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A growing societal awareness of environmental issues is causing increasing numbers of companies to integrate sustainability practices and processes into their business operations. An area that has attracted particular attention is packaging. Packaging is critical to supply chain management because of its multifarious functions. It makes it easier to transport products, protect them in transit, and display consumer information.

Packaging has often attracted attention for the wrong reasons. The materials used have often been single-use and non-recyclable, generating pollution and waste. It is estimated that waste generation will more than double population growth by 2050, a situation that is not sustainable in the long term. The focus on packaging is critical because the packaging market is set to grow from $1.10 trillion in 2023 to $1.33 trillion by 2028 at a Compound Growth Rate (CAGR) of 3.9%. The UK packaging manufacturing sector has annual sales of £11 billion and an expected CAGR of 3.8% in the same time period.

There are several benefits for companies that are actively introducing sustainable packaging into their supply chains. It reduces the environmental impact of their operations and also provides opportunities for cost reduction, improved brand perception and enhanced engagement with key stakeholders. A McKinsey study revealed that consumers favoured brands that made positive ESG commitments, with more than 60% of respondents prepared to pay more for a product with sustainable packaging. Companies committed to sustainable packaging are aligning with global legislative and regulatory initiatives to tackle environmental and climate change issues. Sustainable packing is becoming a crucial factor for business success.

Key factors in using sustainable packaging

The aim of sustainable packaging is to reduce the impact packaging has on the environment throughout its lifecycle. For companies committed to reducing their environmental footprint, this necessitates a re-evaluation of their current packaging materials, especially the materials made from and how it is used to get their products to customers. This is a crucial step in integrating sustainability into supply chains, and there are several key factors to consider. What steps can companies take to ensure their packaging is sustainable?

Selecting materials: Choosing recyclable and reusable materials is a key factor in packaging sustainability. This involves replacing traditional materials such as plastic and Styrofoam with alternatives that are biodegradable or made from renewable resources such as paper, cardboard and bioplastics.
Reducing material: Reducing the amount of material used in packaging, especially secondary or tertiary packaging, can significantly reduce the amount of waste. Reducing the size and improving the shape of packaging optimises the use of space in storage and also in transportation, which can decrease the number of deliveries and lower carbon emissions.
Packaging design: Efficient design builds in sustainable material selection and reduction from the start. Key design considerations include ensuring packaging is compact and efficient by eradicating unnecessary layers and components, using lighter-weight reusable, recyclable material that can be repurposed, and using local sourcing of materials. Equally important is the protection packaging provides during storage and transit and its appeal to consumers by clearly displaying product information and attractive branding. Cost and production efficiencies can be created by standardising packaging for all customers.
Circular economics: Efficient packaging design supports circular economic principles. Using recyclable and reusable materials supports the continuous cycling of these materials back into the production process. For materials that need to be disposed of, companies can incentivise consumers to return empty packing so it can be disposed of properly.

Implementing Sustainable Packaging in Supply Chain Management

Effective integration of sustainable packaging into the supply chain requires companies to take a holistic approach to reducing their carbon footprint. Companies can’t achieve this alone. A collaborative approach with suppliers and manufacturers of shared objectives and best practices is essential for embedding sustainability processes at every stage of the supply chain in which packaging is a key element.

At the same time, companies must consider the cost, functionality and durability of packaging as well as their environmental responsibilities. Products need to be protected when they are stored and transported: it is costly to replace damaged goods. There are also very strict packaging regulations that need to be complied with for certain commodities such as food. Packaging also needs to be attractive to consumers and convey the brand image. It is difficult to balance all these considerations, but there are several initiatives companies can undertake to integrate sustainable packaging practices into their supply chain management and realise sustainability opportunities. We consider these initiatives below.

Collaboration: Implementation begins with company procurement teams sharing sustainability expectations and objectives with suppliers. Exchanging ideas and encouraging initiatives can solidify best practices. Criteria for the use of sustainable packaging can be incorporated into procurement evaluations and supplier contracts.
Prioritising sustainable suppliers: Procurement teams can prioritise suppliers that use sustainable packaging and are committed to reducing their environmental footprint. Basing preferment on sustainability credentials will encourage other suppliers to adopt sustainable practices.
Optimise logistics: Careful logistical planning is central to efficient supply chain management. Optimising packaging sizes and shapes reduces excess usage and improves pallet and package-to-product ratio efficiency during transportation. This decreases empty-mile journeys, thereby improving fuel use efficiency and lessening transportation emissions.
Shorter supply chains: Local sourcing and route optimisation can further reduce the frequency and distance of transportation. This reduces carbon emissions and helps to decrease the amount of packaging required in distribution.
Conduct a Life Cycle Assessment (LCA): An LCA evaluates the total environmental footprint of packaging from the extraction of materials used to produce packaging, through production processes, transportation, how it is used and stored, and how its end-of-life is managed. The evaluation will help to identify areas that can be improved.
Continuous monitoring and improvement: An LCA provides the platform for measuring the environmental impact of a company’s operations and for continuously monitoring and analysing performance and processes. Suppliers, manufacturers and logistics providers should be involved in the process so the company can benefit from their expertise. The company should stay abreast of innovations and developments in materials and processes that reduce environmental impact. Identifying areas for improvement will help to develop best practices.
Traceability: Introducing traceability into a company’s supply chain can prevent the reputational damage of being accused of greenwashing its sustainability credentials. QR Codes and intelligent labelling enable product data to be collected, mapped back through the supply chain, analysed and shared with consumers and regulators to verify and promote the company’s sustainability claims.
Storage: It is often necessary to store packaged products for lengths of time. Adopting environmentally friendly practices such as energy-efficient lighting, cooling, and heating systems in warehouses can significantly reduce greenhouse gas emissions.
Take the long view:  The purpose of integrating sustainability into the supply chain is to achieve long-term benefits. Therefore, strategic decisions and implementation should focus on long-term advantages rather than on quick fixes that may prove counter-productive in the future.

Many companies have turned to Perivan to manage the purchasing, storing and distribution of their corporate merchandise. Perivan has integrated sustainability into its business operations and supply chain and has huge experience in marketing operations services. Perivan’s distribution & brand management platform, Enable, helps companies to manage the procurement, storage, ordering, stock control and distribution of branded merchandise. If you would like to learn more about Enable or see a short demo, please get in touch.