Imagine this: every piece of clothing you sell comes with a QR code that reveals where it was made, how it was produced, what it’s made of, which certifications it has, and how to recycle or repair it at the end of its life.
Seems like science fiction? It’s actually the vision of the European Union’s Digital Product Passport (DPP).
The Digital Product Passports are part of the EU’s Ecodesign for Sustainable Products Regulation (ESPR) and will become mandatory for all textiles and footwear in the European Union in 2027.
For small and medium-sized fashion brands, this might sound daunting. Over the past years, a substantial set of new legislations targeted at sustainability in the fashion industry have been implemented and the digital product passports seem like the cherry on top of that.
But it does not have to be intimidating. Chances are that you are already way more prepared than you think you are and there is help available to get you were you need to be.
As the legislation is yet to be formalised, this blog serves as a guide on how to prepare for DPP in the fashion industry as a small- and medium-sized business. Moreover, we share how you can handle this ambitious piece of legislation and use it to your advantage.
What Is the Digital Product Passport (DPP)?
The Digital Product Passport is a centralised, digital record that shares detailed information about a product’s:
- Material composition
- Environmental impact
- Production processes
- Supply chain data
- Recyclability and repairability
The DPP will be accessible via a digital tag (like a QR code), allowing consumers, regulators, and supply chain partners to access key sustainability information in seconds. It’s a digital environment where people (or machines) can access all this information in one place, to increase accountability for sellers and transparency for consumers.
Why Is the DPP Being Introduced?
The DPP is part of the Ecodesign for Sustainable Products Regulation (ESPR). Its goals include:
- Increasing transparency in the fashion supply chain
- Reducing waste and raw material usage
- Encouraging product durability and circularity
- Helping consumers make informed choices
When Will the DPP Take Effect?
Even though the ESPR, of which the Digital Product Passports are part, has already been accepted, the exact requirements of the DPP are not finalised yet. The current suggested requirements are as follows in a phased rollout:
Phase 1 (Starting in 2027): A Minimal and Simplified DPP
Suggested mandatory information in the first phase of DPP:
- Use of recycled materials
- Presence of hazardous substances/microplastics
- Environmental impact reporting
- Recyclability
- Production process locations
- Packaging recyclability and content
Suggested additional information in the first phase of DPP:
- Weight, quantity and composition of the final product’s main component
- Means and distance of transportation
Phase 2 (Starting in 2030): Advanced DPP
Suggested mandatory requirements in the second phase of DPP:
- All mandatory information from Phase 1
- All suggested additional mandatory information from Phase 1 becomes mandatory
- Social impact reporting (per CSRD and CSDDD)
- Animal welfare information (if products include animal-derived materials)
- Additional product-specific data (colour, size, brand name)
- Tracking of after-sales services and reselling info
Phase 3 (Starting in 2033): Full Circular DPP
Suggested mandatory requirements in the third phase of DPP:
- All requirements from Phase 2
- Complete supply chain traceability (however, this will not have to be publicly available)
- Distribution, usage, and repair records
Why Digital Product Passports Can Be a Game-Changer for Sustainability in the Fashion Industry
The fashion industry is notorious for its lack of transparency, exploitation and misconduct of workers and its negative environmental impact. From social scandals like luxury brands not paying the people who produce their materials and the use of forced labour to environmental scandals like illegal landfills full of dumped clothes that can be spotted from space.
A Digital Product Passport could offer a solution, because it targets:
- Circularity: by requiring full information about a product's composition, a digital product passport can make the recycling process of clothes easier and more scalable. A challenge that is currently halting the growth of post-consumer waste recycling.
- Transparency: with lots of information publicly and easily available, consumers can make well-informed decisions about what products align with their values.
- A data-driven reduction of the fashion industry’s environmental impact: by having data available on the actual impact of the fashion industry, it’s possible to set data-based targets based on unified frameworks. This could be a win, as currently it’s up to brands what they include in their impact measurements and hence, they are hardly comparable amongst each other or even over different years. This poses a challenge for both consumers and legislation.
A unified framework could lay the foundation for brands to get more insights into their sustainability efforts compared to their peers. Making this data available to consumers too can help brands gain a competitive advantage from becoming quantifiably more sustainable than their peers and could make investing in optimising their environmental impact more attractive.
The Downsides of The European Union’s Digital Product Passports
Although a strong European-wide effort to reduce the negative impacts of the fashion industry is applaudable, the Digital Product Passport as currently implemented comes with challenges and risks that we want ot highlight.
- The suggested product environmental framework for brands to base their claims on is skewed towards the use of plastic-based materials.
- Brands with sustainability at their core already have tight margins and stretched teams. Adapting their current communication to match the exact requirements of the Digital Product Passport poses an additional burden on stretched teams with limited budgets to higher external consultants or use dedicated tools. For example, there are many online services to help brands with setting up their DPP, but these tools start at €400 per month (!) and always require input from at least one team member.
- Fashion brands are known to make unreliable claims. For example, Nike recently reported its suppliers pay on average 1.9 times the minimum wage, but research showed that only 1% of garment workers investigated received that wage. In another example, brands claim their products are “Made in Italy” but only the last stitch is actually done there. In an ideal world, DPP would be a solution to these false claims, and in its policy suggestions, it refers to tools and blockchain to help brands substantiate these claims. However, most of these tools and blockchain are still dependent on data entry from people who can easily manipulate these systems if no independent audits are being done. Very little service providers actually ask for additional verification methods before accepting claims.
- Crowding out impact-driven brands. Brands with bigger budgets and/or marketing teams can use DPP to create a positive brand story that now seems backed by the EU. By highlighting specific aspects and ignoring others, they can mislead eco-conscious consumers into thinking a brand is actually committed to sustainability whereas many small brands are actually contributing to change but get overshadowed by these bigger budgets.
Steps to take to Prepare your Small or Medium-sized Fashion Brand for Digital Product Passports
As the DPP is not finalised yet, it remains unclear what the exact requirements will be. However, by gaining awareness about what is currently included in the DPP, you are already one step ahead of your peers and can adapt smoothly once the legislation becomes finalised.
These are simple steps you can take to make sure to stay on track:
- The social impact will be measured based on the reporting standards of the Corporate Sustainability Due Diligence Directive and the Corporate Sustainability Reporting Directive. Even though small- and medium-sized fashion brands are not obliged to provide these reports, you can voluntarily create an action plan on how to comply with these reporting standards
- Appoint someone within your team (or do it yourself) to dedicate a designated amount of time on a weekly basis to this. Initially, it can be sufficient to make sure you set aside some time to read into any updates, but closer to the implementation deadline it will be extended with actions.
- Organizations like Tex.Tracer and Plan A regularly host events to keep you in the loop on whenever new actions need to be taken. Subscribe to their newsletter to keep up to date.
