Accountants have seen many examples in recent years of how their role ‘is expanding beyond traditional financial reporting to include environmental and nature-related financial disclosures’, as Loree M. Gourley, responsible finance advisory lead with SLR Consulting, puts it. Engagement with Digital Product Passports (DPPs) is set to put many at the cutting edge of a new frontier.
As the World Economic Forum (WEF) pointed out in April, the current shipping crisis in the Middle East ‘illustrates how dependent modern economies are on complex, often poorly understood materials flows’, noting that ‘transparency remains limited when it comes to where many materials originate’, and indicating this is proving a difficult challenge to address.
The WEF identifies DPPs – digital records that follow products through their lifecycle – as a ‘promising solution’ to an issue that bedevils product sourcing globally, as well as offering a decisive support for the circular economy of the future.
The EU agrees. In 2024, it announced plans to make DPPs mandatory for virtually all goods and products, with an exemption for food and medicines on the basis that these are already heavily scrutinised. The introduction of DPPs kicks off in earnest in 2027 with batteries, clothing and consumer electronics. (See boxouts for timelines and key details.)
‘Organisations must collect, structure and share detailed data across complex supply chains’
For retailers, manufacturers and service providers in Ireland there is much to consider, and finance functions in particular will find themselves grappling with the implications of DPPs in terms of reporting, compliance, audit and cost.
Beyond compliance
DPPs will primarily utilise QR codes (though other options are possible) to link end users to what the EU mandates as essential data on a product – from material composition and carbon footprint to repairability and end-of-life instructions.
While specifics for product types will be established by delegated acts, requirements will likely include a unique product identifier, a global trade identification number, TARIC and other relevant commodity codes, along with compliance documentation (which could include a declaration of conformity, technical documentation and conformity certificates), and information related to substances of concern.
Businesses will also need to hold information related to the manufacturer, operators and importer; unique facility identifiers; details on return or disposal and on minimising negative impact and ensuring long-term durability; information for treatment and recycling facilities; and user manuals, instructions, warnings or safety information.
Digital Product Passport timeline
- July 2024: Ecodesign Regulation, the European regulation introducing the Digital Product Passport, came into force.
- February 2027: DPP requirement comes into force for industrial, automotive and portable batteries placed on the market.
- Throughout 2027: first wave of mandatory DPPs expected for sectors such as textiles/fashion, consumer electronics, tyres and detergents.
- 2028-30: DPPs extend to packaging and plastics, chemicals, machinery, furniture, mattresses and other consumer goods.
Source: Slimstock
It’s an approach that KPMG says ‘goes far beyond compliance. Organisations must collect, structure and share detailed data across complex and often global supply chains to meet DPP requirements.’ This will require ‘collaboration with suppliers, integration of digital systems and adherence to evolving standards’.
The EU refutes any suggestion of regulatory overreach, describing DPPs as a response to ‘consumer demands for transparency and the current lack of reliable product data’. At home, the development sits comfortably with commitments made in Ireland’s Whole of Government Circular Economy Strategy.
‘DPPs will help consumers to make informed decisions about what they buy’
Minister for climate, energy and the environment Darragh O’Brien recently described the circular economy as ‘central to how Ireland will grow cleaner, smarter and more self-reliant’, noting that DPPs specifically ‘will help consumers to make informed decisions about what they buy and will drive demand for sustainable products’.
If the political arguments are clearcut, the technical path to implementation is less so. The UK’s Retail Gazette said in March that ‘clarity around the scheme has been slow to emerge’, and argues that while some businesses will see DPPs as ‘a chance to showcase their sustainability credentials, others may face a more abrupt reckoning’. It pointed to EU research showing that 53.3% of examined environmental claims made by companies were ‘vague, misleading or unfounded’.
DPPs won’t just put greenwashing under the spotlight. Sustainability expert Laura Milillo of GS1 UK says the consequences of non-compliance could range from hefty fines to goods being blocked from the EU marketplace.
Structured response
So, how should accountants advise businesses in preparing for this impending revolution in traceability? Joakim Gavelin of Swedish software company Inriver says that a robust approach to product information management is ‘the backbone for structuring, governing and distributing the product data needed to fuel DPPs’.
‘Relatively few organisations so far have set up end-to-end DPP ecosystems’
Martina Sattanino of consultancy firm Renoon says brands, manufacturers and retailers should be aware that ‘data must be consistent across systems. Marketing claims that are not aligned with DPP data may raise red flags during audits or checks’. Among potential pitfalls, she points to collecting data without validation. ‘Incorrect or inconsistent data can create more risk than missing data,’ she says.
What are the benefits?
- Enhanced transparency: DPPs provide companies with detailed information about their products’ origin, materials and environmental impact.
- Improved supply chain management: passports offer a comprehensive digital record that spans a product’s entire value chain.
- Regulatory compliance: DPPs ensure that companies can easily adhere to environmental standards and regulations.
- Risk identification: The DPP process spots potential and actual risks that help companies catch problems with authenticity, compliance and environmental impact.
- Trust building: By providing transparent and verifiable information, DPPs help build trust among customers, investors and other stakeholders.
Source: Worldfavor
Yet, if the heat is on, there is little evidence of any scramble to action among European manufacturers. Carlo Giardinetti, director of product innovation and circularity with Deloitte, says that, as of March 2026, ‘relatively few organisations so far have set up end-to-end DPP ecosystems’. He points to ‘challenges and bottlenecks that have made comprehensive implementation difficult and resource intensive’.
Risks and upsides
Indeed, the likelihood of DPPs enjoying a seamless launch is under question. Li Yuan, a researcher at the University of Helsinki, argues ‘the legal, technological and policy infrastructures supporting DPPs remain underdeveloped’, and says that ‘without inclusive consultation mechanisms and capacity-building, DPP systems may disproportionately burden smaller suppliers or non-EU partners’.
Others see challenges but believe they will be outweighed by upsides. Foivos Psarommatis, a researcher with the University of Oslo, describes DPPs as ‘a game-changing strategy in the pursuit of sustainable manufacturing methods’. The obstacles to implementation ‘present chances for creativity and teamwork, highlighting how crucial it is to create standardised data procedures and security safeguards,’ he says.
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