“You can be down with DPP or you can be out of business.”
That was Crispin Argento, managing director of cotton-sourcing platform The Sourcery, speaking about digital product passports at the recent Kingpins show in Amsterdam.
With the European Council’s adoption of the ecodesign for sustainable products regulation, or ESPR, last month, DPPs are all but inevitable. All that needs to happen now to formalize the decision is one last sign-off from the European Parliament and Council presidents and publication in the European Union’s official journal, following which the legislation will enter into force 20 days later. Two years from that, the ESPR—DPPs, included—will become the law of the land, at least officially speaking.
Jan Mercx, sustainability specialist at GS1 Netherlands, the preeminent barcode standards organization, expects DPPs to be mandatory for textiles no earlier than the third quarter of 2027. It’s a “really slow process,” he said at the same session, mostly because no one’s settled on what they should contain.
“There’s a lot of consultations to see what are the important criteria, which we need to put in the DPP,” Mercx said. “So we can have longer lasting products which will be recyclable and which will be recycled at the end.”
Imagine different countries all building rail systems, he said. If the train tracks aren’t all the same width, anyone traveling from Warsaw to Zurich to Berlin will have to keep changing trains. That’s what the EU wants to avoid with data, which needs interoperability between platforms to chug along unencumbered. DPPs aren’t a traceability tool per se, Mercx said. They’re meant to provide downstream information on how to use, reuse, repair and recycle products so they retain their highest value. But the ESPR itself requires life-cycle assessment information that can only be obtained by having an intimate knowledge of one’s upstream partners.
It’s why Besim Ozek, strategy and business director at Bossa, says that digitalization of the supply chain is going to be so important. Already, the Turkish textile mill is fielding requests from buyers who want to kind of data that DPPs are set to provide because “they’re not willing to wait three more years.”
“We should have very detailed information about all of our value chain,” he told the Kingpins audience. “At the end of the day, we’re a denim producer and our biggest raw material is cotton. I should know who my farmer is, who my dealer is, where it is produced for all of my value chain.”
Most denim makers are vertically integrated, meaning they do their own yarn spinning, fabric weaving, washing, dyeing, cutting and sewing. Other sectors—knitwear, for instance—are more fragmented, making gathering information about various production stages a harder lift.
In short, if suppliers are not conducting LCAs to suss out their water usage or carbon footprint per garment, they need to be investing in them now, Ozek said. They should have a “beautiful” enterprise resource planning or materials requirements planning system that easily communicates with brand systems. Otherwise, everything will take too long.
“For example, today I am doing a manually with some of my customers; it takes two hours for one brand,” he said. “Imagine that I get over 50 brands. So everything should be digitalized. Everything should be automatically taken from our system and uploaded to the brand system directly.”
Iris Skrami, co-founder of Renoon, a Dutch transparency and compliance management platform, agreed. New regulations are demanding that companies not only capture data but also process, display and make it meaningful. One of the big questions her firm is wrestling with is how to use DPPs, which will soon be a matter of compliance, as more than compliance vehicles.
“That’s also what I think is an opportunity in our industry, that we have a product that is a sexy product that people want to buy for different reasons,” she said. “And so actually having the DPP opens up a new channel, where you can communicate and you can utilize.”
Denim brands are already doing this. AGI Denim revealed in April that it’s working with sustainability analytics firm Green Story to present its social and environmental impacts in a visually engaging manner via a QR code-enabled DPP that creates a “chain of trust.” The first garments from Gucci’s recycled and regenerative Denim Project, poised for release later this year, will also include a DPP tracing their development and production journey while supplying information about care and repair. Y/Project’s DPP adds exclusive blockchain-enabled features, such as authentication, transfer of ownership, product history and personalized offers from the brand.
But “direct” data points such as country of origin or fiber content are one thing. More subjective data related to say, footprint calculations, are quite another. Methodologies for measuring impact can vary widely and so can the assumptions that influence calculations—and conclusions. Cautious brands might feel a little stuck now because they’re wary of falling into greenwashing territory, at least until the EU provides more clarity through delegated acts.
‘Massive opportunities’
Even so, DPPs don’t have to be viewed as an albatross, said Jenny Wärn, head of implementation at TrusTrace, just before the Stockholm-based supply chain traceability firm launched a playbook on the topic at the Global Fashion Summit: Copenhagen Edition in Denmark last month. The information sharing that DPPs facilitate can provide companies with “massive opportunities” to understand how their products are being used and disposed of. They might even “go wild” and create a community of customers whose engagement with a brand extends beyond the point of sale. And while not explicitly set up for that purpose, as Mercx mentioned, the data within DPPs can fulfill other legislative requirements on both regional and global levels, such as supply chain due diligence or extended producer responsibility.
Take new denim entrant Marimekko, which ran a DPP pilot with TrusTrace.
“They discovered that given that there will be so many more touch points with consumers post sale, that it increases their ability to add value to create that community,” said Anja Sadock, head of marketing at TrusTrace. “That could be value creation that they could potentially commercialize or it could just be driving more affinity with the brand.”
Supply chain resilience is another benefit. Having the right data at their fingertips gives companies an eagle’s eye view of where potential disruptions could arise, as well as a better idea of how they can swerve them, Sadock said. As the pandemic demonstrated, those who are agile, win.
What it comes down to, however, is that businesses that don’t comply with DPP legislation won’t be able to sell into the world’s largest single market. That might be a bigger financial blow than not doing the work.
Or as Argento put it, “It’s not a ticket, it’s not jail time; you just don’t get to play the game.”