Saving the planet should come first for CPG companies

Photo by Waldemar 

Recycling is an essential part of mitigating climate change and reducing waste, yet the facts around it remain sobering. The U.S. generates 268 million tons of waste annually, and only 32-40% of that gets recycled. In particular, plastic production is a major contributor to the climate crisis, generating 1.6 billion tons of greenhouse gas (GHG) emissions annually, while only a minuscule 2% of that plastic gets recycled. As public awareness of environmental issues grows, there is increasing pressure on consumer packaged goods (CPG) companies to take a proactive role in creating sustainable solutions. But are they doing enough, or is profit still the priority?

Many people view CPG companies as the culprits behind plastic pollution, relying heavily on packaging that harms the environment. However, what often goes unrecognized is that many of these companies are actively involved in initiatives to reduce their environmental impact. Extended Producer Responsibility (EPR) legislation, for instance, holds CPG brands accountable for the waste they produce, requiring them to manage and recycle their packaging. These measures force companies to rethink their packaging strategies, but the public may not realize that some of these brands are embracing change not only out of obligation but to lead the charge for a more sustainable future.

JD Ambati, Founder & CEO of EverestLabs, explains that technology plays a crucial role in these efforts. “Plastic production and waste represent part of climate change’s root cause. Today, technologies that provide automation and data, such as robotics and AI, are able to support sustainability efforts by providing companies with data on whether their packaging is being recycled and informing them on how best to optimize packaging design and materials.”

Incorporating AI-driven recycling technologies offers CPG companies the opportunity to monitor and improve the recyclability of their products. By gathering data from recycling centers and material recovery facilities (MRFs), CPG brands can gain insight into which packaging materials are successfully recycled and which aren’t. This data allows them to redesign their packaging to ensure it is easier to recycle, reducing the demand for virgin materials and cutting down on GHG emissions. It’s a proactive approach, offering both environmental benefits and long-term cost savings. However, it’s not without its challenges.

Despite these innovations, the reality is that profits remain a priority for many CPG companies. Balancing sustainability efforts with profitability is a delicate act, especially in a highly competitive market where cutting costs is often seen as a way to stay ahead. Many brands still prioritize cheaper, less eco-friendly materials because transitioning to sustainable options can be expensive and time-consuming. This approach, however, is short-sighted.

Consumers are becoming more environmentally conscious, and brands that continue to ignore sustainability could face long-term damage to their reputation and market share. Studies show that a significant number of consumers—32.4%, according to a survey by EverestLabs—would opt for more sustainable products if they were affordable. This means CPG companies have the opportunity to appeal to this growing market by investing in sustainable materials and practices. The key is for companies to recognize that sustainability isn’t just a passing trend; it’s a core expectation from consumers moving forward.

“Practicing sustainability doesn’t have to break the bank,” says Ambati. “It’s important for CPG companies to understand that price hikes aren’t the only way to see a return on investment when it comes to sustainable packaging. Offering eco-friendly packaging at a reasonable price will not only protect the planet but also build consumer loyalty.”

The public perception that CPG companies are slow to embrace sustainability isn’t entirely unfounded, but it’s not the full story either. Many companies are taking significant steps toward reducing their environmental impact, but the transition is gradual and often overshadowed by the sheer scale of the problem. As climate change worsens, companies can no longer afford to be reactive. They must act with urgency, investing in new technologies, optimizing their supply chains, and leading by example. The future of the planet depends on it.

To further drive home the importance of this shift, it’s critical for CPG companies to understand the public’s growing skepticism. EverestLabs found that 70.2% of people who don’t believe recycling works are men, and their skepticism is valid. Inefficiencies in traditional recycling systems often mean that much of what consumers think they’re recycling ends up in landfills. This is where companies need to step in and take responsibility for closing the loop, ensuring their products truly fit into the circular economy.

In the end, while profits may be essential to survival in business, the companies that prioritize sustainability today will be the ones thriving tomorrow. And with the stakes this high, there’s no time to wait. It’s time for CPG companies to be proactive, not reactive, in the fight to save the planet.