Sustainability Strategy? -  Brand manufacturers fail to meet their sustainability targets

A few years ago, large brand manufacturers defined ambitious goals regarding sustainability in their packaging and its production. These goals are closely linked to the 17 global sustainable development goals of the United Nations, aimed at acting responsibly and conserving resources worldwide. 2025 was to be the first milestone by which they intended to implement certain voluntary commitments. In the past few months, more and more businesses have backpedalled on this target and have had to admit that they will not be able to achieve their sustainability targets by next year. This includes corporations like Unilever, PepsiCo and Colgate-Palmolive.

In April of 2024, consumer goods manufacturer Unilever, one of the largest users of plastic packaging worldwide, went back on its 2019 promise to halve its use of new plastics by 2025. Instead, the company is now aiming at reducing new plastics by a third by 2026, as reported by British daily newspaper The Guardian. This would correspond to approximately 100,000 additional tonnes of new plastics per annum. This postponement of the self-imposed target was also attributed to deficiencies in existing recycling systems in the economy. In addition to the environmental targets, the company is also giving up the objective and responsibility of paying its suppliers a living wage by 2030.

According to its sustainability report published in spring, Colgate-Palmolive will likely also fail to meet its target of only using packaging that is technically recyclable, reusable or compostable eco-friendly by 2025. Nevertheless, the corporation had achieved 89.5 percent of its target by the end of 2023, but according to the ESG report, the challenges posed by flexible plastic packaging are currently preventing a full transformation by 2025.

The food and beverage corporation PepsiCo most recently also acknowledged that designing 100 percent of its packaging in such a way that it would be recyclable, compostable, ecological, biodegradable or reusable would likely not be possible by 2025. In its current sustainability report, the company estimates that it can achieve 92 percent of its target by 2030. In addition, the report notes that PepsiCo cannot meet several other targets related to improving corporate sustainability, including the circular use and reduction of plastics. By its own account, the company used approximately 2.6 million tonnes of plastic in its packaging in 2023. This increased the amount of new plastics used by six percent. However, PepsiCo aims to reduce plastics by 20 percent by 2030.

In its 2020 sustainability report, Henkel announced its intention to actively promote the development of a circular economy, including achieving 100 percent recyclable or reusable packaging solutions by 2025. In the last two years, 87 percent of packaging was already designed for recycling or reusability. The amount of new plastics from fossil sources is to be reduced by 50 percent by 2025 and the proportion of recycled plastic is to be increased to more than 30 percent. According to the company, the proportion of recycled plastic was 19 percent at the end of 2023. Nevertheless, the company is currently sticking to its timetable for achieving its sustainability targets.

A study conducted by German commerce newspaper Handelsblatt, which analysed sustainability reports from cosmetics companies last year, came to the conclusion that there was a definite possibility of the companies missing their targets, for example the target of producing 30 percent of their packaging from recyclates by the end of 2025. Although Beiersdorf managed to more than double its rate compared to 2020, it is still a long way off the 30 percent target at its current ten percent. L’Oréal even set a target of using 50 percent recycled plastic by the end of 2025, but had only reached 26 percent in 2023.

The Mars food corporation also currently doubts that it will be able to meet its targets for sustainable packaging by 2025. The company’s recently published 2023 sustainability report states that although progress is being made in adapting the packaging portfolio to future recycling requirements, the necessary design and infrastructure changes will take longer than expected. Given these numbers, it is challenging to further promote the production of packaging from natural and renewable raw materials, especially when paper is considered as an alternative to plastic.

In its recently published ESG report for 2023, Ferrero highlighted the progress made in improving packaging sustainability. This included measures to reduce packaging weight and use more post-consumer recycled plastic (PCR), for example. The target for 2025 is to design at least 90 percent of packaging in such a way that it is recyclable, reusable or compostable. Currently, the company states that it has reached 90.7 percent compared to 88.5 percent in 2022. However, as the US business magazine Packaging Dive reports, the 90 percent target from the current report was stated as a 100 percent target in the previous year’s report (2022).

The Shell oil corporation has also recently acknowledged that its ambitious promise to transform a million tonnes of plastic waste into oil annually by way of chemical recycling starting in 2025 is no longer technically or economically feasible. No new target was mentioned. The decision was justified by global demand for recycling chemicals falling short of expectations, a lack of available raw materials for pyrolysis oil producers, the slow development of the necessary technologies and an unclear legal situation, reports the business service Euwid.