Extended Producer Responsibility Solution to CEOs’ Concerns over Raw Material Costs
A recent EL article discusses PwC’s Global Annual CEO Survey finding that energy and raw material costs pose the biggest dangers to business growth in the minds of 53 percent of CEOs.
As the US’s largest bottled water company, Nestle Waters North America (NWNA) considers itself high on this list of companies who take the current cost of raw materials seriously, not to mention environmental considerations surrounding this issue. At the direction of my CEO, as VP of Sustainability, I spend a great deal of my time focused on the materials that make up our bottles, but also on what happens to our bottles once they are empty.
Right now, we are advancing Extended Producer Responsibility (EPR) US state legislation for packaging and printed paper. NWNA sees EPR as the best solution to today’s volatile commodity prices for raw materials, particularly the PET plastic we use to make our bottles. These prices are only predicted to become more unstable in the coming years. We think implementing EPR could stabilize the U.S. market for PET and other materials by injecting a domestic supply of recycled PET (rPET) into the packaging materials supply chain.
The How and Why of EPR
EPR can save businesses and organizations money by cutting back on energy and raw material costs, with the added bonus of conserving natural resources and reducing GHG emissions. Designed using private sector efficiencies, EPR shifts the financial responsibility for recycling to businesses. Brand owners pay for the collection and recycling of their products when they reach end of use. This incentivizes businesses to find ways to responsibly manage products through their full lifecycle, including reducing waste and operating costs.
For many of us in the packaged beverage business, our interest lies in plastic bottles. The current US recycling rate for plastic bottles has stagnated at a dismal 29 percent. This causes an inadequate supply of high-quality recycled PET plastic (rPET) for us to use to make new bottles. As EPR continues to help recycling rates go up, we foresee a secure market for recycled materials and a reduction in the use of raw materials for industries across the board.
If the PwC survey stat that 47 percent of CEOs plan to work on reducing their environmental footprint is true, than EPR could just be the tool they are looking for to decrease their environmental impact while simultaneously making that raw material hole that’s been burning their pocket a little bit smaller.
Michael Washburn is vice president sustainability for Nestlé Waters North America.
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