Matthew Ekholm, Protokol’s Digital Product Passports and Circularity Specialist, explains how the EU’s Digital Product Passports Movement will advance the circular economy.
It’s not news that sustainability is becoming an obligation to grow for businesses and consumers operating in the modern world as global warming continues to burden the planet. We can already see the changing way of thinking among modern consumers. Many are willing to pay a 9.7% sustainability premium, even if the cost of living and inflation concerns weigh.
Similarly, as part of Apple’s goal of becoming carbon neutral by the end of the decade and its desire to appeal to more demanding environmental consumers, it shows how important sustainability has become as a growing business goal, with 55% of its greenhouse gas emissions since 2015.
In addition to major technologies, governments are implementing a variety of laws to make sustainability more serious, strengthen circularity and make more sustainable decisions. This includes the eco-design of Sustainable Product Regulation (ESPR) that is part of the EU’s circular economy action plan and aims to advance sustainability factors for circulating products in the EU market.
While some companies make a real effort to support circularity, others seek recognition without any real action, challenging consumers to distinguish between them and raise concerns about greenwashing. But by relying on the EU sustainability law, businesses can stand out as true sustainable providers and stand out from those who simply preach.
EU sustainability movement and promoting consumer relations
EU sustainability laws can be seen as a burden on companies placing their products in the EU market due to these diverse and complex requirements. At the same time, businesses are feeling nervous that they must appeal to the growing appetite of modern consumers for sustainable products and services. Many people feel overwhelmed when it comes to combining these two pressures to carve out more sustainable processes.
However, if a company adopts a strategic mindset, there is a very clear way to donate one issue to another. ESPR compliance efforts, particularly the legal mission of the Digital Product Passport (DPP), allows businesses to comply and prove their sustainability qualifications to appeal to consumers in one move.
The role of DPP to emphasize actual eco-business
DPP serves as an important tool for sustainability by enabling seamless information exchange between consumers and producers regarding the environmental impact of products.
When acted as a secure digital record, it can track the lifecycle of a product and store important details such as event history, transactional data, and sustainability metrics such as its carbon footprint. They ensure greater transparency and accountability in sustainable production and consumption.
Uniquely, DPPS can also enable businesses to provide a clear path to end-of-life processing. For example, you can provide information on how to dispose of items in the most eco-friendly way, and which materials can be recycled. To access DPP, consumers can simply scan data carriers (such as barcodes and QR codes attached to physical products) using devices such as smartphones.
As the above data is accessible to consumers, there is very clear opportunity and guidance for consumers to take more sustainable actions on products they purchase. DPP also enables businesses to appeal to modern consumers by providing a way to provide and access information about sustainable “composition” of their products. This can include additional information on a variety of aspects, including, but not limited to, important data points related to the location where the product’s materials were supplied and the raw material extraction process.
By providing consumers with such accurate data about the entire product lifecycle, businesses can verify sustainability claims and ensure that greenwashing accusations are quickly dismantled for the data provided by DPP.
A survey conducted by McKinsey & Company found that 60% of consumers actively prioritize sustainable products and brands. By integrating DPPS, consumers look internally at the efforts behind making their products, services, or operations more sustainable. This transparency not only helps counter Greenwash concerns, but also promotes customer loyalty and addresses its sustainability promise by presenting the company as open and trustworthy.
DPPS can also provide convenient resources to support customers in the resale market experience and verify product ownership and sourcing, history of repairs and upgrades, and reliability of purchased products.
Addressing challenges as one: paving the way for sustainable business
The EU has not yet announced any delegated actions regarding product data information required by each industry to comply with the ESPR DPP mandate, but the electronics industry is marked as a priority sector of the law and must comply in 2027 for harmful production of e-waste.
As time continues to pass, tech companies that want to thrive in this changing landscape and connect with modern “eco-ide” consumers should take proactive steps to position themselves as the brand of the future, not only ensuring compliance with the ESPR’s DPP mandate.
As DPPS will allow brands to showcase their sustainability pledge, their reputation as an environmentally friendly circular company could boost customer loyalty. Similarly, by actively working on the ESPR DPP mandate, companies can highlight themselves as a data-driven, reliable, future-ready brand.
As consumers become more and more focused on sustainability, taking the lead now in adopting digital product passports positions business as an innovator in the environment within their field.
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