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 27 September 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 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.
Peterson Solutions says one of the biggest misconceptions among businesses is that these regulations apply only to European companies. In reality, any organisation 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.”
Peterson Solutions Sri Lanka Assistant Manager – Business Communications and Marketing, Dulini Wijeratne 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 recognise 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 organisations 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 organisations 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 organisations preparing for these evolving requirements, Peterson Solutions Sri Lanka will conduct a complimentary webinar titled ‘ESG Reporting Basics: Why, When and How’ on 30 July 2026 from 3.30 p.m. to 4.30 p.m. (Sri Lanka Time).
Many organisations 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.
With reference to the article titled ‘EU green rules: Exporters face € 2 m or 4% turnover fines for false claims’ published in 21 July 2026 of The Daily Morning , Peterson Solutions Sri Lanka sends the following correction:
We appreciate your coverage of this important topic. However, the above article materially misinterprets the original article issued by Peterson Solutions Sri Lanka and changes the intended meaning of the EU Empowering Consumers for the Green Transition (EmpCo) Directive. In particular, the article conveys the impression that Sri Lankan exporters themselves are liable to penalties of up to € 2 million or 4% of annual turnover. Our original article does not make such a statement. Rather, it explains that companies exporting products and services to the EU must ensure that environmental and sustainability claims are supported by credible evidence and that enforcement is carried out under the applicable laws of the relevant EU Member State for businesses found making unsubstantiated sustainability claims. Its purpose was to encourage exporters to prepare for these evolving compliance obligations.
Editor’s note: We regret the publication of the erroneous information and have withdrawn the article. We apologise to those affected and to our readers for the error. A correction is published below to set the record straight.
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