A new report explores the benefits of digital product passports (DPP) to store and share information throughout a product’s life cycle and finds the system could be key to helping consumers make better-informed choices and incentivising producers to increase the sustainability of their products.
Published by the Taskforce for climate neutral and circular materials and products at the University of Cambridge Institute for Sustainability Leadership, in collaboration with international think tank Wuppertal Institute, Digital Product Passport: the ticket to achieving a climate neutral and circular European economy? argues a product passport system would provide industry stakeholders, businesses, public authorities and consumers with a better understanding of the materials used in the product as well as their embodied environmental impact.
In the context of the COVID-19 pandemic, the Russian invasion of Ukraine and the cost-of-living crisis, the report suggests it is critical to transform economic and business models, while addressing the huge scale of material emissions. In addition, the report concludes DPPs can accelerate the twin green and digital transitions as part of EU efforts to deliver positive climate action and sustainable economies.
Eliot Whittington, Director of Policy, University of Cambridge Institute for Sustainability Leadership said: “The war in Ukraine is underlining that it is essential that we live within our means and find ways to be more geopolitically independent with our materials in Europe. A Digital Product Passport will be an invaluable policy and business tool in support of this goal, as it will enable businesses to create more sustainable and circular materials and products by monitoring how they are made throughout the supply chain. It will also support consumers to make well-informed choices based upon sustainability criteria. This could be game-changing in the effort to build a European circular economy.”
The report shows widespread agreement amongst business leaders that product passports could have both short- and longer-term benefits, improving access to reliable and comparable product sustainability information for businesses, consumers and policymakers, and suggests the system offers an opportunity to modernise and digitalise product information to support industry transformation towards carbon neutrality and increased circularity.
Prof. Dr.-Ing. Manfred Fischedick, Scientific Managing Director of theWuppertal Institute said: “The EU fosters digitalisation and the transformation towards a climate-neutral, sustainable economy and describes this parallel process as the green and digital ‘twin’ transition. A Digital Product Passport as envisaged in the EU’s European Green Deal and Circular Economy Action Plan is a great opportunity to modernise product information throughout the entire value chain. DPPs could be a big step forward for more sustainable products and consumption, boosting energy and resource efficiency by enabling new business models based on e.g. digital data sharing. DPPs could also substantially contribute to an improved security of energy and material supply for a resilient economy.”
A DPP can unify information, making it more readily accessible to all actors in the supply chain. This will support businesses to ensure an effective transformation towards a decarbonised industry. It could also create incentives for companies to make their products more sustainable, as improving access to reliable and consistent information across supply chains will make it easier for customers to make comparisons.
The introduction of the DPP would deliver a range of benefits including:
- Access to reliable and comparable product sustainability information for businesses and policymakers, and also information to address product liability challenges more broadly.
- Access for consumers to information that enables them to make more informed and sustainable choices.
- Increased transparency, traceability and consistency for each player in each part of the value chain.
- Support for companies to monitor and report against sustainability indicators and claims through a digital tool.
- A tool that can facilitate innovative thinking on circularity and new practices.
- Potentially an enabler for the development of completely new business models.
- New data sources that can enable sustainable investment decisions.
- Enabling resource optimisation as well as energy efficiency strategies.
Anthony Abbotts, Director of Group Sustainability and Public Affairs, ROCKWOOL Group, a member of the Taskforce, said: “The introduction of different regulatory tools within circularity are critical to support our efforts in achieving a net-zero carbon economy. One such tool is the Digital Product Passport which helps to ensure green claims are credible while further boosting market surveillance. For DPP to succeed third party verification of data is key to ensure transparency across a wide range of materials and products.”
The report outlines recommendations and calls on policymakers to align with the following principles:
Coherence and consistency:
All forthcoming EU regulations and initiatives for which DPPs are discussed should be closely aligned and linked with the approach proposed for the ESPR and experiences from the EU Battery Passport.
The digital infrastructure and software for IT implementation of DPPs should be interoperable and compatible as far as possible with other systems.
The EU should manage the overall governance for implementing a DPP through setting clear guidelines for use. The EU should also create an enabling environment through common standards, access rights management and an interoperability framework.
Existing international initiatives, approaches and stakeholders present in the harmonisation of product data and standards should be used to avoid redundancies or duplication of efforts.
DPPs should be used to set criteria for green public procurement and as a substantiation tool for ecolabels.
DPPs should enable a common framework for additional voluntary product information sharing, by setting a standardised approach to exchange information such as recycled content or carbon and product footprints in complex supply chains.
Flexibility and exploration:
Start small and modestly but promptly with DPP testing and pilots, based on a phased approach with the possibility for continuous extension and further development to enable iterative learnings.
Start with a variety of clearly defined products and sectors as pilots, to test the general approach and identify what commonalities exist between different product groups.
All detailed data included in DPPs should be product group specific to be reliable and comparable rather than a one-size-fits-all approach.
A decentralised DPP approach to product information storage is favoured by most businesses over a centralised approach.
Transparency and accountability:
Sufficient data should be provided for consumers, businesses and investors, so that they can make more informed purchasing decisions that take sustainability criteria into consideration.
All information requirements for a DPP should be relevant and fit for purpose; hence, each piece of information should be based on a clear scope and a concrete user benefit along the product life cycle.
Mandatory product information in DPPs should balance different levels of data access and data protection needs, so that transparency is ensured as default along the value chain without infringing legitimate confidentiality concerns.
The operational implementation of DPPs should be carried out via trusted intermediaries to ensure strong governance principles that have both technical expertise along with an understanding of the wider policy aims of DPPs to support a circular economy.