In order for firms to implement the Circular Economy, and close all material and energy cycles, connections are needed not only within but also between multiple Industrial Ecosystems. To enable such complex interconnections, the European Union is preparing legislation to enforce the use of digital product passports (DPPs). These are verifiable collections of data about products’ composition, environmental footprint and opportunities for preventing waste. The notion of the DPP relies heavily on a suitable digital infrastructure, and it opens the possibility of using the power of artificial intelligence (AI), to optimize circular production within and between Industrial Ecosystems. The benefits of DPPs will only be attained if their design, knowledge engineering, and implementation is well-orchestrated. The purpose of this paper is to develop a set of guiding principles for the orchestration of DPPs, based upon a trans-disciplinary analysis, that form a theoretical basis upon which future research can build.
As part of its Green Deal, the European Commission proposes the introduction of digital product passports (DPPs) in the European Single Market as an enabler of circular business practices leading to efficient use of materials and CO2 emission reduction (European Commission, 2022). The proposed regulation will mean that products can only be sold or put into service in the European Union if a DPP is available, providing an accurate and verifiable set of information about the products’ environmental sustainability, intended to help consumers and businesses make informed purchasing choices. Additionally, DPPs are intended to facilitate repairs and recycling and improve transparency about products’ environmental impact during production and throughout their entire lifecycle. DPPs will also enable public authorities to assess products’ compliance with sustainable production and usage regulations, as they will include data to enable the tracking of any substances of concern throughout the products’ lifecycle (Berger, Schöggl, & Baumgartner, 2022).
Implementing DPPs in practice presents a complex challenge to firms in industrial ecosystems to maintain high-value and high-quality material and energy cycles (Korhonen, Honkasalo, & Seppälä, 2018) as their supply chains extend around the globe, covering multiple administrative areas (Hopkinson, Zils, Hawkins, & Roper, 2018). Additionally, in order to close all necessary energy and material cycles, connections are required not only within such ecosystems but also between ecosystems, as waste from one industrial process may become input for a previously unrelated industry (Liu, Ma, & Zhang, 2012).
5.1. Critical reflection on the function, relevance and boundary conditions of the guiding principles
The guiding principles developed through the integration of several discipline-specific expertise serve as a roadmap for industrial ecosystems and public bodies as they approach the implementation of DPP. The guiding principles favor outcomes at the system level, which is a key requirement for DPP to effectively drive the changes needed to address environmental concerns. While the current analysis attempts to consider multiple factors and dimensions relevant to DPPs, research in this area should continue and test whether the developed principles and orchestration framework are mutually exclusive and collectively exhaustive. The orchestration framework focuses strongly on the implementation of DPPs with emphasis on operational guidelines, adoption and use across and within IEs with the purpose of enabling the transition to the CE. Realizing CE outcomes as a main purpose of DPP is a view we adopted in this study, yet, DPP are a broader development which most likely will entail broader implications, including intended and unintended consequences.
The implementation of DPP can be further enhanced by learnings from implementing other standards, technologies, and certifications at the global level, such as ISO or EPR models. ISO certification schemes have been widely adopted in practice on a global level, but their implementation is firm-specific with a strong internal focus (e.g., internal engagement of management and employees) and does not explicitly consider external stakeholders. Yet, a key learning from implementing ISO 9001 and 14001 is that managers tend to focus too much on the auditing and certification processes and less on continuous improvement and internalization of learning (Boiral, 2011). With a strong focus on technology, the implementation of DPP should also consider the risk of overemphasizing the technology at the expense of the actual outcomes to be achieved through the technology. EPR models are an example of standards implemented beyond individual firms. The increasing interest in EPR models has shown that implementation on a wider scale, across national boundaries, requires harmonized legislation and the development of a coordinating framework that can enable the proper enforcement of recycling standards and the role of orchestrators such as Producer Responsibility Organizations (Kunz et al., 2018). Thereby, the orchestration framework proposed in this study as a linking glue for the guiding principles follows this narrative and emphasizes a multitude of relevant actors to be engaged and the emerging governance, regulatory, and implementation challenges.