When a consumer picks up a T-shirt labeled 100% organic cotton or an electric vehicle battery marketed as sustainably sourced, they're placing trust in those claims.
That trust is eroding. A European Commission study found that 53% of environmental claims examined were vague, misleading or unfounded, while 40% were entirely unsubstantiated. With approximately 230 different environmental labels circulating across EU markets, consumers face a confusing choice where distinguishing genuine sustainability from marketing claims has become nearly impossible.
Meanwhile, consumers are increasingly mindful of what they buy. According to PwC's 2024 Voice of the Consumer Survey, which surveyed over 20,000 consumers across 31 countries, 85% report experiencing the disruptive effects of climate change in their daily lives, and they're willing to pay a 9.7% premium for sustainably produced goods.
But this willingness comes with a demand: verifiable proof.
The gap between consumer demand for verified sustainability and the prevalence of unsubstantiated claims is a trust crisis that threatens the credibility of the entire green economy. Digital Product Passports (DPPs) built on a blockchain technology stack could play a major role in solving this.
Digital Product Passports: Hard-Coding Circularity Into Markets
The European Union has moved decisively to address this trust deficit through the Ecodesign for Sustainable Products Regulation (ESPR), which introduces DPPs for virtually all physical goods placed on the EU market.
A DPP is a structured digital record that contains detailed lifecycle data, material composition, manufacturing origin, carbon footprint, recycling instructions and compliance certifications, accessible via standardized interfaces such as QR codes or NFC tags.
From February 2027, every electric vehicle and industrial battery with a capacity over 2 kWh sold in the EU must include a battery passport accessible via a QR code that contains information on carbon footprint, electrochemical performance, and durability. Textiles, electronics, furniture and construction materials are expected to follow between 2027 and 2030.
The regulation's Brussels Effect means global manufacturers must comply regardless of where they're headquartered. No major company can afford to bypass the European market, as it impacts both exports and imports.
In February 2024, the EU further strengthened its position by revising its blacklist of unfair commercial practices to explicitly prohibit misleading green claims, including generic terms such as "eco-friendly" or "climate neutral" unless backed by recognized certifications. Non-compliant companies face penalties of 4% of annual revenue.
How Blockchain Impacts DPPs
What distinguishes DPPs from previous labeling frameworks is the requirement for tamper-proof, interoperable records that survive product lifecycles spanning decades and multiple ownership transfers. This requirement inherently favors decentralized, immutable infrastructure, which makes blockchain a structural necessity.
The fundamental challenge with sustainability claims is verification. Traditional centralized databases allow retroactive modification: a manufacturer that hosts its own sustainability data can quietly alter records if compliance issues arise in supply chains where entities often compete and may not trust each other.
In such cases, a neutral, shared ledger becomes essential.
Toyota, for example, publicly described its Toyota Blockchain Lab initiatives, which include supply-chain use cases aimed at improving efficiency and traceability by recording and sharing information about parts manufacturing and shipping.
The Aura Blockchain Consortium—founded by LVMH, Prada, Cartier and OTB—announced in September 2024 that it had surpassed 50 million luxury products registered on its blockchain. Louis Vuitton now offers traceability for its LV Diamonds collection, tracking each stone's journey from mine to final setting.
In short, blockchain can address the core issues of traceability and trust through cryptographic immutability. Once product provenance data is recorded, altering it requires computational resources exceeding the combined computational resources of the network securing the chain. A product's manufacturing date, material composition and chain of custody become verifiable facts resistant to manipulation.
Smart contracts, which are self-executing code on blockchains, enable automated verification without human intermediaries. When a product changes hands, smart contracts can automatically verify authenticity against on-chain records, execute warranty transfers and trigger compliance checks based on predetermined criteria.
Creating A Phased DPP Strategy
If you place products on the EU market, you’re the economic operator responsible for ensuring a compliant passport exists at market entry.
The starting point is understanding the regulations and enforceable timelines. The good news is that we're talking mostly about existing data. The task is not building new data from scratch but standardizing and connecting data sets already sitting in your ERP, PLM systems and supplier records.
The logical next step is a gap analysis. Map ESPR-mandated data categories against your current systems. For each data point, determine: Do we have it? Where does it reside? Who owns its accuracy? Some data will come from your bill of materials and bill of processes. Some will require Life Cycle Assessment inputs from upstream suppliers.
Many suppliers will be hesitant to share proprietary information, so businesses need to begin supplier conversations early. Have data-sharing agreements that specify formats, update frequencies and verification protocols. For proprietary data protection, zero-knowledge proofs can be used. Sensitive information can be encrypted so that only authorized parties can access it upon verified request.
Once the data framework is defined, the technology layer becomes clearer. Barcodes, QR codes, RFID tags or NFC chips can make the passport accessible from the physical product. Blockchain’s role begins one layer below. It provides a tamper-evident trust anchor for key lifecycle attestations. You don’t have to replace ERP systems; you can have them publish verifiable updates into a shared integrity layer via middleware and APIs.
This level of integration is complex, so you may want to work with a partner familiar with supply chain complexities and strict regulatory compliance requirements. Either way, you will need a direct thread of data that links a raw material to a finished good. You will also need to ensure that the digital twin is compliant with the ESPR interoperability standards.
Conclusion
For businesses, the question is no longer whether to invest in traceability infrastructure, but how quickly they can build the systems to substantiate their claims. In a marketplace flooded with unsubstantiated green claims, the ability to provide cryptographic proof of sustainability is becoming a regulatory requirement as much as a competitive advantage.
