Eco-efficiency or circular economy model? Both strategies have merit. Which choice is right for you?
At the Sustainability in Packaging event sponsored by Smithers Pira in March 2014, several conference sessions ended with a debate about preferable end of life treatment—such as the recovery of flexible packaging, the issue of marine debris and more. Recycling had taken a back seat to increasing trends in new biobased polymer technologies and food waste; however, the debates demonstrate that the end-of-life management issues raised by both trends have been “recycled” (pardon the pun).
The debates at the conference centered on two different philosophies: practices that are more resource-intensive today but are truly able to be sustained in the long term, versus practices that have a quantifiably lower environmental footprint today, but not necessarily in the long term. PE International and the Sustainable Packaging Coalition have helped many companies wrestle with this dichotomy in their own efforts. This article will outline the issues and ideas behind how an organization should approach the question.
At the conference, the debates came up in the context of a few different conversations, but in particular surrounded the recyclability of flexible packaging.
Generally speaking, most companies choose to move to lighter weight designs (like flexible packaging) as part of their sustainability efforts because of the potential for significant reductions in materials used, energy consumed, transportation burden and even total waste (that is, even for flexible packages that aren’t recycled, the total waste burden can be lower than recyclable materials if rates of recycling are low). Happy Family brands, for example, presented on the success of its new flexible packaging design as part of its sustainability initiatives. The questions from the audience following the presentation suggested the need to move away from a linear, industrial model, toward a closed-loop, “circular” economy model.
A circular economy, as defined by the Ellen MacArthur Foundation, is “an industrial economy that is restorative by intention; aims to rely on renewable energy; minimizes, tracks and hopefully eliminates the use of toxic chemicals; and eradicates waste through careful design.” This is contrasted with most current business models, which are linear in nature.
Generally, resources are taken from the environment, made into products and are discarded at the end of useful life, typically ending up in a landfill. Sometimes recycling steps are included within a linear process, but these steps have the effect of delaying its final disposal cycle rather than preventing it completely.
In the language of packaging, we will oversimplify this to be a debate between recyclable and/or renewable packaging and packaging that is simply more efficient than packaging from a previous generation.
Our petroleum-based packaging infrastructure is both well-established and highly efficient, while our material recovery infrastructure has been slow to catch up, and infrastructure surrounding non-traditional packaging materials (such as biopolymers) is in its infancy. This can mean that, today, more non-renewable fossil resources might be required to produce recyclable or biobased polymer packaging than to produce the traditional petroleum-based alternatives. We know we cannot rely indefinitely on the current system despite its relative efficiency, as this efficiency depends on a finite resource. However, choosing recyclable or biobased polymers has the potential to increase our fossil fuel burden in the short run.
As such, we end up with two strategies:
1. Eco-efficiency—Choose the most resource-efficient option, even if this does not use renewable resources and is more difficult to sustain in the long term.
2. Circular economy—Choose renewable resources or recyclable designs, but accept a less-efficient overall packaging option in the short term. This option can require a complete system redesign, and includes a lot of uncertainty and investment.
So which do you choose for your strategy? And what tools are involved to drive success?
Making your choice
Building your strategy around efficiency or around a circular economy are both solid concepts—and both have the potential to lead us to unintended consequences. This article doesn’t try to refute or defend either, but rather emphasizes the point that both may have a place in your approach to sustainable packaging—the extent of which is up to you.
As PE has written in other recent articles (“Making Sustainable Packaging Stick,” “The Myth about LCA in Packaging” and 5 Steps to Sustainable Packaging ), your own corporate sustainability vision and strategy should be the guidepost for your choices. With that said, here is a summary of four key considerations:
1. What is your own desired leadership positioning? Closing the loop on packaging requires investment, leadership and vision. If your company is a “first to be second” type of company, you might be best served allowing the leaders to blaze the trail. It doesn’t mean you aren’t thinking about or even supporting a longer term vision, but your targets and initiatives may stay focused on efficiency. Companies that seek to “blaze trails” and serve as innovation leaders may make a conscious decision to apply technologies that may not be the lowest carbon or lowest waste today, but that are setting important initial steps toward the ultimate future state. Recognizable examples include Coca Cola’s PlantBottle and method’s Ocean Plastic Bottles. Efficiency can also drive meaningful change; companies setting significant reduction goals do, in fact, contribute meaningfully to our near-term needs for conservation.
2. What are the key impacts of your product system? Packaging is not negligible in its contribution to environmental impact, but it may be that you’ll get a bigger bang for your buck with a focus on something you didn’t expect. Life-cycle assessment is useful in this regard, as a way to help focus your attentions.
The biggest potential unintended consequence of the circular economy around packaging is that we lose sight of what’s important to the product supply chain. Reduction of packaging that increases the chance of product damage or spoilage is the most notable example. It takes a focused effort to consistently consider holistic product systems in your packaging process. See PE’s article on the “Myth of LCA in Packaging” for demonstration of how LCA can play a role in either strategy.
3. What are your stakeholders’ perspectives? The priorities and values of your consumers, customers, communities, employees and other stakeholders should at minimum inform your strategy. Driving business success with sustainability usually ties back to meeting their expectations.
4. What is the associated brand/sales impact? Responding to stakeholder expectations doesn’t necessarily require a change to your brand promise or message. And, conversely, the lowest overall impact design may not be the most “brandable.” Be true to your brand commitment and be mindful that messages consumers don’t understand could represent a significant investment in brand communication.
In sum, trends and stakeholder expectations of end-of-life management continue to change, and it’s important for all companies concerned with the sustainability of packaging to be aware of new technologies, infrastructure updates and the priorities of stakeholders. Taking a strategic approach enables a response that provides the foundation of consistent messaging and meaningful progress—however you define it for your organization.
This article was written by Laura Flanigan, Nina Goodrich and Sandy Smith.
Laura Flanigan, Director Consumer Goods Sector at PE International, has with 13 years of experience developing, implementing and evaluating customized strategies, frameworks and tools to help clients achieve their visions for sustainable products, business practices and operations.
Nina Goodrich, Director, Sustainable Packaging Coalition, and Executive Director, GreenBlue, came to GreenBlue with an industry background in R&D, innovation and sustainability strategy. She believes that innovation and sustainability are linked as key drivers for our future.
Sandy Smith, Managing Director, U.K., at PE International, has 14 years of experience in product sustainability and advising business on how to integrate sustainability issues within their business strategies and operations.
Illustration courtesy of the Sustainable Packaging Coalition from its Design Guide for Sustainable Packaging.