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November 5, 2021updated 18 Jan 2022 4:22pm

ESG in Packaging: Technology Trends

Both regulators and non-governmental initiatives are progressing the packaging sector towards a circular economy. This means gradually decoupling economic activity from the consumption of finite resources and designing waste out of the system.

By GlobalData Thematic Research

Packaging companies that fall behind the competition in environmental, social, and governance (ESG) will see an exodus of customers moving to a more sustainable packaging provider and a drop in profits far sooner than they ever imagined.

Listed below are the key technology trends impacting the ESG theme in packaging, as identified by GlobalData.

Internet of Things (IoT)

Packaging companies use IoT in their factories to operate with far greater efficiency and flexibility, allowing them to continuously monitor energy and water consumption. A 2018 analysis of more than 640 IoT deployments, undertaken by the World Economic Forum in collaboration with IoT Analytics, showed that 84% of existing IoT deployments address, or have the power to advance, the UN’s 17 Sustainable Development Goals (SDGs).

Artificial intelligence (AI)

Within the packaging sector, companies are using AI in several ways to address ESG challenges. Packaging companies can use AI to analyse data from production machines and cooling and heating systems to identify areas to improve their efficiency. AI-powered recycling robots use computer vision (CV) and machine learning (ML) to differentiate and sort materials based on their characteristics to ensure that they can re-enter the supply chain.

Blockchain

Blockchain is an electronic ledger of transactions that are continuously maintained in blocks of records. The ledger is jointly held and run by all participants and protected by cryptographic security. The movement of goods across the globe depends on an extraordinarily complex set of processes and a vast array of regulations.

Blockchain enables companies to record information like location, quantity, date, and certification, increasing transparency and efficiency and reducing the number of counterfeit products. Integration with other technologies, particularly IoT, will be crucial for getting the most out of blockchain in the supply chain.

Advanced materials

As progress in advanced materials continues amid a growing focus on recyclable materials, increased taxation, and rising bans on single-use plastics, materials such as polyvinyl chloride (PVC), low-density polyethylene (LDPE), and high-density polyethylene (HDPE) will be less favourable options for packaging.

Advanced materials that are currently used for packaging are branching out, becoming more sustainable and affordable. More manufacturers are also implementing recycled materials to lower their impact on the environment and their degradation properties. Some companies are also targeting bio-based packaging or biodegradable packaging.

This is an edited extract from the ESG (Environmental, Social, and Governance) in Packaging – Thematic Research report produced by GlobalData Thematic Research.

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