Digital Product Passports (DPPs) are gaining momentum around the world. In response to pressures such as new or evolving regulations and requests for more data from a number of different directions, many organisations are grappling with how to approach their DPP strategy.
DPPs represent an immediate business challenge. But pause for just a moment to consider that the real challenge isn’t the passport. It’s how information moves between organisations, systems and jurisdictions.
As Zachary Zeus, CEO of Pyx, puts it:
“The digital product passport may be the immediate requirement, but the bigger opportunity is creating trusted information that can be reused across multiple markets, multiple stakeholders and multiple future requirements. That’s why DPP decisions are the catalyst for developing a broader interoperability strategy.”
This article offers some advice on how to think about Digital Product Passports strategically before committing to a particular implementation approach.
The DPP Is the Output. The Challenge Is Interoperability.
A Digital Product Passport is ultimately a way of presenting information. Behind that information sit the systems, processes and organisations responsible for creating, validating and maintaining it:
- Conformity assessments
- Sustainability claims
- Certifications
- Product provenance information
- Supply chain records
- Regulatory disclosures
This information needs to move between organisations, systems and jurisdictions, and it will need to support multiple purposes. For example, the same sustainability claim may be required to support compliance, procurement, financing, market access and a range of reporting requirements. The more times information must be recreated, revalidated or reformatted, the greater the cost and complexity.
That is why interoperability has to be part of the DPP conversation.
Since There’s an EU DPP Model, Should You Just Adopt That?
As organisations assess DPP requirements, three broad approaches are beginning to emerge.
Question 1: Should your company tackle a DPP strategy on its own, or is there work to be done at an industry sector level?
For organisations with no exposure to Europe, no customer demand and no immediate regulatory pressure, there may be no need to launch a major DPP initiative immediately.
However, this does not mean doing nothing is the best course of action.
This is the time to engage with industry associations, membership organisations, certification bodies and other sector leaders that are helping shape the future of digital trade and information exchange in your industry and your region.
The challenges associated with DPPs, compliance, traceability and trusted information sharing are not problems that individual organisations should try and solve alone. They benefit greatly from industry-wide coordination, common approaches and shared infrastructure.
“During our work on the Responsible Business Alliance’s UN Transparency Protocol (UNTP) implementation over the past year to issue digital passports and facilities records, we saw some of the largest, best-known global organisations deciding to approach this together.”
“They recognise that trusted information exchange works best when industries, regulators, technology providers and market participants move together.”
Industry bodies can work with trust architects to convene stakeholders, identify common requirements and help sectors develop interoperable approaches such as UNTP adoption that reduce costs and complexity for everyone involved.
The objective becomes developing a consistent approach to trusted information exchange that can support multiple markets, multiple stakeholders and multiple future requirements.
Individual organisations have an important role to play by participating in these conversations, sharing their needs and encouraging industry leaders to take action. The organisations that engage early can help shape solutions that work for their sector rather than simply adapting to decisions made by others.
Question 2: Should Europe-focused organisations adopt the EU DPP model?
For organisations that only operate in Europe, the EU DPP makes sense and should be the focus. It’s going to be a compliance requirement, so the answer is yes. The regulatory requirements are becoming clearer, and the implementation pathway is increasingly well-defined.
However, you can do so in such a way as to ensure that the same data you use for the EU DPP will be useful for other needs.
Question 3: Is there an approach that can support EU DPP requirements while also serving broader needs?
For organisations operating across multiple international jurisdictions, this is where the discussion shifts from compliance to strategy, and the focus doesn’t have to be on meeting one regulatory requirement.
Interoperability is the more pertinent challenge to solve, so you can get the DPP and any other digital information sharing done in a way that works for many purposes and reporting requirements without requiring the same work to be done many times over.
While the EU DPP framework may be entirely appropriate for organisations whose primary focus is Europe, global organisations need to consider a broader set of questions.
- Will the same approach work across all the markets in which they operate?
- Will it support customers, suppliers and regulators in different jurisdictions?
- Will it adapt as new requirements emerge?
- Will it enable trusted information to be reused across multiple reporting and compliance obligations?
One option is to adopt an approach that supports EU DPP requirements while also enabling trusted information exchange across other markets and use cases.
The reason that the UNTP is attracting increasing attention is that it provides a way to support trusted information exchange across multiple jurisdictions, industries and use cases.
In practical terms, there is ongoing work between UNTP and CIRPASS to understand how the approaches complement one another, with strong alignment already identified across areas including product identifiers, communication protocols, data models, traceability, lifecycle management and conformity vocabularies.
It’s worth remembering that interoperability is not a challenge that organisations need to solve in isolation. If some of the world’s largest companies are working through industry initiatives, standards bodies and collaborative programs to establish common approaches, other organisations should feel empowered to do the same. Industry associations, membership organisations, scheme owners and certification bodies all have a role to play in helping sectors identify shared requirements and develop solutions that work for entire ecosystems. Where those conversations are not yet happening, organisations can help by encouraging industry leaders to take up the challenge.
Do You Need a Different Approach for Every Reporting Requirement?
The temptation is to treat a DPP as a standalone compliance project, and that’s understandable. But if you’re already doing the work, it’s worth adopting an approach that can support all of your reporting, compliance and market-access requirements rather than solving each requirement separately.
There is no single answer to DPP strategy.
- For organisations focused solely on Europe, the EU DPP may be all that is required.
- For organisations that are still observing developments, now is the time to engage with industry initiatives and help shape the future approach.
- For organisations operating across multiple markets, the strongest strategy may be one that starts with interoperability and uses DPPs as one expression of trusted information exchange rather than the end goal itself.
Regardless of which path you take, interoperability challenges are rarely solved by a single organisation.
Industry coordination, common approaches and shared infrastructure are increasingly becoming part of the answer.
As Zeus puts it:
“Publish trusted data once. Reuse everywhere.”
Related Reading
- The Question Everyone Keeps Asking Me About Digital Product Passports
- How Do I Evaluate DPP Approaches so I Can Choose the Right One?
Join the Discussion
On the Pyx Trust Architecture community forum: when organisations start talking about DPPs in your sector, what is driving the conversation?
Share your perspective at forum.community.pyx.io.