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£193billion worth of UK goods risk being stuck at EU border – urgent new warning


The proposed Green Deal aims to make the EU carbon neutral by 2050, and includes efforts to make traceable, sustainable products the norm while prohibiting misleading green claims. Attention to increasingly sustainable goods has been driven by consumer interest and demand.

The Deal includes over 70 regulations, many of which will impact UK businesses who buy and sell goods with the EU. Confusion is already plaguing leading UK retailers due to a lack of clarity over which rules are already in place or likely to be implemented, delayed, or dropped in the next few years.

Today, AI-powered verification platform Compare Ethics has released new data suggesting that unless UK businesses are prepared, £193 billion worth of goods could be stuck at EU borders. An average UK retailer exports £1.6 million worth of goods into the EU, yet would incur a cost burden of £154,000 due to a delay.

Abbie Morris, CEO of Compare Ethics said: “The EU is leading the way in responding to ethical consumerism. Businesses need to take note – noncompliance with the avalanche of new rules will mean restricted market access for UK or international companies who want to grow in Europe. 

“In a shifting economic and increasingly green landscape retailers must equip themselves with the necessary capabilities to navigate the changing regulatory environment and avoid border delays. This includes urgently investing in data collection, trackability, and reporting capabilities against their highest-risk areas.”

Border disruption could also incur substantial costs including storage and delay charges of around 30% of the total cost, and revenue loss through supply chain disruptions, amounting to a potential burden of £9 billion for UK-EU trade. 

Despite the positive impact the Deal will have, its passage has been impacted by delays from member states due to a backlash against some of the measures which are seen as costly and burdensome to businesses. Yet preparing for the Deal offers opportunities for growth.

Businesses who are already investing in sustainable practices are more likely to have resilient supply chains and attract a broader consumer base. In the past five years, businesses who successfully made sustainability related claims achieved a growth rate 8% higher than competitors without such claims. Aligning operations with environmental and social responsibility can also lead to better access to capital – 84% of companies reported a greater ability to attract external investment – and report significantly higher employee engagement and retention.

To continue to be able to make green claims while navigating the changing regulatory environment, businesses need to prepare for necessary compliance processes. Existing regulations like the Textile Labelling Regulation and Waste Shipment Regulation are already in effect, and the Empowering Consumers Directive has just been adopted. The Directive will prohibit insufficiently explained generic claims such as “eco-friendly,” or “green,” drastically altering the way many products are described and marketed alongside the level of justification required.  

Without scalable compliance capabilities UK businesses risk losing hours hours to collect the right data, set up the necessary systems, and report back to regulators before even reaching the border.

Expected future regulations range from disallowing products not certified as deforestation-free, set to take effect in December, to specific frameworks set for products with ecodesign requirements, such as product durability and reusability, agreed by the Commission in December 2023. Adding to the complexity, each business’s scale and the variety of product groups they offer will face various regulations with differing timescales and transition deadlines.

Businesses that prioritise scalable sustainability and compliance technology in line with these regulations will significantly reduce the cost of compliance burden in an increasingly competitive market. These are the businesses that will be best placed to capitalise on the growth opportunities presented by net zero, which could include better access to markets and increased capital.

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