Environmental impact can damage your wealth

A good New Year’s resolution for the packaging and packaging materials sector would be to dig deeper into the environmental impact of not just carbon but water, too. Driving down carbon emissions is familiar territory by now for companies from conglomerates to the smallest enterprises and it has become a major undertaking to make improvements and then to report on the results in public documents.

Unquestionably, water has become The Next Big Thing from a corporate reporting point of view. A first global water disclosure project will start this year, asking the biggest companies with the greatest potential impact on world water resources to come clean on the implications for their businesses of tightening availability and rising costs of water.

These companies in many industries will be chasing supply chain partners, including packaging providers, for current data on water usage and future targets. An Eziserv assessment is likely to reveal that an eye-watering volume is being wasted, which if allowed to continue will equate to increasing financial losses.

Packaging manufacturers in the UK have access to various schemes to improve approaches to waste in different forms and in so doing unlock cost savings. A free, government-funded e-learning course, Rethink Waste, starts in early 2010. Modules cover how to collect benchmarking data and develop a waste-cutting action plan.

“With landfill tax set to rise to £48 per tonne in 2010/2011, the economic imperative to minimise waste at every opportunity is clear,” remarks Michael Savage, production specialist at Envirowise, a publicly supported unit which promotes sustainable use of resources, designed the course with the manufacturers’ organisation EEF.

Flexible packaging manufacturer Roberts Mart is busy cutting carbon emissions and bringing down the company’s energy costs thanks to new, resource efficient equipment paid for with an interest-free loan, under a UK business scheme run by the Carbon Trust. Thanks to the Big Business Refit scheme, Roberts Mart replaced old lighting and drying equipment and says it is saving around £2,000 on monthly bills, which after helping pay back the loan will eventually be ‘money in the bank’.

Teach-ins for suppliers up and down the country are ensuring they understand and can explain to prospective customers how to apply for loan sums of between £3,000 and £400,000 (€3,800 – €450,000).

Roberts Mart believes that retail suppliers who grasp this opportunity to reduce production emissions could be strengthening their position when the time comes to renew contracts with key customers, because supermarket chains and brand owners are keen to minimise the carbon footprint of their supply chains.

Water Disclosure Report

This year, 300 of the world’s largest companies will reveal their exposure to water shortages - an expected impact of climate change - in a first annual ‘water disclosure’ report to be published later in 2010 by the Carbon Disclosure Project (CDP).

By 2030, almost half of the world population will live in areas facing water stress, forecasts the United Nations. Companies could see water shortages impacting manufacturing processes and new regulations increasing water prices, says CDP.

The Water Disclosure Project report will become a resource for investors to evaluate those companies’ exposure to risk due to water stresses, says CDP. Companies in fast moving consumer goods, food and beverages, paper and chemicals, and pharmaceuticals will need to disclose figures on water usage and identify opportunities and risks in their own operations and supply chains.

In 2008, most companies had figures on their own water usage, but not that of their suppliers, and only half saw water as a risk, according to a small CDP pilot water disclosure project. The latest data are likely to show that the ‘water story’ has developed into an important chapter in corporate reports.

Links Between Water And Energy

The head of CDP Water Disclosure, Marcus Norton, told Packaging Today that environment experts recognise the link between water and energy, but industrial consumers do not yet fully understand it. The water footprint will develop much faster than that of the carbon footprint, according to some industry commentators.

Water footprint engagement is probably where the carbon footprint was three years ago, says The Coca-Cola Company’s director of corporate responsibility, environment, Ulrika Sapiro. Being a heavy water user, her company ‘jumps fast’, sensitive to pressure from possible threats from water resource depletion as well as investors.

Coca-Cola’s stated water strategy is ‘to safely return to communities and nature an amount of water equivalent to what we use in all of our products and their production’. Coca-Cola says it wants to improve water use efficiency by 20% by 2012 against a 2004 baseline, and is aiming for 100% compliance to ‘stringent’ internal wastewater treatment standards by the end of 2010.

The first Coca-Cola water footprint breakdown showed significant indirect, supply-chain water impacts. The product assessed was a 0.5 litre PET bottle, including an HDPE closure, PP label, tray carton and shrink film, pallet stretch wrap and pallet.

Ms Sapiro says she cannot divulge actual figures. “The numbers are not reliable. There are fluctuations and uncertainties present [but] they give an idea of the direction of travel,” Ms Sapiro told a European paper industry meeting in Brussels last November, which Packaging Today attended.

She said only that water impact in packaging lies mainly in the substantial volume of grey water needed for cooling in the production of the plastics bottle, label and cap. In the case of paper and board, the water for growing trees would have to be accounted for, she added. “We will start with what we can control,” says Ms Sapiro, who used to work for a water utility company in the UK. Packaging dependent brands Cadbury, Unilever, Nestlé, Diageo and major beer makers will join Coca-Cola in debating global water policy, as part of the UN Global Compact’s CEO Water Mandate, which focuses on critical areas of greatest impact and future supply chain risks. World Economic Forum, Global Water Challenge, World Water Forum and Water Footprint Network are other key debating platforms.

UK retailers and brand owners are exploring ways to cut back on resource use by trialling reusable and refillable systems.

Selected Asda supermarkets have set up Eziserv self-dispensing technology for shoppers to buy concentrated fabric conditioner in reusable pouches, which they can return to the store to refill up to 10 times. The project, starting January 2010, will give a saving in packaging of more than 90% when the pouch is reused, and scaling up could eventually mean lower overall cost to customers, says Asda.

Contract manufacturer and project partner Robert McBride anticipates that this ‘closed loop’ supply chain could reveal consumer perceptions of the environmental benefits of reducing packaging. Unilever says it is keen to see the impact of self-dispensing technology on packaging waste and road transport associated with supply of liquid products.

Container Reuse

In the home improvement sector, Crown Paints is trialling a reuse scheme that encourages trade users to return empty polypropylene paint containers for cleaning and refilling. Meanwhile, DIY chain B&Q has tested a prototype reusable plastics packaging format for delivering skirting board, which completed more than 20 trips. B&Q’s reusable transit Carrierpacs for kitchen worktops reached 80 cycles.

Recent research by the UK grocery sector found that 85% of manufacturers believe sustainability is not yet high enough on the shopper agenda and interest in green products is still in its formative stages. However, IGD consumer research indicated that shoppers are concerned about the environmental impact of products.

“While they are becoming increasingly price sensitive, they are not leaving their ethical concerns at home when they go food shopping,” an IGD spokesperson explained. “The aspiration for high quality, more sustainable food remains, but people are scrutinising closely to get the best value for their values.”

Retailer suppliers have either stepped up their investment in sustainability or kept it the same during the recession, and it is set to be a major feature in the marketplace in the coming new decade, according to IGD.

Three-quarters of suppliers think that sustainability will play a greater role in their trading relationships with retailers in the near future. And just over 40% view increased global competition for resource and more complex legislation as among the biggest threats to wider business sustainability in 2010 and beyond.

Tesco’s UK business claims that since July 2009 it has managed to divert all its waste away from landfill, which is contributing to lower levels of landfill methane gas. “Methane gas is significantly more damaging to the environment than carbon emissions,” a company spokesperson told Packaging Today.

Further, she said: “Recovering the maximum amount of recyclable materials from the waste, Tesco is reducing the carbon footprint of future product lifecycles.” A 30% reduction in the carbon impact of the products in the supply chain by 2020 is the goal.

Tesco’s boss Sir Terry Leahy has aimed to reassure suppliers, saying: “We are neither imposing nor seeking to impose this target on you. We can achieve our target only with your co-operation and your collaboration.”

Secondary and tertiary packaging is being incorporated into the coming new Courtauld Agreement (Courtauld 2) to go still further in eradicating unnecessary waste. Tesco, one of the many signatories, is already recycling used cartonboard boxes to make new ones in a 14-day cycle. Courtauld 2 will come out later this year, reports Andy Dawe, head of retail packaging at WRAP (Waste and Resources Action Programme). The aim, through cutting packaging and food waste, is for absolute reduction in terms of CO₂ and equivalent – that is, greenhouse gases such as methane which is known to have 24 timesgreater potential impact on global warming.

“It is little understood by politicians the role resource efficiency can play,” said Mr Dawe, adding that a possible minus 8% waste by 2050 would have significant potential without negative impact on ‘UK plc’, a WRAP report concluded.

European rigid plastics packaging manufacturer RPC Containers expects to achieve its 40% energy saving target on generating chilled process water at its Corby, UK, site thanks to ‘intelligent cooling’. IsoCool’s TC500 free-cooling system was retro-fitted to the Montair chiller plant in August 2008: it has already cut the annual running cost by 45% and will have paid for itself by October 2010, says the company.

The UK’s major dairies are doing their bit to ‘milk’ resources for greater environmental value and increased demand for post-consumer recycled high density polyethylene. The Government has set the industry a target to incorporate 10% r-HDPE into plastics milk bottles by 2010. Recycling group Greenstar WES reports nearly doubling production of r-HDPE between October 2009 and January 2010. Greenstar’s managing director, James Donaldson, sees no technical barrier to increasing recycled content up to 50% by 2020, but stresses it will take more than innovation to reach environmental targets. Investment and commitment will be the most important factors, he says.

And investment and commitment will be what every company needs to meet the expectations of investors, governments and end-consumers to keep their business sustainable. ¦

Further Reading

The European Water Partnership (EWP) has published its informative EWP Water Stewardship Newsletter. visit www.european-waternews.com

WRAP (Waste and Resources Action Programme) has published a timely report called Meeting the UK climate change challenge: The contribution of resource efficiency. It can be downloaded at www.wrap.org.uk

An update on energy and water policy can be found in The Confederation of European Paper Industries Sustainability Report 2009, available to view at www.cepi.org