Digital Product Passport: Leveraging ICT for Sustainable Fashion Choices

The European Union, as the second-largest importer of textiles, sees each resident consuming an average of 16 kg of textile products annually, with over 70% of this waste ultimately disposed of in household bins. Textile production results in 20% of global wastewater being rich in hazardous chemicals. These textile products are composed of polyester, acrylic, and nylon, mostly made up of plastic and undergo processes comprising heavy metals such as lead, cadmium, and chromium, especially the dyeing process, emitting huge amounts of GHG emissions. This resource-intensive industry emits 5 billion tons of CO2 globally, increasing the overall “carbon footprint” of the industry. These data points are the macro impact of the fashion industry. However, today’s conscious consumers increasingly seek transparency on the sustainability of each product they purchase. Questions about a product’s journey, processing emissions, and overall environmental impact are driving the demand for traceability. Due to mass and complex supply chains comprising the majority of small enterprises which are not able to collect granular data on each of their production processes in the textile and fashion industry, traceability becomes challenging and requires digital automated solutions to be addressed.

Given this extensive resource-intensiveness of the fashion and textile industry, which is grappling with a triple crisis—ecological, economic, and social along with a lack of granular data with the companies—the EU is utilising new information and communication technologies (ICTs) to drive a twin (ecological and digital) transition across Europe. As part of its EU Strategy for Sustainable and Circular Textiles, the Commission introduced Digital Product Passports (DPPs), further detailed in the Ecodesign for Sustainable Products Regulation (ESPR). The ESPR outlines information requirements on product durability, reusability, resource efficiency, and “carbon footprint”, aiming to embed circular economy principles into fashion supply chains, combat greenwashing, and enhance accountability.

Digital Product Passports are the digital IDs of the products that will provide information about the products' environmental sustainability. The initiative uses QR code technology. Through scanning of QR codes, consumers can access authenticated product information, ensuring authenticity and enabling informed, purchasing decisions. Deployment of this technology facilitates the traceability of products and answers the questions of What, Where and How much? increasing brand value and product transparency. For instance, consumers can get verified information if the T-shirt it uses is made of conventional or organic cotton, or if the T-shirt is made of natural or chemical dyes. The type of information required by DPP as established by the European Union is explained below:

Information Requirements & Implementation under DPP

The proposed structure of DPP by the EU requires 16 categories of information that could be included for the textile products - product description, composition, supply chain, transport, documentation, environmental impact, social impact, impact on animals, circularity, health impact, information on the brand, communication/identification media, granularity, quantity, costs, after-sale tracking and tracing, customer feedback. Each of these categories has indicators across different cycles of a product - Supply chain, Finished Product, Distribution, usage and end of life. The EU has emphasised that these 16 categories of information should be granular, detailed, reliable and complete.

The DPP will be implemented in three phases explained below:

The following table depicts the ‘mandatory’ and ‘additional’ information required in different phases of DPP implementation, as proposed by the EU:

Collecting information on all these indicators helps maintain a database for brands, which will also incorporate data from different supply chain stakeholders, which otherwise become tedious due to complex supply chains. This will allow companies to manage their supplies and increase their sustainable sourcing of raw materials. The main advantage of DPP is that it goes beyond labels. The information in the DPP will enable repairing products by identifying them and accessing specific maintenance or repair services to order spare parts. This service would be available to consumers and circularity actors: repairers, second-hand dealers, renters, collectors, sorters and recyclers. Other such benefits of adopting DPP are discussed in the next section.

Benefits of DPPs to businesses

The main objective behind developing DPPs is to mitigate the lack of information among consumers with most of the consumers demanding the “carbon footprint” of their consumption which would help them in making sustainable fashion choices. According to the PwC Voice of Consumers Survey 2024, more than 80% of consumers are willing to pay more for sustainability, even as the cost of living pressures weigh. Moreover, they are also willing to pay on average 9.7% more for goods that meet specific environmental criteria, including locally sourced, made from recycled or eco-friendly materials, produced in a supply chain with a lower “carbon footprint”, and more. This shift in consumer behavior makes companies liable to introduce digital IDs to consumers to make better-informed decisions.

Enhance consumer satisfaction & engagement: With the rise in environment-conscious consumers who are demanding answers about - Where a product comes from, how it is made, and what it is made from matters, it has become the responsibility of companies to be transparent by using emerging technologies such as DPPs. This allows companies to satisfy curious consumers and increase the authentication of their products. Such digital systems using QR codes eliminate the risks of cloning the information. Further, adding information such as instructions for repair and disassembly creates additional revenue streams for companies, providing valuable feedback to the producers and the recyclability of their products.

First mover advantage to producers: Giving sustainability information of the product to end consumers with DPPs will give an edge to the producers and differentiate them from competitors. DPP provides a higher level of information that can appeal to demanding customers and create a unique customer experience. These brands strive to promote transparency to create a special bond with their customers and to share their values as part of a commercial strategy.

Easy compliance and sustainability reporting: Digital product passports facilitate seamless information exchange across supply chains, enabling stakeholders to maintain databases for compliance with regulations like CSRD, PEF, and SBTi, which require sustainability data. This system is particularly useful for tracking Scope 3 emissions, covering indirect emissions throughout the value chain, and simplifying the auditing process.

Reducing costs: Textile supply chains involve numerous stakeholders, making it challenging to gather product information. Increasing regulatory requirements add to administrative time and necessitate various compliance systems. Digital product passports streamline this by consolidating compliance data in a centralised format, reducing the need for multiple software solutions for each new standard. This approach preserves essential processes while simplifying information organisation and enhancing supply chain efficiency.

Given these advantages, it is essential for companies to adopt Digital Product Passports (DPPs). Furthermore, all companies operating within the EU, irrespective of their origin and headquarters, are required to include DPPs on their labels to qualify for product sales in the region. Non-compliance may result in restrictions on selling products in the EU. Additionally, countries like France enforce specific regulations, such as Article 13 of the Anti-Waste for a Circular Economy Law (AGEC), which mandates that all products sold in France display certain environmental and recycling information on their labels. This requirement extends to e-commerce platforms selling products in France. Penalties for non-compliance include fines of up to €3,000 for individuals and €15,000 for legal entities.

Greenstitch’s DPP resource

Greenstitch is an automated AI software that specialises in “carbon accounting”, sustainability reporting such as CSRD, BRSR and DPP-specific reporting, “life cycle analysis”, and traceability of textile products. As a textile-specific software, it has access to all third-party textile data as approved by the EU, such as Ecoinvent. The Greenstitch platform uses the company’s onboarded data in addition to existing databases in its system to develop a digital product passport. The categories on which the Greenstitch software focuses are vast and include all the details that the European Union proposes.

The following table depicts Greenstitch’s broader categories of information to be included in DPP and their components:

A snapshot of DPP on the Greenstitch platform is shown below:

Features of DPP resource in Greenstitch platform:

1. Supplier extension to fetch supply chain data: To facilitate completeness in DPP, Greenstitch will provide the facility of supplier extension where each associate supplier of the company will be reaching out for necessary information where information with the company is not available. This will further build on the Scope 3 data which results from upstream and downstream activities which are out of the purview of the company to collate and calculate.
2. “Life cycle analysis” with PEF integration: Greenstitch's expertise in “life cycle analysis” allows it to integrate the Product Environmental Footprint (PEF) methodology, as developed by the EU, to standardise and enhance the analysis process. By adhering to PEF, Greenstitch helps businesses maintain consistency and credibility in lifecycle assessments, streamlining reporting and meeting EU sustainability criteria. This method identifies the total environmental impact, encompassing everything from raw material sourcing to end-of-life disposal, ensuring companies meet the highest standards for product lifecycle transparency.
3. DPP Carrier with QR Code Integration for Consumer Transparency To make DPP information easily accessible to consumers, Greenstitch offers a QR code solution as proposed by EU guidelines. Each QR code serves as a DPP carrier, which can be scanned to reveal a digital product ID detailing the product’s entire lifecycle data. This easy-to-access format empowers consumers with knowledge of each product’s environmental and social impact, enhancing consumer trust and brand value.
4. One stop solution for complete DPP management: Greenstitch simplifies the complex task of DPP development by offering an all-in-one solution: from initial data collection to final product digitalisation through QR codes. By managing everything from environmental impact calculations to secure data integration, Greenstitch’s platform removes the need for a specialised in-house sustainability team, making DPP adoption straightforward and accessible for companies of all sizes. With blockchain-powered data integrity, Greenstitch ensures that each DPP is reliable, secure, and aligned with industry best practices.

Integrating DPPs is no longer optional for companies trading in Western markets, where regulations increasingly require proof of sustainability. Greenstitch empowers businesses not only to comply with these requirements but to excel, providing a clear pathway to enhanced consumer satisfaction, brand value, and loyal green-conscious customers. With Greenstitch, businesses are investing in a platform that facilitates transparency, fosters consumer trust, and paves the way to a sustainable and prosperous future.

References

1. Digital product passport for the textile sector, Briefing, European Union, 2024
2. Digital product passport for the textile sector, Study, Panel for the Future of Science and Technology, European Union
3. Digital Product Passport (DPP): The Complete Guide, Protokol, 2024
4. Digital Product Passport: The next step for the textiles and fashion industry, Recover Fiber, 2024
5. Fashion’s playbook for digital product passports, Vogue business, 2024
6. Explainer: Time to introduce Digital Product Passports in fashion? Just STyle, 2024
7. Why Digital IDs are essential to the EU’s strategy for sustainable textiles, EON, 2022
8. Consumers willing to pay 9.7% sustainability premium, even as cost-of-living and inflationary concerns weigh: PwC 2024 Voice of the Consumer Survey, PwC, 2024
9. The benefits and ROI of digital product passports. Circularise. 2023
10. The benefits and opportunities of digital product passports, BRC, 2024