What makes sustainable packaging difficult? A-shares Beauty and Beverage ESG Watch | ESG Disclosure Season

How Can AI · Sustainable Packaging Transformation Turn Compliance Costs into Market Advantages?

Reporter Lu Taoran of 21st Century Business Herald, Beijing Report

China’s “14th Five-Year Plan” outlines that, “resist excessive packaging and reduce the use of single-use items,” and calls for comprehensively advancing green and low-carbon transformation to accelerate the formation of green production and lifestyles. This year’s Government Work Report also requires strengthening the recycling and utilization of renewable resources.

Data from the OECD’s “Global Plastics Outlook” show that plastic has a significant carbon footprint. Greenhouse gas emissions across its entire lifecycle account for 3.4% of total global greenhouse gas emissions, of which 42% is used for packaging.

Against this backdrop, a sustainable transformation of packaging has been put on the agenda. As brand owners, A-share consumer goods companies in industries such as food, beverages, and beauty are subject to ESG requirements related to packaging management. However, these companies generally fall short in quantitative disclosure of packaging data. Most firms disclose only reduction cases for individual products, lacking key information such as total packaging material usage, recycling rates, and the proportion of regenerated components. Smaller and mid-cap companies in particular are especially lacking systematic transformation pathways and innovative technologies.

Meanwhile, upstream packaging suppliers are also facing transformation pressure. Packaging material companies are trying to get involved at the design stage, driving technological breakthroughs in recyclability, lightweighting, and biodegradability. But most small and mid-sized enterprises remain in a passive response mode. How to turn sustainable packaging from a “compliance cost” into a “competitive capability” is a question the entire supply chain must answer.

According to statistics from the European Commission, in 2023 the average European generated 178 kilograms of packaging waste. If no effective intervention is taken, by 2030 the total amount of packaging waste may increase by 19% compared with 2018 levels, while plastic waste is expected to rise by as much as 46%.

As the world’s largest producer and consumer of plastics, China accounts for more than 20% of the global plastics market. The disclosure requirements for the sustainability, recycling, and comprehensive utilization of packaging have already been clearly set out in the “Guidelines for Sustainability Reporting of Listed Companies” issued by the Shanghai, Shenzhen, and Beijing stock exchanges.

At present, A-share listed companies are gradually disclosing their latest quarterly ESG reports. Looking back at the previous disclosure season, among the eight soft-drink companies on A-shares, only Dongpeng Special Drink disclosed an ESG report. The other seven soft-drink companies that have not disclosed ESG reports are Chengde Lululemon, Happy Family, Quanyangquan, Weiwei Shares, Yangyuan Beverages, Xiangpiaopiao, and Lizi Garden.

Among them, Yangyuan Beverages disclosed in its annual report that the outer packaging for its “Six Walnuts” “Fresh Pack” series uses Tetra Pak eco-friendly packaging. Weiwei Shares also stated in its annual report that it aims to incorporate concepts such as green, environmental protection, and convenience into packaging design, but its ESG reports have not yet been submitted with quantitative data. From the perspective of packaging materials, Dongpeng Special Drink has disclosed the total amount of packaging materials used for its products and the packaging material density.

Shangdao Consulting partner Lang Hua said that, according to research conducted by Shangdao Consulting in 2025 as part of its “Exploration and Promotion Project on the Emission-Reduction Potential of Sustainable Packaging Transformation for Small and Mid-Cap Listed Consumer Goods Companies” study, compared with industry-leading companies, small and mid-cap consumer goods firms often lack systematic transformation pathways and methods, innovative packaging carbon-reduction technologies, and resources for packaging emission-reduction partnerships. For beverage (dairy products, tea drinks) companies, risks related to sustainable packaging transformation are likely to come from changes in consumer preferences, policy and regulations, and transformation costs.

At the level of real company execution, Lang Hua recommends that companies start with the following key steps. First is to establish a “bottom-line thinking” management system. There is no need to pursue an all-in-one approach from the start. The primary task is compliance. Ensuring that packaging meets national regulations on “over-packaging” and “plastic pollution control” is the survival baseline.

Second, it is recommended that companies first set up a dedicated team for sustainable packaging management, so as to ensure coordination among key departments such as the supply chain, procurement, and R&D, and to ensure smooth internal implementation.

Based on Shangdao Consulting survey data, among 28 small and mid-cap companies in the four A-share sectors of food, beverages, alcohol, and beauty, only 15 mentioned the departments responsible for internal implementation in their reports. Among these, 11 companies identified packaging as a substantive ESG issue and also disclosed their ESG management structure. The other 4 companies mentioned concerns about packaging’s environmental impact in parts of their supplier management or logistics management.

At the same time, on the basis of inventorying basic data, pilot projects can be carried out starting with core flagship products. First, reduce packaging weight or replace materials for some star products (such as “paper instead of plastic”), accumulate first-hand experience and data on carbon reduction and waste reduction, and provide references for later, more extensive sustainable packaging transformation.

Finally, since small and mid-sized enterprises have weak R&D capabilities, they should actively leverage the technological capabilities of upstream packaging suppliers. Many large packaging material manufacturers already have mature low-carbon packaging solutions. Companies can directly adopt the suppliers’ “green packaging materials” to achieve transformation quickly.

“Compared with food, beverage, and e-commerce industries, beauty care companies’ product packaging is more diverse. Therefore, for packaging transformation, reduction strategies should be prioritized, followed by reuse and recycling, along with material substitution strategies. In addition, projects such as sustainable raw-material procurement and optimizing logistics packaging—including encouraging consumer participation in returning empty bottles—should also be carried out,” Lang Hua told a reporter from 21st Century Business Herald.

In the beauty care industry, sustainable packaging has standards and initiatives such as the “Requirements for Limiting the Excessive Packaging of Goods—Food and Cosmetics” and the “Initiative Letter on Green Packaging for Cosmetics.” At present, there are 31 A-share listed beauty care companies. Marubi Biotech, Shanghai Jahwa, Liangmianzhen, Fureida, and Aimeike have already disclosed their 2025 ESG reports.

According to the results of Shangdao Consulting’s research, Shanghai Jahwa has disclosed a complete breakdown of packaging management responsibilities: the R&D department is responsible for packaging creativity and materials development; the procurement, quality management, R&D, and planning departments work together to procure sustainable packaging materials; and the supply chain department is responsible for overall management of production and logistics transportation packaging. The company has formulated the “Measures for Sustainable Packaging Management” and reports ESG progress to the Strategy and Sustainable Development Committee every month.

Betaini has set time-bound targets for sustainable packaging: by the end of 2030, ensure that more than 85% of plastic packaging can be reused or recycled; expand the application coverage of FSC-certified paper in new products to more than 98%.

In an interview with 21st Century Business Herald, Wang Sudan, sustainability director of Huaxi Biotech, said that packaging is not just a project driven by a single department, but a systemic issue closely tied to emission reduction, the circular economy, green consumption, and brand-value building.

In terms of source reduction and dematerialization, replacement packaging designs have already been rolled out across multiple company brands. Through standardized design, components such as outer boxes, outer bottles, and caps can be reused, allowing consumers to not repeatedly obtain a complete package when purchasing products from the same series, thereby reducing single-use material input and packaging waste generation. Taking the Quadi CT50 energy-supporting lightweight facial cream as an example, each replacement cartridge can reduce the lid and glass outer-shell weight by about 223.5 grams, accounting for about 96% of the total packaging weight of the product.

In Wang Sudan’s view, the real difficulty of green packaging is not only “recyclable design,” but whether post-consumer items can truly enter recycling and reuse systems. As of the end of 2025, the Runbaiyan brand has cumulatively recycled 21.2767 million single-use squeeze tubes; other brands’ empty tubes total 3.8527 million.

Wang Sudan said that sustainable packaging transformation is still a systemic project involving materials R&D, packaging design, manufacturing, supply-chain coordination, consumer participation, and the development of a recycling system. As green consumption concepts strengthen, policy standards improve, and new materials and new processes accelerate in maturity, the industry is moving from single-track exploration to a new stage of systematic and large-scale advancement.

Undertaking sustainable packaging and establishing management systems is not only the responsibility of brand owners; upstream packaging suppliers are also facing transformation pressure. With increasingly stringent domestic and international regulations and higher ESG disclosure requirements, packaging material companies urgently need to embed sustainability concepts into product design, production processes, and supply chain management.

In an interview with 21st Century Business Herald, Long Chaoyang, Director of Sustainable Development for Tetra Pak in East Asia and Oceania, said that common Tetra Pak paper-based packaging is composed by compounding about 70% paperboard, 25% polyethylene, and 5% aluminum. Among these, paperboard itself is a renewable raw material sourced from FSC-certified forests or other controllable sources.

On this basis, Tetra Pak has continuously invested about €100 million per year in packaging research and development globally. Under the premise of ensuring food safety, it uses innovative technologies and processes to develop sustainable, low-carbon packaging solutions, continuously increases the share of renewable materials, while reducing carbon emissions and mitigating climate impact.

“In the practical application of sustainable packaging materials, it is necessary to consider multiple factors comprehensively, including technical validation, cost, and downstream recycling value,” Long Chaoyang said. For food packaging, ensuring food safety is the prerequisite for any R&D and innovation work. Therefore, before true commercialization, it needs to go through complete and rigorous market testing. In addition, equipment used by different brands is not exactly the same. Based on factors such as how well it matches the innovative sustainable packaging materials, corresponding solutions require careful development and validation.

Long Chaoyang said that when a new sustainable packaging solution is in the early stage of adoption and promotion, costs may indeed increase. But with ongoing technological iteration, the gradual emergence of scale effects, and positive policy guidance, costs will correspondingly decrease. At the same time, brand owners should not only calculate the economic side clearly, but also comprehensively consider the increase in brand value brought by adopting sustainable packaging solutions, the satisfaction of consumer needs, and the new market opportunities that may be unlocked as a result.

“Beverage paper-based composite packaging is one of the four product categories chosen for the national pilot of the Extended Producer Responsibility (EPR) system. Since its establishment in 2018, the Beverage Paper-Based Composite Packaging Recycling Utilization Special Committee has worked with parties from various sectors to explore a target-based industry self-regulation and fulfillment model, achieving notable results. The industry reached the National Development and Reform Commission’s 40% resource-utilization target one year ahead of schedule, and recycling performance is expected to further improve in 2025,” Long Chaoyang said candidly. Meanwhile, he acknowledged that the recycling industry still faces challenges such as relatively small recycling volumes, insufficiently realized value in the back end, and difficulties in achieving profitability for recycling companies. Driving the high-value utilization of discarded beverage paper-based composite packaging has become an urgent challenge for the industry, while also containing opportunities for future development.

Dow recently told 21st Century Business Herald that sustainable packaging needs to consider recyclability starting from the material design stage, rather than making up for it afterward. “One of the key focuses of implementing and scaling a circular economy in industry is to ensure packaging supports circular economy goals while also helping brands enhance packaging efficiency, thin material usage, improve durability, and optimize appearance—thereby meeting the dual challenges brought by market competition and regulatory requirements.”

Dow said it has diversified sustainable packaging design strategies tailored to the needs of different industries. For example, in the field of food and specialty packaging, Dow proposes the “Design for Recycling” concept. Using packaging solutions based on a single-polyethylene (PE) structure, it can improve recyclability while maintaining packaging strength, appearance, and processing efficiency. For the automotive industry, recyclable design must go hand in hand with comfort and lightweighting. For post-consumer recycled plastics, a systemic approach is needed to unlock the value of waste.

Based on Shangdao Consulting’s 2025 research on the sustainable transformation of consumer goods packaging and the development of related transformation toolkits, in 2026 it will formally launch the “Sustainable Packaging Transformation and Full-Value Chain Emission Reduction for Small and Medium-Sized Listed Consumer Goods Companies” project. The aim is to further expand the scope of research into sustainable packaging transformation for small and medium-sized listed consumer goods companies, and to build systemic capabilities in sustainable packaging transformation by professional evaluation models, demonstration effects, and enabling experts and industry ecosystems.