After eight years managing the Circular Economy Initiative at Geneva’s World Economic Forum and now as associate director of environmental, social and governance issues for Deloitte Consulting in London, James Pennington is well versed in EU and UK laws making businesses responsible for keeping their products out of landfills.
“We see it generally over electronics, batteries, packaging (and), increasingly, textiles,” he says of “extended producer responsibility” regulations. “Some countries like France have EPR for around 20 different categories or more, including medical packaging. I think there’s even EPR for old boats. … It’s quite the list.”
Pennington spoke during an NRF webinar, “EPR Business Opportunities and Considerations,” held earlier this month, where he and Deloitte colleagues outlined growing environmental responsibilities that businesses face around the world and what U.S. companies can expect as similar requirements expand here.
Pennington was joined by Deloitte Audit and Assurance Partner Brenna Vanderloop and Managing Director of Sustainability Tal Viskin, along with NRF Vice President of Corporate Social Responsibility and Sustainability Scot Case, who is also executive director of NRF’s Center for Retail Sustainability.
Deloitte is a sponsor of the Center for Retail Sustainability and co-creator of the Retail Circularity Action Guide, which provides a broad perspective of activity on environmental responsibility issues from a retail perspective.
More than 400 plastic taxes and EPR programs are in place in over 170 countries, Vanderloop said. These programs seek to hold producers accountable for the entire lifecycle of their products.
“One of the things we are seeing is that some of these EPRs can actually result in increased consumer appeal,” she said. “Being able to drive a broader strategy while compliant with EPR may help attract more eco-conscious customers as well as help foster partnerships with sustainable producers as well.”
“It’s sometimes helpful to think of EPR not just in a silo … but as a factor in the overall business case for circularity,” Viskin said. “Compliance reporting analytics … can be used toward fine-tuning around consumer sentiment so that you can get extra value out of those ROI investments.”
The 27 countries of the European Union have had EPR laws and regulations for years, Pennington said, but rules, fees and requirements vary from nation to nation, resulting in a “very patchwork” system. The same is happening in the United States as laws are passed at the state level in the absence of national requirements.
Regulations seen so far in the United States have included bans on single-use plastics like bottles or dining utensils, requirements that products contain a certain amount of recycled content, deposits intended to ensure that products like bottles or cans are returned for recycling, and emissions reductions measures, Vanderloop said.
Specific initiatives include legislation passed by the California Senate and pending in the Assembly that would require producers to fund programs that reuse, repair and recycle clothing and textiles. A 2022 Massachusetts law bans disposal of textiles and mattresses; Oregon adopted the Mattress Stewardship Act the same year.
A Maine law that took effect this year requires manufactures to cover the cost of recycling for packaging materials. And a number of states have passed or are considering laws addressing plastics recycling.
“This isn’t just apparel or fashion,” Viskin said. “This bleeds into some other interesting segments of retail, whether that be mattresses … or consumer electronics. This is starting to gather some steam.”
Given the state-level approach, compliance can be challenging.
“If something’s on a federal level, it’s possible to sort of stay up to date,” Pennington said. “But if it happens in a smaller market or just one state, it can be quite difficult.”
As suggested by the name of the webinar, Case said EPR requirements can present opportunities as well as challenges. But retailers need to be prepared.
“Retailers are not thinking about EPR just in the packaging space,” Case said. “They’re recognizing, like what’s going on in Europe, that these kinds of things likely are going to influence consumer expectations and consumer demands here in the U.S. People are building strategies now because integrating EPR and circularity into a business strategy is a multi-year process.
“If people are sitting back and waiting until the EPR laws are requiring specific activities, you might’ve missed the strategic opportunities. You might be stuck in a reactive mode instead.”