Digital Product Passports and the Traceability Challenge for Vietnam’s Textile and Garment Industry

For many years, traceability in the textile and garment industry was viewed primarily as a requirement for quality control, material certification, or the preparation of documentation for international customers. This approach is changing as major markets move from requiring companies to provide documents for each order toward building data systems that cover the entire product life cycle.

One notable change is the Digital Product Passport mechanism, within the framework of the European Union’s Ecodesign for Sustainable Products Regulation. This regulation addresses not only how products are manufactured, but also requires information about materials, durability, repairability, recyclability, and environmental impacts to be organized in a way that can be accessed and verified.

For Vietnamese textile and garment companies, this is not a technical requirement separate from export operations. It is directly related to how companies purchase yarn, manage fabric, control chemicals, store production records, work with suppliers, and substantiate environmental claims. Companies may not yet have to implement a complete product passport for every item, but they need to build data capabilities early if they want to maintain their position in global supply chains.

Digital Product Passports Change How the Market Views Textile and Garment Products

The EU’s Ecodesign for Sustainable Products Regulation, issued as Regulation (EU) 2024/1781, establishes a legal framework for the EU to set sustainability requirements for various product groups. The regulation was published in the Official Journal of the European Union in 2024 and replaces the previous ecodesign framework, which focused primarily on energy-related products.

Under the new framework, the EU may issue regulations for individual product groups. Textiles and footwear are among the groups receiving attention because they consume significant resources, often have short product life cycles, and have high disposal rates. However, specific requirements for each product group must be defined through separate implementing acts. Therefore, companies should not equate the general legal framework with the immediate entry into force of all technical requirements for all apparel products.

In essence, a Digital Product Passport is a set of data associated with a product or product line. Depending on the product group and specific regulations, the data may relate to material composition, raw material origin, durability, repairability, spare parts, end-of-life treatment methods, or environmental indicators. The passport may be accessed through a digital tool such as an identifier or connectivity code, but the more important elements are the quality, consistency, and verifiability of the data behind it.

This creates a significant difference from providing a single set of documents. A certificate or material list may satisfy an inspection requirement at a particular point in time. A Digital Product Passport system requires companies to connect data across design, procurement, production, testing, logistics, and distribution. If important information exists only in separate spreadsheets or depends on a supplier’s paper records, verification will become difficult.

It Is Not Only a Concern for Direct Exporters

A contract garment factory may not sell products directly to European consumers, but it can still be affected if brand customers request input data. In practice, a finished product often involves multiple layers of suppliers: fibers, yarn, fabric, dyes, trims, packaging, and finishing services. If even one link lacks reliable records, the company at the final stage may have difficulty substantiating information about the product as a whole.

This is why traceability requirements are increasingly shifting from the factory level to the supply-chain level. Garment companies cannot control only cutting, sewing, finishing, and packaging. They need to know where materials were purchased, which specifications were used, which certificates belong to which batches, and whether the data can be reconciled with commercial documents.

The Biggest Gap Lies in Material Data

In textile and garment production, data is often generated across many different systems. The procurement department manages purchase orders; the warehouse tracks receipts, issues, and inventory; the laboratory stores test results; the production department records consumption norms; while the social responsibility or environmental department manages assessment records. These data sets may serve each department well, but they do not necessarily form a unified product record.

For example, an order for shirts may use fabric blended from natural and synthetic fibers. To provide reliable information, the company needs to distinguish the composition ratio according to the applicable standard, identify the fabric batch corresponding to the order, link the fabric to the yarn or raw material supplier, and retain the relevant inspection documents. If recycled materials are used, the company must also substantiate the source of the material, the method used to calculate the recycled content, and the scope of the relevant certification, rather than simply writing “recycled fabric” in marketing materials.

Similar difficulties arise with claims about organic cotton, regenerated fibers, bio-based materials, or water-saving processes. An environmental claim has value only when its scope is clear, the measurement method is appropriate, and the records are sufficient for third-party review. The generalized use of green terminology can create compliance and reputational risks, especially as buyers increasingly demand verifiable information.

Linking Data Across Production Stages

To prepare for the new requirements, companies need to establish consistent identification codes for raw materials, semi-finished products, and finished products. Each fabric batch should be linkable to information about the supplier, composition, receipt date, test results, and the orders in which that batch was used. Similarly, data on electricity, water, chemicals, or waste generation should be linked to the relevant process and clearly defined measurement scope.

This does not mean that every company must immediately deploy a complex technology system. A simple but consistent data management system may be more useful than expensive software that departments do not use in a coordinated manner. The priorities should be determining which data must be collected, who is responsible, how frequently it should be updated, and how discrepancies between procurement records and production records will be checked.

For small and medium-sized enterprises, the process can begin with a core group of export products. Once the procedures have been tested, the company can expand them to other product lines. A step-by-step approach helps reduce initial costs and enables the company to identify inconsistencies in the data at an early stage.

Potential Impacts on Relationships with International Customers

In the short term, Digital Product Passport requirements may increase the administrative and internal-control workload. Companies must allocate resources to collecting documents from suppliers, standardizing material names, verifying certificates, and updating information when materials change. For factories handling many small orders, numerous designs, or frequent supplier changes, the cost of managing data can be significant.

However, the impact is not limited to costs. Companies with good data can improve their ability to respond when customers request inspections, reduce the time needed to locate records, and limit the risk of providing inconsistent information. Data also supports consumption calculations, waste control, and the identification of processes that generate unusually high levels of defects or resource consumption.

From a commercial perspective, traceability capabilities may become a criterion for classifying suppliers. International brands are not only looking for sewing capabilities with stable quality and competitive prices; they also need partners that can provide ESG data, chemical records, and evidence of raw material origin. Companies lacking data capabilities risk receiving only lower-value-added orders or becoming dependent on buyers’ requirements.

Conversely, a reliable data system can help Vietnamese companies participate more deeply in sustainable product development programs, made-to-order production with high technical requirements, or supply chains that value transparency. This is an opportunity, but it will not arise automatically simply because a company has invested in software. The outcome will also depend on data quality, employee capabilities, and the level of coordination with suppliers.

Challenges for Environmental Claims

Digital Product Passports also place pressure on how companies communicate about sustainability. Messages such as “environmentally friendly,” “green,” “clean,” or “sustainable” may be considered unsubstantiated if they lack a clear scope and supporting basis. Companies need to distinguish between a specific product attribute and an overall assessment of environmental impact.

For example, using a certain proportion of recycled fibers does not mean that the entire product has lower environmental impacts in every respect. The assessment may also involve durability, dyeing processes, energy use, fiber separation, washing methods, and post-consumer treatment. A more accurate approach is to clearly state which attribute has been substantiated and according to which standard or method, rather than drawing a broader conclusion than the available data supports.

Where Should Vietnamese Companies Begin?

Preparation should begin with a data inventory rather than the immediate selection of software. First, companies need to list their export products, target markets, material groups used, and data requirements that regularly appear in contracts or customer assessment forms. From there, they can identify the gap between the information currently available and the information they need to provide.

The next step is to develop a common data dictionary. The same type of material should not be recorded under different names by procurement, warehousing, and production. Units of measurement, material codes, supplier codes, and methods for recording composition ratios need to be standardized. These rules may appear administrative, but they determine the ability to connect data later.

Companies also need to classify suppliers according to their level of importance and risk. For key materials, they should request a minimum documentation package containing information on composition, origin, applicable standards, certifications if available, and relevant test results. Certifications must be checked for their scope, validity period, and the products covered; not every certificate should be treated as comprehensive evidence for the entire supply chain.

At the factory level, the person ultimately responsible for product data must be identified. If data is fragmented without a central control point, errors commonly arise at the intersections between departments. A cross-functional team consisting of procurement, production, quality, information technology, and sustainability staff can help standardize procedures, even though the organizational scale of each company differs.

Technology Investment Must Go Hand in Hand with Process Standardization

Tools such as enterprise resource planning systems, production management software, traceability platforms, or digital identification codes can support companies. However, technology cannot create accurate data by itself if the initial recording process lacks discipline. A QR code attached to a product is meaningful only when the information behind it is updated, sourced, and accurately reflects the relevant batch.

Companies should pilot the process on a product line with a relatively stable supply chain. During the pilot phase, they should test their ability to answer basic questions: Where did the materials come from? Which order were they used for? Which information has been verified? Who approved the data? How long does it take to retrieve a record? These questions help assess actual capabilities more effectively than simply inspecting the interface of a digital platform.

At the same time, employees need training in product data concepts, record version control, and the security of commercial information. Not all data can be made public to every user. Companies need to distinguish between information intended for regulators, customers, recycling partners, and consumers, while protecting sensitive data such as purchase prices, processing formulas, or supplier lists.

Early Preparation Can Reduce Risk, but Companies Should Not Pursue Form Over Substance

Digital Product Passports are only one part of the broader trend toward a circular economy, sustainable design, and producer responsibility. The practical impact on each company will depend on its product group, export market, role in the supply chain, and the EU’s specific implementing regulations. Therefore, companies need to monitor official documents rather than rely on unverified commercial interpretations.

What can be established is that the demand for data transparency will become increasingly important. When customers and regulators need to verify composition, origin, or environmental claims, companies cannot rely solely on the experience of a few employees or records stored in scattered locations. The ability to provide consistent data will become part of both production capability and export capability.

For Vietnam’s textile and garment industry, this process creates investment pressure but also an opportunity to upgrade supply chains. Companies that build a reliable data foundation, manage suppliers effectively, and accurately explain sustainable attributes will have an advantage as international customers begin evaluating suppliers based on both product quality and transparency. Preparing for Digital Product Passports should therefore not be viewed as a campaign to react to new regulations, but as a step toward strengthening the management capabilities of textile and garment companies in a market that increasingly values evidence.