Tensions in Data-Sharing Governance for Circular Cities: The Case of the Digital Product Passport

Abstract

Data sharing across organizational boundaries has become increasingly important for advancing the transition to circular cities. To establish a structured data-sharing effort among different actors, collaboration in cross-sector partnerships is needed. However, these partnerships face specific challenges, especially regarding the governance of data sharing. Through a qualitative analysis of cross-sector partnerships formed around the development of the Digital Product Passport, we uncover the tensions associated with collaborative data-sharing governance in the context of circular cities. We also offer guidance to actors involved in urban transitions to the circular economy on how to address these tensions.

The concept of a circular economy (CE) represents an economic paradigm that rejects the single use of resources and instead proposes a system that regenerates itself by keeping resources in use. ¹ Hence, the CE is seen as a promising alternative to the linear “take-make-waste” system, which is known to engender the depletion of natural resources and threaten the longevity of our natural environment. Over the last few years, scholars and practitioners have emphasized the importance of fostering a transition toward the CE in urban areas, introducing the “circular cities” concept. ² Circular cities represent urban ecosystems where “waste” resources are looped, ecosystem services are protected, and resource flows are localized where possible. ³ With the increasing concentration of population, resources, and waste in cities, creating circular cities is crucial to realize a global transition to the CE. ⁴

In this context, municipalities and entrepreneurs have started developing urban circularity initiatives aimed at localizing different value chains. A case in point is the food value chain; as the Ellen McArthur Foundation ⁵ highlighted, “cities can trigger a shift to a better food system” by fostering local, regenerative food production. For example, the city of Milan is currently working on transforming its entire food system by fostering local procurement, developing logistics for distributing surplus food, and valorizing discarded organic material. ⁶

One of the key mechanisms necessary to facilitate such efforts is data sharing, as it enables city actors to identify relevant gaps and opportunities for circularity, track and understand resource flows, allocate resources in a well-informed manner, and monitor their performance. ⁷ To enable this, different kinds of data should be provided by various actors such as producers, recyclers, municipalities, and citizens. Hence, effectively harnessing data for circular cities calls for establishing cross-sector partnerships (CSPs). CSPs represent horizontal arrangements in which organizations from the private, public, and/or civil society sectors join forces to collectively address societal concerns they cannot solve by themselves. ⁸

While some of these studies have touched upon the concept of data and data sharing in cities, ⁹ this literature has, to date, not fully shed light on this practice. Stemming from prior research on adjacent topics, that is, on CSPs at the city level ¹⁰ and on collaborations for data sharing, ¹¹ we expect that governing cross-sectoral data sharing in cities is a complex endeavor, as CSP partners are likely to have different expectations, interests, and concerns. It is, therefore, crucial to understand the specific tensions that are likely to emerge when governing such structured data-sharing efforts within CSPs at the city level. As such, this study addresses the following research question: What tensions are CSPs at the city level likely to face when governing data sharing to promote the CE?

To the authors’ knowledge, there has not yet been a structured cross-sectoral initiative at the city level that involves data-sharing to promote circularity efforts. Hence, to answer our research question, we focus on a unique empirical setting that combines cross-sector collaboration and data sharing for the CE, namely the development of the Digital Product Passport (DPP). DPPs refer to a system that contains detailed information about a product’s materials, origin, use, and end-of-life handling instructions. ¹² While the DPP has not yet been implemented at the city level, its adoption would be highly relevant for circular cities, particularly to support the localization of value chains. As noted earlier, localizing value chains is core to realizing circular cities, ¹³ and several municipalities have already initiated measures to attain this objective. At the same time, such urban circularity initiatives suffer from several challenges, including a lack of consistent and comprehensive data to base decisions on, ¹⁴ a lack of coordination among actors, ¹⁵ and a lack of follow-up and evaluation of the evolution of circular city initiatives. ¹⁶ The DPP can help address these challenges by offering a structured data-sharing approach that enables actors to coordinate and evaluate their efforts to localize value chains for circular cities. For instance, adopting a DPP for locally produced food at the city level would allow different stakeholders (e.g., municipalities, farmers, local logistics companies) to appraise and improve the environmental impact of localized food value chains.

To ensure an effective implementation of the DPP for urban circularity, we believe it is crucial to understand the tensions related to its development. We focus on the current, initial phase of CSPs for the DPP because, at this stage, actors are confronted with high levels of complexity and a multitude of conflicting demands around data sharing, which makes this period fraught with uncertainties. Based on qualitative data collected in CSPs established around the DPP, we adopt an inductive approach to study the tensions associated with data-sharing governance.

Our study contributes to the debate on urban circularity transitions ¹⁷ by uncovering the relational complexity inherent in these transitions. Building on existing cases of cross-sector collaboration for data sharing, we offer insights on the tensions that may emerge in the context of circular cities when similar collaborative initiatives are established to enable cross-sector data sharing for urban circularity. In line with these tensions, we provide a conceptual reflection on potential responses to these tensions that actors at the city level could adopt. In doing so, we particularly suggest the role that digital technologies could play in addressing or preventing these tensions. Based on these insights, we offer an array of important managerial implications for CSP actors involved in urban circularity, which enable them to address the tensions related to data-sharing governance for the DPP and, as a result, to pursue circularity objectives.

Theoretical Background

Cross-Sector Collaboration around Data Sharing for Circular Cities

The CE encompasses “an economic system that replaces the ‘end-of-life’ concept with reducing, alternatively reusing, recycling, and recovering materials in production and consumption processes.” ¹⁸ The core tenet of the CE entails replacing the single use of resources with a system that regenerates itself, “by slowing, closing, and narrowing resource loops.” ¹⁹ Cities are important arenas for realizing the transition to the CE, ²⁰ as they represent contexts with high resource consumption and production, greenhouse gas emissions, and waste production. ²¹ At the same time, cities have been shown to constitute important sites of experimentation that have the potential to spur change. ²² This makes them conducive to fostering the global CE transition.

Over the last few years, digital technologies have increasingly been used to attain circularity goals in an urban context. ²³ Underlying this body of work is the understanding that digitalization brings an “increasing ability [. . .] to access, store, process and use data at unprecedented capacity and pace.” ²⁴ Data is a key enabler of the CE, as it allows actors to track and monitor resource flows more efficiently, leading to “well-informed and multi-constrained decisions.” ²⁵ For example, data about consumers’ product usage can help product manufacturers design more durable and recyclable products. At the same time, recyclers can target specific products for remanufacturing and recycling if they have access to relevant data on product composition. ²⁶ To realize circular cities, multiple actors, including producers, recyclers, municipalities, and citizens, ²⁷ need to provide and access different kinds of data, such as those on material sourcing, product use, recycling potential, and waste. Therefore, fostering circular resource flows in urban areas hinges on the collaboration for data sharing between a diverse set of actors.

To efficiently organize such multi-stakeholder data-sharing efforts at the city level, the creation of CSPs is warranted. CSPs represent horizontal arrangements in which actors from different sectors join forces to collectively address societal challenges they cannot tackle by themselves. ²⁸ Prior research has shown how CSPs that are set up to tackle challenges in urban areas operate through collaborative innovation, ²⁹ boundary work, ³⁰ the combination of different roles, and the pooling of resources. ³¹ Moreover, scholars have recently started assigning attention to CSPs dedicated to the CE in urban areas: For example, studies have investigated the involvement of local communities within a multi-stakeholder initiative for circularity in a neighborhood, ³² as well as the drivers of collaborative governance for the CE in different local contexts. ³³ Similarly, scholars have proposed a framework for a multi-stakeholder circular business model on electric batteries in a city, ³⁴ or have explored circularity in the built environment. ³⁵

Although the CE literature thus emphasizes the importance of cross-sector collaboration to realize circularity in an urban context, the concept of data sharing for the CE at the city level has received scant attention. While extant studies have explored collaborative data-sharing initiatives within cities more generally, ³⁶ to the authors’ knowledge, a structured, city-level cross-sectoral initiative aimed at systematically sharing data for the CE does not yet exist. Yet, such an initiative would be particularly valuable, since cities exhibit a high concentration of resources and waste, and municipalities aim to localize resource flows. A case in point is the food value chain, whose potential for localization has been emphasized by researchers and practitioners. ³⁷ By localizing resource flows, urban circularity initiatives play a significant role in reducing waste and diminishing ecological impacts resulting from global supply chains ³⁸ . While this is the case, we know little about how such cross-sectoral initiatives should be governed so that they reach their full potential. In the following section, we elaborate on the concept of data-sharing governance and its relevance for CSPs in the context of urban circularity.

Data-Sharing Governance for Circular Cities

Although data sharing is critical to creating and capturing value in an urban context, CSPs established for this purpose are likely to face specific challenges, because incentives and concerns may substantially differ between the actors involved. For example, studies have shown that CSPs centered around data sharing are often confronted with coordination challenges, unclear value propositions, or a lack of ethical guidelines. ³⁹ Hence, data sharing between multiple actors in the context of circularity has to be “governed” in order to be efficient. Building on prior research, we conceptualize data-sharing governance as the values, rules, procedures, standards, and infrastructure that facilitate and restrict data sharing among multiple stakeholders. ⁴⁰ While largely overlooked by management scholars, data-sharing governance has received interest in Information Systems research. ⁴¹ According to this body of work, to share data effectively, relevant stakeholders must agree on how such data flows should be orchestrated and coordinated. Moreover, designing governance for data sharing requires considering the risks and opportunities that this entails for each stakeholder and weighing different interests, rights, concerns, and responsibilities. ⁴²

To understand the complexity inherent in data-sharing governance for circular cities, we draw on the concept of tensions as a lens. Tensions represent competing demands or sources of contradictions that arise from complex and ambiguous organizing contexts. ⁴³ They have been shown to be influential for CSPs, as their heterogeneous composition often implies the presence of competing demands and interests. ⁴⁴ Extant studies on circular cities have also emphasized the likelihood for tensions to arise in this context, as urban circularity requires collaboration between individuals with different backgrounds, skills, and perspectives. For example, scholars have highlighted the challenge of actively engaging citizens and policymakers in circular initiatives and committing them in the long run. ⁴⁵ In CSPs that are still in the formation stage, the likelihood that tensions become salient is high because partners bring different perspectives, and they are “typically unfamiliar with each other’s interests and orientations.” ⁴⁶ Yet, understanding the tensions associated with CSPs created for novel purposes, such as data sharing for circular cities, is crucial. If not addressed properly, these tensions may severely hinder collaborative efforts. ⁴⁷

In sum, even though there is increasing awareness of the fact that data sharing in the context of circular cities is a cross-sectoral endeavor, we know little about the tensions associated with the governance of data sharing in an urban context. Nevertheless, related literature, such as that on industrial ecology, has highlighted the challenge of organizing reliable and efficient data sharing to promote circularity objectives. ⁴⁸ Therefore, this study explores the tensions that data-sharing CSPs at the city level are likely to face when designing data-sharing governance. To do so, we study a context broader in scope than the city level, but highly relevant for understanding the tensions associated with data-sharing governance in circular cities. We elaborate on our setting below.

Methods

Research Setting

As there are no structured examples of cross-sectoral data-sharing efforts for the CE in an urban context, we focus on a setting that is broader in scope but still highly relevant at the city level. Specifically, we study the collaborative development of the DPP, which constitutes an important measure within the Ecodesign for Sustainable Products Regulation, a key component of the European Union (EU) policies for the CE. ⁴⁹ The DPP is a structured collection of data covering all stages of a product’s lifecycle, enabling different actors to share relevant information about products placed on the EU market. ⁵⁰ The main data included in the DPP concern the origin of the product, its materials’ composition, the product use, and environmental and recycling information. DPPs operate through a data carrier, such as a QR code, which is physically present on the product and connects to a unique product identifier. This sharing of information is intended to benefit all stakeholders involved in making a product’s lifecycle more circular, including producers, users, repairers, and recyclers, ⁵¹ as it allows them to make more informed and more environmentally conscious decisions, for example, by facilitating the optimization of resource use and aiding effective waste management. ⁵² Even though the environmental impact of certain technologies used by the DPP, such as blockchain, has been critically debated, the DPP is expected to outweigh these negative impacts due to the overall benefits for energy and resource consumption it will bring. ⁵³ While relevant for multiple sectors, DPPs will first become mandatory for batteries and consumer electronics in the EU in 2026, and for other product groups, such as textiles, in 2030. ⁵⁴

In the past months, several CSPs have emerged that aim to prepare for the gradual deployment of the DPP. In these partnerships, actors from the private sector, public sector, and academia join forces to develop common principles and roadmaps to prepare the DPP’s roll-out. Hence, these CSPs do not develop the technology, but they jointly discuss and negotiate the infrastructure around it. As the DPP will become mandatory first for batteries and consumer electronics, the CSPs that are currently active predominantly focus on these industries. For our interviews, we selected two CSPs that were particularly representative for the purposes of this research, as they are composed of actors from at least two different sectors, and they were initiated specifically around the roll-out of the DPP. Although these CSPs are not at the city level, we believe they represent informative cases for our research question, as they represent multi-stakeholder settings composed of actors committed to advancing circularity objectives through data sharing.

Data Sources

This study draws on semi-structured interviews and archival data, allowing for converging lines of inquiry and data triangulation.

Semi-structured interviews: Our first data source comprises eight semi-structured interviews with actors involved in CSPs formed around the development of the DPP. Due to the novel and confidential nature of the discussions around the DPP, we experienced challenges reaching interview partners who were willing to be interviewed. Nevertheless, in our interviews, certain themes and concepts consistently resurfaced, providing us with certainty of their relevance and generalizability. ⁵⁵ The interviews were organized around the CSPs’ general collaborative dynamics for the DPP development, the process of establishing governance practices to coordinate its roll-out, and the challenges actors faced in this process. While relying on these overarching topics to structure our interviews, we adapted our topic guide to the focal interviewee. All interviews were conducted by both researchers via Zoom and lasted between 30 and 60 minutes.

Archival sources. For each CSP, we analyzed diverse secondary sources such as blog posts, press releases, podcasts, and publications developed by the CSPs or other institutions focused on the DPP. Archival data are a fruitful source of data as they provide helpful insights into change processes and rich records of a prime method of communication between key actors within a field. ⁵⁶ We also relied on other documents that provided helpful contextual information, for example, the websites of individual CSP actors. Finally, we collected video and audio material, such as podcasts or online webinars. One important data source was the “Product Pioneers Podcast,” which hosts several DPP experts, many of whom also participate either in the CSPs we interviewed or in other collaborative settings focused on the development of the DPP. The online webinars also hosted independent experts and actors involved in different CSPs around the DPP. In total, our archival data sources comprised 58 documents. All archival data were collected and coded in ATLAS.ti.

Data Analysis

To understand the tensions associated with data-sharing governance for circular cities, we relied on an open-ended theory-building approach, which started during the data collection stage and involved several iterative cycles. To analyze our data systematically, we collected all data sources in an ATLAS.ti database and coded the data in three steps, resulting in the abstraction to higher-level concepts. ⁵⁷ First, we coded all data related to the collaborative process around the DPP development and to how actors tried to organize rules and guidelines to structure this process. We specifically focused on passages where actors exposed the challenges they faced in establishing data-sharing governance. From these passages, we created first-order codes that were close to the raw data and mostly in vivo.

Then, we achieved a more theoretical interpretation of the first-order codes by aggregating them into second-order themes. During this step, we constantly iterated back and forth between the literature and our data to understand what the challenges associated with collaborative data sharing represent. Specifically, we understood that the challenges identified in the first round centered on three themes: (1) the amount of data sharing necessary, (2) the desired level of detail for the DPP data, and (3) the question of how many platforms are needed to share and store data efficiently. Moreover, we observed that these themes are associated with conflicting demands that push and pull CSP actors in different directions. In the final coding step, we thickened our analysis to provide a more theoretical interpretation of our second-order themes by building a set of aggregate dimensions. Drawing on the literature on tensions, data governance, and CSPs, we conceptualized the challenges CSP actors experience as tensions associated with data-sharing governance in CSPs. Specifically, we identified three tensions: transparency versus confidentiality, granularity versus feasibility, and platform multiplicity versus standardization.

Findings

Tensions Related to Governance of Data Sharing

In general, CSP actors are convinced that the DPP will be a meaningful tool to advance the transition to the CE. As one of them explains, “The DPP is the foundational requirement to get away from the linear to a circular supply chain” (Adrian van Mühlenen, BASF, Product Pioneers Passport podcast). At the same time, during the preparations for the DPP, actors discovered several unexpected challenges associated with it, especially regarding its governance. One interviewee describes: “We share a common motivation about the DPP. We see that it can be a great tool if it’s designed properly. What we don’t share is a vision on how to build it” (Interview, coordinator, CSP 1). Indeed, our findings reveal that the process of organizing data-sharing governance for the DPP is rife with collaborative tensions fueled by competing demands and interests between the different actors involved. Below, we unpack these tensions in more detail.

Tension 1: Transparency versus Confidentiality

The first tension that emerges in organizing data-sharing governance for the DPP revolves around striking a balance between actors’ willingness to share data with a wide range of actors, versus a simultaneous desire to keep their data confidential. Concerning the first pole of the tension, it is critical that actors ensure data transparency, because the DPP’s quality and circularity benefits will depend on the amount of data actors are willing to share. First, transparency is necessary for actors to be aware of the features and origins of products to make conscious decisions and engage in circular behavior. For example,

Digital product passports can provide the information and the transparency for people to know that the battery in my electric car really is as good as they claim and I’m not causing some unknown damage somewhere else in the world that I don’t know about.—Julia Poliscanova, Transport & Environment, Product Passport Pioneers podcast

Besides creating awareness around products’ circularity features and guiding circular practices, transparency is also necessary for CSP actors to monitor and measure the impact of their circularity efforts over time:

We are really aware that we can achieve our objectives of building a sustainable and responsible value chain because only if you have the transparency, you see whether the measures you are taking are effective and leading you in the right direction in the long run—Torsten Freund, BASF, Product Passport Pioneers podcast

Nevertheless, while CSP partners are thus aware of the importance of transparency, many of them are reluctant to reveal their data to actors with whom they were not required to share data before. Our findings indicate that actors have different reasons for not wanting to share the full spectrum of their data, starting with the fact that they are afraid to share sensitive business information:

In all those industries, I hear that the business confidentiality is important for them, and they actually don’t want to reveal their supply chain. For Audi, this is also extremely important for our business partners obviously. We have to be extremely careful about this aspect, respecting the need for the privacy of business relations.—Josef Schön, Audi, Product Passport Pioneers podcast

Second, data transparency is contested because the value of the data shared is not equally divided among actors. While some actors involved in developing the DPP have little to lose when sharing their data, this is much more critical for others. One of our interviewees elaborates on this as follows:

It comes down to the different roles of the organizations. So, you have some involved that actually produce software in these collaborations, and well, they want to use it in the future and other projects of their own, so to say, as well. They of course want to learn from real-world data and would most likely not want to share their specific code. Others are kind of mere data providers. They might also think what’s in it for us. Maybe startups who want to use the data actually being transported in the Battery Passport, they have only to gain from the Battery Passport. So, it’s the different roles of the companies within the project and their outlook of a business case that defines their willingness to share data in the end.—Interview, research institute, CSP 2

In a similar vein, our findings reveal that within CSPs, actors have diverging ideas on how to handle data, which in turn influences actors’ willingness to share them:

When you talk with U.S. or Chinese stakeholders, for example, they see, yes, perfect, a lot of data. So, we can use it and analyze it. But in Europe, when you talk about it, no, no, there’s data. It should be used for policy and environmental aspects; otherwise, it should be confidential.—Interview, research institute, CSP 1

Another concern some actors have is that sharing data across value chains for the DPP conflicts with already established regulations. As one of our interviewees explains,

When doing these pilots, we have recognized that it is neither necessary nor is it allowed to share all data with everyone. That has very practical aspects which are not resolved. So, take a look at the antitrust law. You’re not allowed to talk about markets vertically beyond the direct contacts. So consequently, if you really take it strictly, you’re not only allowed to see your supplier and your customer, but not your suppliers’ suppliers or your customers’ customers.—Interview, firm, CSP 2

Finally, several actors are reluctant to share their data as they question the value of complete transparency for the development of the DPP. One of our interviewees explains,

Yes, transparency is undeniably important, but I mean often it is confusing when we say we should have transparency, it’s transparency to what extent? If you say supply chain transparency, is it necessary for the consumer to know that this particular product has traveled to this specific supplier in India and I don’t know China and Turkey, let’s say, or is it sufficient for them to know that it just came from these three countries?—Interview, NGO, CSP 2

In sum, while data transparency is a prerequisite for the development of an efficient and high-quality DPP that will enable circularity benefits in the long run, our data reveal that CSP actors also have several concerns regarding sharing their data, fueling a tension between transparency and confidentiality.

Tension 2: Granularity versus Feasibility

A second tension that arises in establishing the data-sharing governance is what we call “granularity versus feasibility,” which concerns the question of the level of detail at which the data will be provided for the DPP. In terms of their level of detail, DPP data can be provided either in a very detailed manner, which implies that the information would be displayed for individual items, such as a single battery, or on the batch or model level—for example, for all products that share the same production number. Whereas this latter type of data would include only general information about a product, such as the type of materials it contains, DPP data on the item level would include not only the general product information, but also relevant data for that specific item, such as its unique repair history. Two main benefits justify the provision of granular DPP data: first, it allows for the collection of important information, which, in turn, enables the achievement of long-term circularity goals. For example, an interviewee explains the circularity potential of granular data for batteries as follows:

The battery status, all of those things that are in the battery performance information like remaining capacity, remaining energy, the SOH, or similar things will obviously be individual for the battery. The different modules or even cells or cell groups age differently due to production issues potentially or other things and having this information would help extend the lifetime of the battery.—Interview, research institute, CSP 1

Second, data granularity is necessary to ensure that a wide range of stakeholders can extract value from the DPP. While certain stakeholders, such as consumers, might not need very detailed information about products, other actors along the value chain need a higher level of detail to engage in circular actions. As an interviewee explains,

For example, as an end customer, you can only tell if your battery is an NCM or LFP type, job done! If you’re a recycler, though, it would be most interesting to judge the value of the battery you are receiving and then saying you have 11.2 kg of cobalt, 80.7 kg of nickel and so on to make the call on how much value can you extract from the spent device you’re receiving. And even steering a battery, a black box made from plastic with an aluminum inlay on the right pile to recycle, because you cannot recycle batteries, you can only recycle on one specific production line, the end-of-life battery of a certain type. And to distinguish the type, that information comes again from the battery passport, including how you dismantle the battery and safety advice.—Interview, firm, CSP 2

Despite its benefits for circularity, providing granular data comes at the cost of feasibility. A key concern is that providing more detailed data will be associated with complex technical requirements. One of our informants elaborates,

Besides those different interests from the companies around granularity, there are many issues with the technical solution side. So, if we need to transfer and store the amount of data times 10, that will make the technical implementation more complicated.—Interview, research institute, CSP 2

Another feasibility issue that challenges the provision of granular data concerns the question of data access. To ensure that the data provided are only used by those stakeholders who have a use case for it, the European Commission has proposed a model of “stakeholder-based access,” which implies that some stakeholder groups will have access to more detailed DPP data than others. In practice, this would mean that recyclers, for example, will have access to more detailed data than consumers. The viability of implementing this stakeholder-based access approach, however, is questionable. As one of our interviewees explains,

Now the European Commission calls it [stakeholder-based access] the interested persons with legitimate interest. But what does that really mean? And that can mean for different data attributes, different things. So, if it’s the detailed or less detailed composition, then basically the recycler is the only one who should kind of know what is in there or who has the use case to state they have an interest. But what do you do with companies that are vertically integrated? So that will be a tough thing, and how do you know that a company is on the blacklist or whitelist from the EU Commission? Then, in the end, that could be administratively a big thing to do.—Interview, research institute, CSP 2

Finally, our interviews reveal that providing granular data may be unfeasible, as this task might be outsourced to more marginal value chain actors, who are unable to bear its costs:

There is fundamentally an additional cost to providing data on the item level, so every time you get somebody to put in the information, track the information volume, and reconcile the information. Have somebody check all the stuff that has gone in and come out, and then equals that, has a cost that is undeniable. So, who’s going to bear that cost? If you’re saying that, yes, it’s absolutely necessary that we have that granularity and information, then we must equally ensure that the industry is willing to bear that cost and that that cost is not just shoved to the supply chain.—Interview, NGO, CSP 1

In sum, a second tension associated with multi-stakeholder data governance concerns the requirement for detailed DPP data on the one hand and the simultaneous need for feasibility around detailed data provision on the other.

Tension 3: Multiplicity of Platforms versus Standardization

A final tension that emerges during the development of data-sharing governance is what we refer to as “multiplicity of platforms versus standardization.” This concerns the question of how many platforms should be used to organize data sharing and storage among actors. Indeed, the DPP needs one or more digital spaces for data to be shared and stored. Using a multiplicity of platforms has several advantages in the eyes of some actors, starting with the prevention of a “platform monopoly” (i.e., the dominance of one platform). As an interviewee elaborates, “There have to be several suppliers of such a technology at the end so that not a single company or whatever platform would dominate it, especially not the big IT players already there” (Interview, research institute, CSP 2). Second, several actors see technical advantages in relying on multiple platforms. As our interviews show: “From the point of data traffic and IT infrastructure, having one huge database is seen as too challenging” (Interview, research institute, CSP 2). Finally, some actors advocate for the use of multiple platforms as they consider centralized systems to be “susceptible to cyberattacks and industrial espionage” (Project report CSP 1, 2023, p. 21). As one interviewee elaborates,

Imagine what would happen if you had all data in one centralized system and a hacker comes along, either blocking it from further use, deleting the history, or receiving access to the entire value chain information. So, knowing who buys how much from whom. Although you don’t have the price information, you can easily calculate back from technical information and cost positions. That would certainly be a disaster.—Interview, firm, CSP 2

Although several actors thus advocate working with a multiplicity of platforms for data sharing and storage, at the same time, many also call for a certain amount of platform standardization to ensure that data sharing and storage remain efficient. First, actors see standardization as necessary to prevent information asymmetries between actors across value chains. Our interviews show,

Standardization will be crucial. There are so many different private initiatives already there. They are completely different ecosystems and might often do the same. They call it differently, but they do the same and collect the same data. But yeah, they are collected in their system, and of course, in the end, when you would have several suppliers of such, you have to ensure that the same data is always available that you transported in the same unique way.—Interview, research institute, CSP 2

Second, a certain degree of standardization is necessary because working with a multiplicity of platforms is likely to create a multitude of different systems, that is, different standards and infrastructures, which might demotivate actors to contribute to the DPP. As one of our interviewees explains,

Especially now in the beginning there probably won’t be any single track and trace platform to rule the entire industry so until then that’s going to mean two things: either companies have to use multiple different systems and share data with all of them or the platforms work together and interoperate to that’s basically lighten the burden for companies to implement this and to share data.—Wouter Middendorft, Kryha, RCS Global webinar

Finally, some actors advocate for standardization, as they fear that relying on multiple platforms might lead to the creation of silos in value chains:

There are a lot of DPP-like systems under development already developed in Europe and many more in the car-making outside Europe. There is also a problem of internal markets because the DPP, if not fully interoperable, might create additional barriers and additional silos between different member states between different supply chains. That is something that, of course from the Commission perspective, we don’t want to happen.—Michele Galatola, European Commission, webinar CIRPASS

Hence, this final tension resides in the fact that, while data sharing and storage require a multiplicity of platforms, a certain degree of standardization is also necessary. Overall, our findings unfold three tensions associated with data-sharing governance for the CE: transparency versus confidentiality; granularity versus feasibility; and multiplicity of platforms versus standardization. Figure 1 summarizes our findings.

Figure 1.

Tensions associated with data-sharing governance for the CE.

Discussion and Conclusion

Acknowledging the Relational Complexity of Urban CE Transitions

Our study on urban CE transitions ⁵⁸ highlights the significance of the relational complexity inherent in such transitions. While extant research has paid some attention to relational factors associated with governing sustainable cities ⁵⁹ or city-level innovation, ⁶⁰ such a focus has been largely absent in the context of urban CE transitions. For example, research on urban metabolism, which has been influential in the debate on urban circularity, has mainly focused on quantifying material and energy flows in urban areas. ⁶¹ While such an approach is fruitful for understanding the overall ecosystem that constitutes urban circularity, it should be integrated with the social dimension of circularity to successfully realize urban CE transitions. ⁶² The tensions uncovered in our study support this need, as they unveil a dichotomy between the potentially unlimited opportunities for circular cities afforded by digitalization and the complexities of stakeholder relationships, which pose significant challenges to the transition toward circular cities. Indeed, the three tensions capture the unprecedented prospects for data sharing for the CE created by digitalization—that is, boundless transparency, hypergranular data, and a system that brings together a potentially infinite number of stakeholders. However, in practice, these prospects conflict with the realities and limits of stakeholder relationships, confidentiality concerns, and the complexity of interconnections within collaborative ecosystems.

Hence, the three tensions suggest that realizing urban circularity becomes unrealistic if stakeholders do not reconceptualize existing interdependencies and relationships. For example, the tension between transparency and confidentiality urges actors to reconsider their openness toward others, as the DPP requires them to share more data than before, beyond their traditional partner network. Likewise, the tension between granularity versus feasibility urges actors to consider how they can collaborate in novel ways to achieve an appropriate level of granularity. Finally, for the tension between using multiple platforms versus standardization, actors should invest time in collaboratively developing a set of standards that will enable them to find a middle ground between these two opposites. Developing an effective data-sharing governance model for a circular city thus hinges on stakeholders’ ability to overcome the relational challenges they experience.

Realizing circular cities is generally feasible but requires acknowledging their relational complexity, which significantly impacts this process. Specifically, the challenge of harnessing the potential of digital technologies in the context of urban circularity (e.g., full transparency) requires considering the relational implications this endeavor entails.

Addressing Tensions in Data Sharing for Urban Circularity

The tensions around data-sharing governance stem from the interplay between the need for data sharing to achieve long-term sustainability outcomes on the one hand and the sensitive nature of data sharing on the other. Data can ideally enable novel flows of material resources, facilitating the achievement of long-term urban circularity objectives. However, while actors involved in urban circularity CSPs should ideally provide maximum transparency, granularity, and connection between data platforms, our findings show that, in practice, this is challenged by several confidentiality and feasibility concerns. Hence, governance in the context of CSPs for circular cities entails a trade-off between sharing data to attain long-term circularity objectives and acknowledging its sensitive and complex nature.

How can city actors respond to these tensions to realize their objectives? With regard to the tension between data transparency and confidentiality, studies from the context of mobile supply chains highlight a few strategies to address this tension. It is crucial to ensure that there is full clarity with regard to the goals and vision behind data transparency from the beginning of the collaboration, and that all communication policies, as well as the terms and conditions included in the confidentiality contracts, are provided to all partners. ⁶³ In line with this, information about the users, processes, roles, and servers involved needs to be determined beforehand. Moreover, strategies to determine the type of sensitive information, the time and scope of disclosure, and the provision of frequent feedback (both positive and negative) should be adopted. Finally, it is crucial that all partners are made aware of how they can benefit from this disclosure. ⁶⁴

A solution to address the tension between granularity and feasibility could be provided by artificial intelligence (AI), which can foster the standardization and interoperability for the efficient provision of granular data. ⁶⁵ In particular, AI could assist in classifying the level of data granularity required for specific stakeholder groups, ensuring that each actor is provided only with data at the appropriate level of granularity for their needs. To illustrate, citizens and consumers will mostly require less granular data from the DPP compared with actors such as recyclers or municipalities. AI could be a fruitful solution in this classification process to ensure that highly granular data are only received by those actors who really need it. This would address concerns about feasibility and data security by ensuring that not all data need to be provided at the same level of granularity, and that granular data are not shared with actors who do not have a use case for it. In addition, blockchain technology can make the provision of granular data more feasible as it can collect relevant data from other applications. For example, studies in the food value chain have shown how blockchain fetches data from IoT sensors installed on the farmland and subsequently pre-defines the data logic process and uploads relevant IoT data into the blockchain ecosystem. ⁶⁶ In doing so, concerns around the feasibility of providing granular data can be addressed, as blockchain would take over a large part of the data collection process. Finally, technologies such as smart sensors or tags can be used to aid the process of delivering granular data in an efficient manner. For example, studies in the fish industry have shown how data-sharing accuracy between different actors in the value chain is ensured by using radio-frequency identification (RFID) tags that trace fish from their origin and collect relevant data that is transmitted directly from sensors. ⁶⁷

Finally, blockchain technology could also be used to address the third tension between platform multiplicity versus standardization by offering a standardized and safe data storage system that can be accessed by several stakeholders within a city. As such, it would alleviate concerns around the safety of using one single platform as well as the lack of standardization associated with using multiple platforms. ⁶⁸ Overall, our findings show that, to attain their circularity objectives, data-sharing governance in urban CSPs needs to strike a balance between the benefits that data can bring and the tensions they may fuel. Digital technologies may be particularly useful in navigating this balance.

Managerial Implications

Data-sharing governance in CSPs for urban circularity is a complex issue that is likely to create several tensions. There are three sets of tension-specific implications for CSP partners that pursue data sharing for circular cities and for municipalities supporting these initiatives. Structured, cross-sectoral data-sharing initiatives following the principles of the DPP will also emerge at the city level. Therefore, understanding the potential tensions will enable CSP partners and municipalities to effectively address them. Table 1 presents an overview of the tension-specific implications.

Table 1.

Tension-Specific Implications.

Tensions	Managerial Implications for CSP Partners	Managerial Implications for City Policy Makers
Transparency vs. Confidentiality	• CSP partners should collaboratively develop a clear set of guidelines on how to handle data.	• City policy makers should create “safe spaces” for private discussion of the partners’ data prior to sharing.• City policy makers should foster a shared framing of the value of transparency for circularity.
Granularity vs. Feasibility	• CSP partners should collaboratively evaluate at what point in the product’s lifecycle granular data are more valuable, and where they are less critical.	• City policy makers should stretch the long-term circularity benefits associated with granular data and link them with the city’s strategic plan on circularity.• City policy makers should provide support to overcome CSP partners’ technical barriers to granularity.
Multiplicity of Platforms vs. Standardization	• CSP partners should collaboratively scrutinize standardizable elements in data sharing and storage.• CSP partners should collectively develop solutions to prevent potential asymmetries between different platforms.	• City policy makers should facilitate contact between different local CSPs to foster collaboration for alignment and standardization• City policy makers should facilitate communication and alignment within the network of CSPs for data sharing active in different cities.

Transparency versus Confidentiality

To address the tension between transparency and confidentiality, the partners of an urban data-sharing CSP should commit to collectively developing a clear set of guidelines for data handling early on. Specifically, CSP partners should discuss how to handle their data prior to developing collaborative solutions and set clear rules for all partners to follow. It would also be important that city policymakers, as intermediary actors, create “safe spaces,” that is, small-scale environments in which partners can privately discuss the nature, value, and potential use of their data before sharing it with the entire CSP. Our research has shown that the use of data differs strongly between actors, which is one of the reasons they are reluctant to share data. Deliberatively creating spaces for CSP partners to privately discuss the use of their data can provide a means to advance the collaboration, despite the sensitive nature of data sharing. City policymakers who are committed to leading a transition to a CE should promote a shared understanding, or “framing” of the value of transparency for circularity within the CSP. This would help address partners’ concerns regarding the need for “full” transparency.

Granularity versus Feasibility

A first implication arising from the tension between granularity versus feasibility involves collectively evaluating and discussing the long-term circularity benefits for the city that come with sharing granular data. City policymakers who have a comprehensive understanding of the urban area should encourage CSP partners to work together to understand these benefits early on, linking them with the city’s strategic plan on circularity. This will help CSP partners understand why exactly they need to provide their data at such a detailed level. At the same time, partners should collectively engage in finding the right balance between data granularity and feasible solutions by evaluating at what point in the product’s lifecycle granular data are more valuable, and where they are less critical. Finally, city policymakers should aid CSP partners who want to provide granular data but face technical challenges. Given the typical budget constraints faced by municipalities, this support could be collective, such as through technical seminars, and by involving partners with the needed technical means and expertise.

Multiplicity of Platforms versus Standardization

To manage the tension between the use of multiple platforms for data sharing and storage within the same city versus platform standardization, CSP partners should first scrutinize which elements of data sharing and storage can easily be standardized. They should then collectively develop solutions to enable this standardization. In a similar vein, CSP partners should jointly design approaches to prevent potential asymmetries between different platforms. This may require communication between CSPs engaged in the development of different platforms for data sharing in the same urban area. Hence, city policymakers should facilitate contact between different local CSPs to foster collaboration for alignment and standardization. It may also be important to extend this dialogue to CSPs created in other cities within the same region or country, as some partners may operate across a specific urban area and be involved in multiple CSPs for data sharing in different locations. Therefore, it would be efficient for them to share data on platforms that have a certain degree of standardization. In addition, some production processes may extend beyond the borders of a specific city. Thus, a high degree of standardization between platforms would make it easier to comprehensively trace material flows. City, regional, or even national policymakers would play a vital role in facilitating communication and alignment within the network of CSPs for data sharing active in different cities.