In May 2023, the United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT) kicked off a critical project: "Transparency at Scale – Digital Solutions for Trust, Resilience and Sustainability: Verifiable Credentials in Supply Chains."
At the heart of this initiative lies Recommendation No. 49, which will guide the implementation of traceability and transparency at scale. A cornerstone of this effort is the United Nations Transparency Protocol (UNTP) for Digital Product Passports (DPPs).
The United Nations Transparency Protocol (UNTP) is advancing toward full implementation. The protocol is being actively refined - through pilot projects and community review - to support governments and industries in combating greenwashing through scalable supply chain traceability and transparency measures.
A range of organisations have registered their intent to implement UNTP specifications, with some organisations in the testing phase. A number of industry specific extensions are underway, including the Australian Agriculture Transparency Protocol (AATP) and the Universal Data Protocol (UDP) for the built environment announced by Standards Australia and the International Code Council at COP29. (More on that here.)
But what is the UNTP designed to do and why are the UNTP and Recommendation 49 being developed?
These digital tools are designed to:
✅ Ensure interoperability across systems and supply chains
✅ Meet disclosure requirements for products
✅ Carry verifiable data—like conformity credentials, sustainability records, and more—about goods traded in value chains.
Here's why:
1. Sustainability challenges are escalating
From climate change to biodiversity loss, water consumption to modern slavery, global sustainability issues are intensifying. The call to action for businesses is urgent and undeniable.
2. Regulatory environments are evolving
Governments and regulators, worldwide, are establishing policies that are designed to drive and reshape market behaviour. Consider these examples:
- The Corporate Sustainability Due Diligence Directive
- The EU Deforestation Regulation
- The US Inflation Reduction Act
- Australia's mandatory climate-related financial disclosures
These frameworks aim to incentivise sustainable practices—and they're raising the stakes for businesses everywhere.
3. Meaningful incentives are emerging, encouraging a race to the top
Sustainability is no longer just a "nice to have." It's becoming a market access requirement:
- For example, the EU Carbon Border Adjustment Mechanism creates direct financial incentives. At today's carbon price of €80–€90 per tonne, reducing emissions isn't just good for the planet—it's good for the bottom line.
- If businesses can't prove compliance (e.g. with deforestation laws), they risk being locked out of key markets.
Sustainability is now a competitive advantage.
4. Sadly, the same incentives designed to drive and encourage sustainability also fuel greenwashing
As businesses face increasing incentives to "go green," the pressure to demonstrate sustainability credentials is mounting. But here's a problem: with high rewards comes high temptation—and greenwashing is thriving as a result.
Greenwashing refers to misleading or false claims about a product, service, or organisation's sustainability credentials. It's a shortcut that undermines genuine efforts and deceives stakeholders, customers, and regulators alike.
The scale of the problem is significant:
- A recent study found that 40% of sustainability claims are either misleading or outright fraudulent.
- Worse still, 60% of claims have no evidence to back them up.
This is not just a consumer trust issue. Greenwashing distorts markets, creates unfair advantages for unscrupulous businesses, and slows progress toward real sustainability outcomes.
Why is Greenwashing Rising?
- Complexity and Confusion: Sustainability claims often involve technical data (emissions reductions, deforestation-free certification, etc.). Without clear, verifiable standards, or a means by which to share credentials in such a way as they can be verified and trusted, it's easy to misrepresent information.
- Market Pressure: Investors, regulators, and customers increasingly demand sustainability. For businesses unprepared to meet these expectations, greenwashing can seem like a quick fix.
- Lack of Oversight: Global supply chains are notoriously complex, with information often siloed, unverifiable, or opaque. This lack of transparency makes it hard to identify false claims.
The result? A lack of trust across the board. Customers are skeptical, regulators are cracking down, and even well-meaning businesses struggle to cut through the noise.
The Real Cost of Greenwashing
Greenwashing isn't just a reputational risk—it's a business and financial risk, too. Companies caught greenwashing face:
- Regulatory fines: Increasingly stringent laws (like ASIC levelling fines at greenwashing culprits or the EU Green Claims Directive) penalise false claims.
- Market exclusion: Failure to meet verified sustainability standards could mean losing access to key markets.
- Loss of trust: Once credibility is lost, it's hard to rebuild customer and investor confidence.
5. Combating Greenwashing Requires Radical Transparency
Transparency is the antidote to greenwashing—but it's easier said than done. Achieving true supply chain transparency demands robust, scalable solutions. It demands solutions that are practical and accessible. There is no one platform that every organisation will adopt and there is no one centralised solution that will work for all.
6. The UNTP and Recommendation 49 Tackle These Challenges
The UNTP for Digital Product Passports is being developed to address the complexities of achieving transparency at scale:
- Ensuring trust in sustainability claims
- Aligning data across global supply chains
- Meeting regulatory requirements efficiently and verifiably
Ultimately, this framework isn't just about compliance—it's about enabling sustainable, resilient supply chains fit for the future.
The Path Forward
As sustainability pressures mount and greenwashing threatens progress, frameworks like the UNTP are critical for enabling businesses to demonstrate trust and transparency.
So the UN Transparency Protocol (UNTP) will succeed at scale, it is being built on a foundation of decentralisation and open-source technology. Why?
- Decentralisation enables trust: In global supply chains, no single entity can—or should—own or control all the data. A decentralised model allows stakeholders to share, verify, and access information without relying on a central authority, fostering greater transparency and reducing risks of manipulation.
- Open-source technology enables interoperability: Supply chains involve diverse systems, platforms, and players. Open-source tools and protocols ensure that organisations can align their systems, verify claims, and interact seamlessly—regardless of their tech stack or infrastructure.
- Scalability and inclusivity: A decentralised, open-source approach allows businesses of all sizes to participate—whether they're multinational corporations or small suppliers—ensuring a level playing field.
By leveraging open-source tools and a decentralised architecture, the UNTP creates a trustworthy, verifiable system that delivers on its promise: transparency at scale for all stakeholders in the global value chain.
Digital Product Passports and tools like Recommendation No. 49 will help organisations:
- Prove their sustainability claims
- Access global markets
- Build trust with stakeholders
The future of sustainability isn't just about talking the talk—it's about proving it.
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