When it comes to sustainability, no one put it better than Thomas Jefferson, the third president of the United States, who wrote in 1789: "The Earth belongs to each generation during its course, fully and in its right no generations can contract debts greater than may be paid during the course of its existence."
The key idea is that sustainability means making decisions and adopting courses of action about the use of natural resources that support life on the planet at the present time without placing onerous limitations on the availability of those resources in the future.
Competitiveness expert Michael Porter's "shared value chain" concept has proved a strong correlation between a business's competitiveness and the health of the communities around it.
Many companies are committed to creating enduring value for their own organisations and the environment by adhering to Triple Bottom Line reporting standards, which consider People, Planet and Profit as the three main pillars. Regulators such as the US Environmental Protection Agency have a compliance-focused environmental management system that uses a "plan, do, check, and act" model for continuous improvement, sustainability performance and disclosure. As far as customers are concerned, they value sustainability highly, as seen in increasing demand for products and services that provide economic value with lower environmental impact.
Packaging is an integral part of the product development process and later product life cycle. The four key functional attributes of packaging across a product's value chain are: (1) to preserve and protect, (2) to communicate brand image, (3) to convey information, and (4) to offer convenience. So, how does a requirement to be sustainable square with the functional attributes of packaging?
Sustainable packaging can be defined to include the following elements that fit well with the functional attributes mentioned above, because it:
- helps to effectively reduce packaging weight and volume;
- causes a reduction in waste-to-landfill through a 3R framework (reduce, reuse and recycle);
- lowers environmental impact across the supply chain in terms of eco-friendly procurement, redesigned production processes and green logistics, reducing carbon emissions to air and water;
- reduces product waste through extended shelf life and prevents damage or contamination;
- delivers a clear value proposition to customers and consumers which is both sustainable and economical for enhanced brand value.
Is sustainable packaging is a short-term fad or a long-term agenda? If governments, retailers and fast-moving consumer goods (FMCG) companies are to be believed, then the commitment to sustainable packaging is surely long-term.
Governments have been increasingly active to pass directives on improving and optimising packaging design and maximising recycling content. For example, at least 30 OECD countries have regulations aimed at reducing packaging waste. China has a packaging master plan that includes legislation to restrict, recover, recycle and reuse all packaging materials. In the EU, all 27 countries must comply with the Directive on Packaging and Packaging Waste. It specifies minimum design standards for recyclability and requires countries to recover and recycle specified volumes of packaging waste.
It is not surprising, then, that retailers and FMCG companies are feeling pressure to seek cost-reducing or cost-neutral sustainable packaging from their packaging suppliers. However, these customer demands as experienced by packaging suppliers have been diverse, which makes standardisation difficult.
Among retailers, the global leader Wal-Mart uses a packaging scorecard and aims to reduce packaging in the supply chain by 5% by 2013. In the UK, Marks and Spencer targets zero landfill by 2012.
For FMCG companies such as Unilever and P&G, the sustainability requirements and goals are quite different. The Unilever Sustainability Living Plan 2020 aims to halve the waste from product disposal by 2020. The strategy includes reducing packaging weight by one third by 2020 through use of lightweight materials and better designs, providing consumers with refills for better reuse, and co-operating with NGOs to increase recycling rates by 5% by 2015 and by 15% by 2020 in the top 14 countries where Unilever operates.
Procter & Gamble, meanwhile, says that by 2020 it aims to use 100% renewable or recycled materials in all products and packaging and plans to have zero landfill for all its consumer or manufacturing waste.
Notwithstanding the sustainability goals of retailers and manufacturers, a common denominator that binds all is that any sustainable solution (from packaging suppliers) should be affordable, as consumers remain price-sensitive.
Juggling multiple sustainability demands from consumers and fulfilling those demands at competitive prices will definitely be challenging for packaging companies. But as the saying goes, with unity no challenge is insurmountable.
At an industry level, packaging companies should collaborate and communicate closely with each other, and with suppliers and customers, to ensure that standardisation of objectives and specifications for sustainable packaging are based on sound understanding of technical and functional requirements of packaging, infrastructure constraints and economic viability. Only then can the environmental footprint of packaging be reduced competitively across the value chain through properly focused R&D and innovation.
Poramate Larnroongroj is the managing director of Thai Containers Group Co Ltd, SCG Paper Plc. The Link is coordinated by Barry Elliott and Chris Catto-Smith CMC of the Institute of Management Consultants Thailand. It is intended to be an interactive forum for industry professionals; we welcome all input, questions, feedback and news at: Barry.Elliott@inslo.com
About the author
Writer: Poramate Larnroongroj