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Authors:
Khodjaev Zafar
Business Research & Analysis
As the global climate crisis intensifies, two major economic powers, the European Union and the United States, are taking starkly different paths when it comes to environmental policies. The EU is doubling down on sustainability, with initiatives like the Green Deal and Digital Product Passports (DPPs), while the US, under the leadership of President Trump, is pulling back from environmental commitments.
This divergence raises important questions: What will this mean for global trade, innovation, and industries reliant on digital traceability tools like the DPP? How will businesses navigate a world where one side prioritizes sustainability and the other favors deregulation?
The EU Green Deal is more than just a policy framework, it is a bold commitment to achieving climate neutrality by 2050. As part of this initiative, the EU has introduced Digital Product Passports (DPPs), a tool designed to enhance transparency, circularity, and traceability across industries.
Key features of the Green Deal:
- Regulations focused on reducing waste and emissions across various industries, including furniture, fashion, and electronics.
- Investment in sustainable innovation, with a roadmap that prioritizes digital solutions for sustainability.
- Binding targets under the Paris Agreement, pushing businesses to adopt greener practices, regardless of immediate profitability.
The Green Deal, the Paris Agreement and the Sustainable Development Goals are not just about compliance, it is about creating a culture of responsibility, innovation, and long-term resilience. Businesses that embrace this shift are not only future-proofing themselves, but also unlocking new economic opportunities in the growing sustainability sector.
There is a misconception that sustainability regulations are merely a burden on businesses. In reality, they are catalysts for digital transformation and competitive differentiation. The introduction of DPPs creates opportunities for businesses to provide consumers with greater transparency, improve supply chain efficiency, and increase product longevity through better lifecycle management.
This is where Lingon comes in. Our Product Certificates and Digital Product Passport solutions do more than help companies comply with regulations, they enhance operational efficiency, via value-added tools and analytic insights, drive customer trust, and create new revenue streams. Imagine furniture that "talks" - a modern, tech-driven approach that gives manufacturers a distinct competitive edge.
By adopting DPPs proactively, businesses can go beyond compliance and position themselves as industry leaders in a digital, circular economy.
While the EU moves forward, the US, under Trump, is stepping back. Key policy shifts include:
- Rolling back climate regulations, and pulling away from previous sustainability commitments.
- Prioritizing short-term economic growth over environmental responsibility.
- Reducing incentives for green innovation, leaving businesses with fewer government-backed sustainability initiatives.
- A reduction in foreign aid, which shifts local priorities toward basic survivability, rather than good stewardship.
This signals a broader cultural and policy divide. While the EU’s approach is collective and long-term, aiming for systemic transformation, the US’s approach prioritizes immediate financial gains, often at the expense of sustainability. This raises concerns about whether the US is regressing into a more industrial-era mindset, while the rest of the world advances toward digital, circular economies.
Sustainability and profitability go hand in hand. That's how you build a resilient company, whether you're an incumbent or starting from scratch. Henrik Henriksson
With two major world economies moving in opposite directions, businesses face new complexities:
- Trade barriers: EU regulations could make it harder for US-made goods to enter European markets if they fail to meet new sustainability standards.
- Compliance issues: American companies might be forced to adopt DPP-like transparency measures to remain competitive in EU markets.
- Innovation gaps: While the EU drives digital sustainability tools, the US risks lagging behind, potentially missing out on new tech-driven business opportunities.
For companies operating globally, the key question is: Should they align with stricter EU standards or take advantage of the more relaxed US policies? Forward-thinking businesses will see sustainability not as a regulatory hurdle but as a strategic advantage.
Climate change is real. Industry must now lead and not depend on government. Jeff Immelt
Regulation versus de-regulation is no longer just a policy debate, it’s a business decision. While governments set the frameworks, it is businesses that define their own future.
Companies that proactively embrace transparency, circularity, and digital traceability will be the ones shaping tomorrow’s markets, and meeting modern consumer demands. Waiting for regulatory clarity is not a strategy, leading the change is. Lingon is here to help businesses take that step forward, whether in regulated or deregulated markets.
The question is not whether sustainability will dominate the future, it’s whether businesses will be ready for it.
The Business of Saving the Planet, Harvard Business School 2019
The Importance of Sustainability in Business, Vanderbilt University 2023
Sustainable Business Practices In The Digital Era: A Multifaceted Approach, Forbes 2024
Lingon reflects on the true meaning behind DPP regulation that is intended to contribute to sustainability by becoming its natural tool. Moreover, Lingon is commited to supporting both the industries and policy makers in this common effort to build a greener future!
Lingon reflects on the many opportunities for DPPs to cut costs and open new revenue streams. The furniture and lighting industries are already taking first steps toward digitalization and circularity, the business value is evident and real examples are already visible.
Lingon reflects on the future with and without DPPs. Will the world embrace the sustainablity goals for the next 20 years? What would happen if the upcoming regulations are not supported and the industry is not transformed? Let's dive into the possibilities!
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