Organizations should act now to stay ahead of new regulations

As sustainability requirements reshape global trade, businesses should begin preparing for key developments such as EmpCo, PPWR, EUDR, and ESG reporting expectations.

SRI LANKAN EXPORTERS targeting the European Union are being urged to prepare immediately for sweeping new sustainability regulations that will fundamentally change how businesses market products, manage supply chains and demonstrate environmental and social responsibility.

Beginning September 27, 2026, companies selling goods and services into the EU will face tougher scrutiny under the Empowering Consumers for the Green Transition Directive (EmpCo), which is designed to eliminate misleading environmental claims commonly known as "greenwashing."

Businesses found making unsubstantiated sustainability claims could face penalties of up to €2 million or 4% of annual turnover in the relevant EU member state, together with reputational damage and possible restrictions on market access.

According to Peterson Solutions Sri Lanka, many exporters remain unaware that the new rules extend well beyond product labels, applying equally to websites, social media, advertisements, sustainability reports and other promotional material carrying environmental claims.

"The era of simply saying a product is 'green', 'eco-friendly' or 'sustainably produced' is coming to an end," said Dr. Rukshan Gunatilaka (PhD), Asia Pacific Regional Manager of Peterson Solutions Sri Lanka. "Businesses must now be able to produce credible evidence supporting every sustainability claim they make. Compliance is no longer just a regulatory obligation. It’s becoming an absolute necessity for access to EU markets."

He said sustainability has evolved from a voluntary corporate initiative into a core business requirement as governments, investors and consumers increasingly demand transparency and accountability throughout global supply chains.

"Doing business and protecting the planet can no longer be treated as separate objectives," Dr. Gunatilaka said. "Environmental, social and governance performance now has a direct impact on a company's reputation, shareholder value and long-term commercial success. Companies that fail to address these issues risk losing both customers and market confidence."

The EU's regulatory reforms form part of a broader shift towards more responsible global trade. Besides EmpCo, exporters must also prepare for the Packaging and Packaging Waste Regulation (PPWR), which begins applying from August 12, 2026, with further requirements phased in through 2030, and the EU Deforestation Regulation (EUDR), whose due diligence obligations take effect for larger companies on December 30, 2026.

The regulations affect a wide range of Sri Lankan export sectors, including food and agriculture, tea, spices, rubber products, apparel and textiles, fisheries, plastics, tourism-related products and even certain service industries supplying European clients.

Peterson Solutions says one of the biggest misconceptions among businesses is that these regulations apply only to European companies. In reality, any organization exporting to Europe, or making sustainability claims reaching European consumers, may be required to demonstrate compliance.

"The European market remains one of Sri Lanka's most valuable export destinations," Dr. Gunatilaka said. "Companies that prepare early will not only avoid regulatory risks but also strengthen customer trust, improve competitiveness and position themselves for long-term growth."

Dulini Wijeratne, Assistant Manager - Business Communications and Marketing at Peterson Solutions Sri Lanka said, “Businesses should view compliance as a strategic investment rather than merely an additional cost.”

"Many established exporters already regard sustainability compliance as an essential part of doing business in Europe," she said. "Companies planning to enter the EU market are also beginning preparations early because they recognize that robust sustainability systems create long-term commercial advantages."

Part of the Netherlands-headquartered PCU group, established in 1920, the company operates in more than 80 countries, delivers projects across 120 countries and serves a global client base exceeding 40,000 clients.

Peterson Solutions provides certification support, sustainability consulting, responsible sourcing, supply chain traceability, ESG advisory services, academy solutions and technology-based solutions. Its digital platforms help organizations monitor carbon emissions, manage ESG performance, strengthen due diligence systems and maintain documentation required for increasingly complex international regulations.

In Sri Lanka, Peterson Solutions works across food and agriculture, apparel, plastics, rubber manufacturing, fisheries, aquaculture, tourism and other export-oriented industries. It also supports clients in Cambodia, Myanmar and the Maldives.

The company advises organizations to begin reviewing their sustainability communications, supply chains and governance systems now, rather than waiting until regulatory deadlines approach.

"The question regulators, investors and consumers are increasingly asking is no longer whether a company has sustainability ambitions," Dulini Wijeratne said. "The question is: Can you prove it?"

To support organizations preparing for these evolving requirements, Peterson Solutions Sri Lanka will conduct a complimentary webinar titled "ESG Reporting Basics: Why, When & How" on 29 July 2026 from 3.30 p.m. to 4.30 p.m. (Sri Lanka Time).

Interested participants may register at: https://app.livestorm.co/peterson-solutions/esg-reporting-basics-why-when-and-how

Many organizations understand that sustainability is becoming important but are often unsure where to begin. The webinar is designed to provide practical guidance and help businesses take their first steps towards effective ESG reporting," said Dulini Wijeratne.

Peterson Solutions Sri Lanka said businesses seeking to understand how the evolving EU sustainability framework may affect their operations can obtain guidance on compliance requirements, risk assessments, supply chain traceability, ESG implementation and evidence-based sustainability reporting.