Podcast transcript: How to use products and packaging to advance the circular economy
38 min approx | 13 Aug 2021
Welcome to Sustainability Matters, a podcast series of EY. My name is Chris Hagler. I’m one of the leaders of our Climate Change and Sustainability Practice and your host for this series. We designed this podcast to provide leading trends and practical advice around the environmental, social and governance, or ESG, issues and opportunities facing business today.
The world has been battling COVID-19 for over a year now with many of us spending much more time in our homes than we ever did before the pandemic. Perhaps this has given you a new appreciation for the household items that we consider consumer products. The items we use to stock our children’s makeshift classrooms, decorate our home offices, clean our kitchens, and send care packages to family and friends.
We rely heavily on consumer products, and we may not realize the tremendous impact our consumption of these goods has on the environment. One study estimates that by 2030, the growth of the global middle class will account for an additional $15 trillion in consumer spending. This is the equivalent of adding a second United States to global consumption.
Today’s podcast episode will be a discussion on the circular economy, talking through how product design and manufacturing can reduce the impacts of the items that we use. Much of what we hear today comes from the lens of consumer products, but also, these recommendations we’ll talk about can be applied to a variety of industry types. Here to discuss their experiences and offer their advice are my guests Ann Meitz and Mark Weick. Ann is the vice president of Sustainability and Packaging Innovation at 3M, and Mark is a managing director in EY’s Climate Change and Sustainability practice, and he leads our group’s Circular Economy Services. Welcome to both of you. Ann, as we get started, can you just give a little bit about your background and your role at 3M?
Certainly, Chris. As you mentioned, I’m currently the vice president of Sustainability and Packaging Innovation for 3M’s consumer business, and I also have a secondary role where I am the circular economy champion for the entire company. So, in this role I get to implement projects to help make our consumer products and packaging more sustainable, make our manufacturing operations more sustainable, and then I also work across the company on various circular economy projects.
And Mark, share a little bit about your background as well, please.
Thanks, Chris. I’m proud to have spent over 35 years in research, new product development, environment health and safety, and sustainability strategy leadership for a Fortune 100 chemicals and plastics manufacturing company, with a decade of directing both sustainability or environment, social, and governance issues, as well as enterprise risk management for the whole company.
In those roles I was responsible for setting the long-term sustainability goals, which included circular economy goals, all of the sustainability reporting, and the enterprise risk mitigation strategy development, as well as relationships with key external stakeholders. And this gave me a lens into corporate strategy, as well as how we could improve the social and environmental impact of what we were doing.
Perfect. Well, I’m pretty sure I have the right guests for this topic. Let’s start at the beginning. Ann, how do you look at design when you’re thinking about circularity or creating circular products?
Product manufacturers strive to build circularity right into the design phase. So, to do this, your product development teams take several factors into consideration. First, what can you be doing to design out waste and to use circular materials? This might include designing with recycled or renewable materials or just designing with less material all together. Second, you should think about how you can do a better job keeping products and materials in use. At a high level this might include things like designing your product so that it’s more durable.
One example that comes to mind from 3M is our Scotch-Brite floor scrubbing pads that are used in these large commercial floor scrubbing machines. The 3M pads have been designed so that their durability is four times that of competitive floor scrubbing pads, which means that less material ends up in the landfill when you’re done with the pads. But even better, the pads don’t have to be changed as often, which results in a productivity benefit for the user.
Another way that you can keep materials in play is to think about what’s going to happen to your product at the end of its life, starting during the product design phase. Can your product be recycled? Do you need to design it for disassembly? Can your product be easily repaired? Do you need to plan for any kind of a takeback program? If you look in the marketplace today, you’ll see takeback and recycling programs are much more prevalent than they were in the past. There are a number of clothing retailers who have setup resale programs, or even just recycling programs that you can bring old textiles in to help ensure they get a second life. You see recycling or resale programs for electronics, prescription drugs, and even things like car seats.
I think the last idea you should consider during that design phase is your business model. Would it be beneficial to leverage some type of a new, more circular business model? Do you need to add a rental program? Leasing? Rebilling? Repair? The possibilities are really countless if you start trying to think about circularity right at the beginning of the design phase.
That’s right, Ann. I think there’s going to be a lot of opportunities for new product innovations to anticipate the accelerating needs that we’re seeing in society and the regulations that we’re seeing put in place for improved maintenance business models, or repairing products, or refurbishing those products, or reusing those products, redistributing products, recycling those products, and resourcing into new raw materials. And that’s part of what we’re seeing with our clients as we work with them relative to their innovation strategy, to take into account the idea that society is moving rapidly through a series of carrots and sticks from the linear economy — the take, make, dispose kind of economy that we’re used to — into a more circular economy where waste is redefined and reused in many different ways that we’re not used to seeing right now.
That all makes sense to me. You were talking about in the design, one of the places to start is the materials that you use in the first place. Do you have some examples of 3M where your input to the raw materials that you’re using are contributing to a circular economy?
Absolutely, Chris. Material selection really is critical for circular products and packaging. At 3M, when we’re going through material selection there are a number of things we consider: can our product be made with recycled or renewable materials? Can we leverage a by-product from one process to use as a raw material for another process? Can we leverage new, advanced recycling technologies that will give us output materials that are like brand new or virgin quality? Or could we just design with less material?
One example is a project we implemented on our kitchen Scotch-Brite sponges. So, on our iconic yellow and green Scotch-Brite sponges, we’ve made the scrubbing fibers out of 100% recycled fiber in 18 countries. Now, maybe you’re sitting there at home and thinking, well, it’s just a sponge, really how hard can that possibly be? I might add that it’s much more challenging than you think to leverage recycled content into your products.
For example, on the sponge, when you use recycled content the material properties can vary more than if you’re using brand new plastic or fiber, so you need to redesign your process or your operating windows so that they can accommodate potential fluctuations in your raw materials. You might also need to do some formulation, tweaks, or redesigns so that you can ensure that you can maintain your product performance. Because, in the end, nobody really wants to buy a product with recycled content if you start to lose product performance.
A second example I can think of related to material choice has to do with packaging design. In the packaging space we’re of course focused on things like source reduction to lower our environmental footprint of our packaging, but it’s also been very important for us to design out problematic plastics like PVC or expanded polystyrene. By designing these materials out of our packaging, it helps improve the recyclability of the packages.
In our consumer business, we’ve actually removed PVC from over a thousand consumer product SKUs in the last couple of years. PVC isn’t curbside recyclable, and it’s really a problematic contaminant in the plastic recycling stream, so this has been a great effort for us to just get rid of it out of our portfolio.
Ann, you mentioned the difficulty, or at least the required change in your manufacturing process when it comes to recycled content; Mark and I have worked with some clients that even getting enough recycled content is a bit of a challenge. What type of partnerships could an organization like 3M or other manufacturers have to really help with that, increasing the recycled content?
Supply is a challenge. Today, we partner with a lot of organizations, NGOs, that are working to improve the whole recycling supply chain. So, there are groups like the Recycling Partnership or Closed Loop Fund that are looking at the different segments of the recycling supply chain. Because if we want to be able to buy more recycled content, it really starts at the beginning of the chain with consumers sending their recyclables into the system. So today, only about 30% of materials are getting collected. These NGO organizations are working to improve collection rates. We definitely partner with these groups on the front end as they’re trying to collect more.
There are other types of organizations that are also working farther down the supply chain with companies that are working to develop more plastic recyclers. So once your recyclables go out of the material recovery facility, or MRF, somebody needs to take that sorted plastic and turn it into a raw material that a company like 3M can buy. So really trying to build up those entities across the supply chain. So, we’ve partnered for many years with these organizations.
More recently, we’re starting to also partner with other Fortune 500 companies who have advanced recycling technologies. So, advanced recycling is an alternative to mechanical recycling. Advanced recycling can deal with more complex types of plastics. So, companies who are operating in this space can also offer recycled materials so it will add onto the availability of the already in-the-market mechanically recycled materials.
But I do think it’s important to collaborate across the supply chain to increase recycling and increase consumer awareness to the importance of recycling, and then to get companies on the other end to be buying recycled content. If any loop in the chain falters, the whole system suffers.
Mark, I know you’ve got some experience working with some industry partnerships. What’s your perspective here?
Ann is right about the importance of collaboration, and where we’ve seen as EY collaborations be most effective is as they span as much of the value chain as possible. So, one of the most innovative organizations that we’ve been working with is a member-based collaboration of people in the plastics industry all the way from plastic producers, to plastic packaging producers, to consumer goods companies, and, perhaps most importantly, waste management companies to try to make sure that plastic waste is not getting into the environment. And in this case, the perspectives of all of the companies that are participating are uniquely helpful in the collaboration.
Different parts of the companies have different understandings of the solutions that will be required and are each adding unique pieces to overall solutions. And as Ann already mentioned, the collection piece in plastic waste is critical. There are over two billion people who really don’t have great access to regular collection mechanisms for their waste, and so their waste can end up in the environment and then be persistent in the environment.
It’s important to take a collaborative approach, including not only industry members, but also environmental activist organizations, academia, as well as government organizations, that can each help to provide their own individual perspectives on how to make the transition from a linear economy into a more circular economy where that waste can be valued. A lot of times getting that waste to be valued is a matter of getting it to the right location at the right time for reprocessing. And this will involve some changes to business models, but this is the kind of collaborative work that will help to accelerate a transition to a circular economy.
It sounds like it would be difficult for any one company on its own to achieve circularity. It’s working with others, whether it’s NGOs or other companies. One other example of circularity is when a by-product of something you make becomes an input, and to your point, Mark, something of value to somebody else. I think 3M has some examples around that as well.
That’s right, Chris, we do. I think when it comes to by-products, it’s really important for your company to shift your mindset. What you previously might have thought of as waste really might be a raw material for another process in your own company or perhaps a raw material for another company.
At 3M we make roofing granules. These are granules that go into the shingles on your house. One of the by-products from this operation is something called natural pozzolans. At some point, the 3M division that makes roofing granules realized that natural pozzolans could also be used as an input to making cement. And even better, when a cement company uses the natural pozzolans from our operation, it actually reduces the greenhouse gas emissions or the environmental footprint of the cement that’s made. So, this is really a win-win for 3M and the cement maker. We’re taking by-product from our operation. They’re using it as an input into their operation. It reduces the environmental footprint of both companies.
And one of the key trends in this regard is the reevaluation of by-products and waste for their current value, as opposed to thinking about them in terms of valuations that you may have done on these by-product or waste streams, say, five or ten years ago.
Oftentimes, a company has done an evaluation on the marketability of their by-products in the past, maybe five years ago or so. And they’ve gotten stuck in their decision-making on the idea that this particular by-product stream or waste product really doesn’t have a whole lot of value, and therefore, has to be landfilled or incinerated in some kind of high-cost waste disposal method. We found it very worthwhile to work with clients to say let’s reevaluate the valuation of that stream in today’s context, where in some cases raw materials have become far more expensive or the supply chains for those raw materials have become more challenged, particularly in our COVID environment. The value of that by-product stream is increased such that it is usable as a by-product for some other industrial situation or some other consumer of that raw material.
So, it’s important to take a fresh lens to a circular economy strategy, as opposed to staying with the kinds of conclusions that maybe we came to at a time when the factors towards moving to a circular economy were just not as strong in terms of the market conditions or even the regulatory environment.
I think that’s a great point, Mark. Looking at valuations of materials can be tricky. It’s especially interesting at 3M. Sometimes we might have by-product from one operation or one plant that maybe could be leveraged at another plant. And getting the economics internally or externally right on this so that you’re encouraging your teams to be repurposing these materials and taking the waste or by-products from one manufacturing process and reusing them in another process is really important.
And perhaps shifting something from “I used to have to pay to incinerate or landfill,” so it was actually a cost, to where it could create something of value — it’s a good point, both of you, to do an analysis of your waste products and say is there a better way? Could I actually even make money off of some of these products?
Let’s shift a little bit. Ann, you also mentioned this idea of the right to repair or the opportunity to repair. My mother was a child of the Depression, and therefore, we were always very cautious. We repaired clothes and handed them down from generation to generation. It was common that we would repair home appliances and products until you just couldn’t use them anymore. That seemed to have fallen out of favor over the last several years, but we’re now starting to see where there is an opportunity for more and more consumer products to be repaired. I’ve even seen clothing where you can send your product back and they’ll fix it and send it back to you. How do you see that concept playing into your products at 3M? And Mark, maybe what you’ve seen some other examples in the marketplace.
“Repair” to be seen as an opportunity for new revenue streams. At 3M our health care business sells a variety of medical devices that are used in hospitals and dentist offices. We have 3M Healthcare Service Centers that offer repair operations for dozens of products in over 18 countries. So, the result is that we’re able to keep about 300,000 pieces of hardware per year in working order, which keeps them out of landfills. It’s also a great option for our customers. Maybe they don’t have the capital budget at this point in time to be able to upgrade to a new model, so this really offers people another choice.
“Refurbish” is something that I would call a close cousin to repair. If you have a product that can be used to refurbish some kind of an existing asset, that can also be very valuable for your customer. And I want to share a couple of examples from 3M in this space. I’m guessing many people that are listening have seen a whiteboard in a conference room that’s really past its useful life. Maybe the surface is ghosting where someone wrote on the whiteboard with a permanent marker that couldn’t be removed.
I’ve never ever done that, Ann, I promise.
(Laughs) Well, I’ve got a solution for you, Chris. 3M makes a product called Post-it Flex Write Surface that can be used to just surface right over the top of an old whiteboard, giving it new life. So, you don’t have to take that old whiteboard down and throw it into the landfill. You can just surface right over the top of the thing. The product can also be used to resurface chalkboards in a school or if you just want to transform any workspace into a whiteboard you can do that too. But even better, once you get Flex Write Surface up you can write on it with both permanent and dry erase markers. So, you don’t have to worry that if somebody writes with permanent marker, you’re going to end up in the same situation that you started. You can also clean the surface just with water.
A second example is our family of DI-NOC Architectural Finishes. These products would be used in a hotel, or maybe a retailer wants to refurbish their check-out lanes or the doors in their bathroom stalls, or anything like that. So, rather than ripping out doors and putting in new doors or ripping out whole check-out lanes, you can just resurface over the top with these DI-NOC Architectural Finishes. You can give things a completely new look and appearance. You can make them look brand new, and at the same time you’re keeping an enormous amount of construction waste out of the landfill. So, I think both refurbishing and repairing things can create new revenue streams for your company.
Those are great points, Ann, and we’re seeing this kind of trend as well in the mobility sector, as well as in the communications sector, where we’re seeing a bit of a conflict in transition between the kinds of old repair models in the automotive and the mobile phone industry where the right to repair was controlled more by the manufacturers, and moving towards right-to-repair being held for more services and products in public hands.
And I think we’re going to be seeing more and more of this trend as right-to-repair becomes a regulatory trend in many jurisdictions, being led by the European Union. So, you’ll see a lot more opportunities for business models around maintenance, and repair, and refurbishment, and reuse of products as we accelerate toward a circular economy.
I do think regulations are going to drive things, like the right to repair. In the European Union they have their circular economy plan that calls out a number of industries. So, for the electronics industry, right-to-repair is mentioned. For batteries in vehicles, there are regulations about what has to happen at end of life. For plastics, there are things on recycled content. For packaging, there are regulations on making them recyclable or reusable. So, I think right-to-repair isn’t the only thing that will be impacted by regulations.
As we think about the end of that circle that we have been talking about, end of life, what can a company do to make their products more recyclable, perhaps make it easier to recycle or more accessible to recycling? If we can’t reuse it, we can’t refurbish it, at some point there’s an end of life, what can a company do?
It starts with material selection, so making sure you’re using materials that are recyclable. Packaging is a great place where a lot of companies can start. Today, it’s very sad; over 90% of plastic isn’t recycled, and plastic packaging is the single biggest user of plastic. So, many companies are starting to focus on making their packaging reusable or recyclable. Picking options for materials like paper, paperboard, aluminum, polyester, high density polyethylene, things like that that are accepted in our recycling streams today.
I think another opportunity for packaging is to be eliminating single-use plastic packaging, especially flexible films that aren’t currently recyclable. You can take some types of flexible films to stores. Many retailers have collection sites, but it’s only for one flavor of films, polyethylene, are accepted at retailers for store drop-off. So, there’s many other types of flexible plastic packaging that just aren’t recyclable today. Another thing that companies can do to help with end of life on things is to give consumers proper recycling instructions for both the products and packaging.
There are a number of collaborative organizations that companies can join. One is called How2Recycle, where hundreds of companies are putting recycling instructions, recycling labels onto a package that are easy to understand. And as these labels are standardized, consumers begin to recognize them. And it’s really important for people to know, okay, this package, it’s not yet recyclable, so I need to put this one in the garbage can, but this other package I can put into my blue recycling bin. That helps keep contamination out of the system. So, those are a couple of things that companies can be doing to think about end of life for their products and packaging.
As you pointed out, there’s a lot of innovation occurring relative to material science and the ability for materials to be more versatile in today’s markets. Many of the plastic packaging materials that we’ve seen in the market over the last 10 to 20 years that are the most problematic are made up of layers of various kinds of materials, each doing a wonderful job for the first and primary use of that packaging to keep the food, for example, safe, and extend the shelf life, etc.
But now we’re seeing a lot of innovation in the use of single layer materials that can do the same kind of jobs that required multiple layers in the past. One of the things to do as you’re accelerating a circular economy within a company is to question the assumptions that you made about the utility of materials in the past. There are incredible product innovations that are occurring that make some new materials preferred as you’re trying to design for a circular economy.
Another thing that I can think of that companies can do in this regard is to create demand for recycled content materials. And many consumer goods companies are doing this now. They’re looking at the marketing advantages for the products that they’re selling by requiring recycled content, and they’re seeing the value in doing so with the consumers. Many people are now saying that they will prefer a product that is more sustainable, that contains more recycled content. And so, these are business model innovations that need to be considered as we’re moving toward a circular economy.
And I would also think that what companies can do is to encourage more waste collection systems for a broader segment of society. We’re not going to get materials back into a circular economy if we can’t collect them properly. This means more recycling streams for more people in a wide variety of not only United States jurisdictions but also global jurisdictions.
So, these are some of the things that come to mind that companies can encourage, again, working in collaboration with governments, with academia, with environmental activist organizations, to drive these kinds of innovations that will encourage a circular economy.
Those are really practical ideas. I really appreciate that, Mark. Ann, we have talked about so many creative and innovative things that are happening at 3M. So, it sounds like you’ve made a lot of progress so far, but what’s next? What do you see on the horizon for circularity at 3M?
At our consumer business we recently announced a new plastics goal. So, we’ve made a commitment to reduce our dependence on virgin fossil-based plastic by 125 million pounds over the next five years. So, by doing this, we feel we’ll be driving the use of more circular materials. We’ll be using more recycled materials, more bio-based or renewable content, and also striving to design with just less plastic.
We have many, many different opportunities within our product lines that we make — everything from home and office tapes to air filters — to be implementing these programs, and really exciting to see how this unfolds over the next couple of years.
Congratulations on your new goal. That is super exciting. And thank you so much for being here. And Mark, thank you also for being here today and sharing your business experiences. We’ve talked about several ways to make the economy more circular: design our products for circularity, substitute renewable or recyclable materials, selling by-products of your manufacturing process or using them in inputs to other processes, offering repair services and new business models to reuse our products more frequently, and improving end of life for recycling as well.
You’ve also highlighted for us some really practical examples as well as additional benefits for circularity. For example, you talked about increased productivity or perhaps revenue from new business models. So, there are absolutely environmental benefits, but also business benefits as well.
The one thing I heard both of you say and underscore more than once, by definition the circular economy requires partnerships — requires partnerships with other businesses, with NGOs, academia, government. So, circularity means working together to solve these issues.
Thank you again for being here to share your business experiences and your practical examples. To our listeners, thank you so much for tuning in into today’s discussion. Be sure to check out 3M’s website at 3M.com to learn more about their new goal and their circular economy initiatives and other exciting sustainability projects. And for more great conversations on corporate sustainability, keep your eye out for future episodes of Sustainability Matters. If you haven’t already, please follow me at @chrishagler and EY’s Sustainable Impact hub at @EY_Sustainable, and please subscribe to this podcast wherever you get yours. Thank you.