The packaging industry is gearing up for new changes in legislation, environmental regulations, and consumer responses. We consulted Tanja Virtanen-Leppä and Janne Logrén from AFRY Management Consulting Ltd. for insights into the expectations surrounding the packaging industry. Tanja Virtanen-Leppä works as a Principal Consultant specializing in sustainability strategy development and implementation across various industries. She brings with her extensive experience in packaging development in both user and manufacturing companies. Principal Janne Logrén has worked on packaging assignments for the past decade and is currently leading the development of AFRY’s Waste and Recycling consulting business.
Sustainability is a major overarching theme in the packaging industry. Geopolitical tensions, supply chain challenges, cost pressures, and tightening regulations are bringing about changes in the sector. Packaging serves as a differentiation tool, and regulations are also expanding in the realm of marketing communications. The forthcoming Green Claims Directive aims to assist consumers in choosing verified environmentally friendly products.
At the national level in Finland, current initiatives include Green Deal agreements targeting the reduction of single-use plastic portion packaging. These agreements seek new technical solutions and operational models to replace disposable plastics.
The challenging economic situation and uncertainty about future legislation are likely to reduce packaging companies' willingness to invest, as they lack clear information on the allowed future solutions. The Packaging and Packaging Waste Regulation (PPWR) may lead, in certain applications, to a shift from fibre-based packaging to plastic alternatives. While plastic packaging solutions often possess favorable characteristics, their life cycle typically presents challenges that need to be addressed. Additionally, it should be understood that reusable plastic packaging also generates its own waste stream.
In Europe, especially legislative changes such as the packaging and packaging waste regulation (PPWR) related requirements for refillable or reusable packaging and the use of recycled material, require packaging companies to be prepared. Leading companies are also preparing for the upcoming corporate responsibility directive (CS3D, Corporate Sustainability Due Diligence Directive), which requires companies to be able to take a stand on the environmental and human rights impacts of the entire value chain. The already approved sustainability reporting directive (CSRD, Corporate Sustainability Reporting Directive) and the related European sustainability reporting standards cause significant changes in the mandatory reporting requirements.
Consumers expect functional, sustainable packaging in their daily lives and anticipate that sustainability won't come at a higher cost. Fiber-based packaging generally receives higher consumer approval in Europe compared to plastic packaging. Some consumers find themselves confused by various sustainability messages related to packaging. For instance, a Eurobarometer study in spring 2023 reported that up to 63% of consumers do not trust companies' sustainability claims. Although this study is not directly linked to packaging only, it can be considered an indication of growing consumer skepticism towards sustainability claims in general.
In connection with the Green Claims Directive, the EU has surveyed labels and claims related to sustainability communication. The survey revealed that there are 230 different sustainability and environmental labels in use in the EU, along with 100 labels related to green energy. The transparency and supporting evidence for these labels vary greatly, and the EU is currently developing the Green Claims Directive to address this. It has been noted that over half of these claims are either misleading or based on vague information. When adopted, the Green Claims Directive will prohibit the use of general and misleading environmental claims without detailed evidence to support the claim. Generalizing an environmental claim about a component to apply to the entire product will also be prohibited. Such claims may be seen especially on packaged products, where a packaging-related claim may be presented as applying to the entire packaged product.
As mentioned, consumers seek information about the sustainability and origin of products and materials. Regulations and reporting requirements will cover not only a company's own operations but also an increasingly significant portion of the entire value chain. This opens up opportunities for responsible, transparent environmental and origin labels that can meet the growing information demands. Sustainability becomes a criterion for selection. If the labels help companies in the value chain to achieve their own sustainability goals, a specific environmental or origin label may well be a reason to choose that particular packaging.
In general, third-party assessments of the ambition level and performance in various ESG areas carried out by organizations such as CDP, S&P Global / DJSI, and EcoVadis, consider joining well-known environmental certification and labeling systems as an indication of transparency. Success in such ESG assessments requires relying on systems provided by a third party. PEFC and other acknowledged forest certification systems are good examples of such systems.
The prevalence of forest certification for wood-based materials reflects the level of traceability. Broadly speaking, in advanced markets, supply chains are transparent and often complex in terms of traceability (involving many small forest owners and material suppliers). The requirements of the EU's Anti-Deforestation Regulation (EUDR) will change the verification and reporting requirements for traceability by, for example, imposing a requirement for geolocation of origin. In some Asian markets, such as China, certification does not play a significant role. Generally, traceability is associated with the emphasized role of ESG perspectives in advanced markets.
It is crucial that EU regulations are predictable and thus provide companies with a stable operating environment across the entire EU. The internal market should have consistent regulations without country-specific variations. The practice of varying national implementation of directives, with some member states introducing stricter national regulations, creates significant difficulties for companies in the packaging value chain operating in the EU market.
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jenni.piela@pefc.fi
thomas.lowenberg@pefc.se
morten.haugerud@pefc.no
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