Tag Archives: Unilever

EPR for Packaging in the U.S. – the Landscape

It is widely known that the route to producer responsibility in the U.S. has been markedly different from the route taken in Europe and, to a degree, Canada. In the U.S., issues were prioritized based largely on toxicity. When the Product Stewardship Institute (PSI) held its first national product stewardship forum in 2000, we asked state and local solid waste management officials across the country what they considered their biggest waste management problems. By far, the number one issue was electronics, followed by mercury products and paint. For this reason, in the U.S., we focused on these products as the top issues.

Europe, however, started with Germany’s packaging law in 1990. Over the past 20 years, more than 30 European countries have adopted extended producer responsibility (EPR) programs for packaging. Four Canadian provinces have now enacted packaging EPR laws. And the U.S. is still building the groundwork for action.

Here is how the landscape is shaping up for EPR for packaging in the U.S.  Proponents of EPR include, not surprisingly, state and local government agencies that started the U.S. product stewardship movement. However, all governments are interested, not just those in progressive states. The cost of managing waste has become a big issue for government, and they are ready to act. Governments are interested in saving money, but are also concerned about the loss of control over the collection of recyclables from households. PSI has been convening its state and local government members to figure out the type of EPR system they want as a model in the U.S.  Other EPR supporters are, also not surprisingly, environmental groups. And that is where the current support for EPR for packaging and printed materials stands at the moment.

There are some exceptions among industry. Nestle Waters North America (NWNA) has stepped out as a major proponent of EPR, and PSI is working with them, among many others. NWNA wants to show that EPR can result in increased supply of recycled materials on par with the rates achieved by beverage deposit laws. This position is not to be confused with the position of others in the beverage industry that developed the EPR packaging bill in Vermont in 2010 that included EPR only if the state’s 40-year old container deposit law was repealed. That strategic misstep has confused many people into believing that EPR is synonymous with a repeal of the bottle bill, and has created great animosity among stakeholders. But it has gotten people talking.

“If success is measured by the achieved recycling levels, then member states with strong producer responsibility systems have successfully increased overall rates.” 2005 European Commission Study on Packaging Waste and Options to Strengthen Prevention and Re-use of Packaging

Consumer packaged goods (CPG) companies have, for the most part, been uninterested in engaging in a discussion about EPR for packaging in the U.S., even though their counterparts are operating under the exact same systems in Europe and Canada. Sierra Fletcher, our Director of Policy and Programs and I spent four meetings over nine months with representatives from P&G, Kraft, Unilever, Colgate-Palmolive, ConAgra, and other CPG companies in meetings held by the U.S. Environmental Protection Agency. These companies, in general, believe that we can increase recycling significantly solely by optimizing the current system. In my ten years of engaging brand owners in EPR, we know that this is a necessary step in the process because the existing system can always be made more efficient, and that reduces cost. But it is always only a stage in the process of moving toward an understanding that EPR, and perhaps other systems, are also needed. Only two CPG companies – Estee Lauder and SC Johnson – have engaged PSI in a real discussion on EPR. Estee Lauder is a big fan. SC Johnson does not believe it is the right solution.

The rest of the stakeholder groups are in learning mode, and this is who PSI is talking to.

End users of glass, plastic, paper, aluminum, and other metals – so called commodities – have started to warm to the idea of learning about EPR. The Association of Post-Consumer Plastics Recyclers invited me to speak at its annual meeting in June. I found an engaged and interested group of plastics recyclers that were desperate for ways to increase the recycling of plastics. They want more supply of high quality recycled plastics at the best possible price. They are looking at all solutions, and their staff and policy committee smartly have begun to learn about EPR and how it can help them. Have they embraced EPR whole-hog? No. But do they think EPR might be part of the solution for more business and more jobs. Absolutely.

Plastics recyclers are leading the commodity groups in understanding that quantity, quality, and price can possibly be achieved by EPR. But aluminum is not far behind. I just got back from a trip to Chicago where the Aluminum Association had its annual meeting. I spoke to aluminum industry executives about what EPR is and isn’t, and how EPR and the bottle bill can live together or apart but that the decision should be up to the brand owner as to how they will meet aggressive performance goals. Aluminum industry representatives asked all the right questions, and we have begun a healthy discussion.

Representatives of glass and paper commodities are still warming to the idea of even having an in-depth discussion about EPR. But PSI is talking to them as well. A key concern of the paper industry is why they should face the potential transactional costs of a shift to EPR when their material is already recycled at a high rate.

We are also having discussions with waste management companies, which view EPR as a potential threat to their business models. These companies have invested in recycling and waste disposal trucks and facilities, and in a business strategy that will need to be flexible to respond to the changes ahead with EPR.

Other groups are pushing the conversation as well. The newly formed PAC-NEXT, based in Canada but working with retailers, CPG companies, and related businesses that operate across North America, has invited PSI to engage with its corporate members with the goal of helping the packaging industry transition toward a world without packaging waste. PSI is co-chairing a PAC-NEXT project to develop best practices for post-consumer material recovery, including EPR, which will lead toward harmonization of programs in North America. And Future 500 out of San Francisco is selectively engaging stakeholders on EPR in the U.S.

Packaging and printed materials is a product area that is much different from others we have tackled in the U.S. – yet at the same time it shares with other products the fact that our traditional waste management system has relied on the patchwork of local and state governments to clean up after us. A solution will not be achieved overnight, but we are starting to build it. There are many stakeholders with multiple interests that need to be melded into a cohesive agreement that is sustainable. These stakeholders are not at the same place in their interest and willingness to develop a model EPR bill in the U.S. But these discussions are taking place, and coalitions are forming.

But the first thing that needs to happen is that people learn the facts, and that is where PSI is spending its time – educating all stakeholders about EPR so that they understand how EPR will result in less waste, more recycling, more jobs for the recycling industry, and lower costs for government. This is all about how good government and the right regulations CREATE jobs. It is time for this reality to be heard loud and clear in America.

Check out the article in Plastics News reporting on my presentation to the plastics recycling industry. Although there are a few factual errors in the article, it will give you a good sense of what I said, and about how EPR can increase material supply and quality, and lower costs.

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My Trip to Wal-Mart: In Search of Sustainability

Edit: visit PSI’s Flickr page to see some photos from the 6th Annual Walmart and Sam’s Club Sustainable Packaging Exposition.

Over the past few years, Wal-Mart has successfully shed its image of fueling America’s thirst for low-cost consumption to become a leader in the emerging field of sustainability. Recently, I had the opportunity to speak about product stewardship at Wal-Mart’s 6th Annual Sustainability Expo in Bentonville, Arkansas. My message was that companies have a unique responsibility to be stewards of their products across the entire lifecycle, and that government can be a good partner. While that message was embraced by many company leaders, I also ran into a tsunami of market-based mania that fears change and uncertain outcomes.

Bentonville is a mix between Rockwell-like farmland with horses and cattle roaming in fenced-in plains…and company row houses. The Expo was located at a hotel that became a Mecca for hundreds of Wal-Mart suppliers, each touting sustainability claims that were verified by PSI partner, EPI, which after six years of Expos, still found the need to correct the claims for two-thirds of the vendors prior to the show. Every commodity association was there – paper, aluminum, plastic, glass, metals. Every consumer packaged goods company was represented, like Colgate-Palmolive, Kraft, Unilever, and P&G. Companies were selling eco-packaging, defined in innumerable ways. And the Product Stewardship Institute was there, with our spiffy table-top display.

Coupled with the vendor booths were three morning presentations, one after the other, two at a time. The rest of the day was free to view the exhibits and mingle. I presented at one of the sessions (twice) and sat in on several of the others. Wal-Mart puts a tremendous amount of effort into defining sustainability for itself and its suppliers. Wal-Mart’s Scorecard compares suppliers on a range of sustainability criteria so that buyers can make decisions based on environmental factors as well as the usual price, quality, and other variables, although I did not hear anything about social criteria (child labor, worker issues, etc.) being measured. The presenters went into painstaking detail about how suppliers are to fill out their Scorecard. The room was packed, and people were paying close attention. I asked several suppliers what motivated them to make changes towards sustainability. “Because Wal-Mart’s asking us to do it,” was the reply.

Perhaps then it should be no surprise that some companies did not take kindly to being told they have a corporate responsibility in the form of product stewardship, and that there was a strong role for government. This is a crowd that runs on voluntary programs, that is motivated by the market, and wants to keep government about the size of a pinhead. They are motivated by cost savings from sustainability, and have not thought much about the environmental impacts of their products when consumers no longer want them.  I took the challenge, and told them about market failures, and about the four tons of mercury going into the environment each year from the disposal of thermostats despite a decade-old voluntary industry program. I made the usual case for jobs, economic value, environmental protection, and taxpayer savings. I described how PSI developed paint legislation jointly with the American Coatings Association, and how this has resulted in the expansion of the recycled paint manufacturing sector, just as legislation on electronics spurred huge growth in the electronics recycling sector years ago.

There was much positive response to what I discussed. However, I also learned that many companies are threatened by product stewardship. One senior executive of a pharmaceutical giant knew all about the Product Stewardship Institute (PSI), including our national dialogue on medical sharps two years ago. His company is a major manufacturer of insulin and uses medical sharps as a means of delivering its medications to patients. He said he did not participate in our sharps dialogue because his company was not prepared to state its position. He complained that the dialogue was not developing solutions for real patients and that we didn’t know what patients wanted (even though we had patient advocate groups, sharps manufacturers, and other pharmaceutical companies at the table). During PSI’s two-year dialogue on medical sharps, we sketched out a statewide pilot project for the collection of sharps through various methods so we could evaluate the costs and complexities of such a model system. Unfortunately, the time and expense of developing the background information, reaching solutions, and designing a pilot came up short because the few key pharmaceutical companies (like this guy’s company) that needed to make a commitment refused to participate. Now, two years later, after billions more medical sharps have been disposed of in the trash, and after more worker injuries and added medical costs, I was told that this major company is working on an industry voluntary solution. He indicated he didn’t want any help.

Later, I saw a colleague from the American Chemistry Council and we talked about local government plastic bag bans and taxes, and how the Illinois legislation that requires producers to pay for recycling programs might be an interesting model, one that ACC and local governments in Illinois support. I then talked with one of ACC’s members and a founding member of AMERIPEN, the new lobbying group for consumer packaged goods companies. This person had attended my session, objected to EPR for packaging, objected to my slide on the benefits of EPR, and saw plastic bag bans as EPR which, by the way, she objects to.

All in all, I came away very impressed with Wal-Mart’s ability to motivate companies with the shear force of market optimism, its ability to stay on message with so many dedicated senior staff, and the results they have achieved. I also came away knowing that many companies and individuals shut down their communication because of fear about changes that product stewardship might bring. These people stop progress for themselves, their companies, and the social good. They are indicative of companies that will find themselves at the back of the pack in making the changes they need to stay competitive. They are risky investments.

I do not expect full agreement with the product stewardship message. But if a problem exists, such as waste, environmental externalities, pollution, lost jobs, and unnecessary costs, we need to put our heads together to come up with the answers. Company representatives that want government to wait until their company has an iron-clad position will only harden opposition to a joint solution.

As always, the Product Stewardship Institute is ready for discussion. We are ready to change our understanding of issues…because that is what happens when people talk to one another. But when problems persist, or if companies bury their heads, don’t expect PSI to stand by idly waiting for companies to finally decide they are ready. Where is the corporate responsibility in that? Where is the individual responsibility and personal commitment needed to take care of problems that products cause? If you work for a company and you don’t act now, try explaining that to your grandchildren.

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