The global economy is at a crossroads.
It is concerning that, despite increasing awareness, global material cycling rates have declined to a mere 7.2%, highlighting the significant gap between aspirations and the actual implementation of circularity principles.
One of the key tools to bridge this gap is the Digital Product Passport (DPP). By providing a comprehensive digital record of a product’s lifecycle, the DPP empowers stakeholders to make informed decisions that support transparency, circularity, and sustainability.
Whether you're a manufacturer preparing for the future, a retailer navigating sustainability rules, or a policymaker shaping the circular economy, this article shows how Digital Product Passports (DPP) are making product data clearer, compliance simpler, and sustainability more achievable.
The Circular Economy: A System Redefined
The traditional linear model, characterised by a 'take-make-use-dispose' approach, is proving unsustainable due to resource depletion, environmental pollution, and climate change. A compelling alternative is a circular economy, which advocates for a closed-loop system where resources are maintained in use for as long as possible, waste is minimised, and natural systems are regenerated.
The circular economy is more than just an adjustment; it requires a complete rethinking of how products are designed, used, and repurposed. Instead of discarding materials after one use, they are continuously cycled through various strategies, often summarised as the ‘9 Rs’:
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Refuse - avoid unnecessary consumption and products with short lifespans.
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Reduce - minimise the use of resources and materials in production and consumption.
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Reuse - utilise products and materials multiple times for their original purpose or identify new applications.
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Repair - fix broken products to extend their lifespan.
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Refurbish - restore old products to improve their functionality and aesthetics.
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Remanufacture - use parts of discarded products in a new product with the same function.
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Repurpose - discover new uses for products or materials no longer needed for their original purpose.
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Recycle - process materials to create new products.
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Recover - extract energy or valuable materials from waste.
What Drives the Circular Economy?
So why are businesses and governments finally making circularity a priority? A few key reasons:
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The environment needs it: The EU’s Circular Economy Action Plan (CEAP) highlights that global material consumption is set to double by 2050, with waste generation expected to rise by 70%.
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It’s a smart business move: Circularity leads to cost savings, new revenue streams, and jobs in growing industries like recycling and remanufacturing.
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People are demanding it: Consumers are becoming more eco-conscious. Brands that ignore sustainability risk losing out.
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Big companies are already on board: Walmart, for instance, aims to divert 90% of its waste by 2025. Others are following suit.
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Governments are making it law: Governments worldwide are implementing policies and regulations to support the transition to a circular economy, including extended producer responsibility schemes and eco-design requirements.
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Technology is making it easier: From smart sorting systems to modern PIM systems to AI-powered material tracking, innovations are helping businesses transition to circular models.
But for all this to work, businesses need real-time, reliable data about their products.
Key Principles of the Circular Economy
The circular economy is reshaping how we produce, consume, and manage products, with a focus on sustainability and reducing environmental impact.
Here are its key principles:
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Eliminate waste and pollution throughout the product lifecycle.
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Maintain products and materials in use for extended periods.
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Regenerate natural systems to ensure long-term sustainability.
The Digital Product Passport: A Key Enabler
Imagine if every product had a digital identity - a record of what it’s made of, where it’s been, and how it can be reused or recycled.
That’s exactly what a Digital Product Passport does.
It’s a digital record that tracks everything about a product, from its raw materials to its disposal. This makes it easier for everyone in the supply chain - manufacturers, retailers, consumers, and recyclers - to make sustainable choices.
Watch this video to get the latest insights on DPP.
How a Digital Product Passport Works: Core Features Explained
The Digital Product Passport is transforming how businesses and consumers approach sustainability by offering clear visibility into every step of a product’s lifecycle.
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Traceability – Follow a product’s journey from raw materials to end-of-life.
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Transparency – Access reliable data on carbon footprint, recycled content, and ethical sourcing.
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Information sharing – supports manufacturers, retailers, and consumers in making informed decisions.
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Data management – helps businesses improve design, production, and waste management.
Benefits of the DPP for the Circular Economy
The DPP offers numerous benefits that directly support the principles of the circular economy:
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Enhanced circularity: Helps extend product life through repair and recycling.
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Improved resource efficiency: Promotes the use of recycled materials.
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Reduced waste: Makes it easier to separate recycling materials.
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Empowers consumers: Gives people more information about the environmental impact of their purchases.
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Competitive advantage: Brands can prove their sustainability efforts.
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Supports circular business models: DPP encourages the development of new circular business models, such as product-as-a-service and closed-loop recycling systems.
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Preparing for the Digital Product Passport Regulation
Is your business ready for the digital product passport (DPP) regulation? Our all-in-one guide breaks down everything you need to get yourself prepared.
Implementation of the DPP - How to Prepare
The EU is already making Digital Product Passports mandatory under the Ecodesign for Sustainable Products Regulation (ESPR). The first wave of requirements is set for April 2025.
That means businesses need to start organising their product data now. Managing this manually isn’t realistic - but Product Information Management (PIM) systems can help.
A PIM system is a central hub for all product data, ensuring it’s accurate, up-to-date, and ready for DPP integration. This makes compliance easier and helps companies stay ahead of regulations instead of scrambling to catch up.
Why Product Data Management Is Essential for DPP Compliance
A PIM system ensures businesses can efficiently manage the detailed information required for Digital Product Passports.
Instead of dealing with fragmented data across multiple systems, companies can store everything in one place, from material composition and manufacturing details to repairability and recycling instructions. This guarantees a single source of truth, making it easier to update, organise, and distribute information across various channels.
How to Ensure DPP Compliance with Accurate Product Data
With DPP becoming mandatory, businesses must ensure their product data is accurate, standardised, and compliant with evolving regulations.
A PIM system eliminates errors through automated validation, ensuring that product information meets DPP guidelines. Real-time updates allow businesses to quickly adjust to regulatory changes without delays or risks of non-compliance.
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The Complete Guide to PIM
‘Complete Guide to PIM’ covers the foundations of Product Information Management.
How Digital Product Passports Improve Supply Chain Transparency
Since DPP data must be accessible across manufacturers, retailers, and recyclers, seamless integration with supply chains is essential.
A MACH-based PIM system effortlessly integrates with ERP systems, enabling smooth data synchronisation. It also integrates with e-commerce platforms and various databases, ensuring product information flows efficiently across the entire value chain.
Get Ready for DPP Regulations: How to Stay Compliant and Competitive
As regulations evolve, businesses that delay adapting to DPP requirements risk face fines, lost market opportunities, and decreased consumer confidence.
A PIM system automates compliance processes, ensuring that all required data is pre-formatted for reporting and readily available for product listings. This allows businesses to stay ahead of regulations, speed up market readiness, and avoid last-minute compliance struggles.
Towards a Sustainable Future
The circular economy isn’t just a nice idea - it’s becoming a business necessity. And Digital Product Passports will play a major role in making it happen.
With better traceability, transparency, and data sharing, the DPP helps businesses reduce waste, improve resource efficiency, and meet sustainability goals.
As regulations tighten and consumer expectations shift, companies that embrace DPP now will have a huge advantage.
