With terms like ESG, CSRD, ESR, DPP, and CSR, the sustainability landscape can be confusing. What do they mean, and how do they connect?
This article unpacks each term, exploring how they relate to the Digital Product Passport (DPP) and whether they are regulated or voluntary. We also explore how DPP can incorporate these concepts, creating transparency and promoting sustainability across the product lifecycle.
Sustainability terms and the Digital Product Passport
ESG: Environmental, Social and Governance
ESG represents Environmental, Social, and Governance factors, covering a company’s commitments to environmental responsibility, social considerations, and governance practices. ESG is not legally mandated but is widely reported by companies seeking sustainable investments and trust from consumers and investors. ESG can be integrated into the DPP to ensure transparency and support responsible supply chains through detailed product information on environmental and social practices.
CSRD: Corporate Sustainability Reporting Directive
The CSRD (Corporate Sustainability Reporting Directive) is an EU regulation effective for many companies from 2024, requiring detailed sustainability and ESG reporting to ensure transparency and standardization. Unlike ESG, CSRD is mandatory for larger EU-based companies and those with significant EU presence. DPP can incorporate CSRD data, providing documentation on product sustainability to meet EU requirements for traceability and transparency.
ESR: Environmental and Social Responsibility
Environmental and Social Responsibility (ESR) emphasizes companies’ obligations to consider environmental and social impacts. ESR overlaps with ESG and CSR but is often applied in industries directly impacting the environment, such as manufacturing and transport. ESR is typically voluntary but may be regulated in certain sectors. By incorporating ESR data, DPP can display responsible practices throughout the product lifecycle, covering production, usage, and recycling.
CSR: Corporate Social Responsibility
Corporate Social Responsibility (CSR) refers to a company’s voluntary commitment to social responsibility. Often exceeding regulatory requirements, CSR initiatives highlight a company’s dedication to sustainable and socially beneficial practices. Though voluntary, companies can document CSR efforts within DPP to showcase their commitment to responsible production, providing a platform for CSR communication and boosting consumer awareness.
DPP: The Digital Product Passport
The Digital Product Passport (DPP) is an EU-driven digital solution to increase transparency by consolidating data on product origin, materials, and environmental impact. DPP is partially mandated in Europe and will soon be required in sectors like electronics, batteries, and textiles. DPP can integrate elements from ESG, CSRD, and ESR to provide holistic product information that fosters sustainability and responsible consumption.
Each of these concepts—ESG, CSRD, ESR, DPP, and CSR—contributes to sustainability and transparency in unique ways. While some are regulatory and others voluntary, all can be integrated into DPP. As a consolidated platform, DPP allows companies and consumers to access detailed sustainability and responsibility data, making it a vital tool for promoting transparency and accountability across the product lifecycle.
