Why the Circular Economy is best for business
All the signs suggest customers will buy more, investors will invest more and the best talent will be attracted to organisations that make the shift to the Circular Economy. Wherever your business is on that journey, we can help you.
Moving towards a more Circular Economy is going to have major benefits for business. Improving the security of raw material supplies, increasing competitiveness, stimulating innovation, boosting sales and attracting the best talent to newly created jobs. Not forgetting the pressure it will take off our planet.
We bring the right experts to the table
Our packaging customers globally are already engaging with us on circularity - although the conversations don’t necessarily start that way. While not all businesses will have KPIs based on the Circular Economy itself, they do have strategic, financial, sales and operational targets that circular solutions can help them meet. Plastic replacement, for one, is on the agenda for everyone.
We’ve looked at the benefits of the Circular Economy from a wide range of angles. By sharing our expertise, we can help people throughout your business meet a broad range of challenges and targets.
At DS Smith we are already a circular business and are perfectly placed to bring clarity, link ‘our story’ to ‘your story’ and be your gateway to the circular future.
A change of emphasis: The procurement expert’s view
Procurement is evolving. It’s no longer focused on just purchasing products to suit immediate customer needs, it considers products and services throughout their lifecycle.
By understanding how a product will be disposed of at the start of its life, our customers can structure procurement specifications to consider total lifecycle costing and not just the upfront price. This can deliver better long-term commercial value.
Many of our customers are looking for circular or sustainable solutions to solve problems they’ve had for some time. For example, nearly half of Europeans (46%) say they want to use cardboard or paper-based packaging rather than plastic-based packaging. So for one of our customers selling frozen, chilled and ambient food we met this challenge by developing ECO Bowl™, a new, more sustainable alternative using a corrugated cardboard tray and a thin foil, reducing plastic content by 85%. Not only that, at the end of life, the materials can easily be separated for recycling.
of Europeans prefer cardboard or paper-based packaging over plastic-based packaging
reduction of plastic content with our ECO Bowl™ sustainable corrugated cardboard tray
More for less: The financial expert’s view
The shift to the Circular Economy has considerable financial benefits. Reducing the amount of packaging waste and driving down CO2 for example can attract and retain customers and deliver efficiencies and value savings throughout your business and supply chain.
A report by the Ellen MacArthur Foundation reveals that by adopting Circular Economy principles, businesses across Europe could share a net benefit of €1.8 trillion by 2030 – that’s €0.9 trillion more than via the current linear development path.
According to the EU, only 5% of the value of plastic packaging material stays in the economy. The rest is lost after a very short first-use. The annual bill accounts for between €70 and €105 billion. Our circular, fibre-based packaging solutions could enable businesses to divert that money into other initiatives, like helping to combat climate change for example.
Circular Economy strategies also allow your business to anticipate and avoid the financial penalties of stricter regulation, such as the 2022 UK Plastics Tax and Extended Producer Responsibility Reforms (EPR) which could erode more from your bottom line.
At our Impact Centres you can discover how our packaging can deliver cost-effective sustainability benefits across your business.
Investors rightly see ESG as integral to deliver good financial returns as well as for customers, employees and the wider environment in which we operate. For us, sustainability is as much a necessity as a commercial opportunity and growth driver.
Increase efficiencies and reduce overheads: The Operations & Logistics expert’s view
Seismic shifts in consumer behaviour since the COVID-19 pandemic are presenting huge challenges across supply chains that require whole new ways of thinking.
How do you deliver more to people’s homes, without filling them with excess packaging, and without more vehicles making our cities more congested and polluted?
We are reducing the impact of transport by developing solutions to remove wasted space in packing, storage and distribution and our Now and Next Sustainability Strategy commits us to reduce lorry journeys by 250,000 by 2025.
Even minor changes can make a huge difference throughout your supply cycle. Just a couple of millimetres reduction in your box size can take hundreds of lorries off the road each year, lowering operational overheads, saving storage space, cutting labour costs and significantly reducing assembly and packing times.
We’re not just taking lorry journeys off roads. We’re reducing the environmental impact of the journeys we do make. Our new HGV tracking system accurately tracks vehicle movements and measures CO2 emissions and the impact on our clients’ sustainability targets. We can also use this information to set targets and preferences for our carriers which they must agree to before being onboarded as a supplier.
Every single step you take towards more circular solutions creates a domino effect of benefits and efficiencies throughout your business.
The right kind of impact: The design expert’s view
Despite the COVID-19 pandemic, our recent Ipsos Mori research suggests consumers’ views on sustainability have hardened.
85% want to buy products that use as little packaging as possible.
29% have stopped purchasing specific brands on the grounds that their packaging was not sustainable.
46% say they want to use more cardboard or paper-based packaging rather than plastic-based packaging.
With over 700 packaging designers and innovators, creating thousands of packaging specifications every year, we are helping our customers to create circular alternatives that increase loyalty and sales by keeping materials in use and design out waste. So your consumers get the reusable, recyclable packaging they demand.
Through partnerships, such as Aquapak and MULTIVAC, we’ve extended our ability to tackle ‘hard to recycle’ plastics with circular alternatives and we’ve developed over 650 designs focused specifically on plastic replacement – with over 54 million units of plastic replaced in 2021 alone.
Striking the right balance between protecting your goods and limiting the amount of materials used is a major challenge for anyone selling online, with 39% of all shoppers concerned by excess packaging. Our bespoke, sustainable solutions eliminate void fill and, by applying our revolutionary PACE programme standards we can protect your products while ensuring no more packaging is used than absolutely necessary.
The journey to the Circular Economy won’t necessarily be a straight line and there may be trade-offs to consider along the way, but we have developed our industry leading Circular Design Metrics tool which explicitly explains the consequences of your packaging choices to help.
Nobody comes to work to create waste or increase climate change. People have a latent intent to do good. What is lacking is the articulation of how you do good as a business. We can help with that.
Protect your reputation and reduce risk: The brand expert’s view
According to the World Economic Forum, a quarter of your company’s market value can be directly related to your reputation. Which is why 87% of executives see reputational challenges as more important than any other strategic risks in your organisation.
Although it can take decades to build, images of your brand’s plastic in the ocean (or just your local high street) can destroy your reputation in a moment.
We are de-risking supply chains by removing 1 billion items of plastic from supermarket shelves by 2025 and replacing them with sustainable, fibre-based alternatives.
Our fibre-based packaging can be recycled up to 25 times and we also have full Chain of Custody accreditation which ensures that any virgin fibres in our products do not originate from deforested areas.
On top of that, because your sustainability credentials are only as good as every link in your supply chain, we also ensure 100% of our strategic suppliers match our sustainability commitments.
Attract and retain the best talent: The HR expert’s view
The European Parliament suggests the Circular Economy could create as many as 700,000 new jobs across Europe by 2030. Yet a report by Price Waterhouse Coopers, suggests 88% of millennials will only want to work for companies with values they share.
We are led by our Purpose - ‘Redefining Packaging for a Changing World’. It’s our reason for being. It’s why we exist. It captures the value we bring to all our stakeholders and the wider world. We keep an eye on the future and recognise the changing world in which we operate. We also have a clear set of values which commit us to caring about our customers, our people and the world around us. As an employer of over 29,000 people across 300+ sites in Europe and North America, we create a workplace that people are proud of, with a real commitment to building a better future.
The Circular Economy is the key driver behind our innovation agenda. We're developing exciting and even radical innovations that demonstrate how we are leading the transition in our industry and delivering benefits for our customers, our world and society.
Talk to us about your next business challenge. The question may not be about the Circular Economy - but the solution could well be.