Why are ESG scores increasingly important?

        In recent years, ESG (environmental, social, and corporate governance) has become a core indicator of global corporate competitiveness. Consumers, investors and regulators are paying close attention to the sustainable performance of companies, and packaging waste is one of the key factors affecting ESG scores.

According to statistics, the world generates about 380 million tons of plastic waste annually, of which only 9% is recycled (UNEP data). Adopting compostable packaging (Compostable Packaging) not only reduces pollution, but also enhances brand image, reduces compliance risk, and even receives policy subsidies.

1. How can compostable packaging improve ESG scores?

When evaluating companies, ESG rating agencies (e.g. MSCI, S&P Global) focus on:

Environmental (E): carbon footprint, waste management, resource recycling

Social (S): consumer health, supply chain ethics

Governance (G): transparency of sustainability strategy

ESG benefits of compostable packaging:

Reduced landfill waste: under industrial composting conditions, compostable packaging decomposes to organic fertilizer within 180 days (compliant with EN13432) Decomposes into organic fertilizer (compliant with EN13432).

Reduced carbon footprint: Bio-based materials such as PLA (polylactic acid) reduce carbon emissions by more than 60% compared to traditional plastics.

Avoid policy risks: EU SUP ban, China’s “Plastic Restriction Order” and other regulations are phasing out non-biodegradable packaging.

Increase brand premium: 66% of consumers are willing to pay 10% more for eco-friendly packaging (Nielsen research).

2. Global certification standards: how to choose compliant materials?

Not all packaging labeled as “biodegradable” is ESG-compliant, and companies need to recognize authoritative certificates:

Certification system Applicable regions Key requirements

EN13432 EU More than 90% degradation in 6 months under industrial composting

ASTM D6400 USA Toxicity testing is required, and the quality of the compost must not be compromised

OK Compost Global Dual certification for home and industrial composting

BPI certification North America Compliance with FDA food contact safety standards

⚠️ Guide to avoiding the pitfalls:

“Degradable” ≠ “compostable”: some oxo-degradable plastics (OXO-Degradable) are microplastics. Degradable) can pollute with microplastics and has been banned in the EU.

Need to match local facilities: If there is no industrial composting plant in your city, prefer home composting certified materials.

3. Success stories: How are these brands capitalizing on growth?

Case 1: Nestlé

Strategy: 100% recyclable or compostable packaging by 2025.

Result: ESG rating upgraded from BBB to A (MSCI), share price up 12% annually.

Case 2: Lush

Strategy: Introduce “naked” shampoo soap + compostable mailing bags.

Impact: 35% reduction in transportation carbon emissions, +200% exposure to environmental topics on social media.

Case 3: Patagonia

Strategy: Replace PE film with compostable cornstarch packaging.

Impact: Named to the Top 10 “World’s Most Sustainable Brands” (Forbes).

4. 4 Key Steps for Companies to Land Compostable Packaging

STEP 1: Supply Chain Audit

Negotiate with existing packaging suppliers for gradual replacement with PLA, PBAT or paper-based composites.

Require suppliers to provide third-party certification reports (e.g., TUV Austria certification).

STEP 2: Cost Optimization

Small batch testing: trial in high unit price product lines first to reduce risk.

Policy subsidies: Some countries (e.g., Germany) offer tax breaks for bio-based materials.

STEP 3: Consumer education

Labeling of packaging with “compostable” logo + disposal instructions (e.g. “industrial composting facility required”).

Show packaging degradation through short videos to increase trust.

STEP 4: ESG Reporting Disclosure

Apply for B Corp certification or CDP carbon disclosure credits.