Digital Product Passport: A Sustainable Revolution [2023 Guide]

In an era where climate change is at the forefront of global concern, the digital landscape is evolving to meet the changing needs of businesses and consumers alike. Sustainability is no longer just a trend or a fad to be greener. It’s a must for all conscious and forward-thinking brands, and it's time to walk the talk.

Product information helps to promote sustainability, and its transparency at all stages of the product lifecycle supports environmentally conscious consumers. The importance of product data is reflected in the Digital Product Passport (DPP), a concept that has become increasingly important due to the European Union's green initiatives and the urgent need to reduce the environmental footprint.

The implementation of the DPP is due to start in 2026, but the official timeline has not yet been published. However, companies in the apparel and consumer electronics industries are already showing interest and planning extensive preparations.

The Digital Product Passport will be a game-changer promoting traceability, material and energy efficiency, and repair-based business models. Now is the best time to gear up for what will come.

In this article, you will learn more about the concept of the Digital Product Passport, its importance, examples and how companies can prepare their data collection for the coming revolution.

What is Digital Product Passport?

In a nutshell, the EU Digital Product Passport is a digital record that provides comprehensive information about a product and its entire supply chain. It contains important data, from the origin of the product and the materials used to its environmental impact and disposal recommendations.

What kind of data will be stored in the DPP?

The data within a digital product passport solution can vary, but it typically includes product lifecycle and value chain information, such as:

• Origin: Where the product was manufactured or sourced.

• Materials: Details of the materials used to manufacture the product.

• Environmental impact: Information about the product's carbon footprint and sustainability.

• Supply chain: Insights into the product's journey from production to consumption.

• Disposal guidelines: Recommendations for the environmentally friendly disposal of the product.

What does DPP mean for businesses and consumers?

For companies, the Digital Product Passport offers opportunities to optimize the supply chain, reduce environmental impact, and enhance brand reputation. It enables them to meet the growing demands of environmentally conscious consumers and regulators.

For consumers, the Digital Product Passport empowers them to make informed choices. With easy access to a product's sustainability information, consumers can align their purchases with brands that share their values, contributing to a culture of responsible consumption.

How did the idea of the Digital Product Passport come about?

To better understand this concept, let's go back to the beginning — the European Union's principal green initiatives.

The European Commission is alarmed that “5 million tons of clothes are thrown away in the EU every year — about 12 kg per person". Fast fashion is a big problem, as is the extent of fake claims about green action, known as greenwashing. In fact, “53% of green claims contain vague, misleading or unsubstantiated information”.

In recent years, the issue of sustainability has been high on the EU Commission’s agenda. Two major initiatives — the European Green Deal and the Circular Economy Action Plan — have paved the way for the development of the Digital Product Passport.

Here is a brief overview of the most important regulations.

These initiatives create a sense of urgency for companies and policymakers to adopt sustainable practices. They emphasize the importance of transparency, resource efficiency, and waste prevention.

In this context, the idea of the Digital Product Passport was born, which provides a digital solution for tracking and communicating the environmental and sustainability characteristics of products.

The primary goals of Digital Product Passport

The key objectives of the Digital Product Passport are to offer consumers and stakeholders detailed insights into a product's origins, environmental footprint, and complete value chains. fostering significant improvements across various domains such as:

• Transparency: To provide consumers and stakeholders with extensive and transparent information on the origin of products, their environmental impact and the entire value chain.

• Sustainability: To enable the tracking of a product's lifecycle from raw materials through manufacturing to distribution and disposal, enhancing supply chain visibility and accountability.

• Traceability: To enable the tracking of a product's lifecycle, from raw materials and manufacturing to distribution and disposal, enhancing supply chain visibility and accountability.

• Product quality and safety: To ensure that products meet safety and quality standards by providing information on compliance with relevant regulations, certifications and test results.

• Consumer empowerment: To empower consumers with the information they need to make informed purchasing decisions based on their values, such as sustainability, environmental impact and ethical considerations.

• Circular economy: To support the transition to a circular economy by facilitating the reuse, repair and recycling of products through information on design, materials and disassembly instructions.

• Innovation and design: To promote new business models, with a focus on repair-based business models, and encourage product innovation through knowledge sharing.

• Regulatory compliance: To aid in regulatory compliance by ensuring that manufacturers and producers can provide the required information in a standardized format.

• Digital transformation: To leverage digital technologies such as blockchain, IoT (Internet of Things) and data analytics to digitally map a product's journey, making it easily accessible and verifiable.

• Data security and privacy: To ensure that the sensitive information in the Digital Product Passport is securely stored and shared to protect both the manufacturer's proprietary data and consumer privacy.

Who should care about Digital Product Passport?

The impact of the Digital Product Passport extends to various stakeholders throughout the product lifecycle.

Here is an overview of who is affected.

Manufacturers and producers

• Thanks to DPPs, they have better control and transparency over their supply chains and can increase efficiency and ensure quality.
• They can use DPPs to improve their brand image through transparency and traceability.
  
  

Consumers

• DPPs provide consumers with extensive information about the products they buy or intend to buy.
• They can make informed decisions about the origin, sustainability and quality of the products.
  
  

Supply chain partners

• They have real-time insight into the movement and status of products. This enables better collaboration, faster problem solving and better management of the entire supply chain.
  
  

Regulatory authorities

• DPPs make it easier for them to check compliance with standards and take appropriate action in the event of non-compliance or recalls.
  
  

Retailers

• They can be sure of the authenticity and quality of products.
• Selling and marketing products with DPPs gives them a competitive advantage and attracts consumers who value transparency.
• Inventory management becomes more effective and reduces the risk of stocking expired or defective items.
  
  

Environmental and sustainability advocates

• They gain comprehensive knowledge of a product's environmental impact and sustainability practices. This enables them to support products and companies that align with their values.
  
  

Technology providers

• They play a crucial role in developing secure and efficient platforms for storing and sharing product information.
  
  

Government agencies

• DPPs facilitate the monitoring and enforcement of regulations related to product safety, quality, and origin verification.
  
  

The impact of Digital Product Passports is broad, influencing various actors which creates a more interconnected and transparent ecosystem for products and information.

Benefits of Digital Product Passport

A digital product passport that provides comprehensive digital records can be beneficial not only for consumers, but also for brands, manufacturers and retailers.

Just think of better identification of counterfeit products (which luxury goods brands have always struggled with), efficient management of supply chains or a move away from fast fashion.

Here's a quick look at the key advantages.

4 examples of Digital Product Passport-like initiatives

It is expected that the data carriers of the Digital Product Passport will take the form of an NFC chip, an RFID code or a QR code.

Although the European Commission’s work on the Digital Product Passport project has not yet been completed and the first tests and visualizations are not yet available, there are already grassroots initiatives from companies in various sectors.

ASKET’s Impact Receipt 

As you already know, the purpose of the Digital Product Passport is to provide consumers with a transparent message so that they can make informed purchasing decisions. Here's an example of how ASKET has found a way to share some sustainability data with its customers.

Since November 2023, the Swedish clothing brand has started to include detailed environmental impact breakdowns on customer receipts. These receipts provide information on the carbon emissions, water use and energy consumption of each garment purchased, providing transparency on the environmental cost of each purchase.

Source: ASKET Instagram profile

Pangaia ReWear Digital ID

Launching in the UK and expanding globally, fashion brand Pangaia introduces the first digital passport-enabled resale platform. Pangaia's QR code system simplifies the resale process by allowing users to scan the QR codes of garments and automatically enter the details for the offer on Pangaia ReWear.

The platform suggests resale prices based on condition and original value, with users able to set their own prices within a certain range. Most items on offer are currently selling for around 50% of their original retail price.

Source: Pangaia ReWear website

Nobody's Child: Digital Product Passports

Another clothing brand — Nobody's Child introduces digital product passports powered by Fabacus and Xelacore, which track a product's carbon footprint and provide product care advice. Customers can scan QR codes in the care label to access a landing page, and Coinbase is enabling customers to store their Nobody's Child Digital Product Passport NFT.

Everledger Battery Passport 

Everledger and Ford have launched a battery passport pilot to track the lifecycle of electric car batteries and ensure responsible recycling. The passport concept is part of the Global Battery Alliance and uses blockchain, AI and auto ID technologies to provide transparency in the battery supply chain.

These examples demonstrate the potential of the Digital Product Passport, but widespread adoption is still in its infancy and the concept is constantly evolving. The success of such initiatives depends on collaboration between stakeholders, technological advances and the industry's willingness to embrace transparency and traceability.

Implementation timeline of EU Digital Product Passport

So when will the DPP be launched?

The European Union is still working diligently to establish a clear timeline for its implementation. The project is still in its early stages, but great progress is already being made.

The European Commission intends to introduce regulations for the Digital Product Passport (DPP) in a phased manner. Initially, the legal obligation to comply with the DPP will apply to batteries, expected in 2026, followed by clothing and consumer electronics in further phases.

Ultimately, around 30 product categories will require a Digital Product Passport, and the implementation timeline is set to unfold from 2026 to 2030.

Challenges related to Digital Product Passport

The concept of the EU Digital Product Passport concept brings promising advantages. I am a big fan of the idea and look forward to it, but we are not living in cloud cuckoo land. The passport could face some challenges when it comes to implementation. These key hurdles include:

• Standardization and interoperability: Achieving a common standard for digital product passports that is accepted by all industries and member states may be a challenge. Ensuring interoperability with existing systems and technologies is crucial for broad acceptance.

• Privacy and data security: Storing and sharing detailed product information raises privacy and data security concerns. To gain the trust of businesses and consumers, robust protocols must be put in place to protect sensitive data and prevent unauthorized access.

• Costs and implementation effort: The introduction of DPP can involve significant upfront costs for companies, especially small and medium-sized enterprises (SMEs). It is necessary to address the potential financial burden and provide support for widespread adoption.

• Integration with existing systems: Many companies already have established supply chain management and product tracking systems in place. Seamlessly integrating a new digital product passport system into these existing systems without causing disruption is a major challenge.

• Complexity of the global supply chain: In today's globalized economy, supply chains often span multiple countries and regions. Coordinating the implementation of a digital product passport across borders and ensuring international collaboration will not be easy.

• Resistance to change: Industries accustomed to traditional supply chain practices may face resistance when it comes to adopting new technologies. Education and awareness campaigns may be necessary to encourage companies to take advantage of DPP.

• Regulatory alignment: It is crucial to align the DPP initiative with existing and future regulations at EU and national level. Ensuring that the system complies with the various regulatory frameworks can be a complex task.

• Consumer acceptance and understanding: For the DPP to truly benefit consumers, they need to know and understand its value. Educating consumers on how to access and interpret the information in the passport is critical to its success.

• Technological infrastructure: Developing the necessary technological infrastructure to support DPP, including secure databases and communication protocols, is a major undertaking.

Overcoming these challenges will require collaboration between policymakers, industry representatives and technology providers.

Legal and regulatory frameworks, technology standards and phasing strategies will need to be carefully considered to ensure a smooth transition and maximize the benefits of the EU Digital Product Passport. There is still a lot to do.

Preparations for implementing DPP

Even though it will still be a few years before the DPP sees the light of day, companies can start preparing now to ensure that implementation runs smoothly.

The most important thing is to keep your finger on the pulse, because the situation is dynamic.

On their side, companies (especially manufacturers) should review the supply chain and set up a central repository for product information to connect data sets from different sources. Data chaos is a real obstacle to the traceability and sustainability of product data.

Leverage PIM solution in Digital Product Passport implementation

To prepare for the arrival of DPP, companies should ensure the quality of their product data and its centralization.

This is where PIM solutions come into play.

Product information management (PIM) systems centralize product information and ensure consistency and accuracy across multiple channels, including eCommerce platforms and social media. These solutions improve collaboration between teams and support the coordination of marketing, sales and IT. PIM solutions also help to adapt to regulatory changes, which is important in industries where compliance is key.

Modern PIM solutions, such as Composable PIM based on microservices, enable lightning-fast integration with best-in-class third-party apps and systems and the freedom to create a digital stack.

If you want to know how PIM can work in practice, download our free The Complete Guide to PIM. Alternatively, you can consult our PIM advisors or schedule a personalized demo to see features and functionality of a PIM solution.

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Final thoughts

All the factors I have listed in this article show that the Digital Product Passport is a well-designed solution that may improve the traceability of product information and support conscious consumers. I hope the DPP will avoid greenwashing and deliver concrete, tangible results.

The development of a framework such as the one happening now in the EU is a long-term process. How the Digital Product Passport will be used is the joint effort of all those involved. As a technology provider, we are also preparing for the DPP to best support our customers, and I recommend that all companies do the same.

Solutions like the DPP will become more widespread. Ensuring high-quality product data and streamlining the supply chain is necessary to remain competitive and fit for the future.