Q&A: Digital Product Passports & Sustainable Supply Chains

• Updated on: 2022-06-11
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When it comes to sustainability, it’s crucial for businesses – both in the promotional products industry and beyond – to be transparent. Without a traceable supply chain, a business is liable to run the risk of being accused of greenwashing.

A number of tech companies have been working on ways to help make product tracking easier to help with everything from sustainability to supply chain risk management. Christine C. Akselsen is the CEO of one such company – Kezzler, which focuses on product digitization and traceability technology. She discusses the European Union’s recent requirements for digital product passports and how that might affect the U.S. in the future. She also explains how companies like hers can create unique digital identities for products, helping businesses trace them through every step of the supply chain.

A: Earlier this year, the European Commission (EC) introduced a mandatory disclosure requirement for companies to report key sustainable data, including origin and potential for recyclability and carbon-conscious waste, about every product they bring to market and every input involved in its production.

These product-specific data profiles, the Digital Product Passports, were launched to advance EC objectives related to reuse, recyclability and waste, and to expedite the establishment of circular economies in the EU. The EC presented a compliance framework that will first target the battery industry, setting a 2026 deadline for battery manufacturers and suppliers to adhere to these reporting requirements. It’s expected that compliance deadlines will follow soon for prominent high-waste sectors such as fashion, consumer electronics, furniture and high-impact intermediate products including chemicals and most industrials. 

A: Multiple studies have quantified the strength of U.S. consumer demand for sustainable products and services, and Americans rank above the global average in considering sustainability an important part of their purchase habits. Digital product passports can help companies nurture consumer trust and uphold sustainability commitments by offering data-driven supply chain transparency and, amid such dramatic global logistical disruption, help U.S. enterprises navigate a litany of supply chain management risks.

These product passports can push companies into our digital-first future and provide the resources required to manage evolving new challenges. Already, we’re seeing enormous demand for traceability in two major industries – batteries and food and beverage. Mandated digital passports for electric vehicle batteries (a requirement advanced by U.S.-based Global Battery Alliance) are already underway, and the U.S. Food and Drug Administration has already called for tech-enabled traceability as a foundational element of its New Era of Smarter Food Safety manufacturing blueprint. Many other core American sectors are expected to follow in calling for better supply chain visibility.

A: Traceability is visibility. If business leaders lack a line of sight into their corporate supply chain, they are inherently ill-equipped to address such issues as black/gray market sales, product diversion, illegal labor practices, and unsustainable or polluting production. Traceability technology empowers these leaders – and consumers who engage with their companies – to make informed decisions about their supply chain, the suppliers and inputs involved in production and the sustainability of what they produce. By allowing companies to track products that may have been diverted, stalled or counterfeited, it also offers the critical data needed to comply with stringent regulatory requirements and identify stages of the value chain wherein unsustainable practices may be occurring, generating cost savings and improving customer loyalty.

A: Kezzler’s technology creates a unique digital identity for every single product. We use this identity to connect all relevant information for that specific item: when, where and how it was made, as well as its journey to the consumer – a sort of digital life record, if you will.

This makes detailed information available to companies, their customers and regulatory bodies at any stage in its supply chain. The platform easily integrates into other IT systems so that it can incorporate, share and parse data with the ecosystem as needed. The result of this is more granular, more accurate and more actionable data that empowers greater supply chain visibility and lower operational and risk management burdens.

Our offering can solve any project from basic product authentication to high-volume, complex traceability scenarios. The challenge with supply-chain digitization initiatives is that they create vast amounts of data and place a burden on system response. What makes our technology unique is that it was purpose-built to solve that challenge and achieve high-transaction, low-latency response even in a large-volume application.

By granting companies unprecedented insight into their supply chain whenever they need it, our traceability technology helps clients meet challenges from counterfeit goods and unauthorized distribution to product diversion to consumer engagement and visibility.

A: Traceability technology is already on track to become widely recognized as a financial and operational imperative for companies across industries. In the coming years, I expect that the private sector will see product traceability become a mainstay risk management tool globally and a key pillar of standard-setting as it relates to corporate sustainability commitments and initiatives.

Simultaneously, as traceability technology proliferates through various sectors, consumers will reinforce its rise and come to expect product traceability and supply chain transparency in all the goods they consume. As more consumers experience product traceability offerings, I expect that they will demand the same from other companies with which they engage.