Creating a Qualified ESG Report: An In-Depth Disclosure Guide for Packaging Sections

From Environmental Footprint to Social Responsibility: Building a Transparent and Responsible Packaging Value Chain

Packaging, as the first point of contact between a product and consumers, has its hidden environmental and social footprints increasingly scrutinized by global regulators, investors, and consumers. As companies commit to building comprehensive and in-depth ESG (Environmental, Social, and Governance) reports, the packaging section is often a key litmus test for their sustainability commitments. What core data should a “qualified” ESG report disclose in the packaging area to truly reflect a company's responsibility and foresight?

This guide aims to delve into the necessity, core data categories, key considerations, and future trends of packaging data disclosure in ESG reports. It helps companies go beyond compliance requirements and build a truly compelling narrative of sustainable packaging. We will break down the specific data points required in the packaging area from the environmental, social, and governance dimensions, and provide practical suggestions for data collection and reporting.

A qualified ESG report requires companies to conduct multi-dimensional, quantitative, and verifiable data disclosure in the packaging section. This includes comprehensive considerations from material selection to waste management, from supply chain ethics to product safety, thereby demonstrating their genuine commitment and strategic vision in sustainable development.

Part 1: Understanding the Core Position of Packaging in ESG Strategy

1.1 The Evolution of ESG Reporting and the Increasing Importance of Packaging

The global focus on corporate sustainability performance continues to escalate, and ESG reporting has evolved from a “nice-to-have” to a “must-have.” Globally, regulations such as the EU's Corporate Sustainability Reporting Directive (CSRD) and the US Securities and Exchange Commission (SEC)'s new rules impose more stringent requirements on ESG disclosure, aiming to enhance the standardization and comparability of information.

In capital markets, the sustainable investment wave is surging, and investors are increasingly viewing a company's ESG performance as an important dimension for assessing its long-term value and risks. Excellent ESG ratings can effectively attract responsible capital and lower financing costs. At the same time, the awakening of consumer environmental awareness is prompting brands to make concrete commitments and improvements in packaging sustainability to win market favor and brand loyalty. From a supply chain perspective, the stable supply of packaging materials and effective waste disposal directly affect a company's operational resilience, cost structure, and even reputational risks. Therefore, packaging issues have become an indispensable component of a company's ESG strategy.

1.2 The Far-Reaching Impact of Packaging on Environmental, Social, and Governance Dimensions

Packaging, seemingly small, has a profound impact on all dimensions of ESG:

• Environment (E): The entire life cycle of packaging, from design and production to transportation and disposal, involves a large amount of resource consumption and environmental burden. This includes the extraction and processing of virgin raw materials, greenhouse gas emissions and water resource use during production, the carbon footprint caused by product transportation, and the pollution of terrestrial and marine ecosystems caused by discarded packaging (especially plastic pollution). Companies face enormous pressure for circular economy transformation and urgently need to shift from a linear to a circular model.
• Social (S): The social impact of packaging is reflected in multiple levels. For example, the procurement of packaging materials involves labor rights protection issues in the supply chain; the chemical composition of packaging materials is directly related to product safety and consumer health, especially the safety standards for food contact materials; companies have a responsibility to educate and guide consumers to correctly sort and recycle through clear guidance on packaging; at the same time, the treatment and management of packaging waste directly affects the environmental quality and residents' health of surrounding communities.
• Governance (G): The formulation, implementation, and supervision of an effective packaging sustainability strategy is a manifestation of a company's good governance capabilities. This includes compliance management with relevant regulations (such as plastic bans, extended producer responsibility), effective communication mechanisms with internal and external stakeholders, and ensuring the transparency and high quality of packaging ESG data disclosure.

1.3 Focus Areas of Mainstream ESG Reporting Frameworks on Packaging

Major global ESG reporting frameworks and standards focus on packaging-related issues to varying degrees, providing guidance for corporate disclosure:

• Global Reporting Initiative (GRI) Standards: As the most widely used ESG reporting framework, the GRI standards' specific indicators such as “Materials,” “Energy,” “Water and Emissions,” “Waste,” “Supplier Environmental Assessment,” and “Product and Service Labeling” can be directly applied to the packaging field. For example, it requires disclosure of the total usage of packaging materials, the proportion of recycled materials, the amount of packaging waste generated and disposal methods, and environmental information labels on packaging.
• Sustainability Accounting Standards Board (SASB) Standards: SASB has developed more specific quantitative indicators for the characteristics of different industries. For example, in industries such as consumer goods and food and beverage, SASB will pay special attention to indicators such as packaging material efficiency, packaging waste management, and the application of innovative packaging materials to reflect the industry-specific sustainable development risks and opportunities.
• Task Force on Climate-related Financial Disclosures (TCFD): The TCFD framework focuses on the impact of climate change on corporate financial performance. In the packaging field, companies need to disclose the carbon footprint of their packaging supply chain, including greenhouse gas emissions from raw material production, packaging processing, product transportation, and waste disposal, as well as the financial risks that climate change may pose to the supply and cost of packaging materials.
• EU Corporate Sustainability Reporting Directive (CSRD): The CSRD sets more stringent requirements for the disclosure of the entire packaging life cycle, emphasizing data traceability and double materiality analysis. This means that companies must not only disclose the environmental impact of packaging but also assess its social and economic impacts, and deeply analyze the importance of these impacts to the company itself and its stakeholders.

Part 2: Environmental Dimension: Detailed Rules for Disclosure of Packaging's Ecological Footprint

In the environmental dimension, a qualified ESG report should detail the ecological footprint of packaging from material selection to waste disposal, demonstrating the company's environmental management performance in a quantitative and transparent manner.

2.1 Core Disclosure: Material and Circularity Data

• Total Packaging Material Usage (by weight/unit): Disclose the total consumption of all packaging materials during the reporting period, which can be subdivided by product category and packaging type (such as single-use packaging, reusable packaging). For example, the total consumption of consumer packaging in a certain year is 10,000 tons.
• Proportion of Virgin and Recycled Materials Used:
  • Disclose the purchase volume and percentage of virgin and recycled materials (such as post-consumer recycled plastic PCR, and post-industrial recycled plastic PIR) separately by material type (plastic, paper, glass, metal, etc.). For example, the proportion of PCR used in plastic packaging is 30%.
  • Focus on disclosing the usage of certified recycled materials, such as the usage of paper certified by FSC (Forest Stewardship Council) or the usage of recycled plastic certified by ISCC PLUS (International Sustainability and Carbon Certification).
• Proportion of Recyclable, Compostable, and Biodegradable Packaging Materials: Disclose the proportion and total amount of all product packaging that can enter the mainstream recycling stream, meet industrial composting standards or home composting standards, and materials that can naturally degrade under specific conditions. This helps assess the compatibility of packaging design with the circular economy.
• Packaging Lightweighting and Reduction Achievements:
  • Quantify the trend of packaging weight changes per unit product and compare it with the base year to demonstrate reduction efforts. For example, compared to 2020, the packaging weight per product has been reduced by 5%.
  • Provide cases and quantitative results of packaging level optimization and removal of unnecessary packaging, such as canceling secondary packaging and simplifying internal fillers.
• Research and Application of Innovative Environmentally Friendly Materials: Disclose the company's R&D investment, pilot projects, and application progress in bio-based materials, new edible/soluble materials, and reusable packaging solutions.

2.2 Core Disclosure: Waste Management and End-of-Life Treatment Data

• Total Amount of Packaging Waste Generated: Disclose the total amount of packaging waste generated by the company's own operations (such as packaging waste generated in production workshops and logistics centers) and packaging waste generated by consumers after the sale of its products.
• Packaging Recycling Rate and Reuse Rate:
  • Disclose the amount and proportion of packaging waste recycled and reused from the company's own operations.
  • Quantify contributions to promoting post-consumer packaging recycling through participation in Extended Producer Responsibility (EPR) programs, such as the total amount of packaging waste recycled through investments in recycling infrastructure or support for recycling projects.
• Waste Disposal Destination: Detail the proportion and total amount of packaging waste sent to recycling, incineration (differentiate with/without energy recovery), or landfill during the reporting period.
• Illegal Dumping and Pollution Incidents: Disclose the number of environmental pollution incidents related to packaging waste during the reporting period, as well as the company's response and handling, reflecting its commitment to environmental responsibility.

2.3 Core Disclosure: Energy, Emissions, and Water Resource Data in Production and Transportation

• Energy Consumption and Carbon Emissions in Packaging Production:
  • Disclose the total energy consumption (by type: electricity, natural gas, etc.) and intensity (such as energy consumption per unit of packaging product or per ton of packaging material) of self-operated packaging production facilities.
  • Disclose greenhouse gas emissions (Scope 1 and Scope 2) directly related to packaging production.
• Carbon Footprint in Packaging Transportation:
  • Explain how optimizing packaging design (such as improving volume efficiency and stacking efficiency) positively affects logistics efficiency and reduces carbon emissions during transportation.
  • Estimate Scope 3 emissions related to the transportation of packaging products (such as transportation from suppliers to factories, from factories to distribution centers, and from distribution centers to customers).
• Water Resource Consumption and Wastewater Management: Disclose the amount of water taken, discharged, and recycled during the packaging production process, reflecting the company's efforts in water resource management.

Part 3: Social Dimension: Disclosure of Packaging's Humanistic Care and Product Responsibility

The social dimension focuses on the impact of packaging on human well-being, labor rights, and community development, as well as the company's responsibility in product safety and consumer health.

3.1 Core Disclosure: Supply Chain Labor Practices and Responsible Procurement

• ESG Audit Coverage Rate of Packaging Suppliers: Disclose the proportion of key suppliers providing packaging materials and services that have undergone social and environmental risk assessments. This includes audits of their labor standards, environmental management systems, and business ethics.
• Ethical Procurement and Human Rights Commitment: Disclose the company's policies and implementation regarding anti-child labor, anti-forced labor, fair wages, and safe working environments in the packaging supply chain, including compliance with supplier codes of conduct.
• Diversity and Inclusion: If applicable, disclose the proportion of cooperation with small and medium-sized enterprises, minority-owned or women-owned businesses in the packaging supplier group, reflecting support for supply chain diversity and inclusion.

3.2 Core Disclosure: Product Safety and Consumer Health

• Packaging Material Safety Certification and Compliance: Disclose the proof and reports that all packaging materials comply with relevant national/regional food contact safety standards (such as US FDA, EU regulations), REACH regulations (Registration, Evaluation, Authorization and Restriction of Chemicals), and RoHS directives (Restriction of Hazardous Substances).
• Hazardous Substance Screening and Restriction: Clearly disclose the company's policy statement on not using specific hazardous chemicals (such as Bisphenol A (BPA), phthalates, heavy metals) in packaging, and provide relevant test results or third-party certifications.
• Consumer Complaints and Recall Events: Disclose the number of product recalls or serious consumer complaints caused by packaging material safety issues, functional defects, or labeling errors during the reporting period, as well as the company's response and handling results.
• Consumer Education and Transparency: Elaborate on the company's investment in providing clear recycling guidelines, waste sorting tips, product ingredient transparency information, etc. on packaging, and evaluate the effectiveness of these measures in enhancing consumer environmental awareness and correct recycling behavior.

3.3 Community Involvement and Impact

• Impact Assessment and Response Measures of Packaging Waste Treatment Facilities on the Surrounding Community Environment and Health: If the packaging waste treatment facilities owned or cooperated by the company may have an impact on the surrounding communities, the relevant environmental impact assessment results and mitigation measures taken should be disclosed.
• Corporate Investment in Community Packaging Recycling Education or Cleaning Activities: Disclose the community activities participated in or funded by the company to enhance public awareness and practice of packaging sustainability.

Part 4: Governance Dimension: The Cornerstone Disclosure of Transparency and Compliance

The governance dimension focuses on how companies integrate sustainable development concepts into their core strategies, operations management, and risk control, and ensure the transparency and reliability of information disclosure.

4.1 Core Disclosure: Packaging Sustainable Development Strategy and Goals

• Company-Level Sustainable Packaging Strategy: Disclose the company's long-term vision, goals, and commitments in packaging sustainable development, such as the goal of “achieving 100% recyclable, reusable, or compostable packaging by 20XX” and a detailed timetable for achieving it.
• Management Structure and Responsibilities: Clarify the department, committee, or senior executive within the company responsible for packaging ESG affairs, and elaborate on its specific responsibilities, decision-making authority, and assessment mechanisms linked to sustainable development performance.
• Risk Management and Opportunity Assessment: Identify ESG risks related to packaging, such as strict regulatory changes, shortages of key packaging materials, reputational crises caused by packaging issues, etc., and elaborate on its response strategies in detail. At the same time, assess the business opportunities brought by sustainable packaging, such as cost savings, enhanced brand value, and attracting new customers.

4.2 Core Disclosure: Compliance and Risk Management

• Packaging-Related Regulatory Compliance: Disclose all regulatory compliance related to packaging during the reporting year, including but not limited to plastic bans, Extended Producer Responsibility (EPR) schemes, and material safety standards in various countries or regions. The number and nature of fines and violations that occurred during the period should be listed, and the corrective measures taken should be explained.
• External Certification and Audit: Disclose the company's certification status for packaging sustainability-related standards, such as ISO 14001 environmental management system certification, FSC forest certification, ISCC PLUS, etc. At the same time, it should be stated whether a third-party audit has been conducted and provide a brief description of the audit results. These certifications and audits are important guarantees for enhancing the credibility of the report.
• Stakeholder Engagement: Disclose the company's cooperation and dialogue with upstream and downstream partners in the packaging supply chain (such as material suppliers, packaging manufacturers, recyclers), industry associations, non-governmental organizations (NGOs), and government agencies in packaging sustainable development, demonstrating its openness and cooperation.

4.3 Data Management and Verification

• Disclose data collection methods, boundary definitions, base year settings, calculation methods, and data quality control measures: Describe in detail the methodology used to collect, summarize, and analyze packaging ESG data, including the source of the data, scope (such as global data or specific regions), the set base year (used to compare performance), and internal control processes to ensure data accuracy and reliability.
• Whether to conduct third-party verification/audit, and attach a brief description or link to the verification report: Clarify whether the packaging ESG data in the report has been independently verified or audited by a third party. External verification can significantly enhance the credibility of the data and improve the transparency and credibility of the report.

Part 5: Data Collection, Challenges, and Best Practices

5.1 Keys to Efficiently Collecting Packaging ESG Data

To produce a high-quality ESG report, it is crucial to collect packaging-related data efficiently and accurately:

• Data Traceability and Life Cycle Assessment (LCA): Use Life Cycle Assessment (LCA) tools to quantitatively evaluate the entire life cycle of packaging materials, from raw material acquisition, production, transportation, use to waste disposal, and comprehensively track their environmental footprint. This helps companies identify key impact points and optimize designs.
• Digital Tools and Platforms: Make full use of modern digital tools. Through Enterprise Resource Planning (ERP) systems, Supply Chain Management (SCM) software, and dedicated ESG data management platforms, automate the collection, integration, and analysis of packaging data, thereby improving data processing efficiency and reporting accuracy.
• Cross-Departmental Collaboration: Establishing an efficient cross-departmental collaboration mechanism is the cornerstone of successful data collection. The procurement department is responsible for material data, the design department provides packaging structure information, the production department provides energy consumption and waste data, the logistics department provides transportation data, and the sales and legal departments provide consumer feedback and compliance information. Collaboration between multiple departments can ensure the completeness and accuracy of the data chain.

5.2 Challenges Faced by Packaging ESG Data Disclosure

Despite its increasing importance, packaging ESG data disclosure still faces many challenges:

• Data Granularity and Consistency: Especially for multinational companies, the data collection standards and granularity of different regions and different suppliers may vary, making data difficult to unify and verify. The complexity of the supply chain also increases the difficulty of data acquisition.
• Data Boundary Definition: The accurate accounting of Scope 3 emissions (such as carbon emissions from supplier production, emissions during packaging transportation, and waste disposal after consumer use) is particularly complex, requiring a large amount of external data and precise calculation models.
• Technology Investment and Professional Talent: The lack of effective digital technology tools for data integration and analysis, as well as talent with ESG expertise for data interpretation and report writing, are pain points for many companies.
• “Greenwashing” Risk: If the disclosed data is merely superficial and fails to reflect the company's substantive sustainable development actions and improvements, it may instead lead to accusations of “greenwashing.” Companies must ensure the authenticity and credibility of the disclosed information and be able to support actual improvement results.

5.3 Practical Suggestions for Improving Report Quality

To overcome challenges and improve the quality of packaging ESG reports, companies can follow these practical suggestions:

• Set Clear, Quantitative, and Time-Bound Goals: For example, SMART (Specific, Measurable, Achievable, Relevant, Time-bound) goals such as “achieving 100% recyclable or compostable packaging by 20XX” can provide clear guidance and measurement standards for the report.
• Conduct Materiality Analysis: Identify the packaging ESG issues that are most important to the company itself and its stakeholders, and focus resources on in-depth disclosure of these issues, rather than being comprehensive and superficial.
• Introduce Third-Party Verification: Hiring an independent third-party organization to verify or audit the key data in the report can significantly enhance the credibility and trustworthiness of the report data.
• Tell a Good Sustainable Development Story: The report is not just a list of data. Combining specific cases, charts, and visualization elements can vividly demonstrate the company's sustainable development efforts and achievements in the packaging field, resonating with readers.
• Continuous Improvement and Transparent Communication: Regularly review the report content and update it iteratively based on the latest industry standards, regulatory requirements, and stakeholder feedback. Communicate openly with stakeholders through various channels (such as the official website, social media, and industry conferences) to demonstrate the company's willingness to continuously improve and transparency.

Conclusion

A qualified ESG report, with its in-depth disclosure of the packaging section, is not only compliance with regulations but also a key to demonstrating a company's commitment to sustainable development, enhancing brand value, and attracting responsible investment. From quantifying materials, waste, and carbon footprints in the environmental dimension, to focusing on supply chain ethics and product safety in the social dimension, and demonstrating strategy and transparency in the governance dimension, every data point carries the company's responsibility and vision for the future.

Looking ahead, with the popularization of digital technologies (such as blockchain for traceability and AI-driven data analysis), the collection, management, and disclosure of packaging ESG data will be more accurate and efficient. Life cycle assessment will become the norm, and emerging technologies such as digital product passports will also provide stronger support for the traceability and circularity of packaging. Packaging is no longer just the outer garment of the product, but an important carrier of the company's sustainable development concept.

We encourage all companies to integrate ESG considerations of packaging into the initial stage of product design, view data disclosure as value creation rather than a cost burden, and make every ESG report a declaration of action that drives industry change and creates a sustainable future together.