The 411 on EPR

by Jul 28, 2021

Shelton Stat of the Week

22% of Americans think companies that use plastic in their packaging bear the primary responsibility for policing the production and use of single-use plastics. — Recycling Pulse 2020

The governor of Maine recently signed an extended producer responsibility (EPR) program into law. Though there are many details to hash out, the law will essentially require consumer product manufacturers to cover the cost of recycling their packaging.

Now, for years, as we’ve probed into consumer beliefs and biases around packaging, we’ve repeatedly heard, “I buy the product, not the package.” We know that plastic in the ocean continues to be the number-one environmental concern for people living in America, and that 76% of us say recycling makes us feel better about our purchases. We also know from our latest Pulse polling that “making recyclable products,” “supporting the recycling of products they manufacture” and “making products with recycled content” are three of the top five answers we get when we ask which three things companies could do to positively impact purchase decisions. Presuming “products” and “packaging” are somewhat conflated in the consumers’ mind, the Maine law is a win, right?

Perhaps.

Here are the upsides and downsides as we see them.

Upside: the playing field is leveled.

A reality of the current “voluntary” system of sustainability in place now is that the companies and brands that go the extra mile to source more sustainable ingredients and materials for their products and packaging bear an extra cost. Virgin plastic resin is less expensive than recycled resin, for example, so brands that include a high amount of recycled resins in their products and packaging pay a price premium for it. If they pass that cost along to the consumer without the benefit of excellent messaging and marketing, they could just look more expensive at shelf than their competitors and get rejected by the consumer.

By putting a regulation in place — essentially a tax on all the makers of products with packaging — every brand is bearing the same cost, so no brand gets a price advantage at shelf because they’re doing the less sustainable thing.

Downside: there are actually a few.

I just alluded to one: the consumer will ultimately pay the cost. Brands will simply increase their prices in order to recoup the cost of paying into the recycling program. The state of Maine estimates that it will be negligible, but it bears pointing out.

The other potential cost is to the environment. A Waste Dive article noted that the governor of Maine “made the case that a packaging-focused EPR law will motivate producers to create packaging that can more easily be recycled and that contains more recycled content.” Yes … and the Ellen MacArthur Foundation is working toward the same goal, too. The challenge is the potential for trade-offs. The packages that are the hardest to recycle (think multi-layer packs, for instance) exist for a reason: to protect the product with the lightest weight possible. By using less material in a package, you reap environmental benefits. And, of course, lighter weight means lighter transport, which reduces travel emissions.

I’m not advocating for the creation of more hard-to-recycle packages, but I am worried that in reaction to legislation like this, some brands will kind of throw up their hands and go back to heavier-weight, lower-cost virgin materials, creating different environmental problems. And because the consumer doesn’t understand things like life-cycle analyses, they won’t realize the trade-off that’s been made … so they’ll have no way to vote with their wallets.

One other downside: either party having too much say.

I don’t think it makes sense for manufacturers to set all the rules in the creation of EPR laws, but I don’t think it’s fair for the manufacturers to not have a say at all. We don’t want laws that allow corporate America to go on about business as usual — the idea is to change the game, after all — but we want laws put in place that don’t have the unintended consequences I mentioned earlier and/or that are impossible to fulfill.

We need everybody’s voice in the mix (business, regulatory, NGO, waste collection and the consumer) to create a sustainable future for packaging. I know there’s a tendency to think Big Business will just shirk its responsibility. That’s kind of been the case in the past, hence why we have to call this thing “extended producer responsibility,” as if the manufacturers didn’t have a responsibility to begin with. But ignoring responsibility would not be a winning strategy going forward. Consumers expect the companies they buy from to both minimize packaging and have a plan for where it goes when they’re done with it. Companies that take the attitude of “it’s not our problem” will be shunned by the market in the long run.

Bottom line: I think we’re going to see more legislation like what Maine just passed in the future.

Companies will be wise to help shape these laws — be at the table or on the menu, so to speak. But it’s also smart from a consumer perception/optics standpoint. If you think your core buyer won’t find out that you fought EPR laws tooth and nail, you’re wrong. They’ll find out, and it will look like you laid a problem at their doorstep. And based on our trendlines, they’re not having it.

News of the Week

The Recycle Bin: New Maine law to get manufacturers, retailers using less packaging
The Times Record

This Times Record article details how important this legislation is for both the future of recycling across the country and how it will impact Maine specifically. This article also goes into further detail about the intentions of the legislation to incentivize companies to streamline their packaging.
Read more…

Merkley: States will aid push for U.S. plastics recycling
Portland Tribune

Now that the precedent for packaging EPR legislation has been set in Maine, everyone is waiting to see if it will become a one-off or the beginning of the new normal. Oregon is already well in the works of similar legislation. This Portland Tribune article details a press conference with U.S. Senator Jeff Merkley and his thoughts on how EPR could become a national initiative.
Read more…

Good Company

Americans are putting their wallets where their values are. They buy brands (or those brands’ competitors) based not just on corporate behavior, but on how that behavior is perceived.

So how do you protect your bottom line and safeguard your reputation, all while making the world a better place? Well, good works. That’s the simple truth, and as you’ll learn in this report, Shelton Group has the research to back it up.

You’ll also learn how your brand can apply our insights to share your good stories in ways that captivate the public’s passion – so you can gain a market advantage.

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About the Author

Suzanne Shelton

Where Suzanne sees opportunity, you can bet results will follow. Drawing on her extensive knowledge of both the advertising world and the energy and environment arena, Suzanne provides unparalleled strategic insights to our clients and to audiences around North America. Suzanne is a guest columnist in multiple publications and websites, such as GreenBiz, and she speaks at around 20 conferences a year, including Sustainable Brands, Fortune Brainstorm E and Green Build.

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