Certainly, you would have heard at least once about digital product passports and how this technology can help brands communicate their commitment to the environmental impact on the one hand, and on the other hand, meet consumer demands in terms of transparency of the brands themselves.

As always happens when a revolution begins, large or small, there is a lot of confusion around the topic, digital ID and product passport are used as synonyms, and you don’t know all the benefits that derive from implementing this technology in your company.

Let’s try to clarify together.

The fashion industry, pollution, and the question of waste management

It is not new that the world of fashion and our wardrobe is one of the main factors that negatively impact the environment.

The fashion industry is one of the main global polluters and has a complex and murky history of excessive consumption, unclear practices, and disrespectful ways of disposing of waste.

According to the latest data, about 10% of global greenhouse gas emissions are caused by the fashion industry and nearly three-fifths of all clothing ends up in landfills within a year of production. And we are not talking about old used garments, but often excesses of stock, so garments that are still new and with tags.

To address these issues, various fashion brands have already introduced new alternative materials into their collections, such as biodegradable fabrics, organic fibers, orange peel, cactus or pineapple, vegan leather, or completely recycled materials.

This information is visible on the tags of each garment, together with washing instructions and instructions on how to take care of the product.

The value of the label

We are so used to the fact that when we buy a garment, it will be accompanied by the labels, that so far we have paid little attention to the information they offer us.

For many years, clothing labels have offered limited information, only telling you:

• the only country where the article was made
• its composition
• instructions for washing
• in some cases, care instructions.

Until a few years ago that was enough for us, but now the music has changed.

This little information makes it difficult for consumers to access more in-depth information about the product, such as who produced it, what conditions this person lives in, not to mention the impact on the planet and the possibilities for recycling.

The label on a cotton shirt or a pair of trousers does not (yet) tell us the story of where and how the cotton it is made of was grown if the workers who harvested it were paid an appropriate wage, nor how much it polluted the way it was shipped from where it was produced to where we bought it.

The good news is this is the time for clothing labels to have their fifteen minutes of stardom.

The digital product passport revolution

Thanks to innovation and advances in technology, today the fashion industry can produce labels that can provide customers with information that goes beyond basic care instructions and the country of origin of the product.

These smart tags, which generally come in the form of QR, NFC, or RFID codes, are digital passports for fashion, also known as Digital Product Passports (DPP).

The digital product passport contains very detailed information on the individual garment, offering full transparency to the customer.

The blockchain aspect

The technology used for these passports is the blockchain, which acts as a guarantor of all data entered by the brand and related to the product itself. All the data entered in the blockchain are unique and cannot be changed, making them reliable.

The stored data is shared along the entire value chain and concerns all the tiers involved in the production (i.e. breeders or farmers, factories, manufacturers, and suppliers).

In this way, digital product passports help customers understand the environmental impact of their purchases by providing details on the fabrics of the garments, the breakdown of costs, the production process, and recyclability, as well as the social and environmental impact they have.

In practice, they allow the final customer to make more informed choices by giving him/her all the information necessary to make a responsible choice.

For the same price and garment, you would not prefer to buy the one produced by a company that respects its workers all over the world, seeks to have a less environmental impact on the planet, and offers more possibility of disposal or recycling, once the life cycle of the garment has ended?

These tags are fast becoming “mandatory” among fashion brands, also as the laws that are coming into force and are about to revolutionize the fashion industry.

Digital product passports are means by which brands can share their sustainability narrative with end customers, telling their commitment to sustainability and increasing their level of transparency by connecting the customer to the journey of the article.

Differences between digital ID and digital product passport

To boost authentication, transparency, and sustainability brands must utilize new technologies to store and share product information. 2 out of 5 fashion executives plan to adopt product passports in 2022 or have already done so.

BOF – MicKinsey State Of Fashion 2022 Survey

Before moving on to operation, it is essential to make a distinction between Digital ID and Digital Product Passport.

Often the two are used interchangeably and are related, but they also have a substantial difference.

The Digital ID, as the name itself implies, is a digital identity that does not necessarily relate to a finished product: the digital ID of a material, a fabric, or the component of an accessory may also exist.

By applying a QR Code on a roll of leather and scanning that code, we will be able to access basic information, such as who produced it, where, who worked it, etc. In short, everything we want, but only that single roll of leather.

The digital product passport is the natural consequence: it can concern the digital identity of a single material, but it also includes all the data of every other component and material of the finished product, including the history of suppliers, the indications of costs, environmental impact and also suggestions on how to dispose or recycle the product itself.

We can say that the digital product passport is an archive with complete information, while the digital ID refers only to a single element.

Furthermore, the digital product passport not only collects all the data of a product, but stores them in an organized way so that both the brand, but also the customer can access and consult them at any time in a simple way.

It is a bit like the unique code of a brake and the license plate of a car: while the former gives us limited information on a single component, the plate gives us all the data of the vehicle, starting from the parts from which it is composed and who produced it, up to who sold it, as well as the information of who bought it, therefore to whom that property belongs.

It is knowing the current ownership makes it easier for us to manage future ones (for example, new owners).

Towards a new model of circular economy

Without a shadow of a doubt we can say that as an enabler, the digital product passport represents the technology at the basis of a new model of the economy in the fashion world. An economy that is no longer linear (buy – wear – throw), but circular (buy – wear – recycle or resell or rent).

All this is achievable only if the customer has access to all the information necessary to move independently and choose how to behave with the product in question.

And further upstream, all this is possible only if the brand collects and catalogs the data relating to the product thanks to a traceability system of the supply chain.

However, it is crucial to note that a circular business model must be seen as a vital part of the entire business ecosystem.

Encouraging product returns or offering coupons for new items can fuel even more production and increase the chances of circular business models becoming impractical, both environmentally and economically.

Therefore the creation of supply networks is necessary to track and circulate products among the owners and is essential to improve the economic growth and environmental effects of the fashion industry in the long run.

Digital product passports are particularly effective in enabling and maintaining a circular economy, especially in the context of vintage luxury shopping, where the authenticity of a garment and its original price can be easily verified and trusted.

More recently, the H&M group of companies has developed a new tool, called The Circulator, which helps their designers produce responsibly, right from the design stage.

Benefits and issues of digital product passports

Digital product passports have the potential to change the sustainability and accountability narrative within the fashion industry, not just towards customers, but also supply chains.

The horizon of greater transparency is less and less a utopia and soon the whole market could benefit from it.

However, this transition is neither immediate nor simple.

First of all, high-end brands have yet to break away from a now anachronistic cultural matrix, which requires the utmost confidentiality on everything related to the production and distribution chain of their garments. As long as you are reluctant to share your data, and the names of your suppliers for fear that the competitor will steal something from us, it is difficult for the process to go on.

Second, the benefits of digital product passports could impact audiences for whom the details on the product’s history could make the difference between buying it or not, but the same may not apply to other categories of shoppers.

For example, vintage fashion shoppers can take advantage of digital product passports, as the company Blue Bite is finding, as the information provided is very valuable. “What was the initial price of this piece?”, “How was the production process?” and “Who owned it before me?” are all questions that may arise for vintage shoppers that digital product passports can easily answer.

But how could this same information be of interest to fast fashion shoppers, behind which there are no memorable stories?

And so, how could digital product passports impact our consumption habits and reduce the phenomenon that started it all in 2013 with the collapse of Rana Plaza, Bangladesh?

What about the legal side?

At the level of laws, the EU Due Diligence Law is coming into force, the New York Fashion Pact has been proposed and these are just two of the laws that are about to revolutionize the fashion system.

On the subject of digital product passports, the European Commission has proposed to establish an EU digital product passport in the regulation on eco-design for sustainability.

What does this mean? EU-based companies may soon be legally required to integrate digital product passports into their operations.

In a few years, they could even become standard practice even outside the EU.

For now, there is no news from the United States regarding future developments, so we just have to wait.

The ID Factory’s solution

Although the future is still uncertain and many questions remain unanswered, it is clear that the digital product passport is a technology destined to revolutionize the fashion industry and forever change the logic of purchase and consumer habits.

If your company is considering adopting such technology and you have any questions about it, please book a free 30-minute call with us.

We will introduce you to our solution, how our digital product passport works and how it can help you take the next necessary step.

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