By 2028, 75% of organizations with stated sustainable packaging targets will sunset voluntary goals in favor of adopting legislative guidelines, according to Gartner, Inc. Chief supply chain officers (CSCOs) must prepare internal profit and loss (P&L) owners for increased costs associated with new packaging legislation, which could rise to millions of dollars.
“By the end of this year, Gartner predicts that 90% of public sustainable packaging commitments will remain unmet, as organizations continue to rely on plastics and single-use packaging,” says John Blake, senior director analyst in Gartner's Supply Chain practice. “With packaging rules rapidly evolving, CSCOs must shift their focus to meeting extended producer responsibility (EPR) requirements, which will demand new investments in data management, package design and compliance resources.”
Key takeaways:
· As voluntary efforts fall short, several U.S. states have passed packaging EPR legislation, and packaging EPR is emerging as a global policy trend that shifts the financial responsibility for packaging waste and recycling to producers and manufacturers.
· EPR laws require organizations to register with a Producer Responsibility Organization (PRO), an entity that manages collection, recycling, and reporting obligations for producers. Companies must submit detailed data on packaging materials, quantities, and recyclability, and comply with varying rules across jurisdictions.
· Key impacts include adapting supply chains and logistics for reusable packaging systems, such as collection and redistribution; accelerating packaging redesign cycles, which can take two years or more; and incorporating legislative requirements into new product development and capital planning.
· Organizations that proactively address legislative requirements can mitigate these risks by designing packaging for circularity; aligning material choices to recycling infrastructure in target markets; ensuring package dimensions, labeling, and color additives do not render packaging nonrecyclable; and confirming suppliers can provide adequate quantities of sustainable packaging materials.
“Organizations that fail to prioritize packaging legislation in their design and sourcing strategies risk losing market access and eroding margins as EPR fees rise. Proactive compliance protects market position and also creates opportunities for differentiation in an increasingly regulated environment,” says Blake.
