Monitoring supply chain standards
With younger consumers demanding sustainable products, the pressure to embrace responsible practices has never been more significant. They expect companies to demonstrate with evidence that they are treating people and the planet in a balanced way.
“We’ll be watching you,” warned Swedish climate change activist Greta Thunberg. And they are! Consumers are unquestionably more proactive in their pursuit of adopting a more sustainable lifestyle, whether by choosing brands that have ethical or environmentally sustainable practices and values, or by no longer purchasing certain products because they have concerns.
Consumers are no longer alone in pushing the sector to improve its sustainability performance. Governments are using regulatory power to coax them along on this seminal journey. In the UK, for example, imported or domestically manufactured plastic packaging that contains less than 30% recycled material is now subject to tax.
Many have argued that the UK tax is insufficient to impact positively. However, anything that succeeds in increasing the demand for recycled plastic – boosts the dire 9% of plastic currently being recycled globally – is still a step in the right direction.
Pollution from plastic pollution is not something that consumers can tackle alone – it requires a collective and collaborative approach, one in which brands, retailers, and their respective packaging suppliers need to get involved.
The challenge we often see at ground level is that the functions of packaging supply chains tend to operate as silos, resulting in them becoming internally optimised without consideration for – and even at the expense of – other operations. This lack of alignment is often recognised but is accepted as the consequence of size, complexity, personalities, and politics. It saps energy that should be used on productive value-creation activities.
Here at Ecoveritas, we’d love to tell you that most brands, retailers, and suppliers surpass their recycled content, recyclability, and reduction targets and are ready to start eliminating plastic from their packaging entirely and work with suppliers to innovate for compostable alternatives. Sadly, this is not the case.
The fact that just 992 UK businesses registered to pay the new tax on plastic packaging, despite HMRC estimating as many as 20,000 companies would be affected, has laid bare a startling lack of awareness.
We expected many people who are part of the plastic supply chain to be significantly impacted. However, that doesn’t appear to be the case. Much of this confusion appears when attempting to establish where the final substantial point of manufacture is. This is the point at which the tax is paid.
Thorough due diligence of supply chains in anticipation of PPT would have clearly defined this. Importantly, businesses can be held jointly liable with suppliers or customers who fail to pay the tax correctly.
You only have to look at the situation at Boohoo, which HMRC charged for some polybags for which it does not have the certificate to confirm the recycled content. Boohoo has covered the cost of any HMRC charge so far but plans on transitioning that responsibility “in the near future.” The online fashion retailer even went as far as sourcing a nominated global supplier that produces 100% certified recycled material and recyclable packaging. At the same time, they extended an option of continuing to use independent suppliers, as long as they could certify that the poly bags they use were at least 50% recycled material, made from LDPE (low-density polyethylene) only and several other standards.
In the future, Boohoo are requiring suppliers to provide 1) the polybag supplier name and contact details, including a monthly report; 2) certification of recycled content – either Global Recycled Standard (GRS) or Standard Global Services (SGS) certification); and 3) confirmation of the percentage of recycled content (over 50% minimum). Simply put, the ripples are starting to be felt.
Sharing is caring
With 1,100 suppliers on Boohoo’s books, this is precisely why prioritising collaborative relationships with suppliers, where data is shared early and often, is an absolute necessity.
Real-time retail is the key to solving the massive disruption in the supply chain and packaging data has fast become a key spoke in the wheel. The trend of cooperation is accelerating, perhaps boosted by the challenges of the pandemic and the obligations associated with multiplying legislation.
Collecting, collating, and submitting data to ensure your business complies with a myriad of packaging waste regulations can be a daunting and complex task. From assessing your business activities and packaging flows and identifying what packaging is obligated to collecting and sorting relevant packaging data, completing your data form, and providing a methodology statement for use at audits, the work is unrelenting.
Ecoview, our versatile digital platform, makes transparency and compliance a much simpler task. The system is designed to make technical and sustainable packaging management simple and more value-adding for brands, retailers and their supply chains.
Ecoview brings online analysis, audit and reporting technologies together in one place – with an intuitive user dashboard that ensures every business has access to packaging data at every level, from the top line to granular.
Whether your priority is to reduce the plastic in packaging, increase the recycled content, or even figure out where to start with plastic packaging, it all begins with opening a dialogue with suppliers. This catalyst sets everything else in motion, from conveying accurate information about degradability and recyclability to tackling waste, increasing recycled content, and collaborating on solutions to reduce plastic use.
Tracking progress towards a target requires a reference point for the start of the project. What first needs to be understood is how ready and capable suppliers are at providing information about the composition of packaging materials. Some suppliers might be mature enough in their sustainability journeys to offer more sustainable solutions; others might not even have a packaging technologist on their staff.
Brands and retailers need to understand their suppliers better and set realistic targets. A target might outline the desired increase in recycled plastic content or a reduction in the amount of packaging needed overall. Suppose this seems too far-fetched due to lack of supplier readiness. In that case, interim targets can help brands and retailers collaborate with current suppliers to adhere to new legislation and reduce environmental impact before tackling more ambitious targets.
Suppliers must be consistently held accountable for providing accurate and up-to-date packaging composition data and fulfilling commitments they have made to reach specific packaging goals. Only then can brands and retailers make substantial, evidence-backed claims about packaging and be ready to face the UK plastic tax.
With every company needing to harness the full power of technology to remain competitive, there is now a perpetual stampede to get modern product packaging right.