Layer after layer – the challenges for the packaging industry

Tim Barbary FIMMM, Chairman of the Midlands Packaging Society, outlines the challenges packaging businesses face in response to the UK Government’s Industrial Decarbonisation Strategy.

The UK Government’s Industrial Decarbonisation Strategy specifies that company data on CO₂e must be granular, accurately calculated and results transparent. Alongside this, the government has revealed its aim to introduce widespread, on-pack consumer carbon labelling.

Today, packaging businesses face a raft of challenges. Most business enterprise resource planning solutions are designed to identify data based on a top-down approach to meet business overall reporting standards. While this dashboard approach undoubtedly meets the needs of business leaders, it drives an immeasurable reliance on spreadsheets to identify and calculate details. Here, one must consider the unreliable nature of the spreadsheet and the level of granularity on data input – the original author, for example, may move on, leaving potential for incorrect interpretation of the calculations by subsequent users. Therefore, it must be considered how granular and reliable the data actually is.

A business that manufactures the same product daily, week after week, will likely have limited energy, time, material and wastage variability. However, producing packaging typically requires small batch production, often in a matter of hours. The process therefore requires many change-overs, some less complex than others, as producers will often try to mitigate common attributes into campaign runs.

The carbon impact of the consumer pack can therefore be significant. For example, take two typical crisp wrappers – ready salted and beef flavours. These may be made on the same manufacturing process-print, laminate, slit, packed, stored and delivered in the same way. Material and thickness may also be the same, as well as the number of colours and possibly the percentage of ink coverage, albeit with some colour differentiation. This often still leaves the biggest CO₂e variable – order quantity.

Waste in the manufacturing process will undoubtedly be amortised over the production volume, leading to a different CO₂e for every stock keeping unit (SKU) – the crisp wrapper. The typical printer and converter are constantly changing, some, if not all of the above, from one SKU to the next.

This situation is often exacerbated by brands and packer/fillers, who endeavour to reduce working capital by reducing their order quantities. In this environment, it is inconceivable to use a simple average for a crisp wrapper, let alone applying an average number to report anything larger. Accurate calculation at the SKU level is therefore critical in helping consumers make informed decisions.

Growing demand for transparency from consumers, means brands and retailers are keen to demonstrate sustainability credentials to their customers and look to the packaging industry to provide transparency that, in turn, reaffirms brand equity.

However, consumers are also becoming wary of some of the claims being made by brands, which in some cases lead to accusations of greenwashing. To the point that the UK Government has now published a Green Claims Code, which is enforceable by law and regulated by the Competition and Markets Authority. This means that the implications for the packaging industry are that all CO₂e data, pertaining to the materials produced, should be reported transparently and accurately.

For the brand or the retailer to be confident they comply with the Green Claims Code, they need to be reassured the data they receive from producers is indeed authentic, and for this there needs to be annual audits and certification.

The brand or retailer can then share the results via their websites and, depending on the business, they may choose to publish the annual certification. However, if the objective is to inform or positively influence consumer behaviour, they may also choose to publish the results at the SKU level.

A solution lies in lifecycle analysis, but it is not cheap – provided by professionals, calculations are conducted manually. So, a limitation lies in that what is true on the day of analysis may not be months down the line. So, while the process is granular, in terms of data gathering and accuracy at the time of analysis, one might well question the trustworthiness of a result.

Software solution providers are emerging, purporting to offer low-cost generic solutions whereby companies can complete the data and calculate results for themselves. The upstream data used here could be based on scientific research data and then applied as averages. Unless this approach is audited and certified annually, it should nevertheless be challenged for its lack of granularity, accuracy and whether, as a result, marking your own homework is considered as trusted data.

The consumer should be considered in all this – not all will have the time to check the detail. This is why an on-pack label, similar to the nutritional information seen on food packaging is the best. Carbon labelling is different to other labelling solutions as it needs to represent not only the pack but also the businesses journey towards net-zero. Carbon neutrality does not happen overnight, it is very much a process.

As a result, the label solution needs to be simple and quick to identify, so a traffic light system is the obvious choice. It should contain the CO₂e value for the SKU, along with a QR code for web-based auditing and further information for the curious consumer. The colour should represent the business’ success on their journey to net-zero.

How might this work? Take the example of if the CO₂e was registered for 2021 and indexed to 100, assuming a net-zero target of 2035. This will take 14 years and businesses need to be recognised for this journey. Additionally, assuming a +7% cumulative improvement year-on-year, the label awarded would be green. If the figure was 4-7% it may be amber, with less than a 4% improvement, the label would be red.

While business success criteria now include people and the planet, to survive it must also return a profit. Being able to benchmark alternatives that enable informed decisions will be critical for success in the coming years.