Nearly 99% of companies in the S&P 500 report on sustainability, with most multinational packaging producers now publishing an annual Sustainability Report. The legal requirement for companies to publish annually varies by region, with the legislation typically dependent on size, industry and market presence, addressing environmental, social, and governance (ESG) factors.
In the EU, the Corporate Sustainability Reporting Directive (CSRD), which was formally adopted on 5th January 2023 and will come into force gradually, states that all companies that meet at least two of three criteria – a €40m turnover, €20m in assets, or over 250 employees – and are listed on EU regulated markets, must publish a sustainability report along with their financial statement, which must, in turn, follow the European Sustainability Reporting Standards (ESRS).
The UK has requirements for listed companies meeting specific thresholds to report under the UK Corporate Governance Code and the Streamlined Energy and Carbon Reporting (SECR) framework, due to the Companies (Miscellaneous Reporting) Regulations 2018, which includes environmental impact.
There is no current federal mandate for sustainability reporting in the US, but the Securities and Exchange Commission has proposed rules requiring public companies to disclose climate-related risks and greenhouse gas emissions. There are already considerable numbers of large companies that voluntarily report using recognised frameworks, often prompted by pressure from investors and due to working with global partners that demand it.
In other global markets, including Australia, Japan and Canada, there are some sector specific guidelines for voluntary reporting, influenced by global standards like the Global Reporting Initiative (GRI) or performance evaluation platform CDP (previously known as the Carbon Disclosure Project).
Investor information
Globally, the trend is toward stricter and more comprehensive reporting requirements, driven by regulatory frameworks, investor demand, and stakeholder expectations. Emmanuel Duffaut, Chief Sustainability Officer at RETAL, a multinational plastic packaging producer, is the driving force in creating the company’s annual Sustainability Report, which it has produced since 2019. Duffaut’s view is that a good sustainability report must be ‘accessible to the reader while meeting all the selected reporting standard requirements’. He says, “It’s certainly clear that a comprehensive sustainability report is imperative for global businesses that work with other global businesses. We know that our key suppliers and partners value the clarity and transparency of the sustainability information we publish, so we are careful to deliver an annual report that accurately shows our performance and progress in managing our material topics.”
Gathering, verifying and aggregating the required data and supporting evidence is no easy task, especially when operating across various sites and territories. The idea being that both financial and sustainability information is clearly available so that potential customers, partners and financial institutions can buy from or invest in an informed way.
Duffaut goes on, saying: “It’s right that gathering this data is taken seriously as its accuracy and verifiability contributes to a company’s reputation and credibility. The new CSRD is leveling the playing field for the companies that are already reporting and doing things right, by requiring over 50,000 companies in EU to report sustainability information along with their financial statement according to a single and common standard and that it be audited by third party.”
Implications for packaging
For the packaging industry specifically, increased regulations on sustainability reporting are a positive move. Companies in the plastic packaging sector face greater public scrutiny due to environmental concerns, so transparent sustainability reporting enables responsible players to show how they’re reducing carbon footprints, improving recyclability, and transitioning to circular economy models. They also serve as a tool to demonstrate innovation in biodegradable materials, use of recycled materials and recyclable products, and the introduction of progressive technologies.
Duffaut continues, “Sustainability reporting goes beyond regulatory compliance to more risk management, and meeting customer, consumer and investor expectations. With clear information on Social, Environment and Labour topics, companies can show the progress they’re making in mitigating their impacts and how they are managing risks. Good reports must be built on accuracy and transparency, especially now that the auditing is in place. There’s a lot of work that goes into making a Sustainability Report happen, as it represents positive, provable action across the business.”
Beyond legal requirements, it’s becoming more popular to align reports with sector-specific guidelines so that clear parallels can be drawn and smart decisions made by investors, financial institutions and potential stakeholders. A well-written, clear report helps companies build trust and attract responsible investors and partners, as well as supporting accountability and promoting a progressive future for the global packaging industry. Essentially, for those companies that were already ‘doing sustainability right’, audited reporting holds no fear.
This article first appeared in the January/February issue of Sustainable Plastics.