Don’t Drown in the Packaging Data Lake
Extended Producer Responsibility Puts Data in the Spotlight
By Greg Lawson, Managing Director of Aura
Legislation regulating packaging sustainability is moving fast, and extended producer responsibility (EPR) policies are progressing in regions around the globe. These new environmental policies are shifting responsibility for packaging waste management from municipalities to producers, using penalties and incentives to inspire waste reduction and more sustainable packaging designs.
However, only about one-third of executives participating in a 2023 PMMI survey said their businesses are considering the impact of EPR regulations on their packaging. In fact, 83% of packaging professionals think their business’s supply chain is either not as sustainable as it could be, or not sustainable at all, according to our own survey of professionals at the SPC Impact 2023 conference in Texas.
The legislation that’s on our doorsteps means the packaging sector needs to start collecting and collating more accurate data in order to demonstrate compliance before new tax rates and penalties are imposed. It’s a no brainer then, that we’d do well to take proactive action to mitigate any financial risks for brands, retailers and packaging companies.
Extended producer responsibility
Regulation of plastic packaging has been gaining momentum for more than a decade in Europe, and a growing number of U.S. states are considering EPR regulations based on the policies enacted by other countries.
For example, the ‘Plastic Packaging Tax’ came into play in 2022 in the UK, and a new EPR policy takes effect in April 2024. As a result of these policies, live, granular details on each packaging component will be required, and averages of specifications (substrates, weights) submitted annually will no longer be acceptable.
In the UK, EPR regulations apply to businesses that produce or use packaging, or sell packaged goods. Qualifying organizations must be registered, and publicly disclose how much packaging waste goes to landfills, the amount of packaging waste they recycle, and their efforts to reduce the amount of packaging they produce.
Currently, the U.S. does not have federal EPR regulations pertaining to packaging, but two bills with EPR language are being considered by Congress. However, packaging and plastic waste disposal are currently in the spotlight at the state level.
California, Colorado, Maine and Oregon passed the first EPR laws for packaging in 2022, and over 30 bills surrounding EPR and packaging have been introduced across the U.S. according to the PMMI’s 2023 Sustainability and Technology Business Intelligence report. In fact, industry analysts believe at least 14 states could have EPR policies regulating packaging by 2027.
These moves are just some examples of many global initiatives devised to steer businesses away from producing packaging made of non-recyclable materials. But there are significant issues set to shine the light primarily on effective data.
Tracking packaging information
The upshot is that all this incoming EPR legislation will force the issue of data tracking, and that’s going to result in the need for more packaging information than has ever been required before. The key point being that data should be live and accurate, as opposed to the current approach, which in part is based on segment averages, and managed retrospectively.
The positive is that live and accurate data enables businesses to make the right choices and measure their successes. The ability to do so in real time means sustainability can be managed every day and the right packaging decisions can be made during the design process, as opposed to ‘optimizing’ packaging specifications after they have been launched. We’ve seen the advantages of this first hand with the world’s biggest e-tailer, as well as the world’s biggest retailer, both of which use real-time sustainability tools.
Identifying meaningful data
But it’s a challenge. One of the main reasons this is a hot topic in the packaging industry right now is because the EPR policies are currently very regionalized and inconsistent – and there’s a lot of debate surrounding recycling policies and infrastructure improvements. Plus, there’s the fact that packaging is influenced by many siloed departments within organizations.
For example, marketing and logistics departments often have different agendas and key performance indicators (KPIs). This has left many organizations pondering which nuggets, within the data lake we’ll be creating, are likely to be meaningful?
An obvious place to start is by considering which questions you need the data to answer. Clear, detailed outlines will define what needs to be collected, how often, and crucially, what insight is needed to drive actionable change on sustainability.
Defining the roadmap
You can’t do everything at once, so the roadmap can be defined by identifying changes likely to have the biggest impact, in a reasonable timeframe, ahead of legislation taking effect. Partnering with experts can also help you plan the way forward.
Then it’s time to think longer-term: data-led decision making should be a core pillar of a brand’s environments, social and governance (ESG) strategy. ESG is fast becoming a core requisite to most organisations, and for packaging initiatives, they can be a solid measure against which to track progress on sustainability that reaches beyond legislation.
Data overload is a very real issue, but taking back control is a key step towards future-proofing operations. With the right processes in place, it is manageable. Understanding what data really matters will enable you to take steps to avoid further problems – and tax brackets – down the line. And the best news is that we still have time to start managing our data lakes.
About the Author
Greg Lawson is the managing director at Aura. Aura e-halo is a real-time packaging sustainability tool, and has delivered distinct advantages to the world’s largest e-tailer and retailer. Learn more at www.aura-consultants.com.