The upcoming Ecodesign for Sustainability Products Regulation (ESPR) is no longer news to a lot of businesses operating in the EU.
Many are aware of why the legislation has come into play but struggle to understand the initial actions they could take to ensure a smooth transition.
The first step is identifying and validating data to support compliance. This stage is likely to be more complex than expected, so moving ahead now could make all the difference.
Legislation and impact
For those who haven’t previously come across the regulation, the ESPR is part of the EU’s Circular Economy Action Plan (CEAP).
It seeks to boost circularity and the practices that contribute to sustainability by creating a framework that makes “sustainable products the new norm in the EU.”
With a focus on making products last, use energy and resources more efficiently, easier to repair and recycle, contain fewer substances of concern and include more recycled content,” the legislation aims to make business more eco-conscious.
The regulation will impact industries and products deemed to have greater environmental impact (e.g. textiles and ICT) and will apply to any business putting such products into the EU market.
Digital Product Passports (DPPs) – a digital record of a physical product, securely keeping track of event, transactional, and sustainability-based information across the product’s lifecycle – will be mandated.
The delegated acts are guidelines outlining the specific information required in DPPs for various industries and products (e.g. water usage, carbon emissions during manufacturing). While these have yet to be announced, the first crucial step toward compliance is collecting and validating data on a product’s environmental impact, source, components and lifecycle.
This will provide the DPPs with relevant information. However, this step will also be one of the biggest challenges. Data is often spread out amongst an economic operator’s value chain, in disparate, fragmented systems, internally as well as externally. Even when the relevant data is sourced, there could be challenges in validating it from other sources and understanding what the single source of truth is.
This is why many businesses are eager to begin preparation – identifying and mapping their data – ahead of the mandate to be in the best shape for compliance.
The following 6 steps provide a structured and concise pathway for assessing, gathering, and integrating essential environmental data across the supply chain:
1. Engage with stakeholders to assess your starting point
Businesses should ensure they engage with stakeholders across the supply chain – such as suppliers, manufacturers, and logistics partners – to build a picture of the product lifecycle data. Discussions with all parties might also uncover information you didn’t know already existed and prompt discussions on how data transparency and access can be improved.
2. Conduct a data gap analysis to pinpoint missing information
Once existing data is identified, it’s advisable to conduct a data gap analysis to consider elements that are highly likely to be required in a DPP (ahead of the specifics being confirmed via the delegated acts). This may be information on the waste generated during production or the carbon footprint of the manufacturing process.
This will help you understand product lifecycle data gaps within the business so you can find ways to close them. This could mean integrating measurement tools or engaging partners to support.
3. Conduct a Life Cycle Assessment (LCA) audit to begin filling data gaps
Once data gaps are identified, a life cycle assessment (LCA) should be prioritised to ensure all gaps are filled. This process measures the environmental impact of a product’s lifecycle and can start from the point of raw material extraction for a complete view.
4. Evaluate DPP solutions for seamless integration
Once all necessary data is collected and understood, evaluating technical DPP solutions will support businesses smoothly. Due to the complexity, building a DPP solution won’t be viable for most businesses, so they will need to seek out suitable partners with their specific challenges in mind.
Assessing how data must be inputted, and the resources required to ingest data into the DPP system, is critical to considering the capture and storage of data in the correct formats. Businesses should also consider whether the DPP solution can integrate with existing systems and how it creates an ongoing real-time picture of a product’s lifecycle.
5. Validate data sources for accuracy and ease of mind
Throughout a business’s data compliance journey, businesses need to validate data sources to build an accurate, verifiable picture of each product. This means assessing the credibility of third-party data suppliers, and ensuring processes are underpinned by the relevant standards.
6. Begin piloting to trial and evaluate
Once the above steps have taken place, the next natural step is piloting to test implementation and capture data to have a more accurate picture of the full task’s scale and timeline. Businesses will then be in a much better place to kickstart efforts once the delegated acts are announced.
In particular, the pilot phase will enable businesses to evaluate the interoperability of the DPP solution implemented, enabling them to assess whether the new system integrates seamlessly with existing IT systems and supply chain management platforms. A pilot scheme will also help businesses assess the ‘user experience’ of processes deployed and the ease of access to pivotal information.
A clear strategy to support success
While the path ahead might currently be filled with unknowns as we wait for the delegated acts to be published, the task at hand doesn’t need to seem so daunting if companies consider the individual manageable steps that can be taken today to be one step closer to compliance.
