Over the past several years, the discussions surrounding ESG initiatives have grown exponentially. For the uninitiated, ESG stands for Environmental, Social and Governance, and it is an operational framework and reporting tool that allows companies to plan, execute and report their activities against a set of standards relating to environmental impact, social responsibility and corporate governance. The intent is one of transparency, which makes a company more attractive for potential investors. In addition, maintaining an effective ESG strategy can make a company more attractive when it comes to recruitment of employees and boosting interactions and sales for the end user or consumer.
While ESG seems to have equal parts support and dissent in the modern-day workforce, it is a huge topic of discussion taking place in companies operating in all industries. The reason for the increased chatter is that ESG is now used as a litmus test by corporate investors when deciding which companies are worthy of investment, and conversely, which ones should be subjected to divestment. In fact, ESG was created for the investment world specifically to drive resources towards more ethical and sustainable companies. Simply put, it is a system that awards accountability and transparency, and for that reason, companies have rushed to take assessments of the environmental, social and governance trident within their own businesses.
How Do Reusable Packaging Solutions Impact A Company’s ESG Assessments?
As it turns out, reusable plastic containers, trays, bins, totes, and pallets all dovetail directly into ESG initiatives. Reusables replace traditional single-use paperboard products, while providing superior protection for their contents and delivering superior stacking strength. By eliminating single-use paperboard products (like corrugated shipping boxes, for example), the amount of waste material entering a landfill is dramatically decreased. The exact amount of waste material that ultimately gets eliminated is only limited by the lifespan and number of uses offered by the reusable plastic container. With the rise of collapsible and nestable reusable containers, the backhaul quantities that fit into any given transport vehicle are increased significantly over their non-collapsible counterparts. This is something that’s celebrated with the drivers tasked with the backhaul, as well as the offloading team.
When it comes to social responsibility, reusable transport and storage containers are packed with features that make them easy to use and lessen the possibility of injury in the workplace. If we use the example of an attached lid tote, they employ integrated carrying handles that improve the ergonomics over a traditional corrugated RSC (regular slotted container). The attached-lid tote is easily opened without using any blades or tools. Given that most companies look to eliminate the presence of box cutters and knives among their staff, this is a massive leap forward when it comes to preventing workplace injuries. Additionally, the attached lid totes feature a tapered design and a purpose-built lid on top, which allows the totes to securely stack on top of one another, eliminating slippage and reducing the possibility of toppling.
If we consider a comparison between traditional wooden pallets and plastic pallets, we see the same trend emerge. It is widely-known that a plastic pallet lasts over twice as long as a wooden pallet, but the final stages of the wooden pallet is much more hazardous. It is common for wooden pallets to splinter, creating a hazardous work condition for anyone tasked with handling them. Likewise, the nails of the wooden pallet begin to pull away from the wood as the pallet ages, creating yet another danger for warehouse and transport teams.
Safety in the workplace is paramount, and a safer work environment fosters a positive company culture and boosts employee morale. It shows that an employer truly cares about the well-being of its team, and employee retention is subsequently improved. This has the effect of making any given company a more attractive place to work, which aids in the recruitment endeavors undertaken by HR departments.
The effect of workplace safety reverberates all the way down to the consumer. In fact, consumers not only care about how a company treats them personally, but also how those companies treat their employees. In 2022, 47% of consumers polled said they would trust a brand more if they took better care of their employees. (Source: Business Wire). This ethical awareness at the consumer level pings the radar of investors, as it has a direct correlation to a company’s bottom line.
Corporate governance has historically been comprised of various pillars, with one of them being risk mitigation. If we stick with the previous example of an attached lid tote replacing RSCs, the improved ergonomic handling, blade-free opening feature, and solid stackability are all factors that reduce the risk of workplace injuries and workers’ compensation claims in a measurable way. Another pillar of corporate governance is fiscal responsibility and transparency. While the standard size reusable attached lid tote may cost $14 compared to a single-use RSC costing $3, the plastic tote boasts a service life measured in years. The return on investment for the attached lid tote is realized after just 5 uses, and it will continue to provide service and save on material costs for a long time to come. It becomes a simple calculation to show the initial ROI as well as the ongoing monetary savings achieved by switching to the reusable container. This serves to highlight a company’s propensity to enhance investment returns by allocating capital for sustainable solutions instead of wasteful single-use items.
What’s In The Future For ESG?
At the present time, the ESG scorecard initiative faces some uncertainty here in the United States due to backlash. It is seen by some as being anti-capitalistic and that it panders too heavily towards ongoing social issues. Texas and Kansas have both already passed anti-ESG laws, so whether we’ll see a snowball effect or not is yet to be seen. Many investors have argued that ESG helps them choose companies whose practices do not pose a risk for future growth. That said, many companies link executive pay directly to the company’s ESG performance.
Whatever the future may hold for ESG, the facts remain. Transitioning to reusable plastic containers, bins, totes and pallets significantly reduces material waste created by single-use materials. They provide for a safer work environment by eliminating blades in the workplace, and a clear case can be made for their ROI and ongoing savings. No matter if you are looking to eventually sell your company, bring in outside investors, or simply optimize your business from a safety, culture and profitability standpoint, the team at Reusable Transport Packaging is here to offer you our expertise in making those goals a reality.
Contact us today for a free consultation on how RTP can help you transition to reusables to positively impact your company’s ESG assessments.