DPP expert: ”Get started now — even if we do not know everything, we know enough”
TrusTrace’s Jenny Wärn: ”Those who do not will be left behind, and, worst case, if they are not able to comply, ultimately not be able to exist in the circular marketplace of the future.”
3 Jun 2024

TrusTrace is a traceability data and compliance management platform for fashion and textiles, working to empower companies with the data they need to know, prove, and improve the impact of their value chains. 

— What makes us unique is our ability to collect, validate and analyse data at scale, meaning traceability processes can be automated across full portfolios, and for any material or sourcing model, says Jenny Wärn, Director of Product Operations.

”On the next question to the audience, if they know what DPP is about — almost no one knew”

Last week, you took the stage at Transformation Conference Helsinki. What did you talk about?

— I opened by asking how many in the audience had heard about DPP (Digital Product Passport) — almost everyone. On the next question to the audience, if they know what DPP is about — almost no one knew. So my talk was about enlightening the audience on what is coming and how they can prepare. I also shared insights into the pilot TrusTrace has done within the Trace4value program, where we run the most extensive DPP pilot within fashion to date. In the pilot, we defined data points, gathered data for three production lines and added unique digital identifiers, a QR code to 3000+ garments at the garment facility, and built an end consumer user interface.

You also explained how DPP consist of garment data and an IT system, and that both are required to make it work in practice. Where are we now in the process?

— The key thing to know is that DPPs are happening. The European Parliament officially adopted the Ecodesign for Sustainable Products Regulation (ESPR), which includes the requirement for Digital Product Passports (DPPs), in April. The ESPR establishes guidelines for DPPs, focusing on sustainability, circularity, and providing clear information about textile products throughout their lifecycle. 

And what are the next steps?

— There’s a lot we know already and can act on, such as what type of data it will be necessary to collect, and a lot that is still to be defined, such as governing standards and methodologies to be used to interpret the data in a consistent and comparable way. In terms of next steps, the latter is being worked on and will come with the Delegated Acts, which specify the detailed requirements and technical criteria for the Digital Product Passports (DPPs), at the end of 2025. This includes defining the exact data points that need to be captured, the standards for interoperability, and the specific technical and procedural requirements to ensure compliance.

TrusTrace just released a new Playbook on DPPs with knowledge and insights gathered through collaborations with brands and industry stakeholders.

— The DPP, and the underlying data infrastructure, will be a major enabler of the circular economy, as we cannot create a circularity infrastructure without knowing what products and materials we will be using, and in what amounts. Nobody really knows this today, and DPPs will fill this data gap for the EU. Unfortunately, while DPPs are very important, there’s a lot of confusion around what they entail and how to implement them, which can become paralysing and hamper action.

— Here, we can contribute with a lot of clarity and show a clear path forward. We have already piloted the DPP for two years as part of the first textile-specific end-to-end DPP pilot with Kappahl, Marimekko, the Swedish Institute of Standards (SiS), GS1, and others through the mentioned Trace4Value project.

— While we believe this guide will be a key resource for brands of all sizes, it may be particularly helpful for SMEs who do not have the big legal teams and budgets of larger corporations. As SMEs also make up the majority of the EU fashion industry, it becomes really important that they can access solutions and advice that work for them.

The new playbook.

What takeaways can you share from the Playbook?

— Get started now. Even if we do not know everything, we know enough. And even if standards and methodologies are not there yet — which is also largely outside the influence of brands — brands can get ahead by gathering all the data needed, so when the Delegated Acts are finalised, they are fully ready to apply the methodologies, Wärn shares. She continues:

— The recommended next step for brands is to get into the details of understanding DPP as collecting all the data needed for DPPs will take time. 

— In short:

— Understand the regulations and data requirements

— Evaluate what data they possess today and in which internal systems

— Begin data collection of the necessary data

— Evaluate data gaps and make a plan for collecting missing data

— Ensure they early on think not only about compliance but how this data can also enable new business opportunities across functions, such as deeper consumer engagement and value-creation throughout the product lifecycle. 

— As part of this work, it’s also important to consider which functions and teams should be involved. The learnings from Kappahl and Marimekko showed that the efforts were truly cross-functional as product data can ultimately be found and leveraged across departments.

Can you explain more about how DPPs can be turned into a business opportunity?

— Firstly, there’s an opportunity to engage more deeply with consumers regarding the products. The ability to narrate and develop the product story over time, throughout its lifecycle, creates more chances to interact with them, thereby driving value and loyalty.

— DPPs can serve as a tool for managing and verifying the authenticity of products and preventing fraud, ensuring the product origin is clear and validated. This is especially important for high-value products.

— Another benefit of having comprehensive supply chain data and a dynamic view of the entire network is that it allows brands to proactively manage their supply chains, helping them anticipate risks and business disruptions.

— Ultimately, transitioning the industry to a truly circular economy, which respects global resources and communities, will ensure sustainable business practices for the future.

What do companies and your clients ask you the most about right now? And what do you answer?

— With all the regulations coming in globally, the primary driver for most brands is compliance, and how to ensure you have the right data in a scalable way to ensure compliance globally. The focus is slightly different per geography; in the US the main focus is Forced Labor Prevention and Supply Chain Risk Management, Due Diligence and Compliance, whereas Europe is more spread out in terms of requirements. What’s true for all of them, though, is that they have discovered the need to get accurate data on their supply chain and products.

— In order to be able to truly understand and manage social and environmental risk — or to be able to populate a DPP with product data — you need to have what’s called primary data, which is data that comes from their actual supply chain. You cannot rely on assumptions based on secondary or third-party data. Both because it will not hold as evidence for compliance, and because it does not enable you to understand where you have the biggest risks or opportunities for improvement, and how to measure it. For example, you cannot calculate meaningful scope 3 reductions in tier 2 and 3 factories without knowing the real starting point — the actual grid they use and their consumption.

— To be able to do proactive compliance, and eliminate risks early on, you need to have your supply chain network mapped out, screen it for social and environmental risks, and have that intelligence not only for the network but for each product. A lot of brands have already cracked this at scale, with suppliers proactively sharing data throughout the tiers. For some segments, like footwear, we already cover up to 80% of the suppliers by volume given we’re working with the vast majority of the biggest global players, which subsequently makes it easier for smaller brands later on, as their suppliers are already used to sharing data.

According to Wärn, two points are worth highlighting, in terms of avoiding pitfalls and fielding the best team to benefit from DPPs.

— It is a common misconception that DPP solutions already exist. The current DPP discussion often centres around the scannable consumer interface, which, while important, is actually the easiest part to implement. A consumer interface with product data is not a full DPP solution but simply a way to share product data. A comprehensive DPP solution does not exist yet, as the standards for DPPs are still being finalised. Brands should focus on ensuring they have all the necessary data to populate these consumer interfaces, as this is the challenging part that will take time.

— Another important point, based on findings from our pilot, is that preparing for the DPP, in terms of both compliance and business opportunities, requires a truly multi-functional effort. The responsibility for DPPs should not be limited to compliance, sustainability, and sourcing teams but should also involve commercial teams.

— The ESPR and, in particular, DPPs and the detailed data requirements associated with them will bring about a massive transformation in the industry. Not dissimilar to how e-com disrupted the industry, with brands having endless data on consumer behaviour to analyse to optimise sales, a future of fully digital supply chains where all data is readily available will bring about a whole new world of opportunity in fashion. Those who prepare early on will reap the benefits. Those who do not will be left behind, and, worst case, if they are not able to comply, ultimately not be able to exist in the circular marketplace of the future.