Top ESG Packaging Trends: Macro Trends

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Citizens, governments, regulators and the media are demanding business action to address environmental, social and governance (ESG) challenges. Packaging companies that fall behind the competition on ESG will see an exodus of customers to a more sustainable packaging supplier and a decline in profits much sooner than expected.

Below are the key macroeconomic trends impacting ESG performance, as identified by GlobalData.

ESG shareholders and activists

Activist investors buy large stakes in a public company and then use the voting rights to pressure the company’s management. ESG issues are increasingly on the agenda of activist investors. BlackRock, the world’s largest asset manager, has vowed to take voting action against companies it says aren’t doing enough on ESG.

Amazon reportedly generated 210,000 tons of plastic packaging waste in 2019. As You Sow, a non-profit organization that promotes corporate environmental and social responsibility, disclosed all of its plastic packaging and the actions planned to solve the problem. The proposal was backed by 35% of Amazon shareholders.

Hashtag Generation

The generation hashtag represents around a quarter of the world’s population and its influence will only grow over the next decade as its members continue to enter the workforce. Consumers in this cohort will choose brands that embrace ESG from ethical business practices and a commitment to sustainability, transparency and philanthropy.

Eco-friendly packaging is one of the most influential features for environmentally conscious consumers. It is significant that for young consumers, information on the water footprint is considered slightly more important than that relating to the carbon footprint, reflecting a better awareness of consumers on the need for sustainable water consumption.

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Mergers and Acquisitions (M&A)

Many packaging companies are looking to acquire businesses that are circular economy-enabled so as not to fall behind on ESG issues. For example, in January 2021, producer of compostable biochemicals and bioplastics Novamont acquired packaging company BioBag Group, which specializes in low-impact solutions for waste collection and packaging.

Earlier, in August 2020, Sonoco bolstered its sustainable packaging portfolio by acquiring Can Packaging, a privately held designer and manufacturer of sustainable paper packaging and manufacturing equipment, for $49 million.

This is an edited excerpt from ESG – Main trends by sector – Thematic research report produced by GlobalData Thematic Research.

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