Part One of a two part series looks at a new initiative that seeks to go beyond bottle laws to getting all major consumer goods companies to pay for recycling packaging waste.
By Francesca Rheannon
Our throwaway culture is trashing the planet.
Paper and packaging from post-consumer use make up almost half the waste that goes into U.S. landfills. As they decompose, they give off methane, a greenhouse gas that traps 20 times more heat in the atmosphere than carbon dioxide. Plastic post-consumer waste is filling the oceans with microscopic particles that living creatures ingest, compromising their health – and the health of humans who eat them. And we are facing “Peak Everything” in our heedless rush to use up Earth’s resources for virgin manufacturing, instead of salvaging what we’ve already used for recycled production inputs.
The slogan “Reduce, Re-use, Recyle” has been exhorting U.S. consumers for decades to be more responsible about waste. Yet they lag considerably behind consumers in other developed nations in recycling rates. (And they aren’t all that great at reducing and re-using, either.) A coalition of public interest and investor groups wants to change that by turning attention from consumers to companies.
As You Sow Joins Investors and NGOs to Promote Extended Producer Responsibility (EPR)
The coalition has decided that it’s time for companies to step in and exercise some stewardship over the post-consumer waste their packaging generates.Called Extended Producer Responsibility (EPR), the concept is already law in47 countries, including the EU, Brazil, Canada, Taiwan and Japan. The laws mandate that any company that puts packaging on the market in any substantial amount must pay fees that partially or fully cover the cost to collect and recycle the materials.
Together with Trillium Asset Management and Walden Asset Management, the As You Sow Foundation brought an EPR proposal to Procter & Gamble’s annual shareholder meeting in October. It garnered 6 percent of the shareholders’ votes – not huge, but an encouraging start.
That follows on two other shareholder actions by the coalition. The first was at Kraft Foods’ annual meeting in May, where 25 percent of shareholders voted in favor of a similar resolution. Another shareholder action on the issue won 13 percent of the vote at the Kroger annual meeting.
CSRwire sat down with Conrad MacKerron, director of the Corporate Social Responsibility Program at As You Sow Foundation, to find out more about the EPR initiative.
Beverage Companies First To Support EPR
How did this project come about?
Conrad MacKerron: The work grew out of a related project that focused on getting beverage companies to take responsibility for bottles and cans. We spent many years going to shareholder annual meetings of companies like PepsiCo, Coca Cola, and Dr. PepperSnapple. After several years, the companies all gave us commitments to recycle 50 - 60 percent over the next five to six years. (Note: Currently, 35 percent of bottles and cans are recycled in the U.S.)
We followed up with the companies and said, “This is a great commitment, but how are you going to do this?”
This forced them to realize that, as beverage companies, they really only had a couple of choices if they wanted to have a national scope in increasing recycling rates. One was to promote the passage of more container deposit laws -- the nickel and dime deposits that exist in ten states. But historically they've been against these, so this was really a non-starter. The other was to import the Extended Producer Responsibility laws that have been passed in other countries and bring them here to the U.S.
This broadened the whole conversation from just the beverage companies to everybody -- especially the big consumer goods companies that have been putting most of the packaging on the market. So now you're talking Colgate, Procter and Gamble, Kraft, Unilever -- the big consumer package goods companies that really dominate packaging - as well as some of the big brands like Wal-Mart and Target. And also other companies you might not think about, like Dell, HP, and Amazon, which use a lot of boxes to ship things.
Leveling the Playing Field
Within the context of a political environment that's so hostile to regulation, what’s your perspective on imposing an additional fee on companies to force them to pay for recycling their packaging?
What's unique and exciting about this is that it's not just the usual suspects, like socially responsible shareholders and NGOs, asking for regulation, but some of the companies themselves. Over the past year, Nestlé Waters and Coca Cola have publically advocated for this. The reason they think it makes sense is that essentially it levels the playing field.
In the history of recycling and of trying to get companies to step up and take responsibility for some of their externalities, it's been very hard to get this done in a voluntary manner without some companies paying a lot more and others getting a free ride -- essentially being subsidized by the other brands that are paying for it. Right now, only the beverage companies are paying, with the deposit laws in ten states.
So Coca Cola and Nestlé realized that the only way to get an equitable system was to mandate new state laws that would require everybody who puts packaging on the market to pay something in, based on the volume or weight. They prefer an EPR to bring in their peers in other sectors to share the burden.
Including Waste Recycling In Sustainability Programs
What’s your pitch to the non-beverage companies to get on board with EPR?
We start a conversation: what is your responsibility for post-consumer packaging? It looks bad that when you've got over $11 billion a year in paper, plastic, glass and aluminum -- valuable materials -- that could be reclaimed and put into closed-loop systems where they're constantly recycled just going into a landfill. That doesn't look very good for companies that say they have strong sustainability policies. It seems like you've got a missing element.
We think these companies need to put this issue on an equal footing with many of the priorities they have now, like climate, water, and toxics reduction. Those are all important issues -- but so is waste.
Getting EPR Laws Passed
How will this EPR initiative actually get implemented?
A new nonprofit organization was started this year, Recycling Reinvented. It is funded mostly by Nestlé Waters and has Robert F. Kennedy, Jr. on board. The mission of this group is to develop model state legislation that companies and environmental groups can agree on and then to submit early next year into several state legislatures, such as Rhode Island, Delaware, North Carolina and Minnesota. The intent is to try this idea out in one or two states and see if it has any traction.
It may seem like a long shot, but you can look at a similar issue that involved producer responsibility over the last decade: electronic waste. A decade ago many of us were having similar conversations with Dell and HP and Apple.
Over the years, the companies started taking responsibility, with take-back programs, and producer responsibility laws have now been passed in twenty-three states in the past nine years, forcing the brands to pay for the recycling of their old materials. So the idea of EPR is growing and fairly healthy in the U.S. at the state level.
Under these state laws government would set high goals -- 75 - 80 percent -- for recycling glass, paper, aluminum and plastic. But they would step out of the way and let companies use their business savvy to do it in the most cost efficient way. Handing this over to business -- with some government oversight -- is a smart move.
As You Sow Foundation is talking to 50 companies, including Wal-Mart and Safeway, about joining the EPR bandwagon. In addition to Nestlé Waters, Coca Cola and New Belgium Brewing are publicly on board. In Part Two of this post, CSRwire will examine the issue of dealing with post-consumer waste from the corporate perspective. Are EPR laws enough? What else can companies do? And what challenges do they face?