Written by: Betsy Dorn on August 31 2013 for Packaging Strategies
In the United States, packaging manufacturers, brand owners, and their respective industry associations are assuming greater responsibility for the end-of-life management of their products and associated packaging. An entire new cadre of professionals now exists to work in this arena. Conferences and meetings addressing this topic abound, and new organizations have cropped up with producer responsibility as their sole mission. Companies are becoming increasingly involved in building the recovery infrastructure for their packaging, and some are even creating new product lines to serve as “closed loop” end markets for the packaging recovered.
This movement has been fueled by customer demand and a desire to retain or grow market share more so than by legislation. A significant driver has been Walmart’s establishment of its “Live Better” scorecards and the growing expectations of Walmart that suppliers provide packaging that is recyclable and sustainably sourced.
Retailer behavior, of course, is driven by consumer demand and in this case, consumer demand for products that are environmentally friendly as well as “natural” and healthy. Demand for green products is even higher in other countries, prompting multi-national companies to set high global sustainability goals (including recycling goals) that all of their markets are charged with meeting. Some of these goals will be particularly challenging for attainment in the U.S.
With respect to policy drivers, EPR legislation for packaging has yet to be enacted in the United States. However, other policy measures, such as local plastic bag bans are getting passed in various parts of the country. The last thing the packaging industry and brand owners want is a patchwork of policies implemented at the local level – something even more threatening than a state policy patchwork. Whether EPR legislation takes hold in the United States remains to be determined. Many companies are not waiting for the answer to this question, and instead, are moving forward with voluntary producer responsibility initiatives, recognizing that strong voluntary programs may lessen the need for legislation as well as better position their companies in the event that legislation is passed.
Of significant concern globally is the rising scarcity of both virgin and secondary resources. Companies dependent on these resources are becoming increasingly active in efforts to increase diversion of these materials from the waste stream in order to increase the overall supply as well as to directly control key sources of supply via long-term contracts and vertical integration. As supply further tightens, the competition for resources will grow all the more fierce.
Another growing concern is that a substantial amount of secondary materials supply recovered in developing countries is collected via the informal sector consisting of men, women, and children working in unsafe conditions manually picking recyclables from open dumps and landfills. Many companies are coming to realize that it is socially irresponsible and risky for them to rely on such sources of supply, yet it is equally irresponsible to bypass what is often the sole means by which these individuals survive. Consequently, efforts are growing to assist the informal sector in becoming better organized, equipped, and educated to enable them to run their businesses more effectively as well as to possibly one day find alternative employment. Reclay StewardEdge is working with clients who are part of this movement to address the needs of the informal sector and improve the sustainability of recyclables supply in developing countries.
Third, but certainly not least, is the growing public awareness and concern over marine debris – a very serious environmental problem that currently has no solution. Heightened public concern over this issue may bring about an entirely new set of expectations on producers, particularly those in the plastics industry and using plastic packaging: To end the flow of packaging into the oceans and to clean up what has been accumulating for decades.
I believe that EPR legislation for packaging will become a reality in selected U.S. states within this time frame, based on the trends in Canada and passage of EPR legislation for other materials in the U.S.
Also, I believe the resource scarcity issue will become a bigger concern to packaging manufacturers and brand owners – especially multinational brands. Growing concerns regarding food scarcity and access to safe drinking will also have implications for packaging – as a means of reducing waste and more efficiently transporting products globally.
In addition, the ongoing advancement of social networking and information exchange via the internet will increase pressures on companies to be responsive to consumer interests and to set and track progress toward achieving sustainability goals in a transparent and rigorous fashion. We see this as a growing area for our consulting practice – to assist with sustainability goal setting, data gathering, and performance monitoring with respect to end-of-life management – both in legislated and non-legislated environments.
Finally, companies will move towards greater collaboration, as individual firm efforts reach their limits – both from a financial and influence standpoint.
I suggest that the packaging industry consider three things in particular. First, keeping one’s head in the sand will not work, as trends show that the need and demand for producer responsibility is increasing and will not go away. Being proactive, rather than reactive, with respect to product stewardship in the packaging arena is likely to yield better results from a business standpoint in the long run.
Second, the packaging industry must at some point accept that recycling collection and processing systems have their limits with respect to the forms and types of packaging that can be handled yet still result in marketable end products of the quality that many of these same companies will require to manufacture new products. There must be a systems-based partnership approach involving sustainability managers, packaging designers, procurement personnel, recyclable materials handlers, and end users that recognizes each stakeholder’s role and capabilities in the value chain. This is currently not the case, and this needs to change.
Finally, the end-of-life management of packaging is an evolving arena. No perfect solutions have yet been found, nor will one size fit all. The packaging industry needs people who are willing to step forward and be change leaders to drive innovation and progress in the industry and help pave the road ahead.