Over the last decade, there has become a mounting imperative for businesses to move to more sustainable practices and prove their efforts towards this collective goal. Over 80% of consumers feel it’s important for companies to implement programmes to improve the environment, and now 96% of the world’s largest companies report on Environmental, Social, Governance (ESG), demonstrating that pressure is leading us in a positive direction.
Encouraging sustainable practices has been a longstanding goal of the EU, with the European Green Deal being the backbone of this effort. In a bid to support a more sustainable future, the European Parliament and Council of EU member states recently announced new ecodesign rules in the form of the Ecodesign for Sustainable Products Regulation (ESPR). This is a published framework that will set the design requirements of products to reduce pressure on natural resources and keep resources in the economy for longer. A central part of this framework is the Digital Product Passport (DPP), which will be mandated across several key industries.
In this article I will outline what DPPs are, how and why they will form a central part of the EU’s new plans, and what businesses can do to prepare.
DPPs are a tool for collecting and sharing product data throughout a product’s entire lifecycle. This data can be recorded from across the supply chain and can include information on the manufacturing process, components, raw material sourcing, and much more. Information is typically accessed through a data carrier like a QR code or barcode, with data being accessed by a device such as a smartphone reading a physical label on the product.
If we think of this in practice, for a laptop, a DPP can provide information on when it was manufactured, the carbon footprint of the manufacturing process, previous ownership, information on spare parts, and how a user can dispose of it responsibly when it comes to the end of its life.
This is precisely why the EU sees them as the perfect tool in helping to increase transparency around a product’s sustainability, environmental and recyclability attributes. Businesses can make efforts to make more informed decisions about purchasing materials from sustainable suppliers, and end-users can make more informed purchasing decisions that contribute to the demand for more sustainable products.
With the mandate applying to numerous product groups across multiple industries that place products on the EU market – regardless of whether or not they were produced there – it will apply to a broad range of businesses.
The electronics and ICT industry has been earmarked as one of the first industries that it will apply to, due to the impact of e-waste, and the high potential for circularity within the industry. According to the World Health Organisation, e-waste is the fastest growing solid waste stream in the world, increasing three times faster than the world’s population, and according to a study from BT, 41% of UK consumers have electrical waste at home.
When it comes to e-waste specifically, the problem isn’t just the volume of waste produced, but the nature of the waste and the risks it can pose to consumers. Some materials used to produce electronics can be hazardous and harmful if they’re not disposed of responsibly. In addition to creating more transparency surrounding the sourcing and sustainability of materials, DPPs also offer insights into the precise composition of a product and guidelines on its safe and responsible disposal or recycling. This represents a pioneering effort to push the responsible and effective management of products at end-of-life by enhancing education and access to information.
As a first step, businesses should select a DPP lead, or team, within the company who – in addition to leading the effort for implementation – will keep abreast of regulatory updates. This should involve gaining an understanding of the requirements currently outlined in key legislation such as the ESPR, and what will be decided at a later date. This should also involve bringing together the right internal stakeholders and external partners to assess the current set-up of the business and its supply chain to determine the best next steps. Every organisation is unique, and having a clear view of what compliance looks like for each business specifically is an important task to support the creation of a strategy.
Only after this process should a business begin to create a DPP strategy which outlines clear goals and actions based on the comprehensive research and preparation that has come before it. At this stage, clear milestones and timelines can begin to take shape and be defined, and initial preparation steps such as the identification of data points can begin to happen. It is crucial however that these first steps are approached with care and trusted partners are identified sooner to set the course for successful implementation.
With many businesses in the technology sector already planning steps towards more sustainable practices, the new EU mandate only serves to function as a motivation that will help move the needle in terms of impact sooner. Not only does the regulation help collective sustainability goals, but the move towards having more visibility of materials can also enable a culture of recycling and reusing. What is certain is that businesses that act sooner will have the most to gain by having the space to plan mindfully. Time to act now.
Want more background? Read Lars Rensing’s earlier article on DPPs
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