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Unveiling Impact on Luxury and Fasion-Conscious Brands Through Traceability |
NEWS |
The business case for Digital Product Passports (DPPs) in the fashion industry is gaining traction ahead of regulations with purpose-led and forward-looking brands, creating ecosystems of branded resale platforms, accelerating positive change across the fashion industry.
Will Consumer Product Passports Lead to Cleaner and Transparent Supply Chains? |
IMPACT |
A DPP is a unique digital twin ID, containing comprehensive information of a physical product such as composition, material sourcing, manufacturing, environment footprint, repair, and disassembly options across the product’s lifecycle.
The DPP will modernize the way we track, label, and communicate product information in a sustainable economy and could potentially replace traditional product labeling. Europe is paving the way for the adoption of DPPs with an array of policies and regulations drafted under the European Green Deal (EGD) with the long-term goal to reach net-zero emissions by 2050. The targeted product groups with the greatest environmental impact, such as Electric Vehicle (EV) batteries, are expected to be mandated to comply by 2026/2027, followed by chemicals, construction, furniture, plastics, and textiles. Regulators are using DPPs to drive circularity, ensure quality assurance, and reinforce accountability and transparency of the supply chain. The ripple effect of DPPs on the global supply chains are immediate and European Union (EU)-led consortiums such as CIRPASS are actively working on standardizing the information shared to drive sustainability, transparency, and product safety across the supply chain.
Consumer brands are using a combination of data technologies listed below with cloud computing, blockchain, or software platforms to capture, manage, and exchange product information depending on a company’s specific needs, infrastructure, and goals.
The data shared through DPPs will shape consumer decisions by identifying businesses with responsible supply chains and sustainability commitments, as well as authenticate and maximize product value in the resale market, especially predominant in luxury markets.
True Potential of Digital Product Passports to Manufacturers |
RECOMMENDATIONS |
The European Commission will approve the DPP regulation in 2024 and any brand with business operations in the EU will have to comply. The scope, technology, and data requirements are open, with different levels of maturity. Progressive consumer products and manufacturers are piloting DPP solutions with supply chain traceability providers and data platforms such as 3E Exchange, Antares Vision, Avery Dennison, Kezzler, Protokol, PSQR, SyncForce, and Wiliot. The true value to manufacturers includes Business-to-Business (B2B) data flow, identifying operational hotspots in the supply chain, competitive branding advantage through demonstrating sustainability commitment, and creating new revenue streams and opportunities for customer retention through repair, refurbishments, and second use. Manufacturers can’t afford to wait until the regulations are finalized to focus on identifying the business value of DPPs by creating working groups with their supplier ecosystems to identify and implement open-source solutions that are agile. Companies that are geared to implement DPPs now will unlock new opportunities for investment and customer acquisition, the potential to influence regulation, improved transparency, and ensured operational compliance.
