This article discusses what Digital Product Passports are and what retailers must to do to become compliant to the new legislation.
Roughly 80 billion new clothing items are consumed globally each year, marking a 400% increase compared to the figure from 20 years ago.
The European Commission has recognised the gravity of statistics like these, and put forward a package of legislative measures. The package was proposed in March 2022 as part of the European Green Deal and was created to ensure all physical goods within the European Union are made to be more durable, environmentally friendly, circular, and energy efficient. As part of the package, the European Commission proposed the creation of the Digital Product Passport.
What are Digital Product Passports?
A Digital Product Passport (DPP) is an electronic document or database containing comprehensive information about a product. Every single physical product within the EU will receive its own unique product passport, giving consumers complete transparency with regards to product information, including sustainability and ethics.
What does it mean for the UK?
Despite not being a part of the European Union and therefore not legally obligated to follow EU rules, the UK is currently required to align to the EU’s environmental standards. The UK also has its own legally binding commitment to be carbon neutral by 2050, and Europe has announced its plan to become the first carbon neutral continent in the world.
It’s imperative for retailers to act now. Those operating in both the EU and the UK must follow the latest legislation, as failure to do so could result in significant fines and a detrimental impact on their reputation. In more severe instances, non-compliant businesses might even face the possibility of trading bans.
The many benefits of Digital Product Passports
There will be huge benefits to reap after the implementation of DPPs, the most obvious one being that retailers will become more sustainable. Not only is this a huge standalone benefit, but it will also improve retailers’ sales and reputations.
There will also be efficiency improvements. In order to create DPPs, retailers will need to manage their product and stock data in a more efficient way. This will result in less time consuming and manual processes, increased data accuracy, and finally a quicker time to market. Of course, this will also result in a competitive advantage.
What are the first steps retailers should take?
Firstly, retailers need to seek guidance from experts to understand how best to navigate the new legislation. By completing an impact analysis, specialists like Retail247 can help retailers plot their journey to compliance, enabling them to not only understand the steps involved, but get ahead of their competitors.
Retailers also need to ensure they have a solid technological infrastructure ready to manage their product data effectively. A PIM platform, or other product management system, and a stock system capable of managing supply chain events at an individual product level will enable brands to have the set up they need before they begin to create and implement DPPs, becoming compliant as a result.
To get advice and learn more about the impact of the European Green Deal and Digital Product Passports, please get in touch.