How to avoid greenwashing in 8 steps
Sustainability is going from being a checkbox exercise to a business driving force. But your sustainability claims must match up with what your product or service actually does. Otherwise, you could find yourself at the centre of a greenwashing scandal. And this could mean losing customers through broken trust. You could even end up facing legal trouble and fines.
Knowing how to avoid greenwashing is now key to any business strategy. But it's not just about avoidance. It can be an opportunity to embrace transparency and improve the sustainability of your supply chain. This in turn can attract new customers and investors looking for value-aligned brands.
So below, we explain what greenwashing is, how to spot it and eight ways you can avoid greenwashing in your business.
3 different types of greenwashing
You might think that most greenwashing happens with malicious intent. Whilst this is often true, it’s also possible to commit greenwashing unknowingly. Whatever the cause, no business wants to be caught red-handed. So it’s important to be clued-in on the three main types of greenwashing.
1. Unintentional greenwashing
This type of greenwashing might be accidental, but it’s really a result of negligence. It happens when a company makes ambiguous or misleading claims without understanding the data or regulations behind them.
2. Partial truths
Imagine an oil company publicising its wind farms whilst continuing harmful drilling projects on the quiet. This is known as selective disclosure, giving partial truths or greenlighting. It’s where you highlight one feature to draw attention away from harmful practices elsewhere in your business.
Selective disclosure can mislead customers. It breaks their trust and harms your reputation irreparably. This is why transparency is crucial.
3. Lies and intentional misrepresentations
Lies and intentional misrepresentations are the most malicious form of greenwashing. They’re a deliberate attempt to mislead consumers and other stakeholders. This includes using symbols, logos or data that paint you in a more sustainable light than the reality.
An example of this is the Volkswagen emissions scandal. Their vehicles were emitting up to 40 times the amount of dangerous nitrogen oxides allowed. But rather than addressing this, Volkswagen installed devices that helped them cheat the emissions tests. They knowingly misled customers and made them complicit in violating EU pollution standards. Legal trials are ongoing, and the company has already paid out billions in fines and settlement fees.
How greenwashing can harm your business’s reputation
Volkswagen is a clear example of how financially damaging greenwashing can be. And in today’s digital world, you can’t be too careful. Thanks to social media, information spreads fast. It’s also open to interpretation and hangs around long after the event.
So in the case of greenwashing, whether accidental or intentional, prevention is always better than a cure.
8 steps to avoid greenwashing
1. Be transparent
Being transparent in business means laying everything out on the table. This includes your progress, your shortcomings and what you’re doing to improve. Sure, it’s natural to want to highlight the good and focus less on the not-so-good. But this misses the big picture and can misrepresent your business. Before you know it, you’re greenwashing.
Transparency can make or break your customers’ trust. In fact, 94% of customers said they’d be loyal to a brand that was completely transparent. A good example of transparency in action is the menswear company ASKET. They include an “impact receipt” with orders to help customers understand how much CO2 was emitted and how much water and energy was used to make their garments. They also show customers how many wears they can expect before needing a replacement.
ASKET empowers their customers by helping them understand exactly what they’re buying. But embracing transparency isn’t just about honesty. It can also be an opportunity to examine your total environmental impact. And once you know where you can improve, you can set targets to serve as your sustainability roadmap.
A great way to do this is to release an annual impact report. Another is to publish your company’s Environmental, Social and Governance (ESG) score. Information like this helps your stakeholders understand your environmental and social impact and the actions you’re taking to reduce them. There’s no doubt that these are big jobs. But you can bring in experienced consultants and writers to take the task off your hands and make sure it’s done right.
Being transparent has the added bonus of attracting new customers and investors. By becoming more resilient to future regulations and the effects of climate change, you become a safer business bet in their eyes.
“Transparency breeds accountability, which is a big part of what drives change and improved results.“ Gary Steele, Group CEO of TES.
2. Conduct a full product life cycle assessment
A full life cycle assessment (LCA) allows you to understand your product’s environmental impact. Based on ISO standards 14040 and 14044, an LCA considers the environmental effects of a product or service throughout its entire life cycle. This begins from the extraction of raw materials to final disposal.
An LCA provides facts that back up your sustainability claims. You can then communicate with more scientific backing. In this way, you avoid making misleading or exaggerated statements and reducing your risk of greenwashing in the process.
For example, think about the recyclable plastic bin bag. The bag itself is recyclable, but its purpose is to contain waste. So, it's more likely that the bag will be sent to landfill or incinerated along with its contents. In other words it’s only recyclable if it isn’t used for what it was made for — go figure. Claiming it’s recyclable without mentioning this is misleading or in other words, greenwashing.
So, conduct a full LCA that looks at every stage in a product’s life. You can then avoid misleading messages and target areas for improvement.
3. Create more sustainable partnerships
Supply chains today remain inefficient, complex and fragile for the millions of businesses that rely on them. In fact, over 80% of greenhouse gas emissions from a typical consumer company comes from their supply chain. And because they’re so complex, it can be hard to know just how sustainable your supply chain is. It’s even harder to verify claims that your suppliers and other partners make. With this lack of visibility, it’s easy to make claims that aren’t actually true in the real world.
So you risk greenwashing if there are areas in your supply chain that don’t match up with your sustainability claims. Like Ikea, which was accused of greenwashing in 2018. The company claimed their furniture was made with wood from responsibly managed forests. But this wasn’t true across the board, as some of its furniture was being actually being made with wood from protected ancient forests. No one took responsibility for the illegal, environmentally damaging activity. Meanwhile the whole issue negatively affected public opinion of all parties involved.
This is why it’s important to work with a packaging partner like Sourceful. We only work with vetted suppliers who adhere to UK and EU regulations, regardless of where they are in the world. And we review their practices annually to make sure their (and our) standards stay high year after year.
4. Be specific and avoid vague buzzwords
“Eco-friendly,” “sustainable” and “green” are all words you think you’d like to see in a product description. But without explanation, vague terms like these can mislead consumers.
This is because the most sustainable thing any of us can do is not extract or produce any products at all. So whilst this isn’t practical in the real world, it does mean that none of our actions can be called truly sustainable. And under the UK’s Green Claims Code, anything that exaggerates any product’s positive environmental impact is greenwashing. So the key to avoiding this is to be specific with your terminology.
For example, imagine you’ve switched from a poly mailer bag to a recycled mailer bag. But, claiming it’s “sustainable” is misleading, as nothing is truly sustainable. Instead, give customers accurate information and include numbers. We’ve done the research and we know that using our recycled mailer bags can reduce your carbon footprint by up to 30% compared to a virgin poly mailer. This specific, reliable information is what you want to give your customers. They’ll appreciate your transparency and reward you with their loyalty.
And this is why we provide live carbon data when you design your packaging online with Sourceful. It helps you to confidently state how much CO2 you’re saving compared to a less sustainable alternative. That way, your messaging is clear, accurate and, most importantly, isn't greenwashing.
5. Be aware of what your branding signals to customers
What would you think if a company like Shell, with its signature red and yellow branding, suddenly switched to leafy green imagery? You’d probably think they’d made some changes in the spirit of sustainability. And wouldn’t you feel misled if that wasn’t the case?
Branding that draws attention to your sustainability efforts is, of course, a good thing. That’s as long as you're actually taking steps towards reducing your carbon footprint. And that you’re not selectively drawing attention to or concealing certain features. Otherwise, your customers may feel deceived and suspect you of greenwashing.
So, ensure your packaging’s colours, logo, images and labels can’t reasonably be misinterpreted. For maximum clarity, include written instructions alongside your labels, such as how to recycle.
6. Choose credible labels and certifications
Environmental labels and certifications show that a product or service follows environmental regulations. And these need to come from reputable third parties, such as the Rainforest Alliance, Fair Trade Foundation or B-Corp.
At Sourceful, we offer packaging made with Forest Stewardship Council (FSC) certified materials. The FSC aims to protect forests and guarantee responsible resource extraction. So, choosing FSC certified packaging and products is a step towards reducing your environmental impact. And you can then include an FSC label on your packaging, which assures your customers that you support more sustainable practices.
7. Partner with people creating true change
Tree planting is one of the most common ways to offset your carbon footprint. And in one sense, it’s great because tree planting has many social and economic benefits. But whilst trees are vital in stabilising ecosystems, reforestation projects aren’t a panacea for the climate crisis.
This is because the forests most effective in removing CO2 from the atmosphere are the most mature ones with a whole variety of species. In contrast, forests grown under reforestation projects may not be diverse enough, limiting their functionality. And even if they were, trees take decades to mature. So they’re not effective in removing carbon from the atmosphere in the short or long term.
Offsetting by planting trees is a useful complementary tool to reach your sustainability goals. But only if it’s combined with solutions to reduce emissions in the first place. Otherwise, it would be like pumping out thousands of plastic bags and claiming it was okay because you’re planting 1000 trees that year. Tree planting can be a part of your impact-reducing toolkit, but it can’t be a justification to continue business-as-usual.
That’s why we created Sourceful Climate, a carbon removal platform that makes it easy for you to reduce your packaging’s carbon footprint. But crucially our partners go beyond short-term initiatives by permanently removing carbon from the atmosphere. So, you can claim with confidence that your carbon footprint reduction efforts make a difference.
8. Stay up-to-date with regulations
As the climate crisis worsens, governments around the world are racing towards net-zero goals. And this means you’ll be seeing more regulations under the Extended Producer Responsibility regulations, like the Plastic Packaging Tax.
To make sure you follow existing and new regulations, stay up to date and adjust your business activities accordingly. Your environmental impact claims will then be in line with your responsibilities, helping you avoid accidental greenwashing.
How to spot businesses that are greenwashing
The Green Claims Code checklist is a great tool for spotting greenwashing. And it’s a helpful self-assessment for you to run through too:
- Are all claims clear, understandable and accurate?
- Is there any messaging that could mislead stakeholders?
- Is there up-to-date, trustworthy evidence to back up the claims?
- Are any comparisons made fairly, using like-for-like products or services?
- Are there any exaggerations or false statements about the environmental impact?
- Are general labels (e.g. green, sustainable or eco-friendly) backed up by evidence?
- Is information that can’t be displayed accessible in another way, with a web page or a QR code for example?
- Is information concerning durability and disposability explained clearly?
- Does the company avoid labelling standard features as environmental benefits?
- Do general labels (e.g. green, sustainable or eco-friendly) reflect the whole lifecycle?
- Does the claim tell the whole story or avoid misleading stakeholders about the overall environmental impact?
Avoid greenwashing with Sourceful
Whether intentional or accidental, greenwashing can damage your business and your reputation. But you can avoid it by embracing transparency and gaining visibility over your entire operation. From here, you can make changes and stay ahead of developing regulations.
Remember to always consult your legal team on what claims can be made and whether you have sufficient basis to make them. This way, you can make sure you’re aligned with all relevant regulations and government guidance on green claims, such as the Green Claims Code.
At Sourceful, we want to help you switch to more sustainable packaging without the risk of greenwashing. We work with vetted suppliers held to UK and EU environmental standards, whilst our Impact Engine gives you full visibility over your packaging’s carbon footprint. And when you offset your carbon footprint through us, you can rest assured you’re supporting meaningful projects that create long-lasting change.
Other articles you might be interested in
Why the full life cycle matters
Data is the foundation of sustainability. It shows us the extent that our climate is changing. It’s the vital information that combats greenwashing, which nearly half of all green claims in the EU are guilty of [1]. It’s the backbone of the IPCC’s (Intergovernmental Panel on Climate Change) reports (e.g. [2]). And it’s the foundation of every Life Cycle Assessment.
Life Cycle Assessments (LCA) are a powerful, science-based tool for estimating the potential environmental impact of products, processes, or services throughout their life cycle [3]. For a full LCA, teams will typically look at data from five life cycle stages:
- Raw materials extraction
- Manufacturing
- Secondary packaging & transport
- Product use
- Final disposal
Missing one or more life cycle stages, however, directly affects the quality of the assessment. Leading organisations are on the same page. For example, The Competition and Markets Authority (CMA) [4], the Advertising Standards Authority (ASA) [5] in the UK and the European Commission for the EU all underline the need for high-quality data across the full life cycle to avoid making misleading environmental claims.
To quantify the impact of not assessing the full life cycle, we ran our own tests using our proprietary LCA engine. Here’s what we found: focusing only on a product’s raw ingredients can conceal between 25-70% of the product’s emissions. Put another way, selective reporting on a product’s emissions will never lead to accurate claims. The full life cycle matters.
Third parties: an extra layer of security
We’ve seen how LCAs rely heavily on the quality and completeness of data. But to ensure the highest standards of accuracy and consistency, third parties offer an extra layer of security. These include standards like ISO 14040 and 14044 and methodologies like the Product Environmental Footprint created by the European Commission.
A proprietary methodology
To go one step further, we developed our own LCA methodology. This allowed us to go beyond the static nature of a normal LCA and instead build an engine that could assess billions of product variants from different suppliers, giving results in real time whilst not compromising on accuracy. After building our engine, we commissioned an external panel of LCA experts and academics to review it to verify that our model conformed to the leading ISO standards.
It’s this rigorous homegrown approach that’s allowed us to develop a catalogue of science-backed products that in turn empower brands to make measurable progress. And it’s allowed us to support those brands in communicating that progress confidently with their customers.
What does the data say?
Our approach to LCA allows us to pinpoint both a product’s carbon hotspots and the biggest opportunities to reduce its carbon footprint.
We’ve found that the production of packaging components, international transport and disposal represent the majority of a packaging product's footprint. Let's dive deeper:
1. Production of packaging components
This stage, which includes the extraction, transport, and refinement of materials, typically accounts for the majority of the life cycle impact (for example, c.70% of our Eco Mailer Box’s total carbon footprint). An example of how we’ve reduced these emissions is custom sizing. By making custom sizing available for our packaging boxes, we’ve empowered brands to remove the empty and wasteful space that has become standard in the packaging industry. We estimate that this can reduce the total carbon footprint of a mailer box by around 8%.
2. Transport
Freight is carbon intensive, especially international air shipping which can represent up to 90% of the life cycle of packaging. But opting for sea freight instead can lower that number by 60%, which is the case with our recycled mailer bag. Whilst this is the best situation, we know that time is a significant constraint for brands, making sea freight often unfeasible.
We launched split delivery as a solution; a freight option where brands can choose how much of their order to send via air and sea. This allows brands to meet short-term demand whilst benefiting from sea freight’s significantly lower emissions. If a brand ordered 20,000 units and sent 10% by air freight, they could reduce their carbon footprint by up to 50% compared to sending the entire shipment via air.
3. End of life
End of life (also known as disposal) is an often overlooked but significant life cycle stage. Even for a cardboard box that can be easily recycled (71%, 2021 UK data, [6]), disposal still accounts for c.15% of its total carbon footprint. Disposal also varies dramatically between materials, making it a crucial part of any comparison. For example, whilst cardboard’s recycling rate in the UK is 71%, flexible plastic’s is unfortunately only 6% [7]. This pushes disposal to account for c.21% of our recycled LDPE mailer bag’s emissions.
Always consider the full life cycle
For an accurate account of a product’s emissions, the full life cycle is essential. This is why authorities like the CMA and ASA require businesses to be clear on which stages of the life cycle they’ve included when making claims about a product’s environmental impact. Gold standard claims will always look at the full life cycle and selectively reporting on emissions will result in unreliable and dubious claims. This will put you at risk in a world that is demanding action and clarity.
With the full life cycle in hand, however, you can measure and track real progress, identify the best opportunities and communicate confidently with customers.
References
- Abnett, K. (2023). EU proposes clampdown on companies using fake ‘green’ claims. Reuters. Available here [https://www.reuters.com/business/sustainable-business/eu-proposes-clampdown-companies-using-fake-green-claims-2023-03-22/#:~:text=EU proposes clampdown on companies using fake 'green' claims,-By Kate Abnett&text=To use such labels%2C a,under an environmental labelling scheme]. (Accessed: 21 Aug. 2023).
- IPCC (2023). Climate Change 2023: Synthesis Report. doi: 10.59327/IPCC/AR6-9789291691647.
- PRé Sustainability (2020). Life Cycle Assessment (LCA) explained. Available here [https://pre-sustainability.com/articles/life-cycle-assessment-lca-basics/] (Accessed: 21 Aug. 2023).
- Competition & Markets Authority (2021). CMA guidance on environmental claims on goods and services. Available here [https://www.gov.uk/government/publications/green-claims-code-making-environmental-claims] (Accessed: 21 Aug. 2023).
- Committee of Advertising Practice (2021). The CAP Code. Available here [https://www.asa.org.uk/static/47eb51e7-028d-4509-ab3c0f4822c9a3c4/The-Cap-code.pdf] (Accessed: 21 Aug. 2023).
- DEFRA (2023). UK statistics on waste. Available here [https://www.gov.uk/government/statistics/uk-waste-data/uk-statistics-on-waste]
- WRAP (2021). Recycling your customers’ plastic bags and wrapping. Available here [https://wrap.org.uk/resources/guide/recycling-your-customers-plastic-bags-and-wrapping]
To achieve net zero and limit the worst of climate change, we have to rethink our reliance on plastic.
This statement is more urgent than ever, but the problem with plastics is unfortunately much bigger than just climate change. In reality, plastics also directly threaten human health and endanger habitats when leaked into the natural environment. Paradoxically, one of the main culprits of this damage is also claimed by some as the next green solution — compostable plastics.
To unpack this new material, we conducted a study on the environmental impact of compostable plastic bags, to find out if they truly offer a more sustainable alternative to traditional materials like paper, fossil plastics and recycled plastic. In this article, we’ll focus on one part of the study: the damage that leaked compostable plastics have on our ecosystems.
The consensus on compostable packaging is unclear
The biodegradable plastics market is projected to expand 2-3x between 2021 and 2026 [1]. And at Sourceful, we’ve seen firsthand the escalating demand for compostable packaging. But whilst many brands are running towards compostable plastics, the consensus is still murky, with other companies (like Tesco and Abel & Cole) publicly distancing themselves from them. We wanted to use our research to help fill the vital knowledge gap and build consensus.
Compostable plastics are often considered a green alternative because they degrade and so are often (incorrectly) assumed to effectively disappear in the natural environment. The theory is that this reduces the amount of plastic in the ocean and the risk of microplastics. But as with most things — it’s not that simple. Life cycle assessments (LCAs) have historically struggled to account for leaked waste and microplastics because of a lack of data, even though both play a major part in a material’s overall environmental impact.
To tackle this, we partnered with the Sustainable Materials Innovation Hub at the University of Manchester. This gave us access to the latest labs, data on new and innovative materials and their in-house expertise — all invaluable to our study. Together, we investigated how traditional fossil fuels and compostable plastics behave when leaked. Here’s what we found.
The impact of leaked waste is twofold
One of the major environmental impacts of plastics (fossil and compostable), besides their carbon footprint, is their effect on the natural environment when leaked.
Leaked plastic waste generates both physical (e.g. animals ingesting microplastics or being entangled in larger pieces) and chemical risks (e.g. the leaching of toxic additives like plasticisers and flame retardants) to wildlife from the breakdown of plastic into microplastics and nano-plastics. Not only does the breakdown of plastics directly leach toxic elements but they can also act as a magnet for other environmentally harmful pollutants.
To make matters worse, leaked plastic waste has also been found to be directly connected to climate change. Researchers at the Ocean University of China found that microplastics reduced the growth of microalgae and the efficiency of photosynthesis, in turn degrading plankton’s ability to remove carbon dioxide from the atmosphere [2]. The knock-on effect is that the ocean itself cannot capture carbon as efficiently; an essential resource in our fight against climate change, given that it sequesters 30-50% of total CO2 emissions from human activity.
Compostable plastics and leaked waste
The longer a plastic takes to break down, the more likely it will be ingested or cause entanglement. Put another way, the risk of adverse effects increases the longer a plastic persists. To account for this, we assessed each material for its degradation time in freshwater, marine, and soil environments, and used that data to identify a leaked waste impact rating for each material.
Our study found that whilst compostable plastics do reduce the risk of some adverse effects (less risk of entanglement and a shorter period of microplastics), they are not a cure-all for plastic pollution. Compostable plastics can persist in the natural environment for over half a century, which puts into question the popular claim that these plastics are the next green solution. This matches up with the conclusions that Narancic et al. made in their study [3]. Here’s an overview of degradation times for fossil plastics and common compostable plastics:
- Fossil plastics take around 4-5,500 years to degrade in soil (with some studies suggesting this is even higher, at around 10,000 years); the worst and longest degradation time amongst all plastics. This is made worse by the common use of harmful additives [4].
- Compostable plastics like PLA take on average 1-63 years in soil[3] to degrade completely. In water, PLA does not degrade at all.
- Other compostable plastics like TPS and PHB take on average 4-6 months to degrade completely.
So compostable plastics do have a tighter degradation window than fossil plastics, and they also typically contain fewer toxic additives (such as flame retardants and stabilisers). But they still can have a significant degradation window, especially and unfortunately PLA, one of the most common materials used in compostable packaging (including coffee lids and bags).
Admittedly, it is still hard to know the exact time it takes for a plastic to decay; the field of estimating polymer lifetimes is still relatively new. But we do have enough comparative data to give us an indicative hierarchy of materials that we can use to assess performance and inform decisions.
Compostable plastics do slightly reduce the risk of microplastics because of their shorter degradation times. But our larger study showed that compostable bags emit 1.5-2x more greenhouse gas emissions over their full life cycle than virgin fossil plastics. In addition, given they are still relatively new, there are uncertainties about the unintended consequences that could come from their use. ****This begs the question: are the reduced risks from leaked waste enough to offset the increase in carbon footprint? For now, we don’t think so.
What does this mean for my packaging?
It’s clear that we need to move away from fossil plastics. And in their current state, compostable plastics are not the next green solution. So, what’s the answer?
First, brands should follow the waste hierarchy. Can this packaging component be removed? Can we use less materials without compromising function? How can I design this product so it’s easy to recycle?
Second, brands should prioritise responsibly sourced paper if possible, which typically has the lowest impact of any material. Its full life cycle emissions are low, and there’s no risk of microplastics if leaked. That’s not to say it’s perfect; forests are often mismanaged and producing and recycling paper still generates emissions, uses large amounts of water and potentially also harmful chemicals. This is why certifications like the Forest Stewardship Council (FSC) and Programme for the Endorsement of Forest Certification (PEFC) are so important.
Paper isn’t also appropriate for every use-case and product, like liquids. This is why we stress prioritising paper if possible. Packaging should always be carefully matched with the product, and blanket rules rarely result in success.
For more information about this study, email climate@sourceful.com
Notes
Thanks to Dr. Guilhem de Hoe and Dr. Chloe Loveless from the University of Manchester for leading the collaboration.
Our study focused on the typical compostable plastics currently seen on the market (PLA, PBAT, PHA and TPS). Our study did not include a nascent group of materials classed as unmodified natural polymers, which we’re interested in exploring in the future.
References
- MarketsandMarkets. (2021). Biodegradable Plastics Market - Global Forecast to 2026.
- Zhang, C., Chen, X., Wang, J., & Tan, L. (2017). Toxic effects of microplastic on marine microalgae Skeletonema costatum: Interactions between microplastic and algae. Environmental Pollution, 220(B), 1282-1288. [Link] https://doi.org/10.1016/j.envpol.2016.11.005
- Narancic, T., Verstichel, S., Chaganti, S. R., Morales-Gamez, L., Kenny, S. T., De Wilde, B., Padamati, R. B., & O’Connor, K. E. (2018). Biodegradable Plastic Blends Create New Possibilities for End-of-Life Management of Plastics but They Are Not a Panacea for Plastic Pollution. Environmental Science & Technology, 52(18), 10441-10452. [Link] https://doi.org/10.1021/acs.est.8b02963
- Chamas, A., Moon, H., Zheng, J., Qiu, Y., Tabassum, T., Jang, J. H., Abu-Omar, M., Scott, S. L., & Suh, S. (2020). Degradation Rates of Plastics in the Environment. ACS Sustainable Chemistry & Engineering, 8(9), 3494-3511. [Link] https://doi.org/10.1021/acssuschemeng.9b06635
Right-sized packaging is the opposite of shipping small products in big boxes. It’s packaging that minimises the empty space around your product — whilst not comprising its safety or your branding. Or put another way, right-sized packaging is the most effective, and most efficient, size packaging for your product.
The benefits of right-sized packaging are many. As a business, you reduce your material usage, which means fewer costs across procurement and production. And smaller, lighter packaging also means fewer costs across transport and storage. All of this means a smaller carbon footprint, less waste and a better, less frustrating customer experience.
Whilst right-sized packaging seems a logical choice, businesses are notorious for using oversized packaging. According to DHL, the average box is 40% too big for its contents. In part, this is because businesses often buy large volumes of stock packaging to reduce unit costs. As a result, they have just a few packaging options for all their products. Products are then shipped in the nearest fitting packaging, regardless of their size. In practice, this means companies end up shipping the product and all of the air around it, which is expensive and wasteful. To put the scale of this waste into context, eliminating the 40% excess volume DHL cite would mean 24 million fewer truckloads annually — in the USA alone.
Another catalyst of oversized packaging is e-commerce. Unlike traditional retail, e-commerce is more complex and more people are involved across fulfilment, freight and last mile delivery — with up to four times as many touch-points. And with more touch-points, the risk of damage increases. According to one study, the average package is dropped 17 times in transit. Businesses use oversized packaging and void fill to minimise this risk and avoid breakage costs. Reducing breakage is important, but many companies don’t realise that with right-sized packaging they can both minimise risk and reduce costs, all whilst being more sustainable.
Let’s dive deeper into why your business needs right-sized packaging.
1. Slash costs across your business
Right-sized packaging is an ideal strategy to reduce costs for any business. In fact, choosing right-sized packaging can have a fortunate snowball effect across your business. Smaller packaging means fewer material costs, which then means fewer production costs and handling fees. And it means fewer transport costs as more packages can fit on a pallet. Or if you’re sending single products via a courier or Royal Mail, your package may fit into a cheaper parcel bracket. And finally, you can store more products for less, which also increases your buffer stock — a useful way to build a more resilient supply chain.
One famous example of right-sized packaging is IKEA’s Ektorp sofa. IKEA’s engineers worked out that instead of shipping the sofa as one piece, they could break it down and ship it as parts. This allowed them to eliminate the air they were shipping (and paying for) and reduce the packaging size by 50%. For IKEA, the result was an annual saving of €1.2 million and 7,477 fewer trucks on the road every year.
2. Reduce your carbon footprint
Whilst IKEA reduced their packaging costs, they also reduced their carbon footprint. Fewer materials meant fewer resources and less energy used to produce those materials. And it meant significantly fewer transport emissions as well as less waste. Although there are exceptions, the rule of thumb is when you use less, your carbon footprint falls, and right-sized packaging is an opportunity to use less. It’s important to remember that right-sized packaging is about removing redundant materials and keeping those that serve a purpose. This makes it a simple way to create more sustainable packaging without jeopardising your product.
3. Create frustration-free packaging and empower your customers
Consumers are tired of bad packaging, so much so that they’ve started Reddit threads to showcase the worst examples. Youtube too is full of consumers venting their anger about oversized packaging.
Their irritation is twofold. First, oversized packaging is often frustrating to open, with unnecessary materials creating a more complex, sometimes overwhelming experience. And second, oversized packaging is wasteful. At a time when research is showing that consumers want to be more sustainable, using excessive packaging hinders their efforts and doesn’t reflect their values. Right-sized packaging, however, addresses both parts of their annoyance. By keeping material usage down, it creates a frustration-free packaging experience and empowers your customers to play a part in reducing waste. A win-win for them and you.
Managing right-sized packaging is hard, but Sourceful can help
As great as right-sized packaging is, it isn’t perfect. Problems often arise because right-sized packaging is only right for one product, which means you may end up with a lot of packaging SKUs. Managing this can be tricky, but with the right tools, it doesn’t have to be. With Sourceful, you can use smart tools like Auto-Stock to manage, track and replenish your packaging in one place. You can also store everything in Sourceful’s warehouse. Fast-growing brands like Zoe and Floom already use Auto-Stock to easily manage their packaging, no matter how much they have. Want to learn more? Contact us.
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