How Companies Can Prepare for Digital Product Passports

The goals are clear: The European Union wants companies, including textile makers, electronics manufacturers, and others, to take responsibility for the lifecycle of the products they create. Among the goals: reduce waste and alleviate the impacts of production on natural resources.

What’s less clear is how the EU and companies will know if they’re reaching their goals. That’s because, as some industry groups have discovered, a lack of reliable data is a roadblock to progress. What’s more, especially in the case of textiles, because there’s little real-world data about products and materials moving through the supply chain, companies can’t discover better, more profitable ways of growing their business.

Enter the EU’s digital product passport (DPP), mandated as part of the broader European Green Deal and Circular Economy Action Plan and described in the recently enacted Ecodesign for Sustainable Products Regulation (ESPR).

The DPP is a form of “digital fingerprint” for every regulated product and includes a unique identifier and standardized data about the product’s origins, composition, environmental footprint, relevant certifications, and end-of-life handling. Some of this information is already available on garment labels or other product packaging, but by digitizing it into a DPP that is readable through existing technology like QR codes or RFID tags, industries can establish the transparency and traceability needed to achieve greater sustainability goals.

And while DPP deadlines may seem far off — the textiles industry, for instance, must implement DPPs between 2026 and 2030 — the time for companies to start planning for compliance is now. Here’s how they can do it.

Understand the DPP

Companies should familiarize themselves with DPP and ESPR requirements — including all relevant stakeholders — to understand how and when it might impact them. DPP continues to evolve, so it makes sense to determine where in a company DPP oversight and compliance will live so staff can build up knowledge and monitor developments. Initially, DPP requirements will focus on specific sectors, such as textiles, electronics, batteries, and construction products, with plans to expand to other sectors over time. Plus, it’s useful to understand why a company must comply to better imagine how DPPs can make the company more sustainable, efficient, and ultimately successful.

Prepare for Robust Data Management

Part of the evolution of DPP is determining the various data that will be included — data about the products, materials, countries of origin, production facilities, commodity codes, compliance declarations, etc. ESPR stipulates the mandatory data requirements; a company’s DPP team will want to monitor that data protocol. But to be ready for compliance in the years to come, it will want to start now by identifying the data it currently collects, where that data is stored, in what formats, and what else — from internal systems or supply chain partners — it can or should include in its data management system. This will require close collaboration with suppliers to fill in any data gaps, while paying close attention to standardized data formats and protocols to ensure consistency and interoperability across sectors and regions.

Establish Traceability

Because supply chains are complex and decentralized, new information technology may be required to meet DPP requirements. Traceability systems give companies the architecture and infrastructure to collect, link, and share DPP data with and from supply chain companies in accordance with ESPR. They allow companies to collect and organize data at various levels of granularity (model, batch, or item, etc.), which will be important as regulators determine how granular DPP reporting must be. And traceability systems go beyond compliance benefits, helping companies better understand their complex supply chains and optimize them in the face of disruption or market opportunity. With traceability in place, they can move onto next steps in preparing for DPP.

Conduct Pilot Projects

Although ESPR and the DPP requirements are still evolving, after establishing a traceability system, companies should consider pilot programs to test and refine their processes before full-scale implementation. In the textiles industry, TrusTrace participated in a multi-stakeholder DPP pilot with Trace4Value and fashion brands to establish data protocols, identify standards, build a traceability infrastructure, and conceive a usable DPP interface for consumers. Using live data for a few specific products, the pilot team learned what worked and what needed further development. The results are detailed in Unlocking DPP: The Why, What and How of Digital Product Passports.

Prepare for Compliance

When the time comes, companies should anticipate audits or inspections to verify compliance with DPP requirements. This is an instance where a traceability system could help develop robust evidence management capabilities, with processes in place to quickly retrieve and present required data. Plus, being able to prove compliance through traceability helps build a company’s credibility in the marketplace, demonstrating, for instance, that the materials it uses are majority recycled, responsibly sourced, or otherwise sustainable and compliant with EU regulations

Because ultimately, conforming with EDPR and DPP requirements will be essential for accessing the EU market, ensuring compliance with evolving EU regulations focused on sustainability and circular economy principles. At the same time, enhanced transparency can improve consumer trust and company reputation. Finally, better data about product lifecycles can lead to more efficient resource use and cost savings.

But to realize all the benefits of digital product passports — both potential and required — companies need to act now,

Written by Shameek Ghosh -CEO and Co-Founder of TrusTrace, a leading platform for supply chain traceability within fashion and retail.