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Making a Business Case for Sustainable Packaging

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How can brands justify funding sustainably beneficial packaging that may cost more?

Noticeably absent from most public conversations about sustainability are the financial considerations. It’s the 800-pound gorilla in the room that many chose to ignore in public forums, but it is ever present. 

In the past, whenever the environment, sustainability, recycled content, and related topics were mentioned, the desired goal was usually followed by “as long as it doesn’t cost more.” 

The reality then was that companies were all for a different approach as long as it didn’t impact the balance sheet.

What is different today is that many companies are willing to take a hit on packing costs for the greater good of the brand and company. They are making concerted efforts to move into sustainable packaging and processing, even though in many instances these materials are going to cost more.

Why is this happening?

  • Consumer pressure is on the rise.
  • Avoidance of negative publicity regarding the brand’s packaging.
  • Minimize regulatory issues.
  • Growth opportunities.
  • Corporate desire to minimize carbon footprint.
  • Pressure from investors/private equity companies/community.
  • Desire to attract a like-minded workforce.

Because this scenario sets the stage for a complex funding ecosystem, involving a wide range of stakeholders that will agree to funding requirements is critical.

In many cases, private equity companies are demanding that their acquisitions incorporate a robust sustainability program.

In fact, there are some that are even divesting portfolio companies that are not aligned with their sustainability objectives. When a sustainability-minded private equity owner is involved, then the likelihood of funds getting greenlighted for these efforts is higher. 

Here are other stakeholders whose financial involvement could be critical:

  • Corporate
  • Marketing
  • Brand
  • R&D
  • Packaging
  • Sustainability

There are also additional considerations/metrics that should be considered for the sustainability program to become successful. These include:

  • Start with a narrow product focus; don’t try to do too much, too soon.
  • Set measurable goals.
  • Conduct cost/benefit analyses.
  • Create incentives for employees and suppliers.
  • Understand where your funding is coming from.

It’s important to make the business case for sustainability clearly understood across the organization. Some companies go so far as to invest in their supplier’s sustainability to improve incoming materials. All key stakeholders need to understand the goals and metrics so that everyone can move forward in alignment.

Craig Robinson is the global vice president of business development and innovation at PTI. He has decades of experience in integrated marketing, concept development and sales management in packaging and branding.

PTI is a global source for preform and package design, package development, rapid prototyping, pre-production prototyping, and material evaluation engineering for the plastic packaging industry. For more information: www.pti-usa.com.

 

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