Mending the chain: How tech advances and policy measures are helping packagers secure supply transparency

06 Dec 2023 --- Supply chain transparency is critical to sourcing quality materials and the packaging products for which they are used. Rising greenwashing legislation and consumer demands continue to drive businesses to give a full account of the origin, emissions footprint, labor and practical value of their products. 

Obtaining necessary or sufficient evidence of needed data can be a severe challenge and sometimes even impossible. This year, a report by Smurfit Kappa showed that inconsistent data access and a lack of supply chain transparency are the key barriers to gaining credibility on environmental sustainability claims. 

The findings, drawn from 440 senior business leaders in 11 global economies, showed that only 11% of companies have robust sustainability strategies in place. 

Dr. Paul Collins, vice president of sustainability at Huhtamaki, tells Packaging Insights that supply chain transparency is largely based on responsibly sourced goods: “Responsible sourcing is based on close cooperation with suppliers. It also includes developing and utilizing supplier screening tools and processes, as well as aligning with third-party verifications and standards.”

With over 20,000 suppliers, Huhtamaki must use state-of-the-art software to ensure its standards are met throughout its global operations. Moreover, indirect sourcing and services, which comprise things like logistics services, energy and protective packaging, are harder to track. 

Dr. Paul Collins, vice president of sustainability at Huhtamaki.The fiber-based value chain
Huhtamaki’s position as a supplier of food-on-the-go and food-on-the-shelf packaging solutions makes it responsible for helping billions of consumers worldwide make responsible lifestyle choices every day, says Dr. Collins. 

“Our supplier network consists of global key suppliers and a large network of local partners located close to our manufacturing units. We work with suppliers ranging from the very small local supplier to the very large global supplier, supplying us locally and globally with raw materials and other products and services. The main materials we source are paperboard, recycled fiber, plastics and chemicals.” 

The company uses the “Huhtamaki Code of Conduct” for suppliers to ensure standards are verifiable. This set of codes “transcends national borders” and must be applied regardless of regional law. The code includes standards from employee conduct, accountability and whistleblowing to managerial responsibilities and political and social activity. 

According to Dr. Collins, the code must be adhered to for all responsible suppliers across all operations. 

“As fiber-based materials such as paper, cardboard and recycled fiber are the primary raw material that we purchase, we have established more specific sourcing requirements for these materials,” he says. “Securing a sustainable supply chain for fiber is crucial and a core component of our 2030 sustainability ambition and our commitment to designing for circularity.” 

Tech against fraud 
Huhtamaki monitors adherence to its code of conduct for suppliers through a software called Navex RiskRate, which provides the company with supplier screenings. Navex claims to be the world’s first organization offering whistleblowing hotlines for companies. 

The service has over 13,000 customers across 150 countries and offers “the most comprehensive tools and support to help better understand risk and compliance health and manage GRC (government, risk and compliance) programs more simply and efficiently.”

“All key suppliers are screened with the help of the Navex RiskRate against sanction lists, watchlists, politically exposed persons lists and adverse media,” explains Dr. Collins. 

“These screenings allow us to identify and take action on issues within our supply chain regarding environmental, social or governance topics, as the databases that our suppliers are screened against cover a wide range of topics.”Tracking shipments through digital technology is an important way for companies to obtain proof of origin.

Covering wide-ranging geographies is often another problem since many regions of the world lack the proper infrastructure to provide needed and reliable information.

This year, supply chain solution specialist Nulogy expanded its services into Latin America to support FMCG contract packaging providers with digitalization technologies. 

Auditing and waste tracking 
The third component of Huhtamaki’s supply chain due diligence process is supplier auditing. 

“We audit our suppliers regularly, focusing especially on matters of quality, but we also aim to increase the number of sustainability audits conducted by independent auditors. This helps us to gain an objective view on suppliers’ environmental, social and governance performance,” says Dr. Collins. 

“Huhtamaki is committed to full compliance with all applicable legislation on supply chain due diligence, and we closely monitor all regulatory developments. Our work in recognizing the risks, mitigating impact and training our staff and suppliers is a continuous process. We work hard to establish robust processes.” 

Despite the efforts made by industry stakeholders, much of the packaging supply chain — particularly for end-of-life — is sometimes impossible to trace. A large amount of trash produced by packagers ends up being exported and either landfilled or incinerated in conditions that would oppose company standards and often violate the law. 

Recently, the European Commission, Parliament and Council have pledged a blanket ban on all plastic waste exports to non-OECD countries to prevent waste from being dumped in vulnerable countries. 

However, OECD countries like Turkey bear the brunt of much of what is exported. Greenpeace has found that over 30% of the UK’s plastic packaging, for example, is sent to Turkey and destroyed in ways that pose a serious risk to human and environmental health. 

Following the EU’s pledge toward non-OECD shipments, some experts spoke out, calling for more stringent measures. 

Dr. Sedat Gündoğdu, a microplastics researcher at Çukurova University in Türkiye, said: “It is disappointing not to see a total export ban on shipments — and not even a ban on hazardous and mixed plastic waste — to Turkey, which is both the largest importer of plastic waste in the EU and an OECD member.” 

By Louis Gore-Langton