Sustainable Packaging

By Anne Marie Mohan, Senior Editor

The Risks for Brands of Not Doing Enough

In a recent article in The Financial, Gartner, Inc. estimated that 90% of those companies that have made commitments to sustainable packaging—in particular, 100% of their packaging being reusable, recyclable, or compostable by 2025—will not meet their goals. That begs the question, what happens then? Is it merely about consumer perception? Are consumers even aware of these commitments? Who’s keeping track?

One organization that’s keeping very close track is As You Sow. As You Sow is a non-profit foundation chartered to promote corporate social responsibility through shareholder advocacy, coalition building, and legal strategies. Last year, the foundation released a comprehensive report, the “2021 Corporate Plastic Pollution Scorecard” (see pwgo.to/7458) that evaluated 50 of the largest consumer-facing companies in North America against 44 metrics divided among six pillars of corporate responsibility on plastic packaging: Packaging Design, Reusable Packaging, Recycled Content, Public Data Transparency, Supporting Recycling, and Extended Producer Responsibility (EPR).

To compile the scorecard, As You Sow gathered metrics information for each company from sources such as the Ellen MacArthur Foundation’s Global Commitment 2021 Progress Report and from companies’ sustainability reporting. From that information, As You Sow gave each company a grade in each pillar and an overall grade, from A to F. Spoiler alert: None of the companies in the report received an A, and only one received a B. The rest of the 49 companies received a C, D, or F. Who got the B, you ask? The Coca-Cola Company.

Among the more notable findings in the report, As You Sow reported a ninefold increase in the number of companies having a plastic reduction goal, compared to the number of those that reported having one in the foundation’s “2020 Waste & Opportunity” report; a majority of the 50 companies have committed to 100% recyclable, compostable, or reusable packaging; and although the reusable pillar was one of the lowest-scoring pillars, the majority of companies evaluated are beginning to explore reuse, with some conducting pilots.

Also uncovered, an increased number of companies—now nearly half—have established goals around the use of recycled plastic content. “However, the availability of supply is lacking, and in order for companies to meet their goals, they need to support policies that will increase the availability of recycled material,” shares Kelly McBee, Waste Program Coordinator for As You Sow and the author of the report.

One positive trend, McBee notes, was the increase in companies reporting the amount of plastic they use. In 2020, only 11 were reporting this information; in 2021, that number rose to 24. Although, she adds, a drastic increase in the number of companies disclosing this information is vital. “This is an important indicator for investors to track how companies can simultaneously balance growth while decoupling that growth from plastic, especially disposable plastic,” she explains. “Are these companies growing while exploring reuse, for instance, or are they growing while continuing to rely on disposable packaging? Without having data on the tonnage of plastic and overall units sold, this is an evaluation that can’t be made.” And this is where companies begin to see the consequences of not making progress toward or meeting their published sustainable packaging goals. According to Bruno Monteyne, Senior Analyst at investment research house Bernstein Autonomous, who spoke during a webinar on the As You Sow scorecard, “Whether you call it a fad or not, there’s a massive obsession in the asset management industry with ESG [environmental, social, and governance issues]. The big institutional investors want to make

This transition to more sustainable sure that how they invest their money packaging or no packaging is is in line with these ESG goals. And obviously plastic is a very big part of the extremely expensive. If you don’t do environmental issue. It’s such a big trend, it quickly enough with the right R&D, if a company doesn’t do enough in this you risk being at a cost disadvantage. area, it will struggle to attract investors.” A second risk, he shared, is to the company’s brand. “Big companies live by the grace of their consumers,” Monteyne said. “They have a right to charge $10 for something that only costs $2 to manufacture, but they can only earn that right through an emotional connection with their consumers. Therefore, as this topic shoots up on consumers’ priority list, failing to act poses a massive risk.” Another risk, he shared, is around legislation. Although all of the companies in As You Sow’s report have North American operations, a majority also have operations in Europe, where packaging legislation, especially around the reduced use of virgin plastic, is progressing quickly. “If a company is not ready for this transition, they risk legal consequences,” he said. And finally there is the cost risk. “This transition to more sustainable packaging or no packaging is extremely expensive,” Monteyne explained. “If you don’t do it quickly enough with the right R&D, you risk being at a cost disadvantage. In conclusion, Monteyne explained that “there are plenty of risks—sales risks, legal risks, cost risks, and profitability risks” to not meeting company sustainability commitments. And companies can bet firms such as his will be closely monitoring reports, including as You Sow’s scorecard, to point investors in the right direction. Be advised, as in the classroom, an F isn’t going to cut it. PW