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In the Loop

How businesses can capitalize on digital product passports

Impending regulation will make DPPs a requirement in Europe and a wise choice around the world.

A mockup of a digital product passport on a TV.

A mockup of a digital product passport on a TV. Credit: Circularise

GreenBiz Circularity VP Jon Smieja and I have received hundreds of speaking nominations for the Circularity 24 event coming to Chicago, May 22 to 24. Among the proposals, a select few lines of text linger in my mind that capture ideas with the potential to catalyze systems change.

The Dutch supply chain traceability startup Circularise used a metaphor comparing nutritional labels to digital product passports (DPPs). Nutritional labels empower healthy consumers, while DPPs will empower sustainable consumers, the company explained. Both enable clear and accessible data for making responsible purchasing choices.

Defining DPPs

DPPs are comprehensive digital records of product information, such as origin, manufacturing processes, materials, sustainability attributes and ownership history. They inform decision-making around reuse, repairability, recycling and disposal. The DPP collection of data on the backend feeds into consumer-facing information that consumers may access by scanning a QR code with a smartphone.

Companies can use DPPs to track and verify compliance with voluntary sustainability certifications and, eventually, mandatory regulations. Data available via DPPs can help extend the life of products, drive sustainable behavior change and support circular business models such as product-as-a-service. 

There is no universal standard for DPPs although standardization efforts have started, led by organizations such as the nonprofit International Data Spaces Association, and industry-specific collaborations such as the Battery Passport Action Partnership. Clear standards as well as independent verification mechanisms will be crucial to prevent greenwashing and ensure transparency and accuracy. 

Through its blockchain-based software, Circularise digitizes essential data from manufacturers, suppliers and others involved in the product lifecycle. Before DPPs, this sort of data would take an enormous amount of manual labor to collect, verify and disseminate effectively.

"We are building the digital backbone of the circular economy," Mesbah Sabur, founder of Circularise, told me by email. "Our mission is to make sure no resource is wasted due to a lack of information." 

Upcoming regulation

In the years ahead, DPPs will no longer be just an exciting new technology but a legal requirement for many industries.

The European Green Deal, the EU's comprehensive climate policy framework, includes a provisional agreement, the Ecodesign for Sustainable Products Regulation (ESPR). If approved, ESPR will introduce transparency and traceability requirements for products and parts, and set performance and information standards for nearly all EU goods. It would also include mandates on substance restrictions, durability, reusability, repairability, upgradability, recycled content and energy efficiency. 

Moreover, the regulation would require DPPs across around 30 categories of products sold in the EU, starting with batteries in 2026, followed by apparel and consumer electronics.

Even companies unaffected would be wise to adopt DPPs, according to the World Business Council on Sustainable Development. It suggests that companies acting now on DPPs will mitigate risk, unlock efficiency improvements and minimize future costs.

Getting started now

Businesses looking to get ahead can identify products or processes now where the technology adds clear value, collaborate with partners to establish standards, and invest in infrastructure. Through small-scale deployments of DPPs, companies can gauge the volume of data they will need to manage, identify early obstacles and lay the groundwork for broader adoption.

"By viewing DPPs as a tool for business transformation rather than just a legal obligation, companies can differentiate themselves and establish a competitive advantage before DPPs become an industry standard," Sabur says.

While questions linger concerning the costs and logistics of implementation, the emergence of DPPs heralds a new era of accessible information, presenting an opportunity to forge a more connected economy and fundamentally redefine our interaction with resources and knowledge.

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