SupplyChainTalk: Digital Product Passports – the catalyst for a new era of digital consumer engagement

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The Forest Stewardship Council (FSC) is the world’s largest green label. Nearly half of consumers worldwide recognise its tree-tick logo,^[1] which is found on a vast array of goods from tissue paper to furniture, timber, books and even clothing made with wood fibres. Eighty per cent of those consumers trust the logo to ensure their products are not harming forests.

 

Fraud is everywhere in FSC supply chains. It has been found in a vast array of FSC-certified products, including furniture, toilet paper, paper plates, charcoal, flooring and pellets. Consumers are already used to greenwashing, and what could give back certifications their credibility is a more granular traceability of products accessible for consumers – it would be much more difficult to provide a counterfeit traceability lineage for the product than just printing a logo on the packaging.  

 

Achieving DPP readiness 

Once digital product passports (DPPs) are leveraged as a competitive advantage, more brands will find it key to provide them. Claims must be backed up for consumers, so they can access and see them for themselves. As industry certification schemes fail, governments must step in to mandate compliance. DPPs pose a higher risk for brands as they involve both implementation costs and hefty fines in the case of a failure to comply. Many see blockchain as a potential solution but there are huge adoption barriers to it, and several big players, in fact, have given up on their blockchain projects.  

 

ESPR became live in July 2024. Yet it’s still only the outline information of the three different product categories we’ve got available, which will require different levels of information granularity – whether on the level of individual products, batches or categories of products. It’s still not established which traceability framework the scheme will rely on – GS1 or some other – and the IT architecture is not defined yet either. For the fashion industry, there’s less uncertainty than for others as DPPs are expected to enforce regulations that are already implemented but often not adhered to by brands. The EU won’t mandate QR codes or how exactly manufacturers provide DPP information.  

Digital engagement with consumers is already the next battleground for brands regardless of when and how DPPs will be implemented. Use cases abound – from checking whether a certain item is part of a product recall to accessing to warranty and rebate information – product data which is increasingly integrated with loyalty programmes too. DPP is just another reason why brands should focus on traceability.

 

Consumer behaviour is also conflicting as 75% deem sustainability a key issue with only 26% acting on it. Consumer awareness varies from product to product – they know a lot about wood’s large ecological footprint but may not know that wood is also the feedstock for viscose. As a result of DPP, consumers may also realise that they can get value out of scanning QR code, which, in turn,  may bring about a step change in consumer behaviour.  There is also value in QR codes for brands, as even if just a fraction of consumers engages with the product, it provides them with actionable insights. 

 

It’s also up to companies to decide how they integrate DPP QR codes with their marketing communications – there is a lot of flexibility around implementation and how a brand creates business value from it. In fashion, if you have your bill of materials for every component of the product with reference numbers for suppliers and attached to PO numbers, then you are ahead of the compliance curve till 2030. All that brands must do at this stage is collate all the information they already have into a useable database. Despite uncertainties, there are preparations that brands can make for the DPP roll-out, such as creating a digital record linked to the physical product including relevant information from suppliers. 

 

The panel’s advice 

• For an idea how DPPs will work, the battery industry is a good place to look – although there will be a great variety between different sectors.  
• Some of the DPP regulations don’t come into effect for another two years. Until then, companies must find a function or role in the organisation that can take a lead by keeping an eye out for DPP legislation. 
• Be wary of 101 consultants. Find ones that don’t only have knowledge of the legislation but can also offer solutions.