A digital twin supply chain has recently been established by Swedish start-up PaperTale for Sail Racing – a brand well known for its durable and long-lasting performance garments for the marine industry.

The collaboration is further highlighted as the primary case study in a just-released white paper prepared by Deloitte, as a guide to how companies could most effectively prepare for the European Commission’s upcoming Digital Product Passport (DPP) and other related legislation.

Complex network

The PaperTale system for Sail Racing fully maps a complex network, beginning with farmers in Australia, moving to garment workers in Pakistan and finally reaching consumers in Scandinavia.

It incorporates data collection from the three countries using NFC tags and blockchain technology to provide detailed supply chain insights and ensure regulatory compliance for the brand.

“Our system captures the supply chain of a product from cradle to grave, in real-time,” says company founder Bilal Bhatti. “By integrating it into existing planning and management systems, factories and brands can gather and verify the flow of material and their social and environmental data in real-time. Data is added to a public blockchain, so it is extremely hard to tamper with, further increasing trust. When a product is finalised, consumers can scan an NFC tag or QR-code to view the entire journey a product has travelled, which craftsmen were involved in the production, and if they have been paid fairly.”

Personalisation

Introducing the usually anonymous factory workers responsible for each individual garment to the person buying it is what really sets PaperTale apart from other tracking systems – a next level of personalisation that will make a valuable contribution to raising the debate on the true cost of textiles.

“This technology is a game-changer in that we provide verified information about the social aspects of the manufacturing process and not just information about the components of the garment,” says Bilal. “We need products and processes to be much more connected with people, especially in such a complex supply chain where a high percentage of the work is carried out by contract workers who are unregistered and often exploited.”

“When the entire product journey is visible using real-time and verified data, higher trust is created all the way from factories to consumers. Our system makes it possible to start the dialogue on the cost of sustainability, paving the way to increase incentives that result in proper wages, contracts and workplace safety. In respect of environmental sustainability, real-time data makes real-time measurement possible, which will also stimulate brands and factories to reduce emissions, water usage and pollution.”

Benchmarks

The new Deloitte white paper, Adopting Blockchain-based E-Liability ESG reporting to comply with the upcoming CSRD regulation, confirms that PaperTale’s project with Sail Racing sets new benchmarks for sustainability and compliance. The paper can be accessed here.

“Crucial data collected during the project enabled the development of a Digital Product Passport (DPP) and met various regulatory reporting needs,” notes lead author Henrik Knak, a supply chain specialist and director at Deloitte. “As the industry evolves, however, there is a risk of DPPs becoming mere compliance reports, but the project emphasises the importance of focusing on extending product lifespans, improving decision-making based on impacts and promoting circularity.”

“The Sail Racing case illustrates how a holistic approach can extend beyond DPPs to ensure robust traceability, accountability and social and governance responsibility across supply chains.”

While much is set still being finalised, the DPP – as well as the European Commission’s Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD) – are fast approaching.

“This makes the insights from Deloitte’s white paper particularly timely and companies need to start preparing now, rather than risking non-compliance later,” says Bilal Bhatti. “We are extremely pleased that Deloitte has chosen our solution as its primary case study as we continue to refine our technology for advanced and well-balanced supply chain transparency and compliance.”

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