One of the big problems with plastic waste is the difficulty in understanding the recyclability of materials. The other is the need for a legally binding instrument to eliminate plastic pollution globally by 2040.
Formal negotiations to address these issues, referred to as the UN Treaty to end plastic pollution, were initiated in November 2022 with the convening of an Intergovernmental Negotiating Committee (INC). Following several cycles of negotiations, the aim is to finalize the treaty by the end of 2024. The ambition is to develop a legally binding, international agreement to tackle plastic pollution across the entire plastics life cycle.
“The treaty represents a once-in-a-lifetime opportunity to unleash the potential of business to solve the plastic crisis,” said Stephen Jamieson, Global Head of Circular Economy Solutions, SAP, speaking at SAP Sapphire in Barcelona. “Its success is crucial. Without effective action, production of new plastic will double by 2040 and even now, only 10% of plastic is recycled.”
The UN Plastics Treaty is an ongoing process with the participation of 175 nations.
“Each market tends to evolve a unique industry approach to specific factors, so you have complex scenarios emerging for different brands,” said Jamieson. “The difficulty of determining the recyclability of a particular material is symptomatic of reality. For this reason, regulators are increasingly interested in how producers demonstrate their commitment to resolving these issues.”
Jamieson went on to explain that brands face significant risk because of poor data quality when establishing EPR systems in local markets. The ecosystem currently relies on secondary datasets that result in inaccuracies in fee calculations and misplaced investments in the recycling and reuse system. This makes it harder for brands to see the fruits of innovation in new packaging designs, stymying progress.
“We are advocating an ERP centric approach where we treat packaging data with the same level of scrutiny as financial information. That gives producers, PROs, policy makers and recyclers accurate insight on materials and helps optimize capital investments in the recycling system,” he added.
Country insights on packaging
According to a survey conducted by SAP Insights, a platform for highlighting digital business trends, most businesses are aware of upcoming regulations and their impact. At least 74% are quite well informed, and up to 66% of respondents say they understand the impact. However, most businesses must implement changes to comply with the regulations; at least 68% believe moderate to significant changes will be necessary.
To delve deeper into local scenarios, a series of pulse surveys were recently conducted in Italy, Spain and Portugal to discover if, and how, businesses are preparing for the new packaging regulations. The surveys include a range of questions that determine how well-informed businesses are of the new regulations, how prepared they are to implement them, and the level of change required to comply. The survey explores the types of data already collected for reporting purposes and the type of changes they plan to make.
For example, in the three countries surveyed, major changes would have to be made in order to remain compliant. Up to 84.5% percent believe they will have to reduce the quantity of materials in their packaging; up to 83% believe they must change packaging to recycled materials; and up to 75% believe they must change packaging design to make recycling easier.
Jamieson and other plastics experts believe that applying global rules will raise the playing field, but collaborative partnerships will be necessary for finding solutions. “Our best hope to drive change is through a collection of businesses that are driven by the same high ambition,” said Jamieson.
The right solutions
SAP is playing a key role in the business coalition to end plastic waste, and its software has been helping customers to manage material flows, including plastics, for decades.
“With SAP customers generating almost 90% of the world’s global business, we understand first-hand the challenges of today’s complex and fragmented web of regulations,” said Jamieson. “We know how difficult it is to understand current material flows and align upstream efforts with downstream solutions.”
Spanish wine producer Gonzalez Byass, for example, tracks plastics from the vineyard to the wine glass using SAP’s cloud solution for the circular economy, SAP Responsible Design and Production, which is designed to address all the requirements of the new plastic taxes.
Henkel, the multinational chemicals and consumer goods company based in Germany, is also engaging in responsible design and production with SAP. The company is providing its customers with sustainability data on its products, so they can also comply with regulations and gauge the environmental impact of choosing Henkel brands.
“We’re seeing a new focus on eco modulation with material level incentives to use more recyclable materials,” said Jamieson. “Businesses can play a pivotal role in eliminating plastic pollution, and we’re here to help.”
