Digital Product Passport: A Game Changer for Textile Compliance

A recent project scoping mission to Pakistan highlighted how busily textile and garment exporters prepare for the upcoming EU regulations affecting their sector. The Ecodesign for Sustainable Products Regulation (ESPR) is particularly relevant to them and will include the Digital Product Passport (DPP) as an essential implementation tool. By 2027, textile & apparel exporters must have implemented DPP solutions that satisfy EU import controls. 

As part of its Green Deal, the European Union (EU) has introduced several directives to enhance the traceability and sustainability of textile and garment products. [UH1] These initiatives include the Corporate Sustainability Due Diligence Directive (CSDDD), Corporate Sustainability Reporting Directive (CSRD), and, as mentioned, the ESPR. Together, they establish a new framework for sustainable product design, responsible corporate behaviour, and transparent supply chains. 

Understanding the Legislative Framework

The ESPR, CSRD, and CSD aim to ensure that businesses operating within the EU or exporting into the trade bloc adhere to strict environmental and social standards. These directives and regulations are meant to drive systemic change within various industries (see Table 1).

Measure	Nature	Objective	Scope	Requirements	Timeline
Corporate Sustainability Reporting Directive (CSRD)	Reporting	Ensure reliable sustainability disclosures	Large EU companies and listed SMEs	Annual sustainability reports per European standards	Effective 2023; national law by July 2024; phased roll-out from 2024
Corporate Sustainability Due Diligence Directive (CSDDD)	Due Diligence	Promote responsible corporate behaviour	Large EU and non-EU companies operating in the EU, meeting employee/turnover thresholds	Conduct due diligence and implement climate plans	Effective July 2024; two-year transposition period; phased roll-out from 2027
Ecodesign for Sustainable Products Regulation (ESPR)	Import Control	Enhance product sustainability	All companies placing goods in the EU market	Comply with Ecodesign requirements – and use the DPP to prove it	Comply with Ecodesign requirements – and use the DPP to prove it

Table 1: Overview of selected EU legislation introducing environmental, social, and governance requirements for businesses

[1] Source: Krajcovicova, J. (2025), Implications of New Environmental Regulations, Policy Brief, DCED 2025 

The Role of the Digital Product Passport (DPP)

The Digital Product Passport (DPP) is a novel initiative to make product information more transparent and accessible. By centralising key sustainability data, the DPP aims to enable better consumer decision-making, regulatory compliance, and sustainable business practices. Its introduction is key to implementing the EU’s commitment to fostering digitalisation and a circular economy.

A DPP is a digital record that captures and stores essential product lifecycle data, ensuring traceability and transparency. The tool aims to close information gaps between manufacturers, regulators, and consumers by offering a centralised and standardised repository of sustainability-related details. Therefore, it serves as [3]:

• A regulatory requirement and transformative tool.

• A decentralised system ensuring security and resilience.

• A unique identifier for each product.

• A hub linking together existing data.

• A “single point of truth” for information about a product.

• A tool accessible to various stakeholders, including consumers, manufacturers, and regulatory bodies.

Key Benefits of the Digital Product Passport

Implementing the DPP is expected to bring multiple advantages for businesses, regulators, and consumers. By providing real-time information about a product’s environmental and ethical footprint, the DPP is designed to drive responsible production and consumption. Its expected key benefits include transparency, traceability, accountability and circularity [2].

In terms of transparency, the DPP will provide precise data on the product origin, composition, and environmental impact. Traceability will ensure end-to-end tracking of materials and processes across a product’s supply chain. The DPP will help companies be accountable by complying with the EU sustainability regulations and benchmarks. Finally, the DPP will facilitate product reuse, repair, and recycling, promoting a circular economy and thus enabling circularity.

Phased implementation timeline

The EU is implementing the DPP in phases to ensure a smooth transition. Initially, industries with significant environmental impact are prioritised. The staged rollout allows businesses to adapt and integrate the required digital tools. In 2026, the first product category requiring DPP compliance will be batteries. This is followed by textile and apparel products and consumer electronics in 2027. Between 2028 and 2030, the DPP requirement will expand to 30 product categories, including construction materials. This structured approach allows industries to adapt gradually, ensuring a smoother adoption across and outside the EU market.

Challenges for Enterprises

While the DPP presents significant opportunities, businesses must navigate key challenges to achieve compliance. Many companies, particularly SMEs, face financial and technical difficulties in implementing DPPs, as they require robust data management systems and enhanced supply chain traceability. Some of the biggest challenges include high compliance costs, resource constraints, and a possible market exclusion [4].

Compliance with the DPP requirements can be costly, depending on a company’s current status of investments in sustainability, transparency and traceability. The compliance costs might include:

• Investments in traceability and data management

• Technology investments

• Workforce training and capacity building

• Product redesign and process modifications

• Supply chain adjustments (e.g., material sourcing)

• Administrative and reporting obligations

• Market competition impacts, such as pricing adjustments

Given this long list of initial investments and subsequent operation costs, SMEs may struggle with the technological and financial demands of compliance, given their typical resource constraints and challenging access to finance. However, the ultimate risk of non-compliance is market exclusion, i.e., the risk of losing access to the EU market, which could mean an existential threat for many firms in developing countries.

As a consequence, the estimated enterprise investments are expected to be huge. A 2023 report estimates that the textile sector alone will generate approximately 62.5 billion DPPs by 2030, leading to over $1.59 billion in software and IT support costs globally [5].

During a DPP information webinar organised by the Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) in February 2025, only about 30% of the participating members indicated they felt well-informed about the DPP requirements or had a concrete implementation plan. Meanwhile, approximately 55% of attendees had heard about the DPP but lacked detailed knowledge, highlighting a significant awareness gap within the industry. When asked what aspects they wanted to learn more about, most respondents expressed interest in understanding how the DPP functions and how to begin implementation. Additionally, they sought information on government and donor support and the availability of financial assistance to facilitate compliance [6].

Opportunities for Enterprises

Despite the challenges, businesses that proactively implement DPPs stand to gain substantial benefits. By integrating DPPs into their operations, companies can improve efficiency, reduce waste, and enhance consumer trust. Key opportunities include access to the lucrative EU market, improved brand reputation and competitive differentiation, and greater supply chain efficiency through streamlined data management and operational processes.

Quality infrastructure contribution to DPP implementation

DPPs depend on quality infrastructure (QI) to provide trustworthy, standardised, and verifiable information. DPPs require verified and standardised product origin, materials, processes, and environmental impact data. The QI ensures this data is accurate, comparable, and globally recognized. 

Conformity assessment bodies, such as testing and certification, verify that products meet environmental and safety standards. The test results and certificates feed into the DPP, providing traceable and trusted proof of compliance.

DPPs are the manifestation of QI services becoming digital. They require electronic test reports, digital certificates, and interoperable data systems to allow information to be automatically integrated into DPP platforms in real-time.

Recommendations for Governments and Businesses Outside the EU

These ESPR and other recent EU regulations will affect countries outside the EU, particularly those that export to the European market, such as Pakistan. Governments, international donors, and enterprises are encouraged to proactively mitigate challenges and leverage opportunities [2].

Governments and international donors could take the following measures, individually or combined in an appropriate and context-specific way:

• Conduct sectoral impact assessments to understand the implications of DPP implementation. For instance, how does the ESPR and its DPP requirement impact Pakistan’s textile & garment sector in terms of both costs & risks and benefits & advantages?

• Take proactive action to align national standards with EU regulations. How could regulatory reforms in countries like Pakistan facilitate the path to compliance for the country’s lead sectors?

• Ensure clear and consistent regulations for businesses to follow. How can good regulatory practices be applied to amend clear and consistent regulations with the local context requirements?

• Invest in technological solutions that facilitate compliance. What investments in new technology and the enabling quality infrastructure are needed to ensure cost-effective compliance? 

• Provide financial support for SMEs transitioning to sustainable practices. What financial support options are realistic and feasible to help enterprises shoulder the financial burden of achieving compliance? 

• Encourage private sector leadership and public-private partnerships to drive sustainable innovation. What should the roles of the private and public sectors be during this endeavour? Who takes the lead, and how can both sectors efficiently cooperate in the interest of a sector, such as textiles and garments, and a country like Pakistan? How could donors contribute to support the effort?

A company embarking on the journey to meet DPP compliance should take the following initiatives:

• Understand DPP requirements and implement necessary changes. What are the gaps between the DPP requirements and the company’s current operational setup? How to close the gaps through smart investments?

• Enhance supply chain traceability by adopting digital tracking tools. What (additional) digital tools are needed to improve the company’s supply chain traceability? How to access these digital tools? Are they readily available or must they be developed by the company, a sector association or other players? 

• Invest in digital infrastructure and data management systems. What, how, and when should a company invest in digital tools and their enabling IT infrastructure?

• Comply with EU sustainability standards and textile certification schemes. Do available sector certification schemes, such as for textiles, offer an early shortcut on the road to compliance? How to get certified with these schemes?

• Collaborate with EU-based partners for seamless integration. For an EU-external enterprise, how can business partners and customers within the EU facilitate the process? What measures and investments have they taken and how to benefit from them?

• Train employees on compliance requirements and sustainability practices. How can we upgrade the knowledge and skills of a company’s workforce to smoothly transition to compliance and operate the DPP efficiently in the future?

• Engage in pilot projects to test and refine compliance strategies. After an initial DPP set-up, how to run a pilot and implement needed adjustments?

Conclusion

The Digital Product Passport (DPP) under the Ecodesign for Sustainable Products Regulation (ESPR) represents a transformative shift in global textile supply chains. While compliance presents challenges, such as increased costs and resource constraints, it also offers substantial benefits. Businesses that proactively integrate DPPs can achieve competitive differentiation, improve operational efficiency, and strengthen market positioning. Moreover, governments and industry stakeholders must collaborate to facilitate smooth implementation, ensuring that companies—particularly SMEs—receive the necessary support to meet EU sustainability requirements. By embracing these changes, the global textile sector can contribute to a more transparent, circular, and sustainable economy. DPPs require robust QI systems to gain credibility. It could even be argued that DPPs embody the digitalization of QI services.

Sources:

[1] Krajcovicova, J. (2025), Implications of New Environmental Regulations, Policy Brief, DCED 2025

[2] The Textile Think Tank (2025), A Comprehensive Guide to Digital Product Passport for Textiles

[3] Kulka-Peschke, C. (2024), Digital Transformation in Metrology and Quality Infrastructure, PTB 2024.

[4] Krajcovicova, J. (2025), Webinar on New Environmental Regulations, DCED 2025 

[5] Everstream Analytics (2025) European Union Ecodesign for Sustainable Product Regulation, Blog post

[6] GIZ-Pakistan (2025), GRAND NATIONAL DIALOGUE on Digital Product Passport & Textile Supply Chains in Pakistan, Survey Results, 17 Feb. 2025