More than Legislation: The strategic benefits and incentives for companies to implement the digital product passport

Digital Product Passports (DPP) are recognized as a crucial component in advancing the circular economy. DPP aim to provide all stakeholders with extensive information about a product’s makeup and its environmental footprint during its production, usage, and end-of-life stages, thereby encouraging sustainable product design, reusability, repairability, and waste reduction. However, we argue that its necessary to explore the incentives for businesses, particularly the strategic advantages that could motivate businesses to adopt DPP, beyond mere compliance.
This study develops the concept of DPP as a strategic capability by contributing with a framework for developing new DPP services that 1) strengthen companies’ relationships with their customers, 2) sustain and accentuate the companies' values and competencies, and 3) generate new competitive advantage in the market. The framework for developing new DDP services is applied in three furniture industry companies, and one case (Fritz Hansen A/S) is detailed to illustrate the strategic advantages and incentives to adopt DPP, that these services generate. The study indicates that developing DPP services could be a way to make the DPP strategically relevant to companies, which could potentially speed up the implementation process driven by businesses.