Hey, SMEs, Let’s Talk EPR and SUPs!
Author: Devry Boughner Vorwerk, Founder and CEO
Today, we are having fun with acronyms: SMEs (small- and mid-sized businesses), EPR (extended producer responsibility), and SUPs (single-use plastics). Yet the title of this article is no laughing matter. We need to talk!
Our current SME clients and client prospects are facing increased scrutiny of the plastic waste their businesses generate. Legislation and regulations targeting SUPs are becoming prevalent across the United States and in other countries. From local ordinances banning plastic bags to states like California passing comprehensive laws mandating businesses reduce SUPs, the legal and regulatory landscape is evolving rapidly. The rules and regulations include EPR.
What is EPR?
The OECD defines EPR as “as an environmental policy approach in which a producer's responsibility for a product is extended to the post-consumer stage of a product's life cycle.” Under EPR, it’s important to note that responsibility for plastic waste is assigned to all actors that use the plastic along the supply chain. If your business uses plastic wrap on a retail product, then your company is responsible for the consumer’s handling of that plastic waste.
EPR is intended to incentivize and inspire businesses to innovate away from SUPs.
Simply put, if your business produces and/or uses a SUP, you can’t pass off the recycling issue to the final consumer. You must take ownership of the problem.
That’s a hefty responsibility!
Where is EPR on SUPs playing out?
For example, in June 2022, California SB54, the Plastic Pollution and Packaging Producer Responsibility Act, was signed into law. At the end of 2023, draft regulations were released for review and comment. The comment period for the rules just closed on May 8, 2024, which means the final regulations are in the hopper. For detailed information on the process, consult CalRecycle’s website. California’s law requires that by 2032, the industry must sell 25% less single-use plastic packaging and food ware in the state, make all single-use packaging and plastic food ware recyclable or compostable, and recycle 65% of single-use plastic packaging and food ware.
California's law is ambitious and requires an action plan on SUPs for your business today. Now, suppose your company is housed in another state or country. In that case, you still cannot bury your head like an Ostrich because the law in California is a bellwether for what is happening nationally. According to the National Caucus of Environmental Legislators, State lawmakers are advancing bills to make plastic producers more responsible for the plastic waste they create through EPR programs. EPR laws were passed in California, Colorado, Maine, and Oregon, and this year, 11 more states are advancing or considering plastic packaging policies, including Minnesota, New York, Tennessee, Illinois, North Carolina, Rhode Island, and New Hampshire. Additionally, according to information from the World Economic Forum, twelve U.S. states had some form of single-use plastic bag bans in effect as of January this year (although few are fully implemented at this time), and more than 500 U.S. municipalities in 28 states have passed plastic bag regulations.
At the federal level in the U.S., a notable example is S.3127, a bill introduced in the US Senate in October 2023, which aims to amend the Solid Waste Disposal Act to reduce the production and use of certain SUP products and packaging. The measure emphasizes the importance of producer responsibility in designing, collecting, reusing, recycling, and disposing of consumer products, aiming to prevent pollution from entering animal and human food chains and waterways. While it is not likely the legislation will pass Congress this session, it is a signpost that a federal response to the problem is brewing.
Notably, at DevryBV, given our experience, we can say with confidence that the business community will ultimately support a federal solution to the SUPs problem because it is more costly to comply with multiple state laws on SUPs than having ONE federal law govern the standards. Our message to clients: it’s coming. Get prepared.
Meanwhile, the European Parliament in April approved a proposed law that bans certain single-use plastic packaging such as mini shampoo bottles in hotels and thin plastic bags for groceries, Reuters reported. And within the African continent, at least 34 countries have banned various forms of single-use plastics and packaging.
It is important to note that bans on certain types of plastics have not been universally embraced, and, after being put into place, some shortcomings in the rules or their implementation have surfaced. A recent New York Times article described how California actually saw an increase in the amount of plastic bags being thrown away, despite laws curbing their use. To remedy the situation, this year, a new bill that expands California’s bag ban to prohibit all plastic bags – even the reusable recycled-content bags that are a major driver of post-consumer film resin sales – has begun working through the legislature. And, in Kenya, one of the pioneering countries in Africa on plastics regulation, international smugglers have been bringing outlawed single-use plastic bags into the country, filling landfills once again with unwanted trash. Despite the law, enforcement as been limited.
Businesses now find themselves at the forefront of both the problem and the solution. At DevryBV Sustainable Strategies, as part of our Integrated Sustainability FrameworkⓇ, we support our clients in anticipating these changes, building solutions and capabilities, communicating results to stakeholders, and leading the change. So, what are our recommendations for SMEs needing to adapt their production, distribution, sales, and marketing practices to align with the changing regulatory landscape?
Recommendations for Small- and Mid-Sized Businesses.
Adopt a “Possibility Mindset.” It's natural to feel stressed about new regulations requiring compliance and reporting. However, these changes reflect a critical need to address plastic waste as our waterways, soils, oceans, and natural habitats suffer. Embrace the mindset that the future demands reduced plastic use. From there, you can see pathways for your company to solve the plastics problem.
Conduct an Internal Evaluation. Assess the impact of the legislation and regulatory environment on your business. Determine if you are a producer of SUPs and whether your customers are requesting alternative solutions. For example, if your company produces plastic packaging for retail products, do you have an innovation team exploring next-generation packaging? Consider whether your business is forward-thinking and actively researching new materials, machinery, and innovations. If not, convene an internal team to start the innovation discussion.
Educate the Business on Extended Producer Responsibility. Your employees need to understand EPR so that they can become part of the solution. Often, your employees innovate solutions from the bottom up when they are presented with the company's challenges. Bring them up to speed.
Stay Informed on Legal and Regulatory Changes. Ensure your business has a dedicated person or team responsible for tracking the regulatory landscape and ensuring compliance. Regularly monitor laws and regulations to mitigate the risk of potentially hefty fines and reputational harm. Understanding the legal environment is crucial for compliance and competitive advantage.
Summary.
One thing is clear: the push to reduce harmful SUPs will only intensify, and your company is responsible for acting. A proactive plan is essential for your business's success and continuity (that’s what sustainability is all about). At DevryBV Sustainable Strategies, we are here to help you navigate these changes and turn challenges into opportunities for innovation and growth. Get in touch with us here.