As political momentum and public comprehension of the impact of climate change continues to increase pressure on consumer businesses, sustainability and green credentials are no longer a "nice to have" but a vital requirement for survival on a corporate and global scale. This is coupled with a fast growing, increasingly onerous, and ever changing regulatory regime; a trend set to continue through 2023 and beyond. This is demonstrated by the fact that the world famous CES Conference now has a sustainability area filled with exhibitors that are committed to making our lives, and world, more sustainable.
There is a rise in regulation of this topic at all levels, from a vast amount of EU legislation planned around packaging, waste and the circular economy - to differing rules on recycling, to what products may be used, and fiscal measures driving change at a state level. In particular, the differing approaches across the EU at Member State level make compliance more challenging. France's Triman Logo, the right to repair, or more recently a ban on single use tableware and other items in takeaways and other restaurants with up to 20 seats are just a few examples of what business must navigate in that market, also Ireland's "latte levy" is another. While there may be a core purpose and intent, there remains considerable fragmentation with greater and greater expectation to report on activity in this area, whether to obtain finance or as part of a legal requirement.
A focus on the UK & EU markets
In the UK, the Competition Markets Authority's market assessment of green claims heralded by its 2021 "Green Claims Code" and the Advertising Standards Authority's environmental claims project are set to keep up the pressure on advertisers well into 2023 and beyond (read our 'No 'safe space' for green claims article). Meanwhile the EU is punching up its unfair commercial practices legislation to deal with "greenwashing" and ambiguous environmental claims. It has always been risky to approach an adverts claim first rather than evidence first, but if ever there was a time to break that habit it is now.
Now is also the time to work cross functionally like never before, as from 2025 new EU corporate sustainability reporting requirements will start to come into force. Companies will have to report on how their business model affects their sustainability, and on how external sustainability factors (such as climate change or human rights issues) influence their activities in line with harmonised sustainability reporting standards. Although these requirements will only apply to the EU, the information provided will be publically available and is similar to information demanded to obtain finance and to other reporting schemes.
EU new packaging legislation
At a regional level, the EU's new packaging legislation highlights the challenges the industry face, its recitals note that since the early 90s Directive, volumes of packaging have actually still increased with a "decline in reuse and refill of packaging amplified by increased on-the-go consumption and eCommerce".
Announced in November 2022 and currently going through the EU Parliamentary process, the proposed Regulation 2022/0396 on packaging and packaging waste, amending Regulation (EU) 2019/1020 and Directive (EU) 2019/904, and repealing Directive 94/62/EC sets out a wide reaching and unambiguous (when it comes to targets at least) regime for packaging in the EU. It is easy to think that this will not impact the UK, but anyone who has struggled with a tethered plastic bottle top in the last few months knows that Brexit notwithstanding, the outputs of EU regulatory requirements can still occur in Great Britain.
Proposed Regulation 2022/0396 would apply to all packaging, regardless of the material used, and to all packaging waste, whether such waste is used in or originates from industry, other manufacturing, retail or distribution, offices, services or households - and essentially creates a regime where packaging in the EU is a regulated product. It creates obligations on economic operators throughout the supply chain, not just for manufacturers, but also importers and distributors. It seeks to update the EU legislative framework for packaging and packaging waste and in line with the new approach to products announced in the European Green Deal and the circular economy action plan, the proposal covers the entire life cycle of packaging.
Elements of the proposals such as the requirements for economic operators to retain documentation for ten years, including the identity of the economic operator's one step forward and behind them, for the manufacturer to draw up an EU declaration of conformity to provide information on the conformity of packaging with the Regulation, and recording obligations, are a familiar read. However, it stops short of including the CE Marking within the packaging regulatory regime, on the basis that using the CE Marking to show compliance with the Packaging Regulation would cause confusion, with the use of the CE Marking's to show the actual product is in conformity with its own specific regime.
The Commission's acknowledged overarching objectives for the Regulation are to reduce the negative environmental impacts of packaging and packaging waste, while improving the functioning of the internal market. Specifically: (i) to reduce the generation of packaging waste; (ii) to promote a circular economy for packaging in a cost-effective manner; and (iii) to promote the use of recycled content in packaging.
The intention is that all packaging in the EU is reusable or recyclable by 2030. The proposal requires each Member State to progressively reduce the packaging waste generated per capita compared to the packaging waste generated per capita in 2018, by 5% by 2030, 10% by 2035 and 15% by 2040. Given that there has been an increase in the use of packaging, and design characteristics which potentially inhibit recycling, in recent years, these are more significant targets than they might initially appear.
A 5% reduction by 2030 is by Commission calculations, is a 19% reduction in absolute terms. The Regulation covers a broad range of topics including: minimum levels of recycled content in packaging; targets for reuse and refill; obligation to minimise packaging used; mandatory deposit return schemes; reduction of plastic carrier bag use; minimum percentage recycling targets and compostable packaging.
