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 GlobalData.
Amid mounting pressure from customers, investors, and governments, they are making forward-thinking moves to improve the world by offering ethical, sustainable purchase choices to consumers, the data and analytics company said.
GlobalData’s poll conducted in April 2022 highlighted that nearly 35 per cent of companies have changed their behaviour in the last 12 months to achieve ESG goals.
GlobalData disruptive tech practice head Kiran Raj said, “As we step into a post-COVID-19 pandemic world, consumers are reassessing their purchases and manufacturers are aligning their products to the 4Rs of sustainability – Reduce, Reuse, Recycle, and Recover – given the target date for various ESG standards edge closer.
“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.”
GlobalData disruptive tech project manager Shagun Sachdeva added that although recycling is a step that companies are heading in the right direction, it’s not the ultimate solution to sustainability as many recyclable plastics are not recycled and considerable energy is required to turn those used products into new ones.
“As plastics remain in circulation and recycling waste ends up in landfills, the focus is shifting more towards green packaging materials,” he added.
In addition, GlobalData’s Disruptor Intelligence Center highlighted some of the recent moves and product launches by various companies that make positive impact on their ESG credentials.
Coca-Cola partnered with O-I Glass, Inc. to recycle glass bottles in May. The Coca-Cola Company collaborated with Graphic Packaging International to launch the US’ first KeelClip paperboard packaging for multipack cans in June and with e-commerce retailer JD.com Inc to support China’s circular economy in January.
Nestle SA invested around $5 million in the Italian venture capital fund Eureka! Fund this January 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 this year to minimize its reliance on single-use packaging. It also partnered with blockchain firm Security Matters in June for plastic recycling.
Furthermore, Danone SA moved the entire PS (polystyrene) cups portfolio in the UK to PET cups and launched PET & 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 recycled PET.
“Even though key FMCG players have sustainable goals in place for the next five to eight 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 said.
“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.”