Fast-moving consumer goods (FMCG) companies are increasingly pledging to bring the environmental, social and governance (ESG) element into packaging with an aim to address various environmental challenges, according to leading data and analytics company GlobalData.
“As we step into a post-Covid pandemic world, consumers are reassessing their purchases and manufacturers are aligning their products to the four Rs of sustainability – reduce, reuse, recycle and recover – given the target date for various ESG standards edge closer,” explained Kiran Raj, practice head of disruptive tech at GlobalData.
“Sustainability seems to have outgrown corporate social responsibility (CSR) tokenism to stand at the top of manufacturers’ business agenda, thus accelerating the shift towards a circular economy.”
The poll conducted by GlobalData in April 2022 highlighted that amid mounting pressure from customers, investors and governments, FMCG companies are making forward-thinking moves and offering ethical, sustainable purchase choices to consumers, and that nearly 35 per cent of companies have changed their behaviour in the last 12 months to achieve this.
“Although recycling is a step that companies are heading in the right direction, it is not the ultimate solutions to sustainability as many recyclable plastics are simply not recycled, and considerable energy is required to turn those used products into new ones,” said Shagun Sachdeva, project manager of disruptive tech at GlobalData.
“As plastics remain in circulation and recycling waste ends up in landfills, the focus is shifting more towards green packaging materials.”
GlobalData’s Disruptor Intelligence Centre highlighted some of the recent moves and product launches by various companies that make positive impact on their ESG credentials.
Coca-Cola United partnered with O-I Glass to recycle glass bottles in May 2022. The company also collaborated with Graphic Packaging International to launch the US’ first KeelClip paperboard packaging for multipack cans in June 2022, and with e-commerce retailer JD.com to support China’s circular economy in January 2022.
Nestle SA invested around $5 million in the Italian venture capital Eureka! Fund in January 2022 to accelerate the research of innovative packaging solutions, improve the quality of collection and recycling processes, and increase the adoption of recycled food-grade plastics.
PepsiCo inked a deal with Carlsberg Group early in 2022 to minimise its reliance on single-use packaging. It also partnered with blockchain firm Security Matters in June for plastic recycling.
Danone SA moved the entire polystyrene cups portfolio in the UK to PET cups and launched PET and rPET cups in France, Spain and Belgium last year. It invested around $6.2 million in Bailleul, France to transform three out of six production lines into PET, and the cups contain 30 per cent rPET.
“Even though key FMCG players have sustainable goals in place for the next 5-8 years, there are still complexities in terms of scaling, long-term planning, and slow market adoption, making it hard for them to execute the sustainability promise with ease,” Sachdeva concluded.
“However, in the long run, it will be interesting to watch how companies will make impactful changes on a global scale in the sustainability game.”
