With the legislation’s aim to elevate economic circularity, many businesses have begun to consider their role in achieving greater sustainability.
In particular, as the ESPR’s Digital Product Passport (DPP) mandate is set to affect a range of industries and product groups over the coming years, the first and most critical step towards compliance involves identifying and validating the necessary product and environmental data to inform DPPs - a process that is likely to be a challenging and complex road for electronics firms to follow.
Moreover, although specific requirements pertinent to each industry are yet to be announced (via the delegated acts), actioning these points early will significantly simplify the compliance journey for all businesses - including technology firms.
How the ESPR will impact the electronics industry
In recent months, the importance of the ESPR has grown amongst EU businesses, particularly with those in the electronics sector.
It is a core pillar of the EU’s Circular Economy Action Plan (CEAP), focused on encouraging practices that contribute to sustainability, by providing a framework that will make “sustainable products the new norm in the EU.”
To do so, it will focus its efforts on making “items last longer, use energy and resources more efficiently, easier to repair and recycle, contain fewer substances of concern and include more recycled content.”
The regulation will impact select industries and products that are currently deemed to have the biggest impact on the environment, including the electronics sector, and will apply to any business that places products onto the EU market.
In particular, the implementation of Digital Product Passports - a digital record of a physical product, securely keeping track of event, transactional, and sustainability-based information across that product’s lifecycle – will be mandated.
As already noted, although the delegated acts - guidelines outlining the specific information required in DPPs for various industries and product groups (e.g., what environmental or sustainability data will be required) - have yet to be announced, the first crucial step toward compliance is collecting and validating data on a product's environmental impact. Such data will eventually be used to populate the DPPs with the relevant information. This initial step can be challenging, as data is often scattered across different systems within a company's value chain, making it difficult to source and validate.
With this in mind, businesses should proactively map and organise their data in preparation for the regulation’s full implementation, ensuring they're well-prepared for compliance.
On this, here are six key steps for electronics companies to systematically assess readiness, and collect and incorporate vital data throughout the supply chain successfully to align with the DPP mandate.
1. Collaborating with stakeholders to understand the business's readiness for compliance
As a first step, engage with stakeholders across the supply chain, such as suppliers, manufacturers, and logistics partners to build a picture of the product data currently available. Discussions might uncover information you didn’t know already existed and give you a pathway to begin discussing how data transparency and access can be improved.
2. Implementing a data gap analysis to identify missing information
After locating existing data, identifying the missing elements that are highly likely to be required by the DPP mandate, once the delegated acts are announced, is advised. This may be the information on the waste generated during the production of a product or the carbon footprint of the manufacturing process - something particularly relevant to the electronics industry which is currently responsible for over half of the world's carbon footprint.
Conducting this exercise helps identify gaps in your business's product data, allowing you to address them by integrating measurement tools or collaborating with new partners for support.
3. Conduct a Life Cycle Assessment (LCA) audit to begin filling data gaps
Once data gaps are established, one process that can be prioritised is an LCA. This process measures the environmental impact of a product’s lifecycle and can start from the point of raw material extraction to provide a complete and comprehensive view of its sustainability footprint.
4. Validate data sources for accuracy and ease of mind
Throughout their data compliance journey, businesses need to validate data sources to build an accurate, verifiable picture of each product. This means assessing the credibility of third-party data suppliers, and ensuring processes are underpinned by the relevant standards.
5. Creating a coherent Digital Product Passport solution strategy
After collecting and analysing the necessary data, evaluating DPP solutions is key to prepare for compliance. Given the complexities involved, developing an in-house DPP solution may not be feasible for most businesses. Instead, seeking partners who specialise in DPP solutions will allow businesses to address their unique requirements effectively.
With the implementation of DPPs being central to compliance, assessing how data needs to be inputted into, and managed within the system is critical to considering the capture and storage of data in the correct formats. Businesses should also consider whether the DPP solution can integrate with existing systems and how it creates an ongoing real-time picture of a product’s lifecycle.
6. The importance of pilot programs for testing and evaluation
After completing the initial steps, the next logical phase is to pilot a DPP solution in a test environment. This allows businesses to test their strategy and gain a clearer view of the scale and timing needed for full deployment. Through piloting, companies can refine their approach, making them well-prepared for the final requirements once the delegated acts are released.
Effective compliance with the EU’s DPP mandate relies on a strategic, methodical approach to collecting, validating, and integrating data across the supply chain.
Positioning your business for compliance success
While the release of the delegated acts still leaves some uncertainties, companies can get a headstart on their path to DPP compliance by focusing on practical and achievable initial steps. Building a robust compliance strategy rooted in accurate data and reliable validation processes will not only facilitate alignment with the mandate but also enhance sustainability and strengthen operational resilience.
Author details: Lars Rensing, CEO of Protokol, DPP Solution Provider
