Quelling CEOs’ Fears Around Raw Material Prices with EPR

Guest blog by Michael Washburn, Ph.D.

Michael Washburn

Michael Washburn, Ph. D. is Vice President of Sustainability for Nestlé Waters North America (NWNA).   His work includes helping coalesce NWNA’s efforts to increase recycling in the U.S., innovate in energy use and building design across its manufacturing facilities, engage in constructive water policy initiatives, and educate and engage with stakeholders about the environmental efforts of NWNA. Michael has spent 15 years working in conservation non-profits and universities on issues of sustainable forestry, land conservation, green building, and conservation leadership. He recently held a senior position at The Wilderness Society, focused on public-lands advocacy, and was Vice President of Brand Management at the Forest Stewardship Council- US, where his work advanced the adoption of independent forest-certification and product labeling programs.

Environmental Leader just published an article shedding light on PwC’s (Pricewaterhouse Cooper’s) Global Annual CEO Survey conclusion that raw material costs exhibit the most significant threat to business growth, according to 53 percent of CEOs. Being the largest bottled water company in the US, Nestle Waters North America (NWNA) certainly sees itself at the top of this list of companies concerned about raw material costs as well as environmental impact. As VP of Sustainability, I focus a great deal of my time considering the materials our bottles are made of as well as where those bottled end up once they have been used. Currently, NWNA is promoting Extended Producer Responsibility (EPR) US state legislation for packaging and printed paper. NWNA believes EPR is the best answer to contemporary volatile raw material commodity prices, especially the PET plastic we utilize to make our bottles. Unfortunately, these costs are only expected to become more volatile in the near future.  The implementation of EPR could steady the US market for PET as well as other materials by providing a consistent domestic supply of recycled PET (rPET) for the packaging material supply chain.

EPR: An Agent of Change

EPR has the ability to cut costs for businesses and organizations by decreasing energy and raw material expenditures, while also offering the environmental advantages of conserving natural resources and reducing GHG emissions. EPR puts the financial burden for recycling onto businesses with the use of private sector efficiencies. Brands become responsible for collecting and recycling their own products at the end of life cycle. This model gives businesses the impetus to look for more responsible ways to manage products all the way through end of use, such as reducing waste and operating costs. The packaged beverage business is particularly interested in EPR’s impact on the recycling of plastic bottles. The present recycling rate for plastic bottles in the US has halted at an unacceptable 29 percent. This causes an insufficient supply of high-quality recycled PET plastic (rPET) with which to make new bottles. As EPR improves recycling rates, we predict a more stable market for recycled materials and a decreased use of raw materials for industries across various sectors. The PwC survey indicates that 47 percent of CEOs intend to put efforts toward reducing their company’s environmental impact. If that’s the case, they should look no further than EPR as an effective approach to lightening their environmental footprint could while also saving those hard-earned dollars on raw material costs.

 

 

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