Fashion's digital reckoning: Why the EU's Product Passport mandate will reshape the Industry

As the European Union tightens its grip on environmental regulation, fashion brands across the continent, and beyond, are bracing for a seismic shift. At the heart of the upcoming regulatory wave lies the Digital Product Passport (DPP), a central feature of the Ecodesign for Sustainable Products Regulation (ESPR), which becomes enforceable in 2026.

This legislation, which aligns with the EU’s broader circular economy and sustainability agenda, will make DPPs mandatory for key sectors including textiles and footwear. These digital passports are designed to store and communicate a product’s environmental credentials, from material composition and recycled content to carbon footprint, repairability, and supply chain traceability.

Beyond compliance: A new value framework

The European Commission, which launched a public consultation on DPP implementation earlier this year, is clear on its ambition: to equip consumers, regulators, and businesses with credible data to support sustainable decision-making, and to reduce environmental harm. However, for fashion brands, the implications stretch far beyond regulatory compliance.

According to a June report by Bain & Company and eBay, DPPs could effectively double the lifetime value of fashion products, particularly through resale and aftercare markets. “DPPs are more than just checking a compliance box,” said Aaron Cheris, partner at Bain & Company. “They are a foundational shift in how value is created, captured, and sustained over a product’s lifetime.”

The report suggests that up to 65 percent of the added value could accrue to consumers through improved resale, rental, and repair services, enabled by digital traceability. For example, a garment originally sold for 500 pounds could yield an additional 500 pounds ver its extended lifecycle, says Global Data.

Alexis Hoopes, Global VP of Fashion at eBay, reinforced this outlook: “Digital Product Passports are critical to powering the future of circularity in fashion. Better product data means smarter buying, responsible selling, and more trust across the resale ecosystem.”

Cost, complexity, and a fragmented landscape

Yet for many industry players, particularly small and medium-sized enterprises (SMEs). the path to compliance is steep. Implementing a DPP system entails not only data digitization and infrastructure investment, but also deep visibility into often opaque supply chains. For artisanal producers in regions like Florence or Kyoto, questions abound: will a handcrafted label suffice, or must every button and thread be digitally documented?

Moreover, the absence of harmonised standards remains a major sticking point. Without a unified protocol governing what data a DPP must contain, and who controls it, the risk of fragmentation and confusion looms large. There are also unresolved concerns around data ownership, privacy, and platform governance, particularly in regard to how consumer or product data may be monetised.

These uncertainties have led some critics to warn of potential digital greenwashing, where DPPs become a surface-level compliance tool rather than a driver of meaningful environmental progress. Unless rigorously verified and standardised, they argue, DPPs could be co-opted for marketing purposes, undermining their credibility.

The end of "business as usual?"

Despite these hurdles, the direction of travel is unmistakable. By 2026, fashion products sold in the EU must carry DPPs containing standardised sustainability and traceability data. Items that fail to meet minimum requirements, such as those made from unrecyclable blended fibres or lacking durability, may be barred from the EU market altogether.

Restrictions are also expected on the destruction of unsold goods, a practice endemic in fast fashion. Brands will need alternative strategies for inventory management, including resale, repair, or donation, rather than offloading excess stock to developing countries.

As such, the ESPR deadline is not merely an administrative hurdle, it is a market access regulation. Brands that are unprepared face not only exclusion from the EU but also potential reputational fallout and financial penalties.

From burden to business opportunity

For forward-looking companies, however, the regulation offers more than just risk mitigation. The Bain eBay report urges brands to view DPPs as revenue tools, capable of unlocking lifetime value beyond the initial point of sale, strengthening consumer relationships, and opening direct channels to the booming secondhand market.

As the resale economy gains scale and consumers grow more discerning, early adopters of DPP infrastructure may find themselves at a competitive advantage. “The brands investing today in digital infrastructure, consumer engagement, and circular business models,” Bain writes, “will be tomorrow’s leaders in data-driven, sustainable fashion.”

In a sector long defined by opacity and overproduction, the Digital Product Passport may just be the key to reshaping fashion’s future, from one of disposable speed to enduring value.