Enforced under the Ecodesign for Sustainable Products Regulation (ESPR), DPPs are crucial for brands and retailers that market products in the European Union (EU). The core strategy of ESPR is to increase the value of the EU market by enabling the Circular Economy. The objectives are to maximise product value retention after the initial sale, encourage a longer product lifespan, and facilitate revenue generation from more transactions after the initial sale. The ESPR contains sustainable product requirements, which could be exceeded if competitive market forces are successfully leveraged.
The DPP is an enforcement tool that ensures the provision and accuracy of mandatory data supporting the Circular Economy and Sustainability Evidence. Penalties for non-compliance will be fines or restrictions on the EU market.
While non-EU brands are not required to comply with ESPR, adopting DPPs can create a competitive advantage by meeting a rising global demand for product transparency. Forward-thinking brands will view DPP adoption not as a burden but as an opportunity to lead on sustainability and build deeper customer loyalty. This article explores the strategic business implications of DPPs for brands operating within and outside the EU.
Understanding the Digital Product Passport (DPP)
A Digital Product Passport is a digital twin that tracks a product’s lifecycle, including raw material sourcing, manufacturing details, environmental impact, and end-of-life options like resale, repair, reuse or recycling. This data is made transparent to consumers via a unique Digital ID and data carrier such as a QR Code, NFC or RFID tag, or unique identifiable physical properties of the product, empowering them to make informed, eco-friendly purchasing decisions. The EU Commission monitors the data accuracy of the DPPs to ensure they provide reliable evidence of compliance with the mandatory requirements.
Initially, textile, battery, and consumer electronic products sold in the EU will require DPPs by mid-2027, with other sectors to follow by 2030.
The mandatory data to be included in the DPPs of textile products is currently being defined and will be published in the Textiles Delegated Act in January 2026.
The DPP framework still holds critical relevance for non-EU brands and retailers. Even if not mandated to implement DPPs directly, these businesses will face indirect pressures from increased competition, heightened consumer awareness of sustainability, and evolving global supply chain standards.
Digital Product Passports: access to verifiable product lifecycle data
Compliance and Market Access
DPPs immediately impact brands and retailers selling into the EU market. From mid-2027, all textile products must have a DPP containing over 100 data points covering the product’s environmental footprint. This compliance is not optional: products will be stopped at EU customs without a DPP, effectively barring market access.
Non-EU brands must consider the competitive risk: as EU brands adopt DPPs and lead in sustainability transparency, global consumers, not just those in the EU, will increasingly prioritise transparency and sustainability. Non-EU brands that delay adopting DPPs risk losing ground in competitive markets worldwide, where eco-conscious purchasing will continue to rise.
Furthermore, global marketplaces and retailers may require DPP-like documentation to comply with regional regulations and consumer expectations. Brands that adopt Digital Product Passports voluntarily, even when not selling in the EU, will be positioned to seamlessly meet these emerging global standards.
Compliance and market access to the EU and competitive advantage in global markets
Strategic Benefits of DPPs for Global Brands
Beyond compliance, DPPs offer strategic advantages for all brands, including those outside the EU. By embracing transparency, brands can build trust with eco-conscious consumers, foster customer loyalty, and differentiate themselves in an increasingly crowded marketplace.
- Global Consumer Demand for Transparency: Consumers everywhere are becoming more selective, seeking brands that can prove their sustainability claims. By offering full lifecycle traceability, DPPs allow consumers to verify ethical sourcing, understand environmental impact, and confidently make empowered purchasing decisions. Brands that provide this level of transparency will stand out from competitors that cannot.
- Brand Loyalty and Reputation: Adopting DPPs early signals a brand’s commitment to sustainability, even if it is not legally required. This can bolster a brand’s reputation and foster deeper connections with socially responsible consumers, who are more likely to develop loyalty toward transparent and ethical companies.
By adopting DPPs, non-EU brands can position themselves as leaders in sustainability, aligning with global initiatives such as the UN’s Sustainable Development Goals, further solidifying their reputation across markets.
- Operational Efficiencies: DPPs improve cost efficiency by enabling more accurate demand forecasting and better resource allocation. Based on real-time product lifecycle data, brands can pre-empt supply chain disruptions and optimise sourcing. Further, this data becomes the basis for the tools to manage a truly agile supply chain.
DPPs support several strategic benefits
New Business Opportunities Enabled by DPPs
Digital Product Passports and their associated Digital IDs open new opportunities for global brands to innovate and tap into previously unexplored business models:
- Product Resale and Repair Markets: As sustainability trends grow, consumers are increasingly interested in the circular economy, where products are resold, reused, or recycled rather than discarded. DPPs can help verify the authenticity and sustainability of second-hand products, allowing brands to participate in or facilitate resale markets and repair partner referrals, which present new revenue streams.
- Subscription and Rental Models: DPPs support Product-as-a-Service models, facilitating product rentals or subscriptions while ensuring traceability and proper maintenance.
- Consumer Engagement: With a Digital ID tied to each product, brands can enhance post-purchase engagement, offering consumers information on care, repair, and recycling. Digital wardrobes are no longer restricted to only a brand’s products – competitors’ products can be included, with the information available for the customers’ benefit. This valuable information fosters long-term brand loyalty by providing deeper interaction and building relationships beyond the point of sale.
- Inventory Management Improvements: Lower Labour Costs by automating key processes; DPPs reduce the need for manual inventory management, lowering labour expenses. Improve Loss Prevention with enhanced tracking capabilities, helping minimise product loss or theft across the supply chain. Support a seamless omnichannel experience for consumers, for example, enabling BOPIS (Buy Online, Pickup In-Store) and BORIS (Buy Online, Return In-Store) for convenience and flexibility.
- Streamlining and Managing Agile Supply Chains: With DPPs, brands gain complete visibility into their supply chains. This enables faster response to global supply chain disruptions such as material shortages or logistical challenges. Disrupt the grey market by identifying unauthorised manufacture and distribution within the supply chain. Real-time data provided by DPPs allows for agile decision-making, enabling brands to optimise their supply chains quickly, ensuring efficiency and a competitive edge in rapidly changing markets.
DPPs open new business opportunities
Implementation Challenges for Brands
While the benefits of DPPs are clear, the path to implementation comes with its own set of challenges, especially for non-EU brands that may not yet be prepared for such data-heavy systems:
- Data Collection and Centralisation: Gathering the required lifecycle data can be complex, especially for brands with global supply chains involving multiple vendors and manufacturing processes. Brands with multi-tiered supply chains should invest in robust data-sharing agreements with suppliers to ensure continuous data flow and compliance with DPP requirements. Cloud-based platforms can offer traceability and transparency, enabling real-time data validation across global suppliers.
- System Integration: For many brands, integrating DPPs into their IT infrastructure, including Enterprise Resource Planning (ERP), Product Lifecycle Management (PLM), and Traceability systems, can be a significant challenge. However, investing in cloud-based, scalable solutions can simplify the process.
- Data Validation and Accuracy: Ensuring the accuracy of the data is crucial for maintaining consumer trust. Brands must invest in technology to validate the data captured and ensure it meets regulatory standards. For brands managing significant product volumes, implementing systems and processes to capture data quickly, accurately, and consistently across the supply chain is essential.
Process and data challenges of implementing Digital Product Passports
Conclusion: Seizing the Strategic Opportunity of DPPs
In a rapidly evolving global market, Digital Product Passports offer brands a critical edge, not just in compliance but in shaping future consumer loyalty and operational efficiency. The time to act is now, and early adoption will define the brands that lead the next era of sustainability.
In the coming weeks, we will explore the challenges and opportunities of implementing DPP. Stay tuned for more insights!
For brands looking to leverage the strategic potential of DPPs, reach out to JBSO Group for expert insights and guidance on integrating this transformative technology into your business model.
