The governor of Maine recently signed an extended producer responsibility (EPR) program into law. And this week, Oregon followed behind with similar legislation. Although there are many details to hash out, the law(s) will essentially require consumer product manufacturers to cover the cost of recycling their packaging.
Now, for years, as we’ve probed into consumer beliefs and biases around packaging, we’ve repeatedly heard, "I buy the product, not the package." We know that plastic in the ocean continues to be the No. 1 environmental concern for people living in America, and that 76 percent of us say recycling makes us feel better about our purchases. We also know from our latest Pulse polling that "making recyclable products," "supporting the recycling of products they manufacture" and "making products with recycled content" are three of the top five answers we get when we ask which three things companies could do to positively affect purchase decisions. Presuming "products" and "packaging" are somewhat conflated in the consumers’ mind, the Maine law is a win, right?
Here are the upsides and downsides as we see them.
Upside: The playing field is leveled
A reality of the current "voluntary" system of sustainability in place is that the companies and brands that go the extra mile to source more sustainable ingredients and materials for their products and packaging bear an extra cost. Virgin plastic resin is less expensive than recycled resin, for example, so brands that include a high amount of recycled resins in their products and packaging pay a price premium for it. If they pass that cost along to the consumer without the benefit of excellent messaging and marketing, they could just look more expensive at shelf than their competitors and get rejected by the consumer.
By putting a regulation in place — essentially a tax on all the makers of products with packaging — every brand is bearing the same cost, so no brand gets a price advantage at shelf because they’re doing the less sustainable thing.
Companies will be wise to help shape these laws. If you think your core buyer won’t find out that you fought EPR laws tooth and nail, you’re wrong.
Downside: There are actually a few
I just alluded to one: The consumer will ultimately pay the cost. Brands will simply increase their prices in order to recoup the cost of paying into the recycling program. Maine estimates that it will be negligible, but it bears pointing out.
The other potential cost is to the environment. A Waste Dive article noted that the governor of Maine "made the case that a packaging-focused EPR law will motivate producers to create packaging that can more easily be recycled and that contains more recycled content." Yes — and the Ellen MacArthur Foundation is working toward the same goal, too. The challenge is the potential for trade-offs. The packages that are the hardest to recycle (think multi-layer packs, for instance) exist for a reason: to protect the product with the lightest weight possible. By using less material in a package, you reap environmental benefits. And, of course, lighter weight means lighter transport, which reduces travel emissions.
I’m not advocating for the creation of more hard-to-recycle packages, but I am worried that in reaction to legislation such as this, some brands will throw up their hands and go back to heavier-weight, lower-cost virgin materials, creating different environmental problems. And because the consumer doesn’t understand life-cycle analyses, they won’t realize the trade-off that’s been made — so they’ll have no way to vote with their wallets.
One other downside: either party having too much say
I don’t think it makes sense for manufacturers to set all the rules in the creation of EPR laws, but I don’t think it’s fair for the manufacturers to not have a say at all. We don’t want laws that allow corporate America to go on about business as usual — the idea is to change the game, after all — but we want laws put in place that don’t have the unintended consequences I mentioned earlier and/or that are impossible to fulfill.
We need everybody’s voice in the mix (business, regulatory, NGO, waste collection and the consumer) to create a sustainable future for packaging. I know there’s a tendency to think Big Business will just shirk its responsibility. That’s kind of been the case in the past, hence why we have to call this thing "extended producer responsibility," as if the manufacturers didn’t have a responsibility to begin with. But ignoring responsibility would not be a winning strategy going forward. Consumers expect the companies they buy from to both minimize packaging and have a plan for where it goes when they’re done with it. Companies that take the attitude of "it’s not our problem" will be shunned by the market in the long run.
Bottom line: I think we’re going to see more legislation like what Maine (and Oregon) just passed in the future
Companies will be wise to help shape these laws — be at the table or on the menu, so to speak. But it’s also smart from a consumer perception/optics standpoint. If you think your core buyer won’t find out that you fought EPR laws tooth and nail, you’re wrong. They’ll find out, and it will look like you laid a problem at their doorstep. And based on our trendlines, they’re not having it.