More Than Legislation: The Strategic Benefits and Incentives for Companies to Implement the Digital Product Passport

Digital Product Passports (DPP) are recognised as a crucial component in advancing the circular economy as well as the EU’s strategic autonomy and supply chain security. DPP aims to provide all stakeholders with extensive information about a product’s makeup and environmental footprint during its production, usage, and end-of-life stages, encouraging sustainable product design, reusability, repairability, and waste reduction. However, we argue that exploring the incentives for businesses, particularly the strategic advantages that could motivate businesses to adopt DPP, beyond mere compliance is necessary. 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 tested in the furniture company Fritz Hansen A/S 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 speed up the implementation process.