Consumer Goods Impact

Plastic packaging waste has become an important issue for consumer packaged-goods companies.

Mary Jane McQuillen - Author

Nov. 5 2019, Updated 1:22 p.m. ET


Plastic packaging waste has become an important issue for consumer packaged-goods companies. While cheap plastic packaging has greatly increased global access to affordable food, beverages and personal care products, plastic waste byproducts have become an increasingly serious environmental problem. Solving the issue requires a multifaceted approach, and we continue to engage with our companies on their strategies for helping to fix the problem. As a first step, many companies have been increasing the proportion of recyclable plastic packaging, which is helpful yet by no means sufficient. Many barriers to efficiently recycling packaging materials still exist, including poor consumer compliance, limited recycling infrastructure in many markets and the current low pricing of recycled goods, which makes recycling costlier for stretched public budgets. In fact, according to an Ellen MacArthur Foundation report, only about 14% of plastic packaging is actually collected for recycling globally, and more than 75% ends up either as litter or in a landfill.

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When ClearBridge hosted Coca-Cola in December for an investor sustainability engagement in front of a large group of investors, an entire section of the day was dedicated to discussing the company’s packaging plans and ideas to mitigate the impact of packaging waste. Industry leaders like Coke are addressing problems across the entire life cycle of packaging. In addition to increasing the proportion of packages which are 100% recyclable, the company has taken several steps to reduce the impact of packaging waste and increase recycling and reuse. These steps include working with local communities and organizations to encourage consumer recycling compliance, investing in recycling infrastructure in markets where such infrastructure is limited, and redesigning packaging to include more plant-based materials and using less plastic per bottle to reduce the overall carbon impact of the packaging process. Such efforts have had a meaningful impact. In South Africa, for example, Coke’s awareness campaign has helped recycling rates increase from less than 10% in 2000 to 55% in 2016.

Unilever is another industry leader in the sustainable use of plastics. The British and Dutch consumer goods company has led the way in committing to 100% of its packaging material being fully recyclable, reusable, or compostable by 2025. Unilever has also committed to increasing the proportion of recycled plastic content in its own packaging to 25% by 2025. These actions create a source of demand for recycled plastic, which will help support recycled plastic prices and make the economic equation of recycling more attractive. Unilever is also building support for more systemic changes across the entire industry, including a Global Plastics Protocol which would simplify the recycling process by enabling coordination among industry participants over what materials go into packaging.

Article continues below advertisement, the world’s largest e-commerce merchant, has been reducing its reliance on hard plastic, plastic ties and plastic wrap for e-commerce shipments with its Frustration-Free Packaging program. Amazon uses 100% recyclable packaging materials and estimates it has eliminated 215,000 tons of packaging material and 360 million shipping boxes in the program’s 10 years. The company also partners with manufacturers globally to reduce packaging waste across its supply chain.

In addition to reducing plastic packaging, several of our portfolio companies are taking innovative approaches to increasing the lifecycle of plastic in the products they develop, which eliminates the need for new plastic production (Exhibit 2).

  • Nike is taking a unique approach to plastic waste by recycling it into yarns for athletic apparel. Polyester is part of the seven groups of non-fiber plastics that account for 92% of historical plastic production. Nike is the number-one user of recycled polyester in the industry, grinding down plastic drinking bottles into pellets and yarns to create its Fast Fit Vaporknit line of soccer kits worn by most World Cup teams. By adding value with recyclable materials, the kits deliver a high level of performance with a lower impact on the environment. Since 2012, Nike has reused over 5 billion plastic water bottles for its footwear and apparel.
  • Herman Miller was one of the earliest furniture designers to incorporate life cycle analysis into their sourcing and production process. The intent is to use materials that are sustainably sourced and then construct those products to be close to 100% recyclable.
  • Trex, meanwhile, is the leading manufacturer of composite deck products made from a blend of recycled wood, plastic film and disposable plastic bags. The company is also one of the largest recyclers of plastic in the U.S., a position that grows in importance as China stops accepting scrap plastics.

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