OPINION: In the UK, Extended Producer Responsibility (EPR) for packaging is not going away and the time to deal responsibly and effectively with the upcoming legislative risk is now.
EPR is complex, multi-dimensional and continuously evolving. So, it is not surprising that many companies face challenges in understanding EPR, its potential impact on their business, and how best to integrate EPR with existing business needs.
EPR is not going away, however, and the time to deal responsibly and effectively with EPR risk is now. This is especially true as investors are increasingly ready to commit to companies that take Environmental, Social and Governance (ESG) seriously. Most companies now recognise that ESG metrics are linked to performance, not just compliance.
Why can it be hard for companies to get EPR reporting right
Companies need to determine:
- Where to get the data necessary to measure (and report upon)
- How to understand, analyse and respond to the regulatory framework
- How to establish the cost impact
- How to separate legal risk from environmental intent (the company’s plans to become good in terms of EPR measurement)
To accomplish all this, most companies need to build their EPR mastery – the right people, solutions and processes at the right level of influence within the organisation. A key first step is getting the EPR data house in order, with good sources as well as the technology needed to collect, organise and analyse the data. And, to keep up with regulatory trends, EPR reporting should become more granular, more consistent, and more accurate.
Change relies on measurement
EPR data can undoubtedly be hard to measure. Everyone should be able to work out what they are purchasing or what’s being sold out of the business. But can companies efficiently monitor what packaging is associated with their products and what each packaging component weighs? Or track gaps in the data, supplier engagement, or the gripes of fragmented data sources? Measurement is a significant challenge when it comes to setting up robust systems for EPR reporting.
Unfortunately, most companies don’t have the data. 85% of businesses we surveyed for our recent study on EPR data measurement said data reporting remains a work in progress with the remainder completely unprepared.
57% of the hundreds of affected businesses we surveyed are yet to begin collecting packaging metrics to progress with their calculations and reporting. The same percentage are yet to make concrete plans for 2024 as to how their business manages data collection. Measurement is a major barrier to action on EPR reporting and wider sustainability reporting. Additional barriers include technology, stakeholder engagement and of course the absence of clear guidance and lack of actual regulations.
These challenges partly explain why many businesses will develop their own frameworks as EPR is embedded over the coming years in the UK. But we must remember that proper measurement needs proper investment. Turning to tech helps: many companies still use manual or semi-automated processes for EPR and packaging metrics measurement. However, Ecoveritas is closing the automation gap and making EPR reporting simpler than you think by access to the right technology at the right cost.
Sustainable packaging starts with accurate data
Measure up
Sustainable packaging starts with accurate data. Decisions demand data. Most business leaders claim to “value” sustainability; they say it’s vital to the long-term health of both society and their organisation.
But becoming truly sustainable means becoming truly stakeholder-centric; it means realising the costs and benefits of your activities to consumers, employees and other stakeholders—and then factoring those perspectives into your decision-making. It means being aware of your (potential) externalities—and then measuring them.
There is much critical work still to be done.
Don’t be put off
This is complex stuff but companies should not be put off by the magnitude of the task. Getting EPR reporting right is a matter of starting, learning, building, and improving. It cannot and should not be done all at once.
Businesses must consider a range of potential questions and trade-offs – for example: If we invest in a packaging spec system, will this increase the accuracy of our data? If I introduce packaging targets, will longstanding suppliers fail? As Polman and Winston note in Net Positive: “Creating positive returns for stakeholders does not mean satisfying all of them at the same time…You can’t prioritize everyone at once.”
But to optimise impact for multiple stakeholders, not forgetting shareholders, companies need good data. With good data, they can make well-informed decisions.
Unreliable and incomplete measurement does not just mean poor reporting—it can lead to strategic blind spots.
Businesses need to start by putting into place realistic and achievable parameters. In their eagerness to show support for the basic premises of EPR, they shouldn’t commit to unreasonable goals as they learn how to best adapt to the challenge.
Regulatory, environmental and consumer trends are quite clear: EPR is an essential dimension of a complete business strategy, and the push toward setting and meeting EPR targets is likely to accelerate. Companies need to embed EPR reporting and connect it to their business goals, but they need to go about this in an organised and intelligent manner. With new EPR-focused technology and solutions, along with commitment internally from employees, companies can be pragmatically optimistic that they comply accurately with EPR legislation.
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