Prepare for plastic legislation or face financial loss, states new report
SAP and research consultancy Earth Action have launched “Shift into Gear,” a report urging the global industry to prepare for incoming plastic legislation to protect its profit and the planet.
The report highlights the risks to businesses failing to scale plastic data management, with corporate liabilities associated with use of the material likely to exceed $20 billion globally by 2030.
“Shift into Gear” details how the risk to business can be acute, such as industrial disasters, or chronic, resulting from long-term damage to the environment or human health.
Transition risks include regulatory changes like plastic bans and EPR fees that increase costs, market shifts driven by evolving consumer preferences and stakeholder pressures, and rising R&D expenses to adapt to new technologies.
Additionally, companies face reputational damage from increased awareness of plastic pollution and greenwashing, as well as potential liability exposure.
To ‘myth bust’ a variety of corporate misconceptions, SAP and Earth Action urge businesses to adopt early disclosure of plastic usage to shield profits, with the report stating “the sooner companies can get a grasp on their plastic footprint, the better”.
EPR schemes have proliferated across the globe, with proposed or implemented programs in over 90 countries, states and provinces. A report case study highlights one multinational consumer company operating in 188 countries could face 63 varying EPR schemes alone.
Following the collapse of negotiations for a UN Plastic Treaty last year, additional rounds of negotiations are now expected to be announced in coming months. However, regardless of Treaty outcome, “Shift into Gear” underscores the global trend of increasing regulation, with international consumer goods companies facing around 100-200 regulations to bring a new plastic product onto the market.
SAP and Earth Action state strong global rules and standardised reporting across the full lifecycle of plastics would allow businesses to reduce their compliance burden as well as enhance more efficient communication across supply chains, decreasing costs. Companies that fail to adapt risk significant financial liabilities.
“Green taxation”, such as EPR or plastic taxes, can be a financial and administrative burden for a business, representing an estimated 0.5 to 1 percent of final product revenue and potentially amounting to millions for multinational corporations.
A solution to the complexities of adhering to differing global regulations is the leveraging of technology. Data management systems, such as SAP’s Responsible Design and Production (RDP), help to build a full accurate picture of global plastic material flows.
Such platforms enable the aggregation and translation of plastic and materiality data, meeting EPR requirements, calculating plastic taxes or identifying potential improvements for improved recyclability. As a result, businesses could save millions in costs associated with administration and regulatory compliance.
Delphine Garin
Delphine Garin, Manager, Circular Finance and Data, World Business Council for Sustainable Development (WBCSD):“Effective plastic footprint management is no longer just about sustainability—it’s just smart business.
“As regulations tighten and consumer expectations evolve, companies face mounting financial and reputational risks. By equipping companies with the tools and insights to navigate complex plastic regulations, we can not only advance industry leadership but also drive systemic change.
“As a business community, we can create a global landscape where sustainability and profitability go hand in hand, ensuring long-term value for companies, society, and the environment alike. This is the inevitable direction of travel, and forward-thinking companies are already positioning themselves to benefit.”
Sarah Perreard
Sarah Perreard, Co-CEO, Earth Action: “An ambitious UN Global Plastics Treaty is both a foundation for change in tackling the plastic crisis and a vehicle to streamline global corporate action. But with a Treaty or without a Treaty, corporations will be unable to erase their plastic footprint and avoid regulation.
“Inaction is no longer an option. Businesses that act now will be better positioned to thrive in the certain future where plastic management, transparency and accountability are the norm.”
Stephen Jamieson
Stephen Jamieson, Head of Sustainability Product Marketing, SAP:“Plastic data management has now become a business imperative. Companies that fail to adapt risk significant financial liabilities, while those that embrace digital solutions can gain a competitive edge.”
“SAP is committed to empowering businesses with the technology needed to navigate the evolving regulatory landscape and turn sustainability into an opportunity for growth as well as empowering businesses to future-proof their operations.”
