One small tech firm in Canberra is at the epicentre of global standards for the digitalisation of global trade. A United Nations Centre for Trade Facilitation and Electronic Business (UNCEFACT) project, led by Steve Capell of GoSource is developing data protocols and standards for Digital Product Passports, a key tool in the fight against climate change.
- Digital Product Passports (DPPs) are an emerging tool for transporting ESG claims in supply chains
- DPPs are an open-source standard and easy to adapt to existing supply chains
- Recommendation 49: transparency at scale from UNCEFACT is set to be released in January for public consultation to establish DPPs as the global standard
- Local tech firm GoSource is leading the UN DPP project and becoming recognised as a global thought leader in Digital Trust
Let’s not squander our place in the fast lane of global commerce
Australia’s technology talent is often world-leading but unrecognised. Our humble nature often keeps innovators quiet about their achievements on the world stage and a conservative risk attitude sees the Australian government and corporations wait for an innovative idea to be proven overseas before we adopt it here. Recently, the Australian Department of Health advocated for FHIR (a data standard developed by Australian company HL7) to be universally adopted in Australia, after seeing it successfully powering in the US health system. And let us not forget about other under-recognized contributions like wi-fi, polymer banknotes and spray-on skin just to name a few.
Over the past few years Canberra tech veteran Steve Capell from GoSource has been supporting the United Nations to build data standards and protocols for the digitalisation of global trade regulation using Digital Product Passports (DPPs). With the pressure now on to combat Greenwashing at a global scale, Steve has been invited to lead a new UN project called “Recommendation 49: transparency at scale”.
Back at home, GoSource have been delivering Digital Product Passport consulting and technology solutions for the Department of Agriculture, Fisheries and Forestry’s AgTrace project, a partnership with Food Agility Australia helping beef farmers deliver digital proof of emissions and compliance with modern slavery regulations. Their recognised expertise on the topic has also seen Steve consult to the Canadian government on the traceability of critical minerals.
Having a local firm in the driver’s seat for such an important global initiative gives Australian government and industry a unique opportunity to position ourselves at the front of pack and make an otherwise challenging transition profitable.
Digital Product Passports: a simple solution to a complex trade problem
In our series of articles about B2B Digital Product Passports published last month we discussed the growing and urgent pressure on Australian agriculture and mining sectors from accelerating Environmental, Societal and Governance (ESG) regulations and the need for nations to do ‘algorithmic due diligence’ at scale. In an era of growing environmental and social consciousness, consumers, investors, corporate buyers, and regulators are increasingly demanding products that are verifiably environmentally and socially responsible. In a recent SMH article, The National Australian Bank signalled a move towards significant interest differentials based on company ESG credentials, a trend that will inevitably hit heavy emitters hard.
Leading the global charge against greenwashing is the EU’s new Corporate Sustainability Due Diligence legislation that may see fines as large at 4% of a corporation’s total global turnover for failing to “identify, and where necessary prevent, end or mitigate the negative impact of their activities, including that of their business partners, on human rights and the environment.” This is a potential bombshell for Australian exports, with only the best performing and most transparent firms granted access to the EU.
International compliance regimes are complex and overlapping, difficult and time consuming to meet, reducing the competitiveness of products with poor ESG performance. This trend will put exporters under increasing pressure over the next decade if they do not invest now in effective supply chain data management. Thankfully, modern technologies and data standards are set to make regulatory compliance across multiple markets significantly easier for producers over the next few years if they act now.
B2B Digital Product Passports answer an emerging and critical ESG problem – how do we collect evidence and claims and share them between actors in a supply chain or between nations? While international data standards might not be as sexy as wi-fi, they are critical in accelerating climate action and eliminating greenwashing.
B2B Digital Product Passports answer an emerging and critical ESG problem – how do we collect evidence and claims and share them between actors in a supply chain or between nations?
They are a simple and promising open-source solution to the growing demand for ESG-compliant products. They are being promoted by GS1 and the United Nations Centre for Trade Facilitation and Electronic Business (UNCEFACT) as a global standard for product conformance. DPPs are simple, transportable digital records that track the lifecycle of a product, providing detailed information about its origin, production methods, and environmental and social impact. Compliance and conformance claims attached to DPPs can be issued by regulators, allowing producers to demonstrate their commitment to ESG principles through their entire supply chain and provide buyers and regulators with the transparency they demand. In the next few years, DPPs are set to be a ubiquitous standard that producers, materials accounting and production management platforms can all easily adopt as a seamless way of transferring product information. Digital Product Passports are currently being adopted in the EU for a range of products, starting with batteries and some textiles, but they are expected to expand in scope and settle on the UNCEFACT standard.
First movers will be rewarded
UNCEFACT is releasing a draft of Recommendation 49 for public consultation in January 2024 and in the wake of the new globally commitments at this month’s COP28, they expect significant numbers of nations and companies to formally pledge to adopt the standard. Further information on how to make the sustainability pledge will be available during February 2024 GoSource are available to talk about Digital Product Passports and how they might be relevant to your business or policy area - contact us to have a chat.
About the Author
Steve Capell is recognised as a global thought leader in digital trust and digital trade and a co-founder of GoSource, an ICT service provider specialising in digital transformation for government and enterprise customers. Steve has been a key contributor to the United Nations Centre for Trade Facilitation and Electronic Business (UNCEFACT) to develop guidelines and standards to accelerate the global transformation of digital trade using verifiable credentials. He is currently the project leader for UNCEFACT Recommendation 49 on Digital Product Passports.