The fashion and textile sector is embarking on a transformative journey. Upcoming EU requirements for digital product passports demand a high level of transparency and sustainability while unlocking immense opportunities for innovation and business growth. According to industry experts, achieving competitiveness in this evolving landscape necessitates a strong commitment to circularity and digitalization. This article delves into why digital product passports are a game-changer and how GS1 standards can help address key challenges in the industry.
What are digital product passports?
Digital product passports are part of a framework under the Ecodesign Sustainable Products Regulation (ESPR), designed to fulfill Europe’s commitments under the Paris Agreement and the UN’s Sustainable Development Goals.
These passports serve as digital representations of physical products, providing comprehensive sustainability data throughout their lifecycle. This information can include:
- Material composition
- Country of origin of materials and production
- Instructions for recycling and repair
- Environmental impact and climate footprint
The digital product passport proposal applies to nearly all physical products on the European market, with exceptions for food, animal feed, and medical products, which are governed by separate regulations. The rollout of these requirements will be phased through 2030, with the textile industry among the first sectors to adopt the framework.
Challenges for the fashion and textile industry
The fashion and textile industry is both global and complex, making it challenging to meet the requirements for digital product passports. Below are some of the significant hurdles that need to be addressed:
- Low transparency in supply chains
Many companies lack full transparency of their entire supply chain, especially with third- or fourth-party suppliers. This makes it difficult to collect and verify data. - Cost pressures and tight margins
Sustainability initiatives involve upfront investment, which can be difficult in an industry where profitability is often under pressure. - Skills gap in technology and sustainability
Many companies lack the internal skills required to implement traceability systems or analyze life cycle data. - Lack of coordinated standards
Without common guidelines on how to collect and report product data, working with digital product passports can be confusing and inefficient.
Opportunities with digital product passports
Despite the challenges, the potential is huge. Companies that embrace digital product passports have the chance to lead a transformation that combines sustainability with business value.
- Build trust and differentiate the brand
By offering full transparency, companies can build trust with both consumers and business partners. This strengthens the brand and attracts loyal customers. - Streamlining and optimizing the value chain
Digitizing the supply chain not only brings sustainability benefits but also increased efficiency, better use of resources and reduced costs in the long run. - Enabling new business models
Digital traceability opens the door to circular business models such as rental, repair services and resale of second-hand clothes. - Sharing accurate data
With detailed and verified data on material flows, carbon footprints and sustainability, companies can create more accurate reports while identifying inefficiencies, optimizing resources and finding circular solutions.
Standards to support compliance
GS1 standards offer businesses tools to collect and structure data in a consistent and globally recognized way. Using identifiers such as the Global Trade Item Number (GTIN) and the Global Location Number (GLN), companies can link detailed information to each individual product, actor and location, which is a fundamental component of digital product passports. This not only allows information on materials, origin and sustainability to follow the product through its life cycle, but also ensures that data can be shared and interpreted across the value chain, regardless of the system or actor.
To achieve the traceability that digital product passports require, some form of standardized data sharing between actors in the value chain is needed. GS1 standards allow actors to have a common global business language, which means they can collaborate effectively, regardless of industry or geographical location. In addition, by harmonizing the exchange of information, stakeholders would be able to reduce the risk of misunderstandings and inefficiencies in the supply chain. Currently, standardization work is underway within the European standardization organization CEN/CENELEC to set these rules of the game and it will be very interesting to take part in it when it is completed.
Lead the way towards a circular fashion industry
In addition to the fact that digital product passports will soon become a regulatory requirement, it is an opportunity for the industry to position itself as a leading force in the green transition. By using standards, fashion and textile companies can get a good starting point to create the traceability demanded by both the EU and consumers.
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Author: David Almroth, Head of Expansion, GS1 Sweden
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David Almroth, Head of Expansion, GS1 Sweden