Top or Flop? Sustainability review 2022 and outlook 2023

Matthias Giebel
14. December 2022

The year 2022 has confronted us with unexpected challenges. Rising energy and raw material costs, inflation and war in Ukraine have claimed many resources. What has this done to the megatopic of sustainability and its aspects such as the circular economy and climate protection? Did it fall under the radar? Was it treading water? Or was there progress? In order to give a meaningful answer to this question, we need to look at sub-areas. And so we take a stock-taking look at what happened at the trade show, the top three initiatives, the voluntary commitments in the area of plastics, packaging design and regulatory activities by the EU. We also look ahead: What awaits us in 2023?

 

Trade shows: Sustainability remains No. 1

Trade shows are a good gauge of the relevance of topics in an industry. In our review of the year, we therefore take a look at FACHPACK and K-Messe.

Circular economy has been the central topic in the field of sustainability at least since the EU’s Green Deal. At FACHPACK at the end of September 2022, it was officially one of the three top topics set. However, anyone who visited the trade fair could get the impression that Circular Economy overshadowed everything else.

• Even compared to the previous year, circular economy has once again gained in importance. It became very clear that the packaging industry is trying to close its loops with increasing dynamism.
• Examples from the packaging manufacturing sector include companies such as Südpack and Greiner, which ensure the availability of recycled materials, which are increasingly in demand and becoming more valuable, through cooperations and acquisitions.
• The packaging machinery industry has also recognized this issue. Richard Clemens, Managing Director of the VDMA Food Processing and Packaging Machinery and Process Machinery and Apparatus Associations, is representative of this: “Our members have recognized the economic potential of the circular economy and have embarked on the journey at full speed.

The K trade show in Düsseldorf at the beginning of October 2022 even dedicated two of its three main topics to sustainability, namely climate protection and circular economy. The topic was occupied by both the major plastics producers and the machine builders.

• Among plastics producers, the wide range of circular raw materials was particularly eye-catching. For example, INEOS showed polystyrene recyclates from mechanical recycling, which are already in concrete applications at two large German dairies.
• In the field of mechanical and plant engineering, the VDMA and 13 of its member companies presented the capabilities of German mechanical engineering companies based on state-of-the-art technologies for the circular economy at the Circular Economy Forum at K 2022.
  • What was particularly striking here was the breadth of recycling technologies With the machines running, visitors were able to see how high-quality re-granulate is produced from plastic waste and how recyclates are turned into attractive, highly functional and recyclable products in various processing methods.
  • The topic of energy efficiency has been recognized for some time in the area of production machinery, such as injection molding machines. Machines are now increasingly being presented with their product carbon footprint.

 

Top 3 Initiatives: Ratings, Strategies, Commitments

2022 has shown that three leading sustainability initiatives are also increasingly becoming mandatory in the packaging sector. Their importance and application are increasing continuously – even if implementation is still lagging behind in some cases.

• The EcoVadis sustainability rating is becoming the “gold standard” for supplier evaluation. More and more B2C companies rely on EcoVadis to verify and transparently present the sustainability efforts of their suppliers.
• Climate strategies are increasingly being drawn up on the basis of science-based climate targets (Science Based Targets initiative; SBTi), with transparency laid down within the framework of the CDP (Carbon Disclosure Project). The advantage of this approach is that the climate targets become methodically traceable. Progress becomes measurable and can be presented transparently.
• Sustainability commitments are increasingly being made within the framework of the Ellen MacArthur Foundation‘s (EMF) New Plastics Economy. It provides a clear framework and recommendations for action in relation to packaging design.

The sticking point: participation in such initiatives and corresponding commitments do not necessarily lead to sufficient progress in terms of sustainability.

• This is shown by a recent study on corporate climate targets in the G7 countries by the non-profit organization CDP, which operates a climate data disclosure system for companies, cities and governments. Specifically, the Paris Agreement’s 5 degree warming target is “currently unattainable.” Taking into account the current emissions pledges of major corporations in G7 countries worldwide, we are looking at 2.7 degrees of global warming.

 

Excursus: Voluntary commitments to plastic reduction

The same picture emerges with regard to the voluntary commitments of companies to reduce plastic use. According to research by Deutsche Welle (DW) and the European Data Journalism Network, the food industry is clearly failing to meet its plastic targets.

• The study examined the plastic waste reduction commitments of Europe’s 24 largest food and beverage manufacturers.
• According to the research team, 98 plastic pledges from the past 20 years were identified.
• More than half of the commitments were made only in recent years, he said, mostly with a target year of 2025.
• Nineteen of the 98 identified pledges were related to reducing plastic packaging or new plastic.
• Two-thirds of the companies considered had committed to making plastic packaging
• One-third of companies are aiming to use a greater proportion of recycled plastics in their packaging, he said.

When comparing set and achieved goals, the research team states:

• Despite some concrete steps and results, corporations such as Danone, Ferrero and Nestlé are lagging well behind their self-imposed plastic waste reduction targets.
• Two-thirds of all “old” plastic targets have failed or are being dropped. Of 37 pledges that should already have been met, a large proportion (68 percent) are either unfulfilled or have been dropped.
• The next “litmus test” for the industry will come in 2025. By then, companies must have fully delivered on their current plastic promises.
• Some of the self-imposed goals have already become binding, regulatory requirements as a result of the European Union’s ambitious plastics legislation, he
• Self-commitments alone are not enough – this is the view of quoted experts, such as the Brussels-based think tank Changing Markets Foundation.

 

Packaging design

There is also still a lot of room for improvement in packaging design in terms of sustainability. Whereby air is one of the problems, according to consumer advocates. To be more precise: too much air in the filled packages, which is also suboptimal from a sustainability point of view due to an unnecessarily high use of materials.

• In random samples, the Consumer Center Hamburg x-rayed 15 products for which complaints had already been received from consumers. The result: All 15 items checked were at most half full, and many had even less content.
  • For example, a plastic can of vitamin B12 tablets from KAL contained an estimated 95 percent air, according to the Hamburg consumer center.
  • With around 65 percent air, a baking mix for banana bread from Baetter Baking, an almond cookie from Ricciarelli, a ready-made mix for an apple and nut cup cake from Lizza and Knorr ham croissants also scored particularly poorly.
  • Somat Gold dishwasher tabs and chocolate almonds from Lidl’s own brand Mister Choc were found to contain 60 percent air.
  • In the case of mini wafers from Bahlsen, the air content was as high as 50 percent, as was the case with a cake baking mix from Dr. Oetker and tortilla chips from Fuego.

In our Market Insight section, we take a comprehensive look at sustainability in FMCG and retail. There we present the top 5 trends.

 

CO₂ as new currency

Consumers have increasingly come to know CO₂ as a new currency in 2022. As various studies – but also market examples – show, Western consumers are increasingly willing to spend more money on more sustainable packaging.

It must be said, however, that there is currently no objective basis for sustainability assessment. Consumers’ judgments are often emotional and therefore subjective. However, consumers are well aware of this point and are therefore increasingly demanding reasonable and relevant information to support them in their sustainability assessment.

Companies in the branded goods industry are also aware of this development. Accordingly, more and more are assuming that the climate-friendliness of a product will play an increasingly important role in consumer evaluations. The first consumer products are already promising us that they are climate-neutral or even climate-positive.

At the point of sale, this product and packaging feature can definitely make the difference in the purchasing process. It gives consumers the feeling that they are actively doing something to combat climate change. As already mentioned, however, the prerequisites for a clean definition of climate neutrality or meaningful carbon labeling are currently still lacking.

 

Regulatory activities

Sustainability regulation has continued to advance in 2022. The significance of regulatory activities for the area of sustainability is immense. That is why we want to shed more light on this aspect – and therefore refer you to our “Policy” section at the end of this newsletter.

 

2023: Quo vadis sustainability?

The review of 2022 has shown that a certain amount of progress can be observed. Our industry’s sustainability efforts are therefore making progress. But the time for pats on the back has clearly not yet come. We need to do more to achieve more.

The recently concluded climate conference in Egypt has shown that the results achieved so far in terms of sustainability are far from sufficient. At the same time, it represents – not only formally – a new focus.

 

Climate Conference COP27

The “United Nations Framework Convention on Climate Change, 27th Conference of the Parties” (COP27) was held in Sharm el-Sheik, Egypt, on the Sinai Peninsula from November 6 to 18, 2022.

 

New focus

What made this climate conference special was that it was the first COP that was no longer about negotiating the framework that had been adopted as the “Paris Agreement” on December 12, 2015. Its elaboration was completed last year at COP26 in Glasgow.

From now on, the focus will shift more to the actual implementation of the agreement. And as discussed in the review of the year 2022, this is lacking in many areas. To put it in a nutshell: The measures taken so far to protect the climate and reduce greenhouse gas emissions are far from sufficient to achieve the 1.5-degree target for limiting global warming.

 

More speed

In order to improve and achieve the necessary results, every industry must make its contribution. This also applies to the packaging industry. It must step up and increase its pace of change.