Circularity has Finally Hit the Mainstream as Nestle, Mars, Danone and Clorox Join Loop to Test Reusable Packaging

Jan 31, 2019 12:30 PM ET

Originally posted on EDF+Business


Having lived and traveled in Southeast Asia for a number of years, I have seen and experienced the negative impacts of plastic pollution firsthand. I can’t count the number of times I’ve visited some of the world’s most breathtaking remote locations and couldn’t stop staring at the plastic everywhere.

Last week, I finally felt that we turned a corner on plastics. At the World Economic Forum several of the largest consumer goods companies announced Loop, a pilot system to test reusable packaging for everyday products like mouthwash, deodorant, household cleaners and certain food products.

Loop partners include Procter & Gamble, Nestlé, PepsiCo, Unilever, Mars, Clorox, Coca-Cola, Mondelēz and Danone. After a year of media attention on the overuse of plastics, the pilot will test consumer’s appetite for more “circular” products.

Circularity has been a buzzword for several years now, but 2019 may be the year it hits the mainstream. At its core, a “circular economy” is simply about designing and manufacturing products and materials that have continuous and infinite life cycles. It should be appealing for companies, as Accenture reported that it holds $4.5 trillion in business opportunity.

Meanwhile the public outcry over plastics has reached a tipping point. Photos of turtles with straws through their nostrils and birds with stomachs full of plastics have struck a chord with consumers across the planet.

It is estimated that by 2050 there will be more plastic in the ocean than fish. The growing awareness and mounting demand for action against plastic pollution has pushed companies and governments around the world to ban plastics. Dealing with the massive climate impact that the exploding production of plastics will cause is a going to be a serious problem for our society for years to come.

That’s why I’m optimistic that Loop and smart action from companies can have a real impact on plastic waste pollution.

To be a true leader in the space of plastics and packaging, companies need to be thinking about the full impact of plastic in their own supply chains, and how to work with governments to address waste leakage issues in key geographies.

Here are a few actions companies can take:

  1. Go circular. If you haven’t jumped on the circular train yet, get on board now. There are plenty of opportunities for companies to work with suppliers to encourage and invest in innovative alternatives to reduce plastics in packaging, use more recyclable materials, and create more circular systems within own supply chains. The Ellen MacArthur Foundation has several resources to get up to speed on the circular economy.
  2. Consider the true cost of plastics. Companies need to fully understand the impact of plastic packaging within their own supply chains. To do this, companies should consider the risk profiles of the types of plastics they use, as well as the end-of-life assumptions they used in materiality assessments. The majority of existing materiality assessments for a product’s end-of-life scenarios assume complete waste management systems, ignoring the reality of waste leakage from plastics. Companies should address the assumptions made in these assessments, and explore ways to better understand the true cost and environmental impact of plastic packaging.
  3. Invest. Studies have shown that a large portion of plastic waste entering the ocean is due to inadequate waste management infrastructure in Southeast Asia. Up to 95 percent of plastic in the world's oceans pours in from just 10 rivers, eight of which are in Asia. Companies can invest in waste management infrastructure in these key geographies through groups like Circulate Capital, an impact focused investment management firm dedicated to financing waste management infrastructure in Asia.
  4. Collaborate. The Ocean Conservancy’s Trash Free Seas Alliance® is an example of a program where companies can share best practices and work in collaboration. This issue is beyond any one company or government action. It is going to take companies, governments and consumers working together to tackle the issue at multiple points in the supply chain.

Action on plastics is needed now. A recent study by the International Energy Agency (IEA) showed that a dramatic increase in greenhouse gas emissions from the petrochemical industry – which includes companies that make fertilizer, plastic and pharmaceuticals – threatens to erode climate benefits from reductions in other sectors.

The main driver of the petrochemical industry’s growing climate footprint will be plastics. Petrochemicals are set to account for over a third of the growth in oil demand to 2030, and nearly half to 2050, even ahead of trucks, airplanes and shipping.

Loop and other promising signs like the more than 250 companies joining the Ellen McArthur Foundation’s New Plastics Economy Global Commitment are a good step forward for creating more circular systems.

If 2018 was the year of plastics, I’m hoping companies make 2019 the year of circularity. As always, EDF+Business will be tracking this issue closely.

Photo credit: SABIC.