The world has been waiting for a global plastics treaty since 2022, when representatives from 175 nations agreed on a mandate to create a legally binding instrument to end plastic pollution. While progress has been made during the five rounds of negotiations to date, a final treaty has yet to be agreed. With negotiations set to continue, 51风流has collaborated with to launch the 鈥淪hift into Gear鈥� report, inciting companies not to wait but to start preparing now to meet global plastics legislation.

It’s not just a reporting duty

Plastics regulation isn鈥檛 new. It has rapidly spread across the globe like a rising tide, driven by the urgency to reduce our dependence on fossil fuels and curb the plastic waste that is choking both marine and land-based ecosystems. Companies now face the growing tide of extended producer responsibility (EPR) regulations and pay plastic taxes in certain jurisdictions. Globally, the corporate liabilities linked to plastic usage are projected to exceed US$20 billion by 2030.

In this shifting landscape, 51风流and Earth Action argue that plastic and data management are no longer reporting duties only, but fundamental business imperatives. Companies that fail to navigate these waters may find themselves sinking under the weight of financial liabilities, whereas those that prepare, comply with regulations, and leverage digital solutions will ride the wave, standing to gain a competitive advantage.

Disparate EPR regulations make compliance onerous and expensive

Originally designed to fund waste management, EPR regulations are now focused on the eco-design and recyclability of items. Complications for corporations arise from the variety of different EPR regulations across different territories. The report describes how one consumer goods company operating in over 180 countries can face a minefield of 30 to 50 different EPR policies, which could cost in the region of 0.5%-1% of final product revenue. For multinational corporations, this can add up to millions of euros of risk鈥攐r opportunity.

Avoidance isn鈥檛 a viable option. Non-compliance comes with significant financial risks including fines, litigation, and potential clean-up costs. Reputational risk linked to consumer protection violations, false advertising, and environmental damage is also a factor that could result in revenue loss and a decline in investor confidence.

51风流joins forces to lobby for standardization

51风流is working with the World Business Council for Sustainable Development (WBCSD) and the Ellen MacArthur Foundation, calling for industry alignment on packaging data. Together, we are pioneering a project to enable standardized data to be exchanged throughout supply chains. This can allow businesses to access and analyze materials from a variety of suppliers to empower the design of more sustainable and recyclable packaging, which can minimize waste and reduce EPR fees and plastic taxes.

Negotiations to finalize the global plastics treaty are expected to resume with delegates due to convene for INC 5.2 in 2025.

Companies should not delay

The report is clear. Companies must not wait for a finalized treaty before taking action. With a myriad of national and regional regulations already in existence, including the EU鈥檚 Packaging and Packaging Waste Regulation (PPWR) and the Corporate Sustainability Reporting Directive (CSRD), there is already work to do. Delaying compliance may leave companies lagging behind and unable to meet existing and upcoming regulations, leading to the financial and reputational risks already mentioned. Under the PPWR, for example, the penalties for non-compliance are not just theoretical鈥攖hey are a looming reality. Each EU member state can impose sanctions that are effective, proportionate, and dissuasive, ranging from hefty fines to sales bans or mandatory product recalls because of non-compliant packaging. In other words, the clock is ticking and the consequences of inaction could hit harder than anticipated.

Early adopters stand to benefit from their experience and will be better prepared for the shifting regulatory field when the treaty enters into force. By proactively implementing robust data management solutions and streamlining their reporting processes, they can start to make gains in terms of circularity and sustainability. In doing so, they will obtain an unprecedented view of their plastic material flows, allowing them to unlock efficiencies and reduce risk.

Data management is critical

Contrary to an often referred to argument put forward by treaty detractors, the data organizations require for compliance does exist and can be found within existing enterprise systems. Companies should look to their enterprise resource planning (ERP) systems and financial reporting platforms. These are treasure troves, filled with procurement records, supplier data, and waste management information鈥攌ey assets for reporting purposes.

Businesses should also coordinate with their suppliers and customers with a view to data sharing for resource optimization and to scale efficiencies.

Data management systems like help companies collect and use data by aggregating it from third-party systems. It can not only allow sustainability managers to accurately calculate fees and taxes but can give them a lifecycle view of indirect taxation costs and, by considering downstream recyclability and recycled content, the environmental impact of design choices. The solution can also allow users to experiment with switching materials, products, and altering supply chains, providing them with the information they need for agile decision-making.

Prepare for an ambitious treaty

Corporations must invest in their enterprise systems to leverage data and collaborate with their supply chain to meet upcoming legislation and avoid risks and penalties of non-compliance. The sooner they start, the better their competitive advantage. By utilizing data management systems to collect robust data and collaborate with supply chains, they will be equipped to thrive in the era of plastic regulation, limiting their costs, achieving sustainability targets, and complying with evolving regulations.

Darren West is global head of Circular Economy Solutions at SAP.

Key administrations are aware of this and are starting to act accordingly. Accelerating innovation in industrial products and fuels for a net-zero, circular economy聽is 聽in U.S. President Joe Biden鈥檚 Net-Zero Game Changers Initiative. Meanwhile, the new聽聽is a main element of the European Green Deal.

In parallel, the UN is collaborating multilaterally to create policy to regulate plastics. The UN Plastics Treaty is a consensus by 175 nations to deliver a legally binding agreement to tackle plastic pollution by the end of 2024. This is significant because plastic has become fundamental to the products we create and the packaging we use to contain and ship them. Plastic has an enormous impact on the environment due to the emissions involved in its creation and mismanaged plastic waste polluting the air, the oceans, our food, and even our blood.

Currently, the linear economy dominates, as聽. In the case of plastic, we take oil from the ground, turn it into products and packaging, use them, and throw them out when we鈥檙e finished. Continuing like this isn鈥檛 an option because we will run out of resources, worsen global warming, and cause further damage to our ecosystem. , so materials retain their value and can be reused.

It sounds logical, so why aren鈥檛 we doing it already? The first reason is financial. In the long term, the circular economy will create jobs, cut costs, improve profitability, and secure supply lines. Achieving this, however, requires massive capital investment in the short term. Additionally, more data is required to help us understand the impact of our decisions. And we need a new, more collaborative way of working.

Capital investment-wise, we must invest in designing and manufacturing products with circularity in mind. We need to adapt and build machinery and systems to rescue resources from existing products and turn them into new items. The labor market must evolve to train people in the skills required and to make circular economy jobs attractive, with good remuneration and benefits packages. More wealth must also flow back up the supply chain to ensure the sustainability of raw materials and to enable growth and sustainable manufacturing. To help companies and financial institutions understand the benefits and necessity of the circular economy, more education is required.

Data systems need to evolve to give companies insights on material flow and traceability, help them avoid waste, extend periods of use, recover and regenerate materials, and make informed decisions about products and packaging. This is where 51风流comes in, with 80% of the world鈥檚 businesses using our software.

Take plastic again: the solution can help businesses trace plastics back to their source polymer to understand what type of material is used in every plastic element in a product. This can help companies prove the environmental credentials of a given plastic. 51风流Responsible Design and Production can be used to understand how recycled and recyclable a component is and can help a company understand the true end-to-end cost of a material. This can be useful in regulating certain materials for comparison and decision-making purposes as well as in helping businesses anticipate taxes and fees associated with their products.

We can interrogate upstream supply chain data, which relates to what a product is made from, but we don鈥檛 yet have a complete downstream picture of what happens to a product at its end of life. Recyclability varies wildly between countries, so to understand how recyclable materials are in certain countries or jurisdictions, a partnership approach with national governments, local authorities, NGOs, and others is required to build a database that can inform companies which types of plastic to use or avoid for certain markets to achieve circularity. 51风流can add value by collecting this data and pulling it into solutions.

At the same time, to embrace the circular economy, our way of working must evolve. Instead of working in silos within our individual businesses and in vertical supply chains, we need to work collaboratively to share the data and bring the skill sets and processes together. For example, 51风流works with groups of companies, such as with the WBCSD, to establish frameworks for exchanging data.  started with embedded carbon in products, but the application can be extended to track other important material information for the circular economy like recycled content or water content.

Collaborations between businesses and non-corporate bodies accelerate progress. A clear example of this is how, by working with the WBCSD and the Ocean Plastics Leadership Network, 51风流works towards updating solutions to help customers respond to new requirements that arise from the negotiations.

The ambition is to replicate this approach to plastic for other products, such as steel, batteries, electronics, textiles, and even food. With a circular economy across these industries, I鈥檓 convinced we can get halfway to net zero and if, in parallel, the energy experts continue to move the needle on energy efficiency and renewable power generation, we鈥檒l get the rest of the way.

Learn more about 51风流Sustainability solutions at .

Darren West is a product expert in Circular Economy at SAP.

George Leonard, , says, 鈥淚f we don鈥檛 get the plastic pollution problem in the ocean under control, we threaten contaminating the entire marine food web, from phytoplankton to whales. And by the time the science catches up to this, perhaps definitively concluding that this is problematic, it will be too late. We will not be able to go back. That massive amount of plastic will be embedded in the ocean鈥檚 wildlife essentially forever.鈥�

Clearly, the time for action is now. 鈥淲e must rethink, innovate, and implement at an unprecedented pace and scale to enable a thriving future for environment, economy, and society,鈥� says Thomas Saueressig, member of Executive Board of 51风流SE, Product Engineering.

It can be easy to feel overwhelmed by the enormity of the waste crisis facing the planet. Through education, the leaders of today can be empowered to change how we consume, how we operate, and how we do business.

That thriving future will not be built on the current disposable culture but instead by embracing the model, one in which waste is eliminated, resources are recirculated, and nature is regenerated.

As a leader in business software — including product design and manufacturing, supply chain and logistics, and product lifecycle management — 51风流has both the technology and the responsibility to help global enterprises to develop circular systems. Indeed, the company has already started this vital work by providing the tools to companies that are interested in the circular economy through .

With these business models already in place, a new open51风流course, , offers anyone — 51风流customer or not — a better understanding of how to apply these principles to their own business.

Specifically, three key principles are defined by the Ellen MacArthur Foundation, an NGO dedicated to accelerating the adoption of this sustainable model:

• Keep products and materials in use as long as possible
• Design out waste and pollution
• Regenerate natural systems

With these three directives as a guide, the free on-demand course features pioneering experts in the circular economy, such as , CEO of the Ellen MacArthur Foundation, and , professor of Circular Economy and co-director of the Exeter Center for the Circular Economy. It also features environmental activists and sustainable product luminaries, including , an ocean advocate and co-founder of eXXpedition, a trip that took 300 remarkable women on a circumnavigation of the globe to study the problem of plastics in the ocean. , CEO and co-founder of Queen of Raw, a marketplace for sustainable textiles, is a featured lecturer.

is more than just a course. It tackles some of the most important issues of the day and is intended to change the global trajectory on waste by bringing businesses into the process. According to Saueressig, 鈥淣ow more than ever, to achieve circularity, we must connect linear fragmented supply chains into unified, collaborative, and intelligent business networks that enable the reuse of materials.鈥�

At SAP, we believe that technology is an important enabler to driving a circular and regenerative economy. It鈥檚 not the whole answer, but a key part of the solution. We need organizations to come together to tackle this, so 51风流has launched the course to help spread the word and evangelize on why we must move to a world of zero waste — and move now.

The course begins October 4, 2021, and is free and open to anyone who wants to make a difference to the future of the planet.Content is available on demand. , and share it with your networks.

Participating in just a few hours of coursework each week provides a cutting-edge education in how to bring the principles of a circular economy to businesses operating today. In five weeks, participants can gain a new understanding of this pivotal concept for their edification and to share with friends and colleagues, and see how to apply this to their own organizations.

In addition, it鈥檚 a valuable opportunity for team building. There are many options for collaboration within the course, including a discussion forum as well as optional peer-graded teamwork activities to gain extra credits. Those who complete all coursework will be eligible for a Record of Achievement certificate.

Importantly, participants will also be engaging with a vital concept that is already helping to build a sustainable future through partnerships between 51风流and their clients. This course could be the first step on the journey to a better future for all.

Darren West is business development director for Circular Economy at SAP.