[00:00:07] Speaker A: Hello and welcome to Activating Sustainability, the Anthesis Podcast. I'm your host, Chris Peterson. I'm joined today by Liz Morris, packaging director, as well as Aaron Gregoire and Fergus Mooney, who are principal consultants with our strategy and circularity and value chain teams, respectively.
As you'll hear, they are all passionate about packaging. And in this conversation we'll explore the current and emerging epr, or Extended Producer Responsibility regulations in North America and globally, including the ppwr, or Packaging and Packaging Waste Regulation.
We'll discuss how to navigate that regulatory complexity, how to shift from a cost to value mindset around packaging and compliance and the systems and networks of peers needed to be successful. Welcome to the podcast. Thanks so much for doing this. Thanks for having us, Chris.
[00:00:55] Speaker B: Yeah, super excited I to be here.
[00:00:58] Speaker A: Fantastic. Well, maybe to kick us off, Liz, could you just give us a quick overview of kind of what is EPR and why does it feel so complex and challenging?
[00:01:09] Speaker B: EPR is the regulation I've been waiting my whole career for. EPR stands for Extended Producer Responsibility.
It's been around in Europe for about 20 years, focused in on a few different areas, packaging, batteries, textiles, electronic waste.
But it has recently showed up in America with the first few states having passed it, and it's causing some panic.
It's here for packaging in the US and it is a little bit complex with being able to understand basically what packaging companies are using, what types of packaging broken down really deep to the material level and. And then trying to figure out volumes at the store level, which can be challenging. Not all companies have that. Additionally, there are a lot of conflicting regulations to make this really fun. So what nuances to each one, especially in the U.S. so what one state has passed is not the same as what another state has passed. In Oregon you have to include your transit packaging. In Colorado you don't.
California is a whole different beast because. Because it also requires source reduction and being really able to understand what plastic you're using.
But it's been a lot of fun.
[00:02:24] Speaker A: It sounds fascinating. It feels like such a big broad title that Extended Producer Responsibility. And so just curious if there's a way that you would characterize it or like put some boundaries around what's generally included when somebody uses the term epr.
[00:02:42] Speaker B: Yeah, so it's basically putting the idea of waste management in the hands of the producer, in the hands of the people making the decisions of the products and packaging that they're using and being able to recover the materials out of it. So if you're generally a producer that is putting Something onto the market that could be reused, recycled, and get those materials back out of landfills. That's what this is the idea of. And the idea is that the fees for EPR that are paid for EPR basically go to funding the infrastructure required to do that. So it's not just a penalty, it's really meant to increase and improve a country's recycling and reuse capabilities or states.
[00:03:28] Speaker A: That's great. And I know, Fergus, when we spoken previously, you mentioned that dichotomy between what does that mean, say in the US or North America and Europe versus maybe some emerging markets or more globally. Do you want to speak quickly to that?
[00:03:43] Speaker C: Yeah, sure. So I think different regions of the world face different challenges, and therefore the implementation of an EPR system should have different considerations. And when we look at North America and Europe with fairly well established waste management infrastructure, we're looking at enhancing collection and recycling rates and establishing new and innovative mechanisms to take back problematic materials or introduce new delivery models that NIZ was talking about, such as reuse, refill, pre fill models that can lock in resource efficiency for longer use cycles.
But when you move your lens to the more emerging jurisdictions which are less mature with their EPR systems, they've got a whole different set of issues that they need to tackle with their policy, whether it's establishing recycling infrastructure in the first place or accommodating the informal sector. So think about waste pickers that are relying on this source of material to make ends meet, really. And when an EPR system is introduced, it will typically bring about it or bureaucracy, and that can have negative implications on that informal sector if they're not able to enter into this system. So, yeah, it's just a different focus and a different set of considerations that the policymakers need to bear in mind. Not alone the producers.
[00:05:22] Speaker A: Yeah, no. And it speaks to some of that complexity that Liz, you were hitting on around the regulatory piece. And I know all of you are working with lots of clients and maybe curious, Aaron, if there's some additional pieces beyond the regulations that make EPR particularly complex or challenging for.
[00:05:37] Speaker D: Yeah, no, absolutely. Yeah. I mean, I think one thing that I'm thinking about is a reason why EPR may seem so overwhelming to a lot of companies right now is that most companies don't really have existing processes to manage it. Right. So historically, a lot of packaging decisions have been driven by other elements, so like cost, functionality, branding, customer requirements. And so now we're really introducing this new variable of regulatory cost and regulatory performance.
And that information just isn't naturally embedded into most decision making processes yet.
So hence panic with companies, especially with the impending deadlines that one of which just passed and then another one is coming up.
[00:06:29] Speaker A: You use the word panic, which maybe is comforting for somebody who sits outside of the kind of core of epr, but clearly is hearing more and more about it. And I'd be curious to hear what is driving that panic or this heightened attention building off what you had shared Liz, of this has existed in Europe for a long time, but it feels to have kind of shifted here in North America.
[00:06:51] Speaker B: A couple of things are driving that panic is one, companies are realizing that they don't have the data, they don't actually have their packaging specs BOMs they've been really focused on product and packaging has kind of been that awkward third wheel in the background that's essential for holding the product, selling the product, the branding of the product, protecting the product, but hasn't really gotten that type of focus from a.
Just an importance of understanding what's in it and what makes it up.
And so that's part of the panic is companies can't find the data they need.
And then the other piece of this is really driven a lot by California and their source reduction requirement. They're the first state to require that companies reduce the amount of plastics in their packaging. And it's hard deadlines starting with 2027, 2030 and 2032.
And being able to make those switches on a packaging line can take a good one, could take about a year, a harder one, 18 months, two years.
Some of these changes are going to require real infrastructure changes for something like a reuse refill model, which also then needs reverse logistics.
So some of these plans can take years to actually implement for a company and just even understanding the investment that would be needed.
But what I love about EPR is it starts to really give that business case for companies to do that. Because now it's oh, if you can switch to this, it can reduce your fees and here's how we're going to look at that. Or you can avoid this penalty, which I think is really important for companies to finally have the business case. I know when I started my career and I got into sustainability marketing would say, hey, could we count that as a sustainability initiative? Like right, like packaging engineers in general, right. We look for ways to cut costs and then somebody's like, oh, what's the story here?
But now it's some of those things that you've always wanted to do can now possibly get pushed through, which is really exciting.
[00:08:58] Speaker A: That's great. And Fergus, I know you're bringing a slightly different perspective from across the pond and curious, as Liz was saying, you're living a little bit in the future for what we're experiencing in North America. So really interested to hear how's that showing up in the UK and Europe and maybe what are some of those lessons from a business value perspective once we get past this kind of reactive panic?
[00:09:21] Speaker C: Yeah, sure thing. So as Liz mentioned, yeah, EPR has been around for quite a number of years in Europe already and we're actually in a period of regulatory reform whereby Europe has evolved its introductory legislation into a more advanced system.
So I think from that producers have had time to prepare and get used to a new way of reporting, a new way of thinking about packaging and other problematic waste streams. And it seems like we're in EPR 2.0 in Europe now. And I know certainly when I joined the world of regulatory compliance back in 2019, I remember someone telling me that it's been the wild west of producer responsibility compliance, but now with much more granular data requirements, higher bills to pay from a compliance fee perspective, it really has a lot more attention and a lot more scrutiny on it, which is pricking up the attention of the C suite. So EPR is featuring on the agenda there and it's really important that it does so that producers can prepare and avoid any nasty surprises such as unplanned compliance costs or auditor scrutiny over incomplete data sets or inaccurate data sets.
What we're seeing is it's not just a reporting task anymore with a small price to pay. It's a reporting task with sometimes quite a large price to pay.
And the way to plan for that is strategy and forecasting and cost mitigation measures. And whether that's packaging redesign or reformatting your product formulation to unlock other benefits of different delivery models.
There's countless ways to think about those cost mitigation measures and there's definitely some pioneers or some market leading producers that are already doing this type of stuff that we can look at as the benchmark for what good looks like and follow in their wake. As to cost mitigation measures and planning,
[00:11:39] Speaker A: maybe that's a great segue to part of what I know we had talked about of like how do we build the strategy? And maybe Fergus picking up on that piece of if there is a gold standard for us to be aspiring to, how are you all supporting organizations going from where they are today to being able to realize some of the same value that others are Already doing maybe. Erin, do you want to kick us off on that?
[00:12:02] Speaker D: Yeah, no, absolutely. Yeah, I think it's a great question. So I think one of the biggest mindset shifts that we're seeing is that companies are initially viewing EPR as a cost center. Right. They're focused on the reporting obligations, the compliance deadlines, the new fees, that really immediate future. Right. But over time, ultimately the companies that are going to get the most value out of EPR will start asking a different question, which is how can we use this regulatory pressure to improve our packaging strategy and really create business value? And so that's where that we see that strategy piece coming in is that shift from compliance to actual value creation, as Fergus was referring to. And I think one thing that we're seeing with clients is that the same packaging decisions that can help reduce regulatory exposure can also create broader business value. Reducing material use doesn't just reduce EPR fees. It can also reduce transportation costs and improve operational efficiencies. And often it also will support the broader sustainability commitments that may exist within the organization itself. And so that's where we're moving the conversation from just compliance to value creation.
[00:13:26] Speaker B: And in some ways it can also provide different revenue streams. Right, Because a lot of what EPR is doing is really promoting the idea of reuse, refill models and as Fergus said, pre fills. So that's that collection process though of old materials, back material. But now that could be a whole new business line, a whole new business structure for companies to be able to expand their offerings. So there's also just a need as well for how to talk about this so your customers are trained and learning so they can participate. This because ultimately all of these systems require customer buy in.
[00:14:05] Speaker D: And maybe just bouncing off of that, Liz, is another thing that we see successful programs having is not just customer buy in, but also leadership buy in. These processes that are newly implemented into the organization needs to have leadership buy in and full company alignment. Because we're also seeing that any new initiatives are not just sitting within one team in an organization, it's dispersed across several different teams and functions. And so folks need to be aligned on what the goals are and what are those immediate next steps and long term action items for proper implementation.
[00:14:46] Speaker C: Yeah, I totally agree with you on that, Erin. And that's the internal collective buy in. But there are also supply chain collaborations that need to take place to really unlock the true business value of these changes that could be made to mitigate cost.
And whether we take lessons from other sustainability disciplines like our net Zero strategies where we engage with suppliers to make sure that they are coming along the right journey for the collective goal as well. The same can be said for a packaging or a product sustainability strategy with an EPR lens.
Your packaging manufacturer needs to know the specifications that you're trying to achieve and you need to know how they're going to get there and the timelines for that.
It's internal, as Erin was saying, it's upstream with supplier collaboration. And there's also horizontal collaboration to consider as well between industry peers which can set up these new collection or voluntary take back schemes which we see more and more examples of really good schemes taking place.
So yeah, it's shared learnings to ultimately achieve a wider benefit. And I always try to remind myself of that when deep in spreadsheets there's a better purpose for this than it is to me around resource efficiency and the carbon reductions.
[00:16:21] Speaker A: I love hearing the personal passion you all are bringing to this and can definitely hear that. But at the same time I can also feel the panic rising in me as you describe how this is it. Kind of ever expanding scope of challenges and things to address.
Could you just speak quickly to how do you engage with clients that are feeling that at the moment? Is there a process you follow that people can get their head around of? Like, how do we shift from panic to action?
[00:16:49] Speaker B: I think one of the big thing we do is we provide consistent and up to date information.
We come in with a calm presence. We can give a to do list, right? Like we can say, okay, here's the step we need to do. Step one is we need to understand your sales data and your specifications and your BOMs. Okay, that doesn't exist. No problem. You have your sales data, we know what the product is. And then being really experienced with packaging on our team and DPR start to understand like, okay, well here's what a BOM could look like, here's what a specification would look like for that product. Let's go test that, let's get in samples, we measure. I have samples all around me actually from companies where we've deconstructed and weighed and documented exactly what's making up the product packaging. And I think that's just coming in there with that study. Like we have a plan, this is achievable, is important for companies. And knowing that we're keeping an eye on the regulations, we're keeping an eye on the latest guidances and making sure that we're always getting out that consistent information as things evolve.
[00:17:55] Speaker A: That's fantastic. Yeah. I think really helpful to have that broad perspective. And as you were saying, Fergus, bring in some of those best practices and some tried and true approaches to breaking this down. As people shift from kind of panic, hopefully faster than I do, to action around that, how should people be thinking long term? Is this just a regulation we gotta meet and then we're gonna put it on the shelf and we'll pick it up in three years again? Or is there a shift in mentality, as you were saying, Erin, or some of the things you all have been referencing here that people should be thinking about?
[00:18:28] Speaker B: I think it's that shift in mentality. It's not just a once in three years thing to think about. The reporting is due every year and in some cases in Europe and other places it can be quarterly, it can be half a year, it can be semi annually. Like the reporting aspect does not go away. And so then it's really about building the systems to, to be able to do it consistently and accurately as possible.
But additionally, where Aaron was saying about getting the leadership buy in for these changes and then really looking to understand how these changes can drive business and drive revenue to a company and they don't just need to be a regulatory, we gotta do this. It can be a really exciting opportunity to try things for a company that they've been on the back burner because they couldn't make the exact business case. But now that business case is here for that and that piece is the really exciting piece for companies.
[00:19:27] Speaker D: Yeah, I totally agree with that, Liz, just to bounce off that. So right now most organizations are understandably focused on California's source reduction plan requirements because those deadlines are coming up quick.
So they're trying to understand our baseline, identify reduction opportunities, determine what's going to be realistically achievable.
Ultimately though, I think if we're looking at the big picture, longer term, the bigger opportunity is that companies can be able to use that work as the foundation for broader EPR strategy. So the exercise that they're going through today and this coming summer of understanding their packaging data, identifying hotspots and really getting like wrapping their arms around where they're currently at is that's exactly the work that's going to support a long term strategy.
[00:20:23] Speaker C: Yeah, I totally agree. And just to build on that as well, that particularly from, well, from a reporting perspective, it can be quite cumbersome of an administrative burden. The strategy stuff is setting your baseline and measuring progress against that baseline and whatever targets that you've set that are relevant to your business but from a future perspective in Europe at least, we know things change.
We're right in the heart of it now. And the latest packaging and packaging waste regulations from the EU is a real demonstration of a phased implementation of evolving regulatory requirements. And I know California have got similar requirements as well. And into the early 2000 and 30s we're going to see some quite strong enforcement of these regulatory requirements which could ultimately see market access restrictions, which means you can't place your product on the market unless you meet these requirements. So there is a long term lens to this. It's not just annual, quarterly, biennial reporting and a one off strategy. It's making sure that you can still supply your products onto the market legally.
[00:21:41] Speaker A: Yeah, it's amazing. I'd be interested to hear if there are examples of successful practice. They are your favorites or the ones they if people are looking for that inspiration of how do we go from where we are to a better output they you would tee up as one
[00:22:00] Speaker B: to explore if we're looking from a packaging innovation standpoint.
I'm always a fan of simple, right? Like the idea of even looking at things that actually don't affect the consumers as much and can really look at operational changes. So little things like switching away from pallet wrap to pallet straps, something that's reusable and being able to do small changes where it's maybe lightweighting a bottle by 5 or 10%, introducing the idea of PCR post consumer recycled content. Companies that have been able to successfully do those smaller things can then gear up to some of these bigger transformational projects that may be needed to do it well because they've already at least are coming into that mindset. But I also think companies as they're doing this need to pay attention to their business needs, their shelf space transportation costs because it's not as simple as a company to say ah, we're going to move everything to glass out of our plastic jars.
That's going to severely increase their transportation costs.
Seeing companies understand the real trade offs to these packaging choices I think is going to be that key.
[00:23:14] Speaker A: Maybe just talking about stakeholders within the organization. I know Fergus, you've done a lot of work in terms of engaging the sales team. Do you want to speak a little bit to that?
[00:23:22] Speaker C: Yeah, sure thing. So an observation that I have taken from attending some industry events recently is that when I'm talking to these sales reps about epr, it's either a matter of ignorance, not wanting to engage with a complicated system, or it's just not on their agenda.
So something that I would encourage producers of packaging, so a packaging manufacturer to start doing is to profile their EPR costs of their packaging portfolio and use this as a lever in their sales negotiations with the actual obligated producers. To demonstrate, well, here's how our products stack up against our competitors. And this is why you might want to consider using our format instead of the one you're currently using as it's yet really good way to demonstrate how packaging innovations are addressing the challenges of EPR costs. And when you combine that with things like product carbon footprints as well, you're getting a multi factor piece of analysis which maybe a PR team can latch onto as well.
[00:24:37] Speaker A: That's great. Yeah. I love those efforts to embed it within the business value, value creation.
I know we're coming up on time, so maybe a lightning round of thoughts from you all. I think we've done a good job of communicating the complexity. Probably panicked. A few people would love to hear. What would you recommend the next steps be for individuals getting going on this process if they're not already, or accelerating their activities if they are.
[00:25:03] Speaker B: The first thing to do is look at your data, start checking it out. Do you have it? Does it exist?
Second thing I would do is call us. Just call whoever you're reaching out to to start to really understand where are you obligated? What are you obligated for?
What are the requirements? What are we really looking at to help just really keep the panic at bay and be able to help companies navigate this.
[00:25:32] Speaker A: Great. Thanks, Liz.
[00:25:33] Speaker C: Yeah, I can add a little bit. We've got plenty of guides on EPR on our website, as well as loads of complimentary content as well. Whether it's a webinar or a usage guide, it's out there for producers to get up to speed with things and if they like what they read, they can certainly get in touch and we'll scope it out from there. Whether it's on their first part of their EPR compliance journey and they need to understand where they're obligated or if it's a more mature company that's looking to really drill into the regulations and see what the definition of recyclability is and how they can embed that more into their packaging design for circularity.
[00:26:19] Speaker D: Yeah. And maybe just a bit more holistically. I think while EPR may start as a compliance obligation, ultimately over time it should shift to being more of a business strategy discussion. Right. So the earlier that companies are recognizing that, then the more value they'll be able to capture.
[00:26:39] Speaker A: Fantastic. Well, thank you all so much for the time on the podcast. I know from engaging with each of you individually, this is something you're really passionate about, and it's been fantastic to see how you've supported clients and organizations in getting their heads around what this means and that transition from just responding to the threat of fines to really generating this business value, as well as that personal mission of leveraging the reduction in impact.
So thank you all so much. Really appreciate it.
[00:27:10] Speaker C: Thanks for hosting.
[00:27:11] Speaker A: Thank you, and thank you for listening. Please be sure to check out the resources linked in the show notes, including a valuable EPR survey, regulatory tracker, multiple how to guides, and resources to help you not just comply, but succeed in this moment. You'll find all those and more on the anthesis
[email protected] thanks again and take care.
Of.
