Sri Lankan exporters found making unsubstantiated sustainability claims while exporting to certain European Union countries could face penalties of up to €2 million or 4% of annual turnover in the relevant member state, under the Empowering Consumers for the Green Transition Directive (EmpCo), according to Peterson Solutions Sri Lanka, a consulting firm headquartered in the Netherlands.
Beginning 27 September this year, 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’.
Peterson Solutions have indicated that 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 Peterson Solutions Sri Lanka Asia Pacific Regional Manager Dr Rukshan Gunatilaka (PhD). “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 12 August 2026, with further requirements phased in through 2030, and the EU Deforestation Regulation (EUDR), whose due diligence obligations take effect for larger companies on 30 December 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.