Over the past few years, "sustainability" has moved from fun, exciting and rewarding to a world of confusion and tightening rules. When set against the backdrop of an even more confusing geopolitical landscape, for many, it has become too hard to think about.
Thankfully, the big changes affecting documentation, compliance and how you talk about ESG are now clear enough to plan around, and done right, the compliance records and the marketing claims can be built from the same record.
Starting now, marketing and communications teams need to be across the detail more than ever, working closely with ESG and operational teams to ensure compliance data is properly formatted and the right systems are in place. If it is built only for an audit, it will be unusable for comms. If it is built loosely for a press release, it will fail an audit. It has to do both.
Three rule changes sit behind all of this:
- a ban on destroying unsold goods, which includes simple "recycling" (from 19 July),
- tighter limits on green claims (from 27 September), and
- a squeeze on exporting textiles for reuse or recycling abroad (from 2027).
If none of those affect how your business handles returns, unsold stock or sustainability messaging, you can stop reading here. If one of them does, the rest is worth ten minutes.
From 19 July, large fashion and footwear retailers and brands (broadly, 250 or more staff or turnover above €50 million) cannot destroy unsold goods, and that means more than warehouse deadstock: it reaches surplus stock, excess inventory, and the products customers hand back. The single most useful thing to understand: "recycling" is not one thing, and not all of it is safe. Sending unsold goods to be shredded for fibre counts as destruction under the first rule. Sending the same goods to an operator who turns them into new product does not. Where your processor sits on that spectrum decides whether you are protected or exposed, so the first conversation to have is with them.
From 27 September, what you are allowed to say about being green is tightly defined. For a marketing reader: you can only say what you can prove. Your ability to talk about any of this, to claim you keep returned product in use or that you can trace where unsold stock goes, depends entirely on whether your ESG colleagues are capturing the right documentation, in the right structure, item by item.
Old habits the rules expose, and easy ways to misread them
Old habits that no longer hold up
"We cannot destroy it, so we will recycle it." Whether recycling is a safe route depends entirely on what your operator actually does. Shredding goods for fibre because nothing else was tried counts as destruction, alongside landfill and incineration. Processing that turns goods into a new product does not. The habit of treating "it went to a recycler" as the end of the story is the thing now exposed: you have to know, and be able to show, what happened to the goods.
"We will just donate it, or it goes to Africa for reuse, so this is easy to meet." From 2027, EU law sharply restricts exporting textile waste outside the OECD, and separately collected textiles count as waste that must be sorted before anything can be shipped. This is the legacy behaviour with the least evidence behind it, and the European Environment Agency has said so directly. EU exports of used textiles nearly tripled between 2000 and 2019 and have held at around 1.4 million tonnes a year since, most of it going to Africa and Asia. The EEA's own finding is that the common belief that donated clothing is always of use in those regions does not reflect reality: once exported, the fate of the textiles is often uncertain, a share is reused and much ends up dumped or burned in the open. That track record is precisely why the rules are tightening. The charities and sorters the donation route relies on have stayed viable partly by exporting a large share of what they take, because EU reuse and recycling capacity is limited. As that outlet narrows, while the ban and incoming producer-responsibility rules push more volume toward them, "someone else will take it" stops being a plan. Donation has to be real and documented, not a label on a bin.
Where the new rules are easy to misread
"This is a warehouse and deadstock issue." The rules explicitly cover customer returns, including anything sent back inside the 14-day cooling-off period and inside any longer returns window you offer. The wrong-size shoe that comes back in August is in scope. So this is not something you can hand to whoever runs the warehouse; it includes what customers give back to you every day.
"This is really only for the fast-fashion giants." It applies to all large companies placing apparel, accessories or footwear on the EU market, including non-EU online sellers. "Large" here is broadly a company with 250 or more employees, or turnover above €50 million (treat that as indicative rather than a precise legal test). Medium-sized companies follow in 2030. Only genuinely small and micro businesses are out.
Five things the new clarity gives you
1. There are three changes, but two you act on directly
Three rules sit behind this, and they pull the same way. The destruction ban (part of the Ecodesign for Sustainable Products Regulation) applies to large companies from 19 July 2026. The greenwashing rules (the Empowering Consumers Directive) apply from 27 September 2026. The two you act on directly are these: one governs what you do with unsold goods, the other governs what you claim about it. The third, the export squeeze from 2027, you do not act on so much as plan around, because it closes a back door many businesses rely on without thinking about it. Seen together, they describe a fairly simple rule to follow: keep goods in use, and only say what you can prove. If you plan for all three at once, your reporting and communications in the coming years will be much easier, and more predictable.
2. "Recycling" is a spectrum, and depending on who is processing your goods you are protected or exposed. It is your job to know
"Recycling" is not a single process. Plenty of operators describe themselves as recyclers while doing very different things, and the difference is now your liability, not theirs.
"Resale", "reuse", "repair" and "donation" all speak for themselves, but what we understand recycling to be in practice has a grey area that is worth understanding. It can range from simply shredding goods into low-grade fibres, while other operators genuinely remanufacture old products into new. The permitted routes, in order, are reuse and resale, repair and refurbishment, remanufacture into new products, and donation, all of which sit above destruction. If your processor turns old product into new product, you are above the line. If goods are shredded for fibre because nothing else was tried, that counts as destruction. The same box in your stores today could be on either side of the line, depending on how the operator handles what you send them.
The one common denominator? Paperwork. You need to document what you are sending and why, and your operator needs to give you evidence of what they actually do with it, so you can show your decision was sound. They cannot take the liability off your hands. They can only give you the evidence that supports it.
3. "We would prefer not to resell it" is not a valid reason
You can still recycle or destroy a product when a genuine exemption applies: it is unsafe, it is damaged or soiled beyond use and not worth repairing, or it was offered for donation and refused. Commercial preference, keeping discounted stock out of the market, protecting the brand by shredding good product, none of those are on the list. The exemptions are specific, and you have to be able to prove what you do.
The "offered for donation and refused" route is interesting to watch, because it is about to behave strangely. As the export squeeze above takes hold, the charities and sorters you would offer goods to are themselves under pressure, and some will start refusing what they cannot move. That makes the "refused" test easier to satisfy, which sounds convenient until you see where it leads: goods clear the last-resort bar sooner and get routed to documented recycling, the very destruction the ban set out to prevent. This is exactly why the record of what you did, and why, must be solid: regulators and auditors will look hardest at exactly these last-resort decisions.
4. Show us your numbers
Large companies must publish an annual figure on their own website: how many unsold items they discarded, by weight and category, why, and where the goods went. The first is due this year, on 2025 data. It is comparable against your peers, and a suspiciously low or absent figure is one of the things regulators are told to flag. This is a number comms will end up owning, whether or not anyone planned for it.
5. The greenwashing rules make your ESG colleague part of the marketing conversation
From 27 September, generic green claims ("eco-friendly," "sustainable," "climate neutral," "fully circular") are only allowed where you can prove recognised, excellent performance. It applies to existing campaigns and packaging, not just new ones. An instinctive response to the destruction ban, advertising "we never destroy" or "100% circular returns," is a claim you would need to substantiate. The penalty for getting it wrong is real: fines up to 4% of turnover in the affected market, plus product bans and public naming.
The practical consequence is that the person who can sign off on your sustainability messaging is no longer in the marketing team. It is whoever holds the documentation, usually ESG or compliance. If they are capturing, item by item, where unsold stock goes in a structure that holds up, you have claims you can make. If they are not, you have a story you cannot tell.
From 27 September, the person who can approve your sustainability claim is whoever holds the documentation. Build the evidence first, make the claim second.
Whose problem is this, exactly?
The obligation falls on whoever decides to discard the product. Not on whoever made it.
Picture a customer returning a pair of running shoes to a multi-brand retailer. The retailer cannot resell them and decides where they go next. At that moment, the retailer is the party carrying the obligation, even though another company designed and manufactured the shoe. You cannot hand that back up to the brand whose logo is on the side. If you took the return and you made the call, it is yours.
That does not mean the brand walks away clean. The brand has its own version of all of this to deal with: its own unsold stock in its own channels, its own public number, its own claims to substantiate. And increasingly, the brand needs to know what happened to its products after they left its hands, for its own reporting and its own circularity story. The only party who can tell them is the retailer who handled the return. So the same decision sits inside a web of stakeholders who all need a piece of the same record: the retailer who must justify the discard, the brand who must account for its own product, the recycler who has to route the item correctly, and, last but not least, the customer who handed it over.
This is why what you capture matters as much as that you capture it.
What is changing, and what is not
Not changing: the customer returns experience. Nothing in either rule forces you to change how a customer returns a product. The reverse-logistics decision happens out of their sight.
Not changing: recycling as a legitimate route, when the process fits. Processing that keeps material in use is still available, and remanufacture into new product sits comfortably above the line. What changed is that the type of process now matters: the same word can describe a compliant route or a form of destruction, so "we recycle it" is no longer an answer on its own.
Changing: where the recycling is a form of destruction, the decision has to be defensible. When the route you use counts as destruction (shredding for fibre, energy recovery, disposal), you can only do it under a specific exemption, and that brings paperwork. The reason has to be recorded, the relevant exemption stated to the operator when the goods are handed over, and the evidence kept for five years. (Earlier drafts asked for ten years and an external audit; both were dropped.) Where the route is genuinely remanufacture or reuse, it is not destruction and this chain does not apply, which is another reason knowing your processor's actual process matters.
Changing: what you are allowed to say. Vague green language is out. Specific, provable claims are in.
Changing: the documentation and evidence threshold. Why something came back and why something must be destroyed are no longer the same thing, and you need to be able to explain this with documentation. Most retailers do not capture this at all. Implementing systems that capture this once, in the right format, the moment the items come into store, will make life easier for everyone.
What this looks like in practice, and how it tends to go wrong
Picture the actual moment. A returned shoe, a staff member who is not a compliance specialist, a queue behind them, and a decision to make in seconds about an item that might be resaleable, might be repairable, or might be finished. Multiply that by every return, every day, across every store.
Left to itself, that situation has one default: the item goes in whatever box is already there, the reason gets recorded loosely or not at all, and the structured record that the annual disclosure needs has to be reconstructed at year-end from memory and guesswork. Regulators have anticipated this. A gap of more than 10% between the figure you publish and the records your operators hold triggers a review, and the burden of proof sits with you.
The question is not whether to capture the reason an item could not be sold. It is how to capture it so simply that a busy person does it consistently, and so cleanly that it serves more than one purpose afterwards.
It does not have to be complicated, and the simplest version is the only one that survives counter-volume. The moment a member of staff decides a returned item cannot be sold again, that is the moment to capture why. A photo, the fault, a date, and where it is going next. Done once, at the point of decision, that single record does several jobs at the same time.
The compliance minimum is narrow: the condition of the item, the fault, and why repair or resale is not viable. That is what the exemption itself needs, and on its own it would let the retailer cover its own back. But capturing the brand and the model in the same action is what makes the record useful to everyone else who touches the item:
- For the retailer, condition and fault are evidence that the discard decision was sound.
- For the brand, the model and identity are what let them account for their own product downstream, the data they now need and can only get from you.
- For the recycler, brand and model are often what determine the correct route, since material, take-back schemes and remanufacture lines can be product-specific.
- For you, the same brand, model and history are the start of a customer record, the one thing none of the rules ask for and the one thing worth the most.
So the record that satisfies the regulator is a subset of the record worth building. Capture only the condition and you have done the bare minimum for one party. Capture the brand and model in the same moment, and the same action serves the brand, the operator, and your own customer file, at no extra effort to the person holding the shoe.
The record that satisfies the regulator is the smallest part of the record worth building. Same action, same moment, many stakeholders.
That returned shoe is three things at once: a compliance line, a known product with a history, and a customer standing in front of you. The law only makes you treat it as the first. Capturing the reason for discard is the same action as capturing the item and the moment, so the brands and retailers that build the compliance record properly get the customer record for free.
The businesses worth watching are not treating the summer as two compliance deadlines to survive. They are treating the returned product as a customer moment they were already paying for and never wrote down.
From 19 July you will have to prove where an unsold product went. From 27 September you will have to prove what you say about it. Both come down to one record, captured once, that your ESG team can stand behind and your marketing team can talk about. The retailers that build it well will also know, for the first time, who handed the product back, and whether they came back too.