THE DIGITAL PRODUCT PASSPORT: TRACKING DATA THROUGHOUT THE ENTIRE LIFECYCLE
How do anonymous goods become trustworthy products? A question that poses problems for many companies, as they lack valid data on their products. This is where the Digital Product Passport (DPP) comes in: a digital representation of a physical product that stores all relevant information, from production and use to recycling. The real estate industry shows how the use of a Digital Product Passport can optimize existing processes – and why products with a long service life in particular benefit from it.
In March 2020, the German government presented its Digital Policy Agenda for the Environment to put digitization at the service of the environment, climate and nature and thus support the shaping of a sustainable future. The planned measures also include the introduction of a Digital Product Passport: According to the German government, this passport will list which materials a product contains, whether it was produced in an environmentally friendly manner, where suitable spare parts can be found and what repair options are available. In a statement, the digital association Bitkom welcomes the environmental digital agenda, but at the same time suggests that the development of a functioning product passport can only succeed in close coordination with industry.
But the industry is still a long way from this: today, all data throughout the product lifecycle is usually stored in the (IT) systems of the respective partners. In the case of a complex supply chain, this means that each actor can only use the data made available by the predecessor – end-to-end data access is not possible. To address the problem, the use of central platforms initially seems obvious: All data on the product is stored centrally on these platforms and can be modified by all actors. However, with a view to possible data manipulation and emerging dependencies on central platforms, this approach raises more new problems than it offers solutions.
And this is exactly where the Digital Product Passport based on decentralized identity technology comes in: A product can be uniquely identified by means of a so-called Identifier (DID). The product passport also consists of a large amount of data that is collected by different actors in the course of the product’s life. This data can either be visible only to one actor, to certain people, or to everyone. In all three cases, however, the data can always be clearly assigned to the product. Blockchain technology ensures the immutability of this data – so the data can be exchanged between different actors and the recipient can rely on the authenticity of the data.
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THE DIGITAL PRODUCT PASSPORT IN THE REAL ESTATE INDUSTRY
The real estate industry shows that there is an urgent need for digital process optimization on the part of the industry – real estate is said to be responsible for around one third of Germany’s total CO2 emissions. For many years, the industry has suffered from a transparency problem, especially when it comes to the seemingly simple question regarding which materials are installed in a building. Various effects of this lack of transparency can be seen in:
1. increasing risks due to non-compliance with regulatory requirements, especially with regard to ESG reporting and a European supply chain law,
2. increasing costs due to manual aggregation of supplier data,
3. the reduction in value of real estate due to the lack of sustainability standards in material sourcing and construction.
The Digital Product Passport can bring more transparency to procurement, the various construction phases, the operation of real estate, and the demolition and subsequent recycling of materials. This can make the entire real estate industry much more sustainable – the data collected can also be used to reduce emissions.
But how does this work in practice? A central role is played by the Decentralized Identifier (DID) already mentioned, which clearly assigns a property to an owner. It provides the basis for tamper-proof data storage. In the Digital Product Passport, all data relating to a building is stored throughout its entire life cycle. This includes supply chain information on raw materials, components and building parts, as well as information on financing, insurance, use, refurbishment and demolition of the building. In this way, end-to-end data exchange can be ensured between all actors involved in the construction, use or demolition of a property. Based on this, not only the procurement of materials, but also, the energy requirements of a property can be precisely determined and, as a result, the energy supply can be adjusted. In this way, emissions can be significantly reduced at various points in the lifecycle through data-based optimization. When a property is sold, the new owner gains access to the property’s product passport and enriches it with new relevant information. Decentralized storage prevents manipulation of the data saved in the Digital Product Passport.
DIGITAL PRODUCT PASSPORT IN TRUST&TRACE
For the simple and secure use of such a digital identity, we have developed the cloud solution TRUST&TRACE: Here, companies create a Digital Identity for themselves and their products to make them uniquely identifiable and to be managed by the users themselves. This identity can now be enriched with data from a wide variety of sources. For example, third parties can also contribute and edit information, which makes sense when working together on a product. However, this is only possible if access has been granted beforehand by the digital identity administrator. Such sharing of access rights is also possible across multiple levels to enable digital and efficient exchange in multi-level partner relationships (i.e., across multiple levels of a supply chain). In addition, the origin and authenticity of the data can be verified by trusted third parties.
In the real estate industry, TRUST&TRACE can be used by companies to obtain required compliance information from a network of participating companies. In this way, all property data is collected step by step: from building construction and leasing to sale and demolition. Interoperability between the various IT systems of all parties and fast partner onboarding form the basis for simple and transparent use of the product passport – paving the way for a more sustainable and efficient real estate industry.
Do you have questions on how TRUST&TRACE can be used for your business needs? Write us an email to [email protected] and let our product experts advise you at no cost and without obligation. Please also find further information about TRUST&TRACE on our homepage.