Brands largely aren’t on track to meet their sustainable packaging commitments by 2025, and consequently some may shift away from goals to eliminate or recycle plastic packaging, research and consulting firm Gartner predicts. These companies instead will begin tying their sustainability metrics to climate action like greenhouse gas emissions reduction, a report released this year states.
The most popularly adopted commitments focus on making 100% of packaging recyclable, reusable or compostable by 2025. Gartner research suggests that as brands, especially CPG companies, recognize their inability to meet these goals, 20% of them will move away from those promises and toward reducing their packaging’s carbon footprint by 2026.
Because of the variety of challenges they face, “basically, we’re saying that some companies — not the majority — will start to look at measures other than 100% of packaging being recyclable or reusable, or even some of the recycled content goals that are more ambitious,” said John Blake, senior director analyst with the Gartner supply chain practice.
"When they started a few years ago — back in 2017 and 2018 — 2025 probably looked like a long way off ... Now, in 2023, it’s looking very short."
John Blake
Senior director analyst with the Gartner supply chain practice
Advocates for better end-of-life plastics management don’t entirely agree with that take, although they acknowledge that many companies won’t meet their goals. They say the 20% discontinuation rate seems high, and achieving greater sustainability through environmental responsibility involves adopting multiple solutions.
“The topic of climate and [plastics] circularity is interesting, and the two are not mutually exclusive,” said Emily Tipaldo, executive director at the U.S. Plastics Pact. “I am a true believer that you have to find a way to deal with both.”
The USPP recently released information indicating some goals are not on track to be met by 2025. This is not the first time brands have retooled after attempts to boost their packaging sustainability. Coke and Pespi introduced bottles in the 1990s with postconsumer recycled resin, but they were phased out, and Nestle set a PCR goal in 2008 that it says went unmet.
Falling short on packaging recycling, reuse and compostability goals within the stated timeframe isn’t a total failure or reason to discontinue the initiative, sources say, but rather an opportunity for brands to double down on optimizing existing plans to accelerate progress.
“Numbers really are just short-term goals, and they should be looked at that way,” said Steve Alexander, president and CEO at the Association of Plastic Recyclers. “There's so much more involved.”
"It doesn't mean that if you don't meet that number by a certain date in 2025 then we're going to throw up our hands and walk away."
Steve Alexander
President and CEO at the Association of Plastic Recyclers
How they got here
Gartner has predicted since 2021 that 90% of companies would miss their 2025 sustainable packaging goals, and the realization prompted analysts to consider what happens next — whether companies would simply let the deadline pass, push to extend their goals or take some other approach to lessen environmental impact, Blake said.
Generally, companies devised their commitments just prior to the pandemic and the goals were already quite ambitious to achieve in such a short timeframe. Then the pandemic exacerbated the time crunch and introduced complexities.
Pandemic-related challenges include supply chain issues with equipment and materials in addition to existing challenges such as the costs associated with quickly changing a system that has been optimized over years and even decades. For instance, new types of packaging that eliminate plastic might not protect the product inside as effectively or allow for the same shelf life.
Another barrier is that many organizations didn’t establish clear, viable, scalable paths to achieve their goals, Blake said. This exposes a disconnect: employees tasked with creating sustainable products or sourcing materials often aren’t those involved in the goal-setting. This can cause the entire organization to struggle with effectively integrating sustainability into the system while still considering quality, cost and time constraints.
Many of these obstacles are likely to exist beyond 2025 and take a while to sort out, Blake said, adding that Gartner sees value in its research helping to “get more transparency to this whole space around sustainable packaging.”
Both, not either
In addition to USPP’s recent cautionary message about brands’ trajectory for missing 2025 goals, portions of the Ellen MacArthur Foundation’s 2022 progress report on achieving a circular plastics economy align with Gartner’s findings. It noted that progress is being made in some areas, but signatories likely will miss some targets. Specifically, it says the target of 100% recyclable, reusable or compostable plastic packaging by 2025 “almost certainly will be missed.”
But organizations don’t necessarily believe that means strategy shifts away from recycling and recycled content are afoot.
“There are definitely times when companies have to make priorities, but I don't think any one company is going to be able to do a full switch away from the focus around making their packaging more reusable, recyclable or compostable and just focus on carbon impacts,” Tipaldo said.
Solely focusing on emissions ignores the fact that plastics already exist in the waste stream and will continue to indefinitely, so they need to be properly handled to promote circularity and prevent plastic waste, she explained.
“Companies can make certain packaging decisions with their carbon footprint blinders on, where they don’t take into account what happens to that packaging at its end of life,” Tipaldo said. “Yes, you may save a lot of carbon emissions on the upstream side and during transportation, but then those materials are still lost at the end of their life.”
Neither USPP nor APR intend to change their plastics strategy in response to missed targets. Alexander corroborates that brands should embrace the “both, not either” approach, even when falling short of stated targets.
“They’re still going to be putting out packaging. Does that mean they’re going to be putting out non-recyclable packaging?” he said. “I'm very concerned that [a shift] would be the strategy of any brand company, because it means that they're moving away from the most important thing that they can do not just to meet their sustainability metrics but also to reduce their carbon footprint.”
Moving away from designing products for recyclability could lead to more contaminants in the recycling stream. That, in turn, would lead to less viable postconsumer resin at a time when brands are calling for more and the supply is already tight, Alexander said.
Perfecting the pivot
Pivoting toward different goals increases companies’ risk of fielding greenwashing accusations, Blake said. However, those that are proactive and act quickly to educate customers, investors and stakeholders could experience more success.
Life cycle assessments are a data-driven way to quantify progress toward goals and are gaining traction as an alternative sustainability metric, Blake said. Historically, LCAs haven’t been as widely used because they are laborious and resource intensive, but “as companies have greater detail on their packaging specifications, and also as they have that data in digital formats, they can executive life cycle assessments much quicker and at much lower costs.”
Extended producer responsibility programs for packaging are emerging domestically, and will contain their own targets that could lead to financial consequences. EPR programs force organizations to capture and report their data to a greater degree than they had to in the past. Having that data available for compliance purposes also makes it easier to complete an LCA.
One thing that most parties agree on is that the current level of infrastructure is insufficient to increase manufacturing of more sustainable packaging, collect it and recycle it at a scale that will meet demand and brand goals.
“The infrastructure is not in place to meet a lot of these goals, but the policy is being the driver,” Alexander said.
Messaging is another area for improvement, especially if brands do reframe their targets.
“Messaging around packaging that is recyclable or 100% recycled content resonates very well; trying to explain carbon footprint of packaging and how that's beneficial to the environment is a bit tougher,” Blake said. “If organizations do go down that path, they have to figure out how to communicate it to the consumers and customers.”
Despite the difficulties, he says companies still are following the trend and signing up for sustainable packaging commitments, even when the wider industry may not directly know how best to achieve them.
“This whole area of sustainable packaging, it’s incredibly complicated,” he said. “As we’ve tried to get to these goals for 2025 we’ve learned quite a lot, which is very encouraging.”
