From a European perspective, last year’s U.S. presidential election may have led to a big change, but we recognize another shift coming—one from this side of the world that will bring massive transformation to global commerce and planetary health, and for which corporate leaders are already embracing the long view.
The 2024 Forbes Sustainability Report affirms that environmental responsibility is a key factor for investment decisions, bowing to the demands and preferences of modern consumers. Close to 65 percent of C-suite respondents named sustainability a top-three priority, and leaders of companies with a chief sustainability officer reported 25 percent more confidence that their environmental and sustainability initiatives positively impact shareholder value. A new European regulation will add fuel to that perspective.
The European Ecodesign for Sustainable Products Regulation: A Continental Shift
July 18, 2024, quietly marked the beginning of a new era in global environmental policy. While the moment passed with little notice in the U.S., it introduced a landmark change in Europe: the formal adoption of the European Union’s Ecodesign for Sustainable Products Regulation (“ESPR”), a foundational component of the EU Green Deal. In April 2025, the first working plan to implement the regulation was adopted.
Ten years in development, ESPR represents a profound regulatory shift. For the first time, it introduces a binding and scientifically rigorous framework for defining and measuring the environmental impact of consumer products. At the heart of this framework is the Product Environmental Footprint (“PEF”) method. Unlike traditional measures that focus solely on carbon emissions, PEF takes a broader, scientific view—incorporating metrics like land use, water consumption, and resource depletion. The goal is to establish a common, objective standard across industries and member states, replacing greenwashing with verifiable data.
The scope of ESPR is sweeping. Most consumer products sold in the EU—spanning a significant portion of the global manufacturing economy—will soon be required to carry a “digital product passport.” This passport will contain detailed information about a product’s composition, environmental footprint, recyclability, and traceability. The aim is transparency: to make environmental impact as visible and measurable as price or performance.
But ESPR goes further. In addition to transparency, it will impose category-specific ecodesign requirements. These may include mandatory thresholds, such as a minimum percentage of recycled content or maximum allowable water usage. These performance-based rules will compel manufacturers to redesign products with sustainability at the forefront and transform how entire industries operate.
Implementation will roll out by product category, beginning with textiles, iron and steel, aluminum, furniture, mattresses, and tires. The first requirements are expected to take effect between 2026 and 2027.
A New Form of Environmental Leadership
ESPR is not simply another regulatory update—it signals a systemic shift in how markets will operate. For the first time, a major political institution has declared that access to its economy depends not on political alignment or trade preferences, but on compliance with scientifically defined environmental standards. With twenty-seven member countries and nearly 450 million consumers, the EU’s purchasing power commands global attention. This especially applies to the U.S., the world’s second-largest manufacturer, whose manufacturing exports amounted to more than $1.6 trillion in 2024, representing nearly 6 percent of U.S. gross domestic product.
ESPR can be understood as a form of environmental sovereignty—not grounded in protectionism, but in evidence-based policy that recognizes that manufacturing supply chains are global. It creates a universal benchmark that other nations and regions can adopt. In the United States, where federal climate policy remains fractured, states are taking similar steps. California’s SB 219, passed in 2024, requires both public and private companies to report climate-related risks, with a particular focus on Scope 1, 2, and 3 greenhouse gas emissions. Other states, including New York, Illinois, and Washington, are considering comparable measures.
Sustainability as Strategy, Not Compliance
While the ESPR rollout will be gradual, starting with high-impact industries such as fashion, steel, and furniture, the timeline is short—and the stakes are high. Companies that delay preparation risk losing access to the EU market. Those that act now may find themselves with a long-term strategic advantage.
The most immediate benefit of compliance is market access. But there’s a deeper opportunity: to gain a systemic understanding of a company’s environmental impact. Carbon footprint alone is no longer a sufficient measure. The PEF method provides a holistic, scientific framework for evaluating total environmental performance. This allows businesses to identify the most effective levers for improvement, rather than defaulting to narrow carbon-reduction strategies that may shift impacts elsewhere and create unintended consequences.
This more complete understanding can drive meaningful innovation. Because the PEF method is publicly available and free to use, companies can self-assess and act independently. The data gathered through this process can also be shared with consumers in a clear and credible way, offering a path to brand differentiation rooted in real environmental performance.
Such is the case for major European brands like Lacoste, Chantelle, and Decathlon, who have adopted the PEF method to understand the reality of their products’ environmental footprint, and to initiate ambitious strategies to reduce their footprint by acting on the right leverage. The goal of these pioneering players is to achieve a level of environmental performance that will allow them to meet the ecodesign requirements of ESPR and leverage their environmental performance as a competitive advantage.
In the US, where no such binding regulatory framework exists, ESPR presents a real opportunity for American companies whether they operate in Europe or not. Sustainability metrics and standards are currently unclear and inconsistent, meaning truly virtuous actors cannot distinguish themselves from their competitors by simply touting environmental claims. For US companies, especially those viewed as leaders in sustainability such as Patagonia or Ralph Lauren, adopting the scientific framework of ESPR can not only open real opportunities for them to understand their impact and concretely reduce it through ecodesign, but also enable them to distinguish themselves and promote environmental leadership in a rigorous and transparent manner, which is becoming increasingly correlated with shareholder value.
As climate-related disasters grow more visible—wildfires, droughts, floods—the demand for environmental accountability is no longer abstract. For younger generations in particular, sustainability is a core expectation. Companies unable to demonstrate credibility in this area risk losing not just customers, but talent. Conversely, those that lead with transparency and science-backed action have an opportunity to future-proof their operations and deepen trust with both consumers and employees.
A Roadmap for a Global Transition
By grounding environmental policy in science rather than politics, the PEF method offers a globally applicable roadmap. Any government, business, or institution can adopt its principles, regardless of local political context. That universality is part of what makes ESPR so powerful. It offers a level playing field where sustainability is measured by shared standards and driven by common goals.
The European Union has done more than pass a regulation. It has opened the door to a global ecological transition—one that aligns environmental ambition with systemic clarity. In doing so, it offers businesses not just a mandate to comply, but a framework to lead.
