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Can Digital Product Passports Help Make Fashion More Sustainable?

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03 Jun, 2024

This post was originally published on Good on You

Digital product passports have been around for a while, but as the European Union looks set to mandate them in the next few years, we look at what they are, and the impact they’ll have in making fashion more sustainable.

What is a digital product passport?

In the same way that your own passport holds core details of who you are and records where you’ve been through a series of official stamps, a digital product passport does a similar thing for products. Proponents believe product passports could support the shift towards a more circular industry by consistently and reliably harnessing information such as raw material origins, durability, care instructions, and repairability and making it available to the likes of retailers, recyclers, and consumers.

Digital product passports have been around for a while and at the moment, are used voluntarily across the fashion industry by brands including Nobody’s Child, Artknit Studios, Moncler, and Mr Porter’s in-house label, Mr P.

The European Commission’s digital product passport

You might be hearing more about digital product passports now because the European Commission looks likely to mandate them for certain items in the European Union, and textile products—along with batteries and toys—will be among the first product categories to have passports implemented.

It’s all part of the European Commission’s Ecodesign for Sustainable Products Regulation (ESPR), which is expected to be approved in 2024 and implemented in 2026. The Commission is the first regulator in the world to mandate digital product passports across multiple industries. And while this regulation is currently only aimed at products brought to market in the EU, it’ll have a much wider impact because so many supply chains are global. This could represent a step towards the legislated publication of traceability and sustainability information.

The European Commission’s proposal outlines some requirements for the passports that look to be mandated, but the wider landscape of product passport solutions can vary quite a lot from provider to provider. Below, we’re taking a broad look at how product passports actually work in general and what their impacts could be for consumer empowerment.

 

How do digital product passports work?

Products are each given a unique identifier that’s visible on the item itself, its packaging, the documents that come with it, or the webpage it’s listed for sale on. This could be a QR code, RFID tag or barcode, which links to formalised data that may include everything from the origin and nature of a garment’s material to the factory in which it was sewn.

While most of this information will be widely available in the passport, access to some data could be limited to specific users, such as recyclers or retailers.

 

A tool for greater circularity and transparency?

This collection of data from across a product’s lifecycle could help businesses better understand the processes and environmental impact behind the things they’re making, and how their products comply with other sustainability regulations.

Passports could also help businesses to offer repair, recycling and reuse services by directing customers to points for each service and also sharing details on what elements of a product are recyclable with sorting organisations—something that’s key in shifting to a circular fashion model. Detailing exactly what materials are incorporated into a product, for example, the percentage of cotton in a polycotton blend or the fibre content of threads used in stitching, could improve recycling and reuse at the end of the item’s life.

Visibility on repairs and resale (which could be bookable through the passport itself) could make it easier for products to be kept in circulation for as long as possible, rather than being sent to landfill.

It’s a similar story for end-of-life management information. When businesses supply details about safely disposing of the non-recyclable elements in their products, there’s less chance of toxic or dangerous materials ending up in landfill or harming the environment.

Another potential benefit of the digital product passport is that it could help inform consumers about the sustainability of products. And in luxury fashion, specifically, passports could be vital in demonstrating product authenticity to a degree that hasn’t been seen before, instilling more trust in customers making big purchases and potentially increasing their resale value down the line.

While proponents suggest that passports will give shoppers greater access to information about where their purchases come from, questions remain about the ease of access and product comparability as product passports become more common, particularly if the information’s formatting and level of detail varies from brand to brand.

This collection of data could help businesses better understand the environmental impact behind the things they’re making

Good On You’s CEO Gordon Renouf thinks this aspect of the passport could be more hype than substance. He cites the effort involved in a consumer seeking out the passport’s information, digesting it, and understanding it in context as key problems that need to be solved before a passport can provide consumers with information they can rely on.

For example, Renouf says that information about a product’s CO2 emissions or material composition could lack context and be confusing to consumers: “The overall behaviour of a brand, for example its climate change actions and engagement with workers’ rights, has a more significant impact than product-level attributes. To achieve sustainability goals we need to change overall company practice, not demonstrate that individual products do better on narrow criteria.”

Katelin Opferkuch, ratings analyst at Good On You, underscores the need for comparability across product passports:  “Providing the same format for supply chain information would make it easier for highly motivated consumers or third parties like Good On You to identify which brands are making the effort to disclose legitimate information and which brands don’t have complete data.”

These are only a few of the challenges businesses and consumers face in implementing and using digital product passports. Addressing these questions will be key to unlocking the promised benefits.

 

The challenges of digital product passports

One of the biggest challenges is data storage. It will require a significant time and cost investment to arrange the infrastructure to hold vast amounts of product data, particularly for companies with large product inventories.

And then there’s data security—vital for reliable passports and traceability, but another potentially significant investment.

Formatting this data and making sure it complies with any future regulation accompanying the passport could also be a challenge. Dozens of businesses have already emerged to address these requirements, for example, Renoon, Fairly Made, and EON. Good On You hasn’t tested these software solutions, and they’re just a few of the many businesses offering product passport solutions for brands that are seeing an uptake in their services across the industry.

EON’s vice president, Nicole Rigas, dubs the passport a “digital twin” for every product, and explains that the company will use a cloud model alongside pre-built infrastructure to integrate into brands’ existing workflows.

Rigas believes that another challenge for brands will be getting all teams throughout a business—and its supply chain—on board to unify their data. That’s tricky, she explains, because “each of these different departments often has its own desired functionalities and use cases, from driving circular business processes to brand protection to customer engagement.”

And it’s not just brands that will need to invest in data management and new processes to meet requirements if passports are mandated by the European Commission. Opferkuch points out that the financial and organisational onus for a lot of supply chain information is likely to fall on suppliers outside of the European Union. “It will require new employees, skills, and systems to manage all the data requests, and suppliers will be at a competitive disadvantage if they don’t do this. In theory, this should push suppliers to improve the sustainability of their practices, but it’s not as straightforward as that, especially if they won’t earn extra money for putting all this in place,” she explains.

Since transparency is key to digital product passports, the brands that are already tracing their supply chains and have disclosure systems in place will be in a much better position to adopt passports when they’re mandated across the industry.

 

Will digital product passports make fashion more sustainable?

The industry experts we spoke to have differing opinions on the nuances of digital product passports, but they all agree that the potential for enhancing supply chain traceability is a good thing.

“Digital product passports solve some of fashion’s biggest challenges for brands, customers and circular businesses… It’s a simple shift with enormous potential for industry transformation,” says Rigas.

Renouf, however, has mixed views about the overall impact of passports. He says their ability to provide additional and more reliable information to businesses in the supply chain is a definite plus, and knowing what materials a product is made from, for example, will support reuse and save costs in recycling.

But Renouf thinks the idea that passports are an effective way to drive consumer action is a stretch: “There is little evidence that consumers will flock to their scanners to access information at the point of sale. Even if they do, the information from a passport is not the easy-to-use, comprehensive data consumers need. Nor does it tell the full story: in particular, there is nothing about the performance of the brand overall—the key driver of fashion’s impact on workers and the environment.”

Meanwhile, Georgia-Rae Taylor, sustainability strategy director at Eco-Age, has concerns about the industry’s readiness: “The potential of digital product passports is massive—they could bring a whole new level of transparency and accountability to products and supply chains.”

Taylor continues: “However, despite the promise, the fashion industry—among others—remains largely unprepared for the passport era. Supply chains are very opaque, and brands struggle with gaps in product data and a lack of understanding regarding inherent risks.”

The world’s most polluting industries have proven time and time again that they can’t be trusted to make the deep change needed to move towards a more sustainable world. Mandating consistent information disclosure is a great step forward, though whether passports live up to their hype remains an open question.

The post Can Digital Product Passports Help Make Fashion More Sustainable? appeared first on Good On You.

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Insurance sector digs into impact of mandatory climate reporting

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Businesses are being encouraged to prepare for the impact of mandatory climate disclosure in Australia.

Earlier this year, the federal government passed amendments to the Corporations Act 2001 (Cth) and the Australian Securities and Investments Commission Act 2001 (Cth), resulting in mandatory climate reporting for larger businesses in Australia.

The issue was examined during a recent address to members of the Underwriting Agencies Council, with particular attention paid to how the new legislation will affect the insurance sector.

Speaking at the event, Prateek Vijayvergia, Xceedance Business Leader – Key Accounts, Australia and New Zealand, said that while 75% of ASX 200 companies were committed to or already performing climate reporting, the number fell to 10.5% for broader ASX companies.

“There’s a lot more awareness and commitment and urgency that we see in the Australian market now and this is not limited only to the insurance business, but for all larger Australian businesses,” he said.

“Although this is all good, there is a gap in climate-related reporting among ASX-listed entities, and the depth and the quantification.”

Joining Vijayvergia in the discussion was Sharanjit Paddam, Principal – Climate Analytics at Finity Consulting, who said that from 31 December 2025, in addition to an Annual Report, large companies will need to submit a Sustainability Report — what Paddam referred to as “the home for ESG disclosures”.

Four pillars underpin the disclosure standards — governance, strategy, risk management, and metrics and targets. Paddam emphasised that the devil is in the detail.

“You not only have to disclose the financial impacts on your balance sheet today and your income statement today, but also in the short-, medium- and long-term future,” he said.

“They (ASIC and APRA) want hard numbers to be put in the accounts about how climate change is financially going to affect the operations of the company.”

Paddam explained: “At the heart of the disclosure is really what are the financial impacts of climate change on your company, investors, customers and shareholders; to understand that and to allocate capital and make investment decisions informed by how climate change might affect your business.”

Paddam added that companies need to consider their own impact on climate change.

“The world is changing in disclosures in a very big way over the next few years, and companies are going to have to think about not just accounting for their financial outcomes, but also their climate outcomes,” he said.

“These are mandatory standards — this is locked in, and it will be required to happen over the next few years, and it is intended that these standards will change the economy and they will drive changes throughout the way we do business.”

A particular challenge will be the reporting of Scope 3 emissions — those indirectly generated by the activities of an organisation — due to lack of data, methodology and resources.

“What’s really helping all of us is the advancement in technology so there are better ways of collecting information and data around emissions,” Vijayvergia said.

“And also, to then slice and dice that information so it can be used to make a plan around climate risk.

“It’s becoming more comprehensive and almost integral to the overall reporting that’s happening for an organisation.”

Organisations impacted by these legislative changes include those that produce accounts under the Corporations Act and meet any two of the following criteria: consolidated assets more than $25m; consolidated revenue more than $50m; or 100 or more employees.

Paddam said the new requirements would capture some of the larger underwriting agencies and brokers.

“It’s an opportunity to look at the services that you are providing and how good a partner you are for your insurance provider, or as a distributor of insurance products, to see where you could uplift your services in this respect,” he advised.

“The things we insure, the things we invest in, are all intended to change as a result of these disclosures, and getting your heads around that quicker and faster than your competition is very important.”

Image credit: iStock.com/pcess609

Accessible Data Makes Renewable Energy Projects Possible Worldwide

Accessible Data Makes Renewable Energy Projects Possible Worldwide

Accessible Data Makes Renewable Energy Projects Possible Worldwide
jschoshinski
Thu, 11/14/2024 – 18:52

High fidelity, publicly available data is essential for mobilizing clean energy investment and informing renewable energy policy and deployment decisions, but access to this data is a critical barrier for many countries aiming to develop and optimize their clean energy resources. Recognizing the importance of tools that offer accessible data to inform renewable energy planning and deployment, the USAID-National Renewable Energy Laboratory (NREL) Partnership developed the Renewable Energy (RE) Data Explorer. RE Data Explorer is a publicly available geospatial analysis tool that provides free global renewable energy resource data to inform policy, investment, and deployment decisions for solar, wind, and other energy resources. 
Two of the thematic days at COP29 are focused on energy and science, technology, innovation, and digitalization. RE Data Explorer is a great example of how digital technologies can play a role in promoting clean energy and addressing the climate crisis. The tool also delivers on the commitment USAID made at COP28 to make investments that will “support technical assistance programs and partnerships to strengthen subnational climate preparedness.”
The use of USAID-NREL public data in Tanzania, available on RE Data Explorer, offers a direct example of the impact of accessible data on the implementation of renewable energy projects. Tanzania is working to accelerate the deployment of renewable energy and decarbonize its grid, aiming for 30-35 percent emissions reduction by 2030. A major challenge to pursuing this goal is the lack of reliable, long-term renewable energy resource data for project planning.
NextGen Solar, a private sector partner of USAID Power Africa, used USAID-NREL data specific to Tanzania to support the development of its renewable energy projects in the country. The company, which specializes in building and operating utility-scale solar photovoltaic (PV) power plants in sub-Saharan Africa and small island nations, utilized USAID-NREL public data to develop the world’s largest PV-hybrid solar mini grid in rural Kigoma, Tanzania. USAID-NREL public data enabled NextGen Solar to perform technical feasibility studies to forecast electricity generation in an area previously lacking reliable, affordable power. Thanks to this reliable data and analysis, NextGen Solar was able to mobilize $6 million in investment to build the plant. This 5-megawatt (MW) plant has now been in commercial operation for over 3.5 years and supplies electricity to over 65,000 homes, the region’s largest hospital, and three schools. It has also helped the Government of Tanzania save an estimated $2.2 million annually while reducing carbon emissions and demonstrating the viability of utility-scale solar power to sub-Saharan Africa.
The application of USAID-NREL public data in Ukraine is  another example of how open data can drive the mobilization of clean energy projects. Planners and developers in Ukraine are looking to incorporate more renewable energy, particularly wind and solar, as the country rebuilds its grid and searches for new means to become less dependent on foreign resources. Like Tanzania, a barrier for Ukraine was the lack of accessible, high-quality data on its wind and solar output capabilities. USAID-NREL is helping Ukraine overcome this barrier through new high-resolution solar time series data accessible on RE Data Explorer, which will help Ukraine meet the needs of stakeholders in the energy sector across the national government, academia, and private industry.
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NREL’s Ukraine program lead, Ilya Chernyakhovskiy

To better understand the broad impact of RE Data Explorer, a 2024 NREL survey gathered insights from respondents on how they applied this data in real-world scenarios. Overall, respondents reported evaluating and planning over 111,000 MWs of solar and wind projects, with a potential investment of over $6.5 billion. End-users also reported over 1,600 MWs of solar and wind energy with over $1 billion  in investment that has been approved and financed. For context, according to the Solar Energy Industries Association (SEIA), 1,600 MWs would power approximately 275,200 average U.S. homes and 111,000 MWs would power approximately 19.1 million.
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From accelerating Tanzania’s clean energy transition, to aiding Ukraine’s rebuilding efforts, to enabling clean energy projects across the world, USAID-NREL public data is helping users and local communities reduce greenhouse gas emissions, promote sustainable development, and pave the way for a cleaner, more resilient future. 
For more information about RE Data Explorer, watch this video. To learn more about how high-resolution solar data is enabling energy expansion across two continents, read this NREL article.

Teaser Text
USAID-NREL’s RE Data Explorer is a great example of how digital technologies can play a role in promoting clean energy and addressing the climate crisis.

Publish Date
Thu, 11/14/2024 – 12:00

Author(s)

Emily Kolm

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Blog Type
Blog Post

Strategic Objective

Mitigation

Region

Global

Topic

Emissions
Low Emission Development
Climate Policy
Climate Strategy
Climate Strategy Implementation
Digital technology
Energy
Clean or Renewable Energy
Grid Integration
Geospatial
Locally-Led Development
Mitigation
Partnership
Rural

Country

Tanzania
Ukraine

Sectors

Energy

Projects

USAID-NREL Partnership

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