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Covenant Strategic Plan 2017 – 2022 Incorporating the 2017 – 2019 Statement of Intent

AUSTRALIAN PACKAGING COVENANT

© Australian Packaging Covenant Organisation Limited ABN 99 056 538 480 Page | 1

Contents

Message from the CEO ............................................................................................................. 2

Vision ........................................................................................................................................ 5 Mission...................................................................................................................................... 5

Guiding Principles ..................................................................................................................... 5 Building on Past Successes ....................................................................................................... 6

From Covenant Goals into the Strategic Plan ........................................................................... 8 Packaging Sustainability Issues ............................................................................................... 10

2017-2022 Covenant Strategic Plan ....................................................................................... 16

Australian Packaging Covenant Statement of Intent: 2017 – 2019 ....................................... 19 Engagement, Monitoring, Evaluation and Reporting ............................................................. 22

Financial Model ...................................................................................................................... 23 Bibliography ............................................................................................................................ 25

Australian Packaging Covenant Strategic Plan 2017 – 2022

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Message from the CEO

Welcome to the Australian Packaging Covenant Strategic Plan (2017-2022).

Packaging provides an important role in society. Its purpose is to support the product contained, and in doing so it delivers a wider benefit - reducing food waste, protecting products over long logistic networks, ensuring safety of goods to protect health and preventing theft1.

Because packaging consumes natural resources, and natural resources are scarce, it is important we use and reuse them wisely.

While businesses avoid or minimise unnecessary packaging, as prioritised in the waste hierarchy, packaging’s role in effective and efficient product delivery continues. To meet high expectations of safety and integrity, packaging is becoming more complex and sophisticated, and in some cases its use is increasing2.

Once the product is consumed, the packaging’s purpose is fulfilled, leaving an item that used resources in its production and that needs disposal. For the package to have some of its inherent resources recovered, it should be reused, recycled, or processed into energy or fuel. Beyond this, it is waste sent to landfill.

Using resources efficiently and preventing them going to landfill is the goal of packaging sustainability. This simple concept is, in reality quite complex. For example, a new packaging innovation that uses less resources and/or improves product integrity is an improved use of resources. To match this resource use innovation, there needs to be reuse and recycling innovation; minimising packaging going to landfill.

Minimising the impacts of packaging on the environment is what we seek to address through the Australian Packaging Covenant (The Covenant) and in this Covenant Strategic Plan (Plan).

The Covenant is an agreement between the state and federal environment ministers and the Australian Packaging Covenant Organisation Ltd. (APCO), on behalf of its members who are businesses supplying packaged product in Australia or in the packaging supply chain. It is an industry-led initiative approved by governments that addresses packaging sustainability through collaboration. Its focus is on the areas over which industry can have the greatest influence.

The Covenant provides businesses a simpler and more cost-effective way to demonstrate responsibility, and is an alternative to being regulated under the National Environment Protection (Used Packaging Materials) Measure 2011 (NEPM) – which requires auditable compliance in each state and territory in which goods are sold.

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As part of the Covenant, APCO develops a five-year Covenant Strategic Plan to outline how APCO will support businesses to improve packaging sustainability performance, thereby reducing the environmental impacts of packaging in Australia. The Plan is endorsed by the ministers for environment, and APCO reports annually on progress.

The Plan outlined here sets out the strategies and priorities that will be employed and the targets to be achieved to deliver further results. It focuses on ensuring industry uses resources efficiently, reducing packaging waste to landfill and enabling industry to take responsible action.

Funding for the implementation of the Plan is provided by industry through their membership of APCO, and the model will be supported through jurisdictional enforcement of the NEPM.

The Plan sets aspirational goals that will require all of industry, governments and community collaboration. However, the onus is on industry, through APCO, to lead the way.

APCO commits to:

• the strategic direction and strategies outlined in this Plan; • continuously looking for improvements and sharing information and lessons learned; • working collaboratively to deliver the desired outcomes; • championing and advocating for the purpose of the Covenant; and • transparently reporting performance in delivering the Covenant’s goals.

In the past, the Covenant’s activities have been jointly funded by industry and jurisdictions, with both committing $15 million over the five years of the previous Plan. Industry has agreed to take full funding responsibility and to significantly increase its direct financial contribution to the Covenant’s activities to $34 million over the next five years.

It is important to note that this is only part of the contribution. Each signatory will commit personnel time and funding resources to their own initiatives, planning and reporting; signatories and other stakeholders will lend their resources to collaboration and knowledge sharing; APCO will create capability enhancements that will add long-term value; and APCO will continue to co-fund projects with individual governments, extending the reach of industry investment.

While the activities we deliver will evolve based on learnings and new information, the Plan identifies eight specific project commitments totalling $10 million. This base commitment will be matched by approximately $2.5 million per annum in signatory services and support. Additional projects and their funding will be identified as part of APCO’s annual business planning, based on knowledge acquired going forward.

This is a bright new future for the Covenant. We are building on the strong legacy that created the awareness of packaging’s environmental impacts in the late ‘90s, brought about widespread kerbside recycling, and led to consistent adoption of the Sustainable Packaging Guidelines by industry.


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Over the next five years APCO will target the following:

• Industry will have increased adoption of sustainable design, to the point where 90% of signatories have a long-term sustainability strategy entwined in their business processes and with clear and measurable targets.

• APCO will have developed proven viable approaches to remove 50% of current problem packaging types or materials (including soft plastics, takeaway coffee cups and expanded polystyrene) from landfill.

• Industry will have widely adopted a unified packaging Recycling/Disposal Labelling Scheme to guide consumer behaviour, resulting in less recyclable packaging going to landfill.

• Industry will have reduced single-use Business-to-Business (B2B) packaging by 30%.

• Twenty percent (20%) of takeaway outlets will have sourced sustainable packaging from the APC Marketplace.

• APCO will have developed a single Packaging Impact Measure and demonstrate a decrease in the environmental impact of packaging in Australia.

• Industry will have demonstrated improved performance through an increase in the overall mean for signatories’ annual report ratings.

For more information about the Covenant, APCO and the Plan please visit packagingcovenant.org.au.

We look forward to working with all stakeholders to deliver this ambitious Plan.

Yours sincerely,

Trish Hyde Chief Executive Officer Australian Packaging Covenant Organisation Limited

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Vision The vision of the Plan is:

An Australia where packaging resources are used and disposed of wisely to minimise our environmental impact.

Mission To be an industry-led initiative in which users of packaging materials and participants in the packaging supply chain can collaborate, lead and learn to:

• efficiently use resources; • divert packaging waste from landfill; and • share knowledge to improve the packaging sustainability performance of Australian

industry.

Guiding Principles The following principles have been used to develop the Plan and will guide its implementation:

• industry-led product stewardship and shared responsibility – operating where industry has a greater capacity to influence outcomes than governments;

• foster sustainable design, using an evidence-based approach and standards: o National Waste Policy and the Waste Hierarchy; o utilise a life cycle approach to assessing the environmental impacts; and o perform in accordance with relevant standards.

• seek national consistency and align outcomes with: o the Australian Packaging Covenant and National Environment Protection Goal; o National Strategy for Ecologically Sustainable Development; and o jurisdictions.

• set goals, measure performance and report publicly: o have measurable targets for member signatories and the APC; and o apply robust measurement, reporting and evaluation framework.

• promote knowledge, learning and thought leadership among industry and consumers.


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Building on Past Successes

The Covenant has been successful in changing business behaviour.

There were 10 targets set in 2010 and signatories have reported against all of them every year. By 2016, all but one due target had been achieved or exceeded (7 targets were due 2015 and 3 are due in 2020).

Targets and progress on the APC KPIs by year

KPI

Targets Achievement

2012 2013 2014 2015 2016

Design KPI 1 % of signatories that have

documented policies and procedures for evaluating and procuring packaging using the SPGs or equivalent

70% (by 2015)

67% 73% 74% 77% 81%

% of signatories that review all new packaging

70% (by 2015)

33% 54% 59% 67% 75%

% of signatories that review half existing packaging

50% (by 2015)

26% 46% 57% 65% 71%

Recycling

KPI 3 % of signatories that apply on-site recovery systems for used packaging at all facilities/ sites

70% (by 2015)

76% 82% 84% 84% 84%

% of signatories that apply on-site recovery systems for used packaging at all or some facilities/ sites

– 95% 98% 98% 99% 99%

KPI 4 % of signatories that have implemented a formal policy of buying products made from recycled packaging

100% (by 2015)

43% 54% 61% 65% 70%

% of signatories that have a formal policy of buying products made from recycled packaging

– 48% 61% 66% 69% 74%

Product Stewardship

KPI 6 % of signatories that have formal processes for working with others to improve packaging design and recycling

100% (by 2020)

59% 63% 63% 64% 68%

KPI 7 % of signatories showing other Product Stewardship outcomes

100% (by 2020)

49% 59% 56% 57% 54%

KPI 7 b % of signatories showing other Product Stewardship outcomes (overall rating of 3 or greater)

55% 59% 65% 71% 74%

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Since 2012, the average overall performance rating for signatories increased from 2.8 to 3.2 (out of 5). This past year 24 signatories received category awards for high performance (greater than 4.2 out of 5), and 4 of these winners were identified and awarded an APC Outstanding Achievement Award.

Over the past five years, 70 resources were published to assist signatories in improving their performance and over 40 workshops held with more than 1,100 attendees. APCO aims to build on existing resources and further engage with signatories to deliver long-term benefits in training, best practice sharing and networking.

Projects

Since 2010, collectively $33 million has been invested in over 45 projects, including research, on the ground clean-up programs, infrastructure support and pilot programs. Going forward, APCO will refine its focus into fewer projects with measurable outcomes delivering greater return.

Compliance

Since 2011, there has been a 71% increase in signatories to 986, including 850 brand owners as at September 2016. In 2015, over 700 companies’ annual reports were reviewed, with 96% of signatories compliant. To validate the review process, 30 companies were independently audited. All were found to be compliant.


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From Covenant Goals into the Strategic Plan

Australian Packaging Covenant Goal 1

The first goal of the Covenant is to:

“Optimise resource recovery of Consumer Packaging through the supply chain by adopting approaches that make changes in the way we design, use and buy packaging and packaged products, so that packaging uses less resources and is more easily recycled, to enable packaging materials to be returned to the economy and minimise waste associated with the generation and consumption of Consumer Packaging across the supply chain.”

The Plan addresses this goal in two of its three strategic pillars.

Pillar 1 focuses on optimising resource use, through:

• packaging design that decreases the quantity of, or more efficiently uses, input materials, including recycled and renewable content; and enables reuse or recycling of used packaging; and

• strong supply chain collaboration to generate wealth from waste opportunities that improve the recovery of packaging materials, such as identifying recycling infrastructure needs to better handle the diversity of materials, and develop new recyclate markets.

Pillar 2 reduces packaging waste to landfill, by targeting individual and corporate behaviour. Establishing a consistent product labelling scheme will improve correct recycling behaviour, as will companies setting diversion targets for their own packaging consumption.

Australian Packaging Covenant Goal 2

The second goal of the Covenant is to:

“Prevent the impacts of fugitive packaging on the environment, by adopting approaches that support new innovations and find solutions to capture packaging materials or waste before it enters the environment, or support the adoption of new or alternative types of packaging.”

Under Pillar 3, the Plan supports new innovations for new or alternative types of packaging and packaging materials by creating a sourcing marketplace for all businesses using the well-known fugitive packaging type – takeaway meal containers.

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By all of industry taking a leadership position on a highly littered packaging, the benefits of the Covenant extend to all businesses in that sector, especially small businesses.

Foundation piece

To deliver on both goals the Plan includes a fundamental foundation piece – knowledge sharing and innovation. As outlined in Pillar 3, collaboration, networking and resources development can guide corporate action and deliver greater outcomes. In turn, information can be harnessed to deliver qualitative and quantitative measures upon which to assess progress.


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Packaging Sustainability Issues

At all levels of government and within industry there is a strategic priority to address environmental sustainability issues, including using resources efficiently and reducing waste to landfill. In Australia, landfill is growing at an unsustainable rate, many times greater than population growth3. Globally, environmental sustainability is being incorporated into policy. This includes the UN Sustainable Development Goals:

• Goal 12 - to ensure sustainable consumption and production patterns, with a target of, by 2030, substantially reduce waste generation through prevention, reduction, reuse and recycling;

• Goal 14 - to conserve and sustainably use the oceans, seas and marine resources; and • Goal 15 - to protect, restore and promote sustainable use of terrestrial ecosystems,

sustainably manage forests, combat desertification, and halt and reverse land degradation, and halt biodiversity loss.

While packaging is just a proportion of the total picture, it is one where ongoing benefits can be reaped if approached well. The following outlines the key packaging sustainability drivers and trends and identifies strategic actions under this Plan.

Efficient use of resources

A significant environmental issue globally and locally that relates to packaging is the need to manage the use of limited resources.

There is global attention on optimising the use of limited resources, to deliver economic and social benefits and minimise waste. These resources include not only the renewable and non-renewable inputs used to produce goods and their packaging, but also the embedded energy and carbon emissions used in their production and transportation. Studies have found that packaging can play an important role in reducing overall resource use and thereby environmental footprint, by protecting and extending the life and quality of product4.

Conceptually this is broadly understood, yet in reality, it is challenging to design packaging that optimises the use and potential recovery of resources, as well as those of the product. To meet this challenge, businesses are seeking to understand the whole of life cycle impact of packaged product5.

There are several examples of companies that have adopted packaging innovations to reduce the resource intensity of certain packaging materials and formats, such as lightweight plastic and glass containers; the use of recycled content; re-usable crates; and the elimination of excess packaging. There are examples where there are limitations on material reuse, such as the use of recycled content in food and therapeutic contact packaging, due to health concerns.

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There is however more that can be done in this area, with companies looking for guidance and advice. APCO planning workshops conducted with industry in September 2016 highlighted the desire of businesses to design for sustainability, but also the limited access to eco-design tools and information.

Sustainable design has been a central part of the Covenant to date, and opportunities to take this to the next level will assist industry to meet the challenge.

The areas where maximum return for signatories and environment have been identified are:

1. enhanced Packaging Sustainability Guidelines; 2. accessible eco-design tools; 3. recognising and promoting excellence; 4. acknowledging performance and encouraging improvement; and 5. online resources and education sessions, including information sharing from industry

leaders.

Closed loop economies

Disconnects, in what could potentially be closed loop economies, is a major issue influencing landfill rates.

In Australia, resources lost to waste are growing at an unsustainable rate, many times greater than population growth. Australia’s municipal waste was 628.3kg per capita in 2010-11, 18.5% above the OECD average of 530.2kg per capita6.

This is the converse trend to Europe where rates of waste to landfill are declining, due to concerted efforts to increase recycling markets, organics composting and the use of waste to energy7. These treatments divert waste from landfill and recover some of the embedded resources.

Locally, contaminants in the recycling stream; packaging that can’t widely be recycled; and limited markets for, or uneconomic quantities of, recyclates are a major contributor of used packaging going to landfill, being stockpiled or exported.

Adding to this issue is the counterbalance to packaging minimisation - consumer trends that may actually increase packaging8. Some of these trends are driven by Australian demographics such as an ageing population, increasing single and two person households, and increasing health issues; some by regulation such as food standards and therapeutic goods standards; some are driven by market competition such as consumer appeal and online retailing; and some are driven by voluntary measures to protect consumers9.


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For example:

• In food and grocery packaging there is an increase in packaging complexity resulting from consumer preferences such as: easy open; no-mess dispensing; lighter weight; ‘resealability’; smaller packs and portability10.

• Online retailing with its need for lightweight, pick and post packs is driving growth in secondary packaging11.

The result is an increase in the complexity of packaging materials and limitations in their reuse or recycling. End of life solutions that can minimise the environmental impacts of these new packaging types are needed.

Addressing the disconnects that prevent closed loop economies is not an easy task because there are contributing factors throughout the supply chain, including lack of coordinated effort, market dynamics and buying power, suitable facilities, logistics, recyclate pricing and new packaging products. In addition, some of these new materials have a low value so finding economic solutions can be difficult.

Over many years, the Covenant has worked across the supply chain to encourage recycling infrastructure. While progress has been made, the disconnects are multi-layered and involve many parties, hence there are packaging materials that continue to go to landfill, are stockpiled or exported.

APCO planning workshops conducted with industry in September 2016 highlighted the complexity of identifying and implementing supply chain solutions to create closed loop economies. As individual companies, businesses see the barriers and frustration points. Yet there is strong recognition that these cannot be tackled alone.

The way forward is a structured and focused collaboration across the supply chain, with governments and with other stakeholders engaged to determine viable solutions for these materials, which could include reuse, recycling or energy and fuel recovery. This holistic approach will define the resources and activities needed to create closed loop economies.

Consumer disposal behaviour

Australians have embraced recycling with 98% of households using recycling in 200912. However this high usage has not translated to all recyclable packaging being recycled. In 2010, 23% of NSW household waste consisted of recyclable items, including packaging13.

One reason recyclables end up in landfill is a lack of clear, consistent consumer information. While consumers broadly know the recyclability of simple packaging materials, the variety of complex

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and composite packages, combined with inconsistent recycling capabilities across councils can leave consumers confused.

The need for clear and consistent consumer information to alleviate confusion is being addressed elsewhere with on-pack labelling. The UK introduced a scheme in 2009 and it is now used on over 75,000 product lines14 and the US has implemented a similar label in 2012 through GreenBlue and now has over 50 participating companies and brands15.

Locally, research indicates strong consumer demand for accurate and consistent information on the recyclability and disposal of packaging16. Further, APCO planning workshops conducted with industry in September 2016 showed widespread support for an industry-led on-pack Recycling/Disposal Labelling Scheme.

A Recycling/Disposal Labelling Scheme, supported by council recycling harmonisation, will support consumer decision making at the point of disposal.

Companies taking responsibility

Operating in a global marketplace adds a layer of complexity that needs to be recognised. Companies operating in many markets seek to harmonise packaging across borders to reduce production costs, maximise economies of scale and optimise logistics17. Companies competing with imported and domestic products seek to be economically competitive.

Packaging suppliers overseas seek to standardise their packaging products and may select larger markets as the benchmark, potentially excluding the desires of their customers in smaller markets like Australia 18.

Significant research and innovation on sustainability and materials is taking place globally19. This is a great opportunity to harness learnings and contribute to the knowledge base. However, individual companies are often limited in their own experimentation for cost, consumer safety and regulatory reasons.

Despite limitations on direct control, Australia cannot sit back and wait for others to solve our problems. At the APCO planning workshops conducted with industry in September 2016, the issue of direct and indirect responsibility was explored. Signatories articulated two areas upon which APCO should focus:

1. a tangible landfill reduction target that businesses can ‘own’; and 2. education and resources to help individuals build business cases and influence their

organisations internally.


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Reducing environmental harm in the natural environment

Most used packaging is contained within the recycling and waste streams. However, this is not universal, with fugitive packaging that leaks from these systems or is littered potentially causing direct environmental harm, as in the case of marine debris.

The problems behind this scenario are complex: littering is generally related to consumer behaviour in a particular situational context; less harmful packaging materials from an environmental perspective may compromise the product or consumer’s health; and, in the case of takeaway meals, the number of businesses, their products and their locations, and the number of customers and where they consume the products are exceedingly large.

Yet the complexity does not negate the reality. In what is considered a global environmental crisis, it is estimated that there are 18,000 pieces of plastic floating in every square kilometre of ocean, and Australia’s marine life is dramatically impacted20.

Rather than shy away from the issue because it is too big and complex, a ‘corporate social responsibility’ approach can be used. Industry will work together to support a business sector - takeaways and quick service restaurants - to source packaging material options that meet the product need with least environmental impact. This approach recognises that while larger companies are able to invest in packaging design and research to address their own packaging impacts, the multitude of smaller Australian businesses cannot. It is industry supporting industry for the greater environmental good.

Demonstrating success

Corresponding with the heightened awareness of the environmental need to effectively use resources and minimise waste, is the global trend for governments and industry to seek measures to understand and track the value of initiatives undertaken.

Measuring the success of an initiative indicates the performance of that initiative only. Each of the initiatives in the Plan can be measured either qualitatively or quantitatively. However, this may not capture the interplay between initiatives; they may be complementary, counterproductive or co-dependent.

Increasingly, there is a desire to set clear simple targets to understand macro performance, along with a focus on education and knowledge sharing. Through a single industry wide Packaging Impact Measure long-term environmental impact can be measured.

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Addressing packaging sustainability issues through the Plan

Each of the issues discussed in this section are incorporated and addressed in the Covenant Strategic Plan. Specifically:

Pillar 1 - Resource Efficiency:

A: Promotes the efficient use of resources through sustainable design.

B: Brings industry together to create closed loop economies.

Pillar 2 - Landfill Minimisation:

A: Influencing consumer disposal behaviour through on-pack labelling.

B: Companies taking responsibility for direct packaging waste to landfill.

Pillar 3 - Leadership:

A: Reducing environmental harm in the natural environment through informed packaging sourcing for takeaways.

B: Demonstrating success through shared learning and meaningful measurement.


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2017-2022 Covenant Strategic Plan

To be effective, the Plan needs to adopt a total life cycle approach that recognises the product’s needs, the environmental cost of packaging resource inputs, and importantly, the waste hierarchy and environmental impacts at end of life. It must result in an improved knowledge base to inform decision making, more packaging designed for sustainability, advancement towards closed loop economies, less waste to landfill and less environmental degradation.

Each pillar of the Plan focuses on a key area for action that will ensure that the Covenant’s objective of minimising the environmental impact of packaging is achieved. Strategies in relation to one pillar will also produce outcomes relating to other pillars.

The following pillars have been identified to support the goals of the Covenant.

1. Resource efficiency: optimising the use of resources through whole of life cycle, sustainable design and closing the loop on packaging material economies.

2. Landfill minimisation: diverting direct packaging waste away from landfill and guiding consumer behaviour with packaging disposal labelling.

3. Leadership: researching and sharing knowledge to improve the packaging sustainability performance of Australian industry.

The pillars recognise that packaging plays an important role in the overall environmental footprint of a packaged product. Accordingly, the product’s efficient delivery is considered along with increasing resource efficiency and diverting packaging waste from landfill.

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Australian Packaging Covenant Strategic Plan 2017 - 2022

Pillars Key Objectives Strategic Priorities and Initiatives Key Performance Indicators

1.

Reso

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A/ Sustainable Design: a life cycle approach

Increase the adoption of sustainable design of packaging by: • embedding packaging sustainability in

business strategy and processes; • enabling informed packaging design

decisions through eco-design assessment; and

• ensuring Packaging Sustainability Guidelines adapt and remain relevant to industry and environmental needs.

Development of tools and resources to support and encourage industry performance: 1. guide design, through the continuous

evolution of Packaging Sustainability Guidelines, eco-design tools, and education and information; and

2. encourage high performance, through awards and recognition schemes.

By 2020, 90% of signatories have a long-term sustainability strategy in place that:

• incorporates the APC Packaging Sustainability Guidelines;

• is integrated into business processes; and

• has clear and measurable targets.

By 2022, 60% of signatories have achieved or exceeded sector specific renewable and recycled content targets based on 2017 levels.

B/ Circular Economies: waste to resources

Find supply chain solutions to recover packaging and create sustainable closed loop economies.

Bring industry together to identify the barriers to the recovery and reuse of waste packaging, develop strategies to address and build innovation across industry sectors and the supply chain.

By 2022, APCO will have developed proven viable approaches to remove 50% of current problem packaging types or materials from the waste stream. By 2022, 90% of signatories will have actively participated in closed loop collaboration.


2.

Land

fill

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A/ Consumer Labelling: informed disposal

Equip consumers to easily determine the correct disposal method for post-consumption packaging.

Develop and implement a packaging Recycling/Disposal Labelling Scheme that provides clear information to consumers and supports the harmonisation of collection systems.

By 2022: • APCO will have delivered a packaging

Recycling/Disposal Labelling Scheme in market covering 85% of packaging; and

• the collective efforts of signatories will have resulted in a decrease in labelled recyclable packaging going to landfill.


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B/ Less Landfill: direct action

Divert packaging waste from landfill. Set and report on individual company targets to direct their own packaging waste to non-landfill options.

By 2022, signatories will have reduced single-use B2B packaging, as a proportion of turnover, by 30%, based on 2017 reported levels.


3.Le

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A/ Away from Home: packaging solutions

Prevent environmental harm caused by takeaway food packaging.

Provide a national takeaway meal packaging database listing life cycle assessed packaging options for all businesses selling takeaway meals.

By 2022, 20% of takeaway outlets will have selected sustainable packaging from the APC Marketplace.

B/ Knowledge exchange: learn, share and innovate

Drive change through evidence-based knowledge sharing and broad collaboration.

Hold regular networking and knowledge sharing events. Provide a centralised packaging sustainability resource centre for members and consumers to support their knowledge needs. Develop and track key macro and micro metrics to measure improvement.

By 2022, the collective efforts of signatories will demonstrate:

• a decrease in the environmental impact intensity of packaging materials in the Australian waste stream through the Packaging Impact Measure; and

• an improvement in mean signatories annual report ratings.

Annually, the majority of signatories will be satisfied with the performance of APC in:

• creating opportunities to share knowledge and network;

• its provision of member information, guidance and services; and

• the setting and support of company reporting requirements.

This is the Strategic Plan for the Australian Packaging Covenant, and the Australian Packaging Covenant Organisation’s Strategic Plan may vary from the above.

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Australian Packaging Covenant Statement of Intent: 2017 – 2019

This Statement of Intent outlines APC’s activities and targets for the next two years, in support of the Covenant Strategic Plan.

Activities and targets to deliver against the Covenant Strategic Plan

Pillars Actions Outcomes

1.

Reso

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A/ Sustainable Design: a life cycle approach

APCO will: • revise the Packaging Sustainability Guidelines and implement member eco-design

tools and resources, including a support service; • encourage high performance, through awards, online tools, education and

information sharing; • establish enhanced recognition schemes for performance and sustainability; and • develop action plan and reporting requirements to demonstrate the business and

environmental value of incorporating sustainable design. Signatories will:

• adopt and incorporate Packaging Sustainability Guidelines and eco-design tools into their businesses and processes; and

• implement sustainable design action plan and reporting requirements.

By 2019, APCO shall develop and implement a Packaging Eco-Design Tool to be adopted by its members, and support the implementation of sustainability and life cycle assessment into members’ businesses and processes.

B/ Circular Economies: waste to resources

APCO will undertake supply chain collaboration: • identify the economic, behavioural, scientific, infrastructure and/or market issues

preventing closed loop economies for problem packaging types or materials, including soft plastics, takeaway coffee cups and expanded polystyrene;

• model solutions to address and engage with stakeholders to prove viable approaches to remove the identified items from the waste stream; and

• develop action plan and reporting requirements to inform closed loop models and assess success.

Signatories will: • participate in closed loop collaboration; and • implement any requested action plan and reporting requirements.

By 2019, APCO will develop proven viable approaches to remove identified problem packaging types or materials from the waste stream including, but not limited to:

• soft plastics; • takeaway coffee cups; and • expanded polystyrene

By 2019, 45% of signatories will have actively participated in closed loop collaboration.


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2. L

andf

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A/ Consumer Labelling: informed disposal

APCO will: • develop and implement a packaging Recycling/Disposal Labelling Scheme that

provides clear information to consumers and supports the harmonisation of collection systems.

Signatories will: • have incorporated the packaging Recycling/Disposal Labelling Scheme into their

action plans and reporting requirements.

By 2019, APCO will have implemented a Packaging Recycling/Disposal Labelling Scheme which will assist consumers to make correct disposal decisions.

B/ Less Landfill: Direct action

APCO will: • develop action plan and reporting requirements to demonstrate the direct

contribution of business landfill avoidance/diversion. Signatories will:

• incorporate into their action plans strategies to divert used packaging from landfill; and implement measurement of direct packaging usage, reuse, recycling and diversion from landfill.

By 2019, signatories will have reduced single-use B2B packaging, as a proportion of turnover, by 15%, based on 2017 reported levels.

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3.

Lead

ersh

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A/ Away from Home: packaging solutions

APCO will establish a national takeaway meal packaging database listing life cycle assessed packaging options for all outlets selling takeaway meals. Signatories will support and encourage APCO in its efforts.

By 2019, APCO will develop and implement an APC Marketplace that will contain packaging sustainability options for 95% of common takeaway food packaging products.

B/ Knowledge Exchange: learn, share and innovate

APCO will: • hold regular networking and knowledge sharing events; • provide a centralised packaging sustainability resource centre for

members and consumers to support their knowledge needs; and • develop and track key macro and micro metrics to measure

improvement. Signatories will:

• support other signatories by collaborating, sharing information and encouraging best practice across the supply chain; and

• measure and report on key metrics required to support the Packaging Impact Measure.

By 2018, APCO will have developed the Packaging Impact Measure, a single measure of the environmental impact of packaging materials in the Australian waste stream. By 2018, APCO will have implemented the member Packaging Sustainability Portal to support signatories to meet their obligations.

This is the Strategic Plan’s Statement of Intent for the Australian Packaging Covenant, and the Australian Packaging Covenant Organisation’s activities may vary from the above.


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Engagement, Monitoring, Evaluation and Reporting

Engagement

The Covenant is a collaborative approach to solving an environmental problem. APCO and each jurisdiction will work together, sharing information and learnings to deliver the Plan.

As the Plan is industry-led, APCO has an important role in engaging its members to both represent their needs and drive performance improvements. To assist APCO in making sound, evidence-based decisions, it will draw on expertise and experience with packaging sustainability issues through the Stakeholder Advisory Group and Technical Reference Group, as well as undertake regular member communications and education.

Monitoring and evaluation

As per the Covenant, APCO will develop a robust monitoring and evaluation framework for endorsement by the Government Officials Group. This will include methodologies for monitoring the performance of signatories and measuring APCO’s own performance against targets.

For the monitoring of signatories, in 2017, APCO will establish new company level KPIs to incorporate in the current planning cycle, as well as action plan and annual reporting requirements for signatories. These will be implemented in a staged process to allow businesses to comfortably incorporate them. In 2017, businesses will also be asked to start measuring baseline data required to support the Plan. In 2018, they will be asked to provide preliminary data as part of their 2019 annual report, and they will be required to update their action plans and submit for review.

APCO will continue to undertake signatory audits to verify the accuracy of self-reporting.

To monitor performance against the Plan, APCO will establish methodologies for measuring outcomes, including the establishment of baselines for all APCO targets listed in the Plan in 2017. These will be set and measured with the assistance of the Technical Reference Group.

As per the Covenant, APCO will also arrange a five yearly, independent evaluation of the Covenant’s performance in achieving its aims.

Reporting

APCO will report its performance against the Plan annually to the ministers of environment, through the Department of Energy and Environment.

This report will identify successes, and areas for improvement and refinement for the Plan to adapt to external changes. It will be made publicly available.

Performance will be assessed annually and the next Covenant Strategic Plan negotiated by 31 December 2021.

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Financial Model

Funding for the implementation of the Plan is provided by industry through their membership of the Australian Packaging Covenant Organisation (APCO), and the model is supported through jurisdictional enforcement of the NEPM.

Specifically, APCO is responsible for setting and collecting membership fees and for determining the funding required for services and projects to deliver the Plan.

APCO is supported in its work by states’ and territories’ commitment to regulating non-compliant companies under the NEPM. This is critical to prevent “free-riders”, and to grow the pool of signatories, thereby spreading the increased financial load across a greater number of companies.

APCO has committed to eight specific projects under the Plan totalling $10 million to be delivered in the first three years.

This base commitment will be matched by approximately $2.5 million per annum in signatory services and support.

Additional projects will be identified as part of APCO’s business planning and funded accordingly.

APCO anticipates the following annual spend to deliver the Plan. To support APCO, the Commonwealth Government will identify “free rider” companies from the current 9,000 product based businesses with greater than $5 million in turnover, and the jurisdictions will incentivise participation through enforcement of the NEPM.

Calendar year Committed project spend

Projected additional project spend

Approximate signatory services and support spend

Total

2017 $2.5M $1M $2.5M $6M 2018 $2.5M $1.5M $2.5M $6.5M 2019 $2.5M $1.5M $2.5M $6.5M 2020 $2.5M $2.5M $2.5M $7.5M 2021 $5M $2.5M $7.5M $34M

APCO will determine the allocation of expenditure on an annual basis.

The funding of packaging stewardship activities will assist in reducing the environmental impacts of packaging waste in all jurisdictions, as they will contribute to shared research and learnings, sustainable product design, building of sustainable packaging capability within industry and messaging to change consumer behaviour.


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In addition to direct funding, industry, stakeholders and APCO will provide significant in-kind contributions that are critical to the success of the Covenant. These include:

• each signatory will commit personnel time and funding resources for their own

sustainability initiatives, APC action plans and APC annual reports;

• signatories and other stakeholders will apply their personnel and financial resources to collaboration and knowledge sharing;

• APCO’s delivery of resources, tools and networking will enhance overall industry capability thereby delivering a compound benefit on the initial investment; and

• APCO will continue to seek co-funders for projects and initiatives further expanding the

scope for deliverables.

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