both the UK and EU, regulation increasingly applies responsibility beyond the point of sale.
Proposed UK Extended Producer Responsibility for textiles would require producers to fund the collection and treatment of textile waste, encouraging more durable and recyclable product design.
Together with EU circular economy policies, this reflects a broader move towards lifecycle responsibility, considering impacts from raw material sourcing through to disposal.
Implications for businesses
End-of-life impacts influence product decisions
Durable and repairable products reduce future risk
Circular business models gain regulatory support
What This All Adds Up To
Viewed collectively, these developments are less a collection of individual regulations and more a shift in how businesses are expected to operate.
Across the UK and EU, sustainability is moving from a communications exercise to an operational and design requirement. It is no longer just about what companies say, but about how products are made, how materials are sourced, how energy is used and what happens to products at end of life.
Across the UK and EU, policy is converging around five core principles:
1. Claims must be evidence-based and verifiable
2. Products must be designed for longevity and circularity
3. Supply chains must be transparent and traceable
4. Operational impacts must be measurable and managed
5. Producers are responsible across the full lifecycle of products
Rather than reacting to each regulation one by one, businesses that focus on these underlying themes will be better positioned to prepare efficiently, reduce risk and adapt as new requirements are introduced.
Preparing for What’s Ahead
The regulatory landscape will continue evolving through the late 2020s, but the overall direction is already clear. Organisations that begin building internal systems now, particularly around product data, supplier transparency and communications, are less likely to face disruption as new requirements take effect.
At B·ABLE, we support businesses to interpret regulatory change, assess readiness and develop practical roadmaps that support compliance while building long term resilience.
If you are unsure which of these regulations apply to your business, or how they will affect your products, packaging or supply chain, we can help you assess your exposure and build a practical plan to prepare. Get in touch to find out more – hello@bable.world