Organizations are urged to take immediate action to adapt to forthcoming sustainability regulations that are transforming global trade. Key developments such as the Empowering Consumers for the Green Transition Directive (EmpCo), the Packaging and Packaging Waste Regulation (PPWR), the EU Deforestation Regulation (EUDR), and Environmental, Social, and Governance (ESG) reporting standards are on the horizon.
Sri Lankan exporters targeting the European Union (EU) must swiftly prepare for significant regulatory shifts that will redefine product marketing, supply chain management, and the demonstration of environmental and social responsibility. Starting September 27, 2026, any business selling goods and services within the EU will be subject to heightened scrutiny under the EmpCo directive, aimed at eradicating misleading environmental claims, commonly referred to as “greenwashing.”
Firms making unsupported sustainability claims may incur fines reaching €2 million or 4% of their annual revenue within the relevant EU member state. Additionally, they risk reputational harm and potential restrictions on their market access.
According to insights from Peterson Solutions Sri Lanka, there is a widespread lack of awareness among exporters that these new regulations extend beyond product labeling. They will also apply to websites, social media platforms, advertisements, sustainability reports, and other marketing materials that include environmental claims.
Dr. Rukshan Gunatilaka (PhD), Asia Pacific Regional Manager of Peterson Solutions Sri Lanka, emphasized that the time of simply labeling a product as “green,” “eco-friendly,” or “sustainably produced” is over. “Businesses must now provide credible evidence for every sustainability claim they make. Compliance is not just a regulatory requirement; it is essential for accessing EU markets,” he stated.
He noted that sustainability has shifted from being a voluntary initiative to a fundamental business requirement, driven by increasing demands for transparency and accountability from governments, investors, and consumers across global supply chains.
“Conducting business and caring for the environment can no longer be seen as separate goals,” Dr. Gunatilaka remarked. “Performance in environmental, social, and governance areas directly influences a company’s reputation, shareholder value, and long-term success. Companies that neglect these concerns risk alienating customers and losing market credibility.”
The EU’s new regulations are part of a wider trend towards responsible global trade. In addition to the EmpCo directive, exporters must also brace for the PPWR, which takes effect on August 12, 2026, with additional requirements introduced until 2030, alongside the EUDR, which imposes due diligence obligations on larger firms starting December 30, 2026.
These regulations will impact various Sri Lankan export sectors, including food and agriculture, tea, spices, rubber products, apparel, textiles, fisheries, plastics, tourism-related products, and select service industries catering to European clients.
Peterson Solutions highlights a common misconception that these regulations only concern European firms. In reality, any business exporting to Europe or making sustainability claims that reach European consumers must demonstrate compliance.
“The European market remains one of Sri Lanka’s most significant export destinations,” Dr. Gunatilaka noted. “Companies that prepare in advance will not only mitigate regulatory risks but also enhance customer trust, boost competitiveness, and position themselves for sustainable growth.”
Dulini Wijeratne, Assistant Manager for Business Communications and Marketing at Peterson Solutions Sri Lanka, added, “Businesses should view compliance as a strategic investment rather than just an additional expense.” She pointed out that many established exporters already consider sustainability compliance a critical aspect of doing business in Europe, while new entrants are beginning to prepare early, recognizing that strong sustainability frameworks provide long-term competitive advantages.
Part of the PCU group based in the Netherlands and founded in 1920, Peterson Solutions operates in over 80 countries, executing projects in 120 nations and serving a global clientele of more than 40,000 clients. The company offers certification support, sustainability consulting, responsible sourcing, supply chain traceability, ESG advisory services, and technology-based solutions. Its digital platforms assist organizations in tracking carbon emissions, managing ESG performance, enhancing due diligence, and maintaining compliance with increasingly complex international regulations.
In Sri Lanka, Peterson Solutions collaborates across various sectors, including food and agriculture, apparel, plastics, rubber manufacturing, fisheries, aquaculture, and tourism. The firm also extends its support to clients in Cambodia, Myanmar, and the Maldives.
The company advises organizations to begin evaluating their sustainability communications, supply chains, and governance frameworks proactively, rather than waiting for regulatory deadlines to approach.
“The pressing question regulators, investors, and consumers are now asking is not whether a company has sustainability goals, but whether they can substantiate them,” Dulini Wijeratne stated.
To assist organizations in navigating these evolving requirements, Peterson Solutions Sri Lanka will host a free webinar titled “ESG Reporting Basics: Why, When & How” on July 29, 2026, from 3:30 PM to 4:30 PM (Sri Lanka Time). Interested participants can register at: https://app.livestorm.co/peterson-solutions/esg-reporting-basics-why-when-and-how.
Peterson Solutions Sri Lanka acknowledges that while many organizations recognize the importance of sustainability, they are often uncertain about where to start. The webinar aims to provide practical insights and support businesses in taking meaningful steps toward effective ESG reporting.
Businesses looking to comprehend how the evolving EU sustainability framework may influence their operations can seek guidance on compliance requirements, risk assessments, supply chain traceability, ESG implementation, and evidence-based sustainability reporting from Peterson Solutions Sri Lanka.
Source: Financial Chronicle Biz English | Sri Lanka Business News.
