The 5 Biggest Data Challenges Behind Digital Product Passports

The Digital Product Passport (DPP) is set to change the way businesses handle product information. With new regulations like the Ecodesign for Sustainable Products Regulation (ESPR), businesses will soon need to provide detailed product data to meet transparency and sustainability goals.

Successful implementation will mean big changes in the collection, management and sharing of data. While DPPs will offer many benefits, they also introduce significant data challenges. A solid data foundation is crucial in this case.

Quick access:

• Why Do Companies Need a Digital Product Passport?
• The 5 Biggest Digital Product Passport Challenges
• Building a Strong Data Foundation for DPP Implementation

A Digital Product Passport is a digital record containing detailed information about a product’s lifecycle, covering aspects such as raw materials, manufacturing processes, environmental impact, and sustainability. The goal is to enhance transparency and enable informed decision-making for consumers.

Why Do Companies Need a Digital Product Passport?  

Regulatory Compliance  

DPPs will become a legal requirement, especially for circular products, which are designed to be reused, recycled or repaired. The idea is to make product data accessible throughout the supply chain and ensure that each part will be handled responsibly. Beyond just compliance, well-structured DPPS will help you to operate more efficiently and reduce waste. A strong data foundation is at the heart of any sustainable strategy. DPP’s ensure you’re collecting the right data and using it effectively.

Improving Operations and Transparency  

While sustainability is a big driver, DPPs can also help your organization to run more efficiently. With all your product data in one place, you can track ethical sourcing of materials, assess environmental impact and optimize your resource use and allocation. DPPs give you a clear and structured view of your products, which makes it easier to respond to customer questions, regulatory requirements and internal decision-making.

The 5 Biggest Digital Product Passport Challenges  

The introduction of DPPs is primarily driven by regulatory efforts, with the EU aiming to make product information more transparent and accessible. One of the key drivers behind this is the Ecodesign for Sustainable Products Regulation (ESPR), which sets the framework for implementation of DPPs. However, these new regulations bring a series of challenges that you must navigate.

1. Managing Complex Product Data  

One of the biggest hurdles with DPPs is the amount of data involved. Your product information is probably spread across multiple systems, like a PIM (Product Information Management) or ERP (Enterprise Resource Planning) system, or even stored by suppliers. Some organizations do not even have all the data they need, meaning they have to go back to their partners to collect this missing information. Bringing all of this together in one structured format is a really big challenge.

2. Keeping Data Accurate and Useful  

Your DPP is only as good as your data. You need to make sure information like material composition and recycling instructions are correct. But data accuracy is not only about avoiding non-compliance; the most important is that everyone in the supply chain, from manufacturer to recycler, knows exactly what they are working with. The level of detail really matters here.

3. Connecting Different Systems  

Many organizations work with global suppliers who use different formats and systems. Ensuring smooth data exchange between them requires you to achieve interoperability, so all systems can communicate with each other and share information correctly. Without it, transparency in the supply chain will remain a challenge.

4. Long-term Data Mangement  

Additionally, long-term data management will be crucial. Since DPPs require lifecycle data tracking, you must put systems in place that allow for efficient long-term data storage and retrieval. Without a scalable IT infrastructure, managing all this data can become overwhelming very quickly. Therefore, you need to invest in a setup that ensures product information remains available and up-to-date, especially as regulations and your business needs evolve.

5. Unclear Ownership of the DPP  

One of the key challenges of implementing a Digital Product Passport (DPP) is defining who’s responsible for it. When a product is made up of components from multiple suppliers, it’s not always clear who should create and maintain the DPP.

Take a bicycle, for example. The frame, tires, brakes, and gears might each come from different suppliers. Each supplier could maintain a DPP for their individual part — but who is responsible for creating the DPP for the complete bicycle? Is it the final manufacturer, or should the supplier DPPs simply be linked together?

Establishing clear ownership means deciding: who combines the individual DPPs into a single passport? Who is responsible for ensuring the data is accurate and up to date? How should the DPPs of different components be structured so they connect and communicate effectively? Without clarity on these questions, there’s a risk of fragmented or inconsistent data, making it harder to use the DPP as intended: to improve transparency, traceability, and sustainability across the value chain.

Building a Strong Data Foundation for DPP Implementation  

Setting up a strong data foundation should be the first step of your DPP implementation strategy, as data is at the heart of any sustainability strategy. It is not only about sustainability, but also about managing materials, recycling instructions, product identification and everything else needed to comply with regulations and improve your operations.

Centralizing your Product Data  

To make DPPs work successfully, you need a single source of truth for all your product information, a structured and centralized system where all product information is stored and managed. Without this, meeting (EU) regulations becomes very difficult, and you will risk inefficiencies and penalties. But it’s not only about compliance. A well-organized data system will also help you build trust with customers and partners, improve transparency and optimize supply chains.

Investing in Reliable Data Management  

For DPPs to be effective, you must also invest in reliable data management systems that can guarantee traceability and accessibility. Your supply chain involves multiple players, from manufacturers to recyclers, and all need to have access to accurate and standardized information.

That’s why investing in the right data management tools and ensuring collaboration across the supply chain is essential. Scalable IT systems that support seamless integration will help you manage data efficiently and adapt for future changes.

Take the Next Step with Squadra!

Do you need help with implementing Digital Product Passports? Or are you looking for a more reliable, centralized data management solution? Squadra can guide you through data management and sustainability challenges. Contact us to learn more!