The Digital Product Passport – Initiative for More Data Transparency

Intro

Sustainability is one of the most important current topics and companies in every sector will have to deal with the consequences for their business sooner or later. Various commissioned studies show that both consumers and companies are prepared to invest in sustainability, whether through higher costs for a sustainably produced end product or through improvement measures and restructuring within the company. Legislators are also putting increasing pressure on companies to achieve international climate goals. The Digital Product Passport (DPP) is a good example and, as an initiative of the European Commission, is intended to promote the sustainability of certain industries and improve transparency for companies and end users.

What is the Digital Product Passport?

The digital product passport is primarily a concept for disclosing sustainability-relevant product information. This transparency applies not only to companies that look at the sustainability of the products offered or manufactured from the perspective of the manufacturer or seller, but also in particular to consumers. They have the option of using special barcodes or QR codes to retrieve product information, which can influence their purchase decision. This makes it possible to inform and sensitize consumers much more comprehensively than before about their own sustainability efforts. The focus is on the entire product life cycle.

Effects of the Digital Product Passport

Even though the Digital Product Passport primarily pursues economic and social sustainability goals, it is also an opportunity to promote innovative thinking, for example with regard to product and packaging design, the development of new business areas or the development of new economic sectors. Against the backdrop of the introduction of the Digital Product Passport, technology providers are already positioning themselves and presenting their own solutions.

The digital product passport will not be relevant for every industry and only companies of a certain size will probably be affected by the regulations. The exact details are gradually being determined and it is certainly advisable to keep yourself informed about developments and decisions. Regardless of what applies in particular to whom from when, it is generally worthwhile for every company to evaluate its information structures against the background of transparency and to identify optimization potential. Because one thing is clear: the digital product passport is not the only initiative and sustainability and transparency are increasingly becoming competitive factors for consumer favor. This does not mean the question of whether an organization should deal with it, but rather when.

Basic work – PIM, MDM and Data Culture

The foundation of every transparency and sustainability initiative is the digital value chain of companies. It describes where which product data comes from, how it is further processed and supplemented and to which channels and to which data recipients it is transferred in which form. The digital product passport would be another of many of these data recipients, which is why its requirements for the completeness of the information must be taken into account as soon as the product data is created or onboarded.

On the system side, the focus is primarily on PIM and MDM systems when it comes to implementing the information requirements set out in the DPP. In the future, it will be important to further improve overall data quality and to increase data volumes in line with increasing demand for information.

In addition to technical and procedural implementation, most companies also need cultural change. Establishing a true data culture will become increasingly important in order to create a uniform understanding of the relevance of data and its quality and thus also to support transparency goals.

Conclusion

The Digital Product Passport makes an important contribution to bringing the issue of sustainability to the forefront and making it more transparent for all parties involved. The initiative can contribute to promoting ecological awareness. On the corporate side, it is of crucial importance to deal correctly with the challenge posed by the Digital Product Passport and to start preparing for it at an early stage. The decisive factors are diverse and relate in particular to the company's internal data culture, the systems used and the employees involved. On the system side, PIM and MDM are in focus and must be constantly reflected on in the light of legal and social developments. As an experienced digitization partner, Advellence is available to answer any questions you may have about the digital product passport and its consequences for the digital value chain.

For more information about the Digital Product Passport, download our comprehensive guide or make an appointment for a non-binding consultation right away!

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