“Our planet is choking on plastic.”
This dire warning from the United Nations is, unfortunately, not an exaggeration. Consumers all over the world are buying one million plastic bottles per day, amounting to 400 million metric tons of plastic waste per year. Half of all plastic is used once and thrown away. now, less than a seventh (14%) of the world’s plastic packaging collected for recycling.
But plastic pollution is more than just an environmental problem. Business is also a problem. For organizations everywhere, the pressure is coming from many fronts to close the gap between what they can do and what they do to promote sustainable practices, especially around plastic pollution.
In 2022, the UN passed a resolution on plastic production and recycling as the first step towards an international legally binding instrument. The UN Plastics Treaty is part of a global push towards a circular economy: a method of keeping materials and products in circulation as much as possible to help solve global challenges including climate change, pollution, and loss of biodiversity.
The Plastics Treaty is not theoretical. It will be live by 2024. And now, forward-thinking organizations in Asia Pacific & Japan (APJ) are seeing the push towards a circular economy as more than just a compliance obligation.
For APJ’s sustainability leaders, the environmental push offers an opportunity to stay ahead of their competitors by creating business models that make sustainability a cornerstone of their growth strategies. Such companies are now limiting plastic pollution downstream, by collecting and recycling, and upstream, by sourcing sustainable materials.
Today, some of these companies are taking inspiration from sustainability innovators outside of APJ who are showing ways to get more results from a circular-economy strategy, designing products for reuse. -change and recycling based on a deep understanding of their actions throughout the supply chain, production. , and sales.
Changing Business Models
Mohawkthe world’s largest flooring company, is consciously changing its business models to reduce plastic pollution.
The US-based company used to make its carpets from virgin polyester. Today, Mohawk makes its carpet fibers entirely from plastic bottles—approximately 6.6 million bottles are used each year. In one recent year, Mohawk saved $4.3 million in landfill and hauling costs as well as the costs of treating and discharging water into public sewer systems.
Mohawk relies on continued partnerships with big box retail partners such as Home Depot, Lowe’s, and ACE Hardware. “We don’t sell to the end consumer,” said Jana Kanyadan, SVP and CIO, Mohawk Industries, “but the end consumer touches our product every day, whether at home or work. We need to make sure that the end consumer have knowledge about our products, and we are attracting them.”
Many organizations see consumers as eager participants and advocates for mitigating plastic pollution. With the help of its audience, Chilean vending-machine start-up Algramo is eliminating single-use plastics, changing its model to include reusable packaging that encourages people to pay for product, not packaging.
Customers using Algramo’s app to order pet food, laundry detergent, and many other items fill their own containers with their purchases at the vending machines. TODAY pilot its model in New York and in Chile, Algramo seeks to lead a “refill evolution” that reflects the kind of creativity that drives the circular economy.
Identifying Problem Areas Through Technology
Plastic taxes on businesses focus on how products are manufactured and disposed of, but future regulations are likely to place more obligations on the level of use of plastics, their material flows, and how customers use, reuse, recycle, and reclaim it.
To put themselves ahead of competitors, some organizations are increasing their own accountability for the use of plastic in their sourcing, production, and sales functions.
The fashion industry is one of the highest polluting industries on the planet: 87% of fiber input ends up in landfills. Understanding how retailers feel paralyzed by ambitious goals like achieving 100% sustainability by 2030, Stephanie Benedetto created Queen of Raw in New York to help stores identify valuable waste in their supply chains—and tap into a market that allows them to buy and sell unused fabrics that would otherwise burn or bury.
The lack of data along the life cycle of plastics and gaps in monitoring have long hindered companies that want to reduce their use of plastic. Queen of Raw helps fashion retailers capture such data through artificial intelligence, machine learning, and blockchain to help identify problem areas and cut their plastic pollution.
As the pressure to tackle plastic pollution mounts, organizations can only succeed by understanding the types and quantities of plastics they use and where they sit in their value chain. Organizations using a circular-economy strategy must combine data transparency with collaboration in their upstream and their downstream supply chains. And they need to align their environmental, sustainability, and management outcomes, including plastic pollution, with financial processes and decisions.
Doing good for the Earth is a business imperative. Increasingly, sustainability goes hand in hand with profitability. And organizations that take advantage of growing consumer demand and regulatory mandates to reduce and reuse plastic may find themselves ahead of competitors who ignore the signs—competitors who may throw not only their plastic but their income in the landfill.
Find out how a circular economy helps you deal with the impact of the linear economy on the planet, on people, and on business. Learn more about how to calculate the extended producer responsibility obligation, plastic tax, and corporate commitments to optimize material choices.
SAP invites you to respond to our Sustainability Survey (sapforyou.com)
