Sustainability has become a business imperative. Over time and across multiple sector there has been a growing concern over the amount of waste produced when products reach end-of-life, and the carbon footprint of products as they move through the value chain. By Lars Rensing, CEO of Protokol
The EU has also taken note, and is putting tangible steps in place to support the creation of a circular economy. A big part of this is the Ecodesign for Sustainable Products Regulation (ESPR) – part of the Circular Economy Action Plan (CEAP). The ESPR is a published framework that will set the design requirements of products to ensure their sustainability.
Under the upcoming regulations, many products that are manufactured or sold within the EU will need to include a Digital Product Passport (DPP) – a tool for collecting product data throughout a product’s life cycle. The aim is to encourage manufacturers and supply chain managers to adopt more sustainable practices and encourage end-users to be more mindful of the sustainability and authenticity of the products they’re purchasing. The mandate will apply to numerous product groups across multiple industries that place products on the EU market – regardless of whether or not they were produced there – it will apply to a broad range of businesses, with priority industries expected to be compliant by 2030.
With the help of DPPs, this regulation aims to make “sustainable products the new norm in the EU, by making them last longer, use energy and resources more efficiently, easier to repair and recycle, contain fewer substances of concern and include more recycled content.”
Demystifying the Digital Product Passport (DPP)
Digital Product Passports (DPPs) essentially act as a “digital twin” of a product, by capturing information related to a product’s entire lifecycle. This can include anything from the materials that were used to create it, the environmental impact of the product, ownership, how to responsibly dispose of the item, and important information on warranty or maintenance. This information is typically accessed through a data carrier like a QR code or barcode, with information being accessed by a device such as a smartphone.
The reason they are an important part of the circularity aim is because DPPs can help prove that the materials used in their supply chain were sourced sustainability, and ethically, and also help all parties in the value chain access information to make choices that contribute to the sustainability effort.
The hidden weapon for better customer relationships
While DPPs are being seen as the perfect tool to support the EU’s effort towards circularity, they also open up a new direct channel for brands to engage directly with customers and foster more loyalty.
For example – if we stay on the topic of sustainability – DPPs help businesses to prove the sustainability credentials of their products to the end consumer and not simply “greenwashing”. By tracking previous ownership, verifying authenticity and keeping a history of any repairs made to a product, businesses could begin a verified resale scheme, encouraging users to recycle their products, turning them back into usable products to be resold – another effort towards the circular economy and proving that sustainability is important to a customer base.
Furthermore, for products that can be added to or form part of a collection, complementary products could be recommended to customers within the DPP and compatibility checked; helping maintain contact and create return customers. DPPs could even be integrated with existing loyalty platforms or used to provide rewards in the future so that customers are compelled to engage with the brand more.
In more complex implementations, information gathered from DPPs could even help inform measurement of sales trends and metrics, helping these businesses to better track their stock, plan for sales events, and better understand the needs of their customer base.
Taking the first step
The EU’s mandate will undoubtedly impact many businesses, but the way each business takes hold of the challenge will dictate whether they simply comply, or comply and thrive. For businesses starting from scratch now, the best first step is to assign a DPP lead or a team to spearhead the efforts towards compliance, and their first priority should be to aim to understand everything they can about the regulation today, and what will be defined in the near future. Success will come to those businesses who plan earlier and see the vast potential.
