Tell us a bit about Unilever’s approach to Circular economy.
Unilever is one of the first FMCG companies globally to commit to sustainability, and we did this way back in 2010 when we said we would halve our environmental impact. And in 2017 we reaffirmed it, committing to ensure 100 percent of our packaging will be designed to be fully reusable, recyclable or compostable by 2025. In 2019, Unilever was also the first major FMCG company to commit to an absolute plastics reduction across our portfolio, stating that we will halve the amount of new plastic used and accelerate the use of post-consumer resin (PCR).
The circular economy model focuses on the three Rs, which I think is well known today. In a circular economy, waste is treated as a valuable resource that can be reused and recycled, thereby not only reducing the volume of trash, but also generating new economies and new opportunities for markets.
I think it’s important to pause at this point to talk about plastic, as the material is now being frowned upon with many consumers and consumer groups pledging to banish plastic packaging. It increasingly ranks as one of the major materials to get rid of to protect the planet. Yes, there is no place for incorrect handling or misuse of plastic and no waste should end up in waterways and oceans. In the last few years alternative materials like glass, paper and other packaging solutions have been gaining popularity due to better biodegradability in some cases. However, when you look at the total impact of plastic vs. most of the other materials, from sourcing of materials to transport, manufacture, consumer use and disposal, plastic has a better environmental footprint than glass. The very properties that make plastic risky such as its lightness, durability, long lifespan, also make it a great social and economic asset as it can be used multiple times. Recent studies show that it maintains similar properties for reuse up to seven times.
It might be a longwinded way to answer the question, but it is important to recognise that plastic packaging plays an important role in protecting products and reducing food waste. It’s durable and the most cost-effective material with multiple uses. Therefore, we have to get the circular economy to work; there is no other material like it.
Unilever recently announced that 70% of all packaging in the MENA region is fully recyclable. Could you elaborate on that?
Unilever has to a big role to play in the MENA region. We are one of the few global companies that have a wide product portfolio under various categories. We use all the major plastic materials in our packaging including HDPE, PP and PET as well as other materials such as paper, metals and multi-layer flexibles. We believe that with our massive portfolio, we can make a difference in the MENA region if we do things right.
While plastic components are recyclable, the recyclability also depends on local facilities for collection, sorting and the technology used by recyclers. In most cases, plastics made of multiple materials are not recyclable. While we’ve made good progress in many areas, there is still a lot of work required in design and in supply capability to meet our goals of ensuring 100 percent of our plastic packaging is designed to be reusable, recyclable and compostable by 2025.
In some cases where the consumer pack may look somewhat different, it is also important for consumers to understand these differences and the reasons so they don’t reject the product based on the appearance. We know that recycled materials may show slight colour differences and small variations. So, from design to marketing and communication, there is still a lot of work to do. But based on the progress we’ve made, we believe we are on the right track to meet those goals.
A throwaway culture and business models dominate especially in the MENA region. How feasible is the programme in this region and what are the roadblocks you foresee in terms of recycling plastic packaging materials?
This throwaway culture in some cases is a lifestyle choice or due to old habits. In most cases it is the result of a lack of knowledge and also the lack of the right infrastructure. At Unilever, we believe that it all starts with education to make people understand and thereafter change the behaviour in the right way to support a circular culture.
While we work to continuously educate, there is also a role to be played by the industry, NGOs, regulators and leaders to ensure the right regulations and infrastructure are in place to facilitate collection and recycling. There are many countries in our region that are already in the process of implementing extended producer responsibility guidelines and standards to facilitate this.
Looking back at 2020, I would say the MENA region is reeling under the impact of the pandemic and the consequences are going to be deep and long-lasting. The region’s economy is expected to contract by five or six percent and some economies are projected to shrink by 13-15 percent. While we face these difficulties, it is important to realise that plastic is a valuable resource and by structuring it in the right way, it can provide jobs and income for people and help boost the economy. Overall, we do believe it is feasible. Though there are roadblocks, Unilever in partnership with other organisations is systematically working to pave the way for this to happen.
What is your strategy to overcome these challenges also bearing in mind the business costs involved? Are you considering any kind of collaboration with other stakeholders on this front?
It’s a really important point and I’ll summarise that in two words, ‘collective action’. Be it private sector, government, environmental service providers, recyclers or NGOs, there is no stakeholder that can achieve this on their own. It needs collective action and a collaborative approach. Recognising this, in 2018 Unilever along with other companies, NGOs and the support of the government, formed the Coalition Circle (Coalition of Innovation in Recycling towards a Closed Loop Economy).
The coalition was set up to achieve sustainable solutions to the problem of packaging waste in the UAE, and to experiment and carry this out through collaboration with other stakeholders to deliver an effective circular economy initiative. A pilot study was launched in Abu Dhabi to identify issues and opportunities and the impact of various packaging materials on the circular economy, and to test the closed-loop model for packaging. It’s all about bringing all the parties together, conducting a pilot and seeing how collective action could help us with the end-to-end solution. In Jordan, we are founding members of the Jordanian Association for Recycling Consumer Packaging Materials to implement EPR. Overall, this has to be done through collaboration and collective action.
Unilever has highlighted that Lux Handwash, etc. have transitioned to PCR and that certain brands are made of 100% recycled plastic. How did you achieve this, also considering the inadequate nature of facilities, collection schemes, etc. in this region?
I think we have made good progress in terms of understanding ways in which we could include PCR in our products. In our markets, based on the lack of infrastructure, it is difficult to get the right quality and quantity of this type of resin. In order to incorporate recycled material into our products there are a number of things that need to be addressed. This includes the availability of the right quality and quantity, and though it might not be available in our cluster, we managed to find a source for this material. While we developed the supply chain and infrastructure, it was important for us to also develop the supply capability and test consumer acceptance, so we found a way to implement 100 percent recyclable plastics into some of our products. That for us is a significant achievement in the short term and our goal is to ensure that the circular economy really works and all the material that we source is from our manufacturing markets.
I believe Unilever plans to cut down on its use of plastic as well. How do you aim to do this? And do you think the reuse and other models will work in this region?
We aim to do this in various ways including packaging design concepts. We constantly explore ways to make our packaging more weight efficient and light weighting of packaging is one area. We look at alternative designs that require less material or different forms of packaging. There are also other packaging options, which requires us to educate consumers on different uses. All of that is work in progress. There is also a unique initiative called ‘Loop’ which uses the old milkman model, where products are delivered at your doorstep and empty packaging is picked up, washed, refilled and readied for delivery to another customer. It is essentially reuse of packaging. Loop was introduced in early 2019 and is being trialled in some of our markets in US and France. These are some of the alternatives we are considering in order to achieve our goals.
It has to work in this region and as I mentioned earlier, education is a key factor. In some markets there is a misconception about what constitutes post-consumer recyclable material. People see it as waste and don’t see the efforts that go into making it ready for reuse. But regarding Loop specifically, it might be a small segment given the way the market operates; it might be an e-commerce play initially, where consumers can order from a Loop website, or have a partner that we work with, where we could deliver online and collect the packaging. So the model needs to be tried and tested, and I think the real challenge is to get the supply chain to work. The other challenge is the need for education and consumers seeing the need to make this work. I think that would be the tipping point between a model like Loop working or not.
We are working with local companies across the cluster and have signed an agreement with Bee’ah, a key partner, to help us with the collecting, sorting and recycling infrastructure. We will continue to work with them and other stakeholders while developing third party capabilities for plastic collection and recycling.
By what date do you expect to make 100% of your packaging recyclable? How significant is regulation in bringing about requisite changes to help achieve your goals?
Our ambition is to achieve our 2025 goals, which is to ensure 100 percent of our plastic packaging is reusable, recyclable or compostable. And to achieve this, we need to consider a number of factors – packaging design, consumer education and habit change, regulation as well as infrastructure. While regulation plays a role in the use of PCR, recyclability is largely dependent on all of these things coming together. Recognising the efforts going into all these areas, we do see rapid progress in the short term. I think through collaboration and collective action in each of these areas, we will definitely achieve our 2025 goals.