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Transparency & Sustainability: Understanding the Environmental Product Declaration for Wood Pallets

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At Nature’s Packaging, our mission is to drive the shift towards sustainable, responsible, and economical packaging solutions. We believe that the future of packaging lies in harnessing the natural benefits of wood, a material that has supported humanity’s progress for millennia.

But in today’s world, it is not enough to simply advocate for a product; we need to show its advantages in a clear, transparent, and verifiable way. That is where the Environmental Product Declaration (EPD) comes into play.

Understanding the environmental impact of a product is a complex task. From sourcing raw materials to manufacturing processes, from usage to end-of-life disposal, each stage has its own ecological footprint. The EPD provides a comprehensive picture of these impacts, serving as a “nutrition label” for products, in this case, wood-based packaging and pallets.

In this Nature’s Packaging post, we will delve into the Environmental Product Declaration for wood pallets, demystifying its purpose, process, and key findings. We will also explore how it can be used in decision-making processes by businesses and individuals looking to make a positive environmental impact.

So, whether you are a seasoned professional in the industry, a sustainability enthusiast, or someone looking to make more informed choices, read on to find out why the EPD for wood pallets is a game-changer in the realm of sustainable packaging.

What is an Environmental Product Declaration (EPD)?

An Environmental Product Declaration, or EPD, is a comprehensive, internationally recognized report that details the environmental impact of a product or a service. It provides quantifiable information on the lifecycle environmental impact, acting like a sustainability ‘passport’ for products.

The goal of an EPD is to provide transparent and comparable information about the lifecycle environmental impact, which can then be used in decision-making processes, either at the organization or consumer level.

The benefits of an EPD are manifold. First, it offers clear and transparent information, which can be particularly valuable in an era where greenwashing is a prevalent concern. By supplying verified, impartial data, an EPD can help customers distinguish between truly sustainable products and those that only claim to be.

Second, an EPD enhances visibility into the supply chain, helping businesses find potential areas for reducing their environmental impact. This can lead to innovations in design, manufacturing, and logistics that improve sustainability.

Finally, the EPD plays a crucial role in green building and sustainability initiatives. Many green building certification programs, such as LEED and BREEAM, recognize EPDs, which can contribute to achieving certification credits. Similarly, organizations that are committed to sustainability goals often use EPDs to measure and track their progress.

In the context of wood pallets, the EPD supplies a detailed overview of the environmental impacts throughout the product’s lifecycle. This includes everything from the harvesting of the wood, the manufacturing of the pallets, their use, and finally their end of life – whether that is through recycling, reuse, or disposal. By painting a comprehensive picture of these impacts, the EPD allows us to make more informed decisions about the materials we choose and the products we use.

The Wood Pallet EPD Process

Developing an Environmental Product Declaration (EPD) for wood pallets is a meticulous process that requires a comprehensive assessment of the entire lifecycle of the product. Here is how it works:

A. Lifecycle Assessment (LCA) for Wood Pallets

A critical step in creating an EPD is performing a Lifecycle Assessment. The LCA is a scientific method used to evaluate the environmental impacts associated with all stages of a product’s life, from cradle to grave. This includes raw material extraction, material processing, manufacturing, distribution, use, repair and maintenance, and disposal or recycling.

  1. Scope and Boundaries: The LCA starts by defining the scope and boundaries of the study. For wood pallets, this would include activities such as forest growth, logging, transportation, manufacturing of the pallet, the use phase, and end-of-life options such as reuse, recycling, or disposal.
  2. Data Collection and Analysis: The next step is to gather data on every process involved within the defined scope. This data might include the energy used in manufacturing, the emissions produced at each stage, water consumption, and waste generation. After data collection, an analysis is conducted to assess the environmental impact associated with each stage of the product’s lifecycle.

B. Critical Review by an Independent Third Party

After the LCA, the data and methodologies used are subject to a critical review by a panel of independent experts. This step is crucial to ensure the validity and reliability of the results. The review also ensures that the EPD is compliant with international standards and that it supplies a fair and accurate representation of a product’s environmental performance.

C. EPD Publication and Registration

Once the EPD has been reviewed and confirmed, it is ready to be published. The completed EPD is registered in an EPD program, making the data publicly available. This promotes transparency and allows customers, regulators, and other stakeholders to access the information.

The EPD process for wood pallets is a testament to the industry’s commitment to sustainability and transparency. By understanding this process, we can appreciate the rigorous scientific analysis that underpins the EPD, and the environmental claims associated with wood pallets.

Key Findings of the Wood Pallet EPD

The Environmental Product Declaration (EPD) for wood pallets presents a wealth of data on the environmental impacts of wood pallets. Here are some of the key findings:

A. Environmental Impacts of Wood Pallets

Global Warming Potential:  The wood pallet EPD is an industry calculated average based on collected data. Wood remains a renewable resource and the manufacturing process for wood pallets requires less overall energy compared to alternative materials.

Water Consumption:  The EPD reveals that water consumption in the production of wood pallets is significantly less than that of alternative materials. This makes wood pallets a more sustainable choice in regions where water scarcity is a concern.

Resource Depletion:  The EPD shows that wood pallets contribute less to resource depletion compared to alternatives. As long as forests are managed sustainably, wood can be a renewable resource, unlike petroleum-based materials or metals.

Waste Generation:  The end-of-life phase of a product is crucial in finding its overall environmental impact. Wood pallets are often reusable, and at the end of their life, they can be recycled into mulch, particleboard, or bioenergy. This reduces waste compared to alternative materials, which are often difficult to recycle.

B. Comparison with Alternative Materials

The EPD also compares the environmental impact of wood pallets with that of alternative materials, such as plastic and metal. In most categories, wood pallets have a lower environmental impact. This information is valuable for customers who are weighing different options for their packaging needs.

C. Opportunities for Improvement and Innovation

While the EPD highlights the environmental benefits of wood pallets, it also shows areas where the industry can further reduce its environmental impact. For example, more efficient manufacturing processes could reduce energy use and emissions, while improved design could extend the lifespan of the pallets. These opportunities for improvement and innovation are exciting areas for the industry to explore in the coming years.

By understanding the key findings of the Wood Pallet EPD, companies can make more informed decisions about packaging choices and contribute to a more sustainable future.

The Significance of the Wood Pallet EPD for the Industry

The Environmental Product Declaration (EPD) for wood pallets carries substantial implications for the industry, marking a significant stride in enhancing sustainability and transparency. Here is why it matters:

Competitive Advantage for Wood-Based Packaging

The EPD offers wood-based packaging a competitive edge. It highlights the environmental benefits of wood pallets compared to alternative materials, providing customers with the information they need to make informed decisions. As businesses and consumers increasingly prioritize sustainability, the EPD can help wood-based packaging to stand out in the marketplace.

Transparency and Trust Among Stakeholders

The EPD bolsters transparency and trust among stakeholders, including customers, regulators, and the broader community. By providing an independently verified assessment of the environmental impact of wood pallets, the EPD dispels ambiguity and demonstrates the industry’s commitment to sustainability. This can strengthen relationships with stakeholders and enhance the industry’s reputation.

Enhanced Sustainability Profile for Customers

For businesses that use wood pallets, the EPD can enhance their sustainability profile. By choosing a product with a clear and positive environmental declaration, businesses can show their commitment to sustainability. This can help businesses to meet their sustainability goals, appeal to eco-conscious consumers, and comply with regulations.

The Wood Pallet EPD is more than just a document; it is a tool that empowers the industry to drive sustainability, enhance transparency, and create value for customers. It underscores the industry’s commitment to a sustainable future and positions wood pallets as a preferred choice in the packaging sector.

How to Use the Wood Pallet EPD in Decision-Making

The Environmental Product Declaration (EPD) for wood pallets is not just a document filled with data—it is a tool to guide decision-making for both businesses and individuals. Here is how it can be utilized:

Selecting Environmentally Friendly Packaging Solutions

The EPD provides an in-depth look at the environmental impact of wood pallets, offering a basis for comparison with other packaging materials. Companies that are committed to reducing their environmental footprint can use EPD to inform their choice of packaging. The data can help in identifying the most sustainable options and highlight areas where changes can make a significant difference.

Inclusion in Corporate Sustainability Reporting

Businesses can also use the EPD in their sustainability reporting. By choosing wood pallets, companies are making a conscious choice to minimize their environmental impact. This can be included in sustainability reports, helping to demonstrate to stakeholders that the company is actively taking steps to fulfill its sustainability commitments.

Integration into Green Building Projects

Wood pallets are not just for packaging—they are also used in many creative ways, including as a material in green building projects. The EPD can provide valuable data for these projects, helping to earn points in green building rating systems such as LEED and BREEAM.

In conclusion, the Wood Pallet EPD is a powerful tool that can guide decision-making across a variety of contexts. By using this data, we can make choices that are not only good for business, but also good for the planet.

Conclusion

The Environmental Product Declaration (EPD) for wood pallets is a testament to the power of transparency and the drive towards sustainability in the packaging industry. It provides a comprehensive, scientifically backed overview of the environmental impacts associated with wood pallets, offering valuable insights for businesses, individuals, and regulators alike.

As we have explored in this post, the Wood Pallet EPD not only affirms the environmental benefits of wood-based packaging but also serves as a powerful decision-making tool. It highlights the competitive advantage of wood pallets, enhances transparency and trust, and empowers businesses to enhance their sustainability profiles.

 

Woman in warehouse using walkie talkie

Women’s Impact in the Pallet Industry

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Over the past few years, the pallet industry has seen a significant shift in its workforce, with more women getting involved in the industry. This trend is a welcome development for an industry that has traditionally been male dominated. The changing demographics are bringing about new perspectives and ideas that are transforming the pallet industry. This Nature’s Packaging blog post will explore how women are getting more involved and changing the pallet industry.

The pallet industry is an essential component of the supply chain management system. It involves the production, transportation, and management of pallets that are used to transport goods and products across different stages of the supply chain.

The pallet industry is a crucial link between manufacturers, retailers, and consumers, ensuring that products are transported safely and efficiently. Over the years, the pallet industry has seen significant growth, with the demand for pallets increasing due to the rise of e-commerce and global trade.

In the past, the pallet industry was seen as a male-dominated industry, with women playing a minimal role in the sector. However, this trend has been changing in recent years, with more women getting involved in the pallet industry. Women are now involved in various roles within the industry, including management, production, and sales.

One of the main reasons for the increase in the number of women in the pallet industry is the growing awareness of the importance of diversity and inclusion in the workplace. Many companies are now actively seeking to hire and promote women in the industry, recognizing the value that diversity brings to the workplace. Women bring a unique perspective and approach to the industry, which can help drive innovation and growth.

Another reason for the increase in the number of women in the pallet industry is the changing perception of the industry itself. The industry is no longer seen as a dirty, manual labor-intensive sector.

Instead, it is recognized as a vital component of the supply chain management system, requiring skilled workers with a broad range of knowledge and expertise. Women are well-suited for many of the roles in the pallet industry, as they often possess the skills and attributes required for the job, such as attention to detail, organizational skills, and strong communication skills.

One of the ways that women are changing the pallet industry is through their approach to management. Women tend to bring a more collaborative and inclusive management style to the workplace, which can help foster teamwork and improve communication. This approach is particularly useful in the pallet industry, where teamwork and communication are essential for ensuring that pallets are produced and transported efficiently.

Women are also bringing new perspectives to the industry, particularly when it comes to sustainability and environmental impact. Women tend to be more environmentally conscious and aware of the impact that the pallet industry has on the environment. They are more likely to advocate for the use of sustainable materials and processes, which can help reduce the industry’s carbon footprint.

The pallet industry is seeing a significant shift and more women are choosing to getting involved in the sector. Women are bringing new perspectives, ideas, and approaches to the industry, which are transforming the sector. The increasing diversity in the industry is a welcome development, and companies that embrace this trend are likely to see significant benefits in terms of innovation, growth, and competitiveness. As the pallet industry continues to evolve, it is essential to recognize the value that women bring to the sector and to ensure that they have the opportunity to thrive and succeed.

The Circular Economy-New Idea, Re-Modeled

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The definition of a circular economy is straightforward but transitioning to the new model remains challenging. Consumers and business leaders have grown accustomed to a wasteful, linear product lifecycle. Manufacturers fabricate goods, ship them to retail outlets, and people buy the items they believe provide the most significant value. But what happens afterward? Most people discard old or broken products without a second thought. Yet, a circular economy breaks the cycle of wastefulness, providing an alternative to the current system and a way to fight climate change.

The Circular Economy – The New Idea

According to the U.S. Environmental Protection Agency, a circular economy “keeps materials, products, and services in circulation for as long as possible.” The typical product lifecycle entails fabricating new items from raw materials, sometimes natural resources, but there is little emphasis on sustainability. If there’s a choice between saving money on production or operating with sustainability, most choose the easy route.

A circular economy takes a different perspective. There is a concerted effort to eliminate waste at a fundamental, systemic level. Products manufactured in the current linear economic structure will not be returned to the manufacturer and recycled.

In a circular economic model, they would. The manufacturer can repair, reproduce, or recycle products using re-fabricated parts, creating a return-loop that promotes and operates with less waste – and lower manufacturing costs. The most vital concept is to be as efficient as possible while maintaining sustainability, including (if possible) using renewable energy.

Circular Economy-Recovered and Recycled

A circular economy isn’t a theoretical framework because real-world examples exist. The difference is that the global economy has yet to shift to a new model. Still, businesses continue to demonstrate how to accomplish the feat and push back on climate change.

Supply Chain

Many international companies in consumer facing industries, like automotive or electronics, are implementing closed loop-reverse logistics programs to capture savings in their manufacturing processes. These businesses enabled a “reverse logistics” system in coordination with partners and suppliers. These organizations gather and reassemble disused components and re-sell them via their reverse logistics supply chain. The result is greater efficiency since reassembled parts cost significantly less than new components. Those savings get passed to consumers, and all parties’ benefit. These industries have renovated hundreds of thousands of parts and components that meet similar specifications as new components.

Wood Pallets

Companies in the wood pallet industry have adopted similar systems, where new products are recycled and re-manufactured from existing pallets. Circular economics in this sector have spawned businesses that recover wood in the form of used pallets and other wood waste and re-purpose it as viable products all the way through the end and beyond of its own product lifecycle. The recycled pallets have the same functionality despite being reused in the supply chain more than once. If waste byproducts occur, those byproducts get used in other ways, such as using leftover wood for compost, or even wood pellets. This way, every ounce of recycled wood has a purpose and reduces the number of trees required to meet demand.

Why is It Important?

Reduce, Reuse, and Recycle seem aimed at a personal level of responsibility to start and that is great. However, a circular economy model offers a different path forward. It allows businesses and consumers to participate in a healthy economic system that protects the environment and fights climate change. The assumption that circular economics introduces unnecessary costs is inaccurate because real-world examples prove it’s possible. The next step is the widespread deployment of circular economic principles, and that’s where the global economy stands today. There’s a clear choice between conducting business as usual or moving on to a sustainable system.

Circular Design – How Reduce, Reuse, and Recycle Can Be Part of Product Design

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The principles of circular design are integral to the concept of a circular economy, a new economic model that values sustainability and efficiency. Many products don’t return to the manufacturer in today’s linear economy, nor would they arrive in a recyclable condition. Sustainability wasn’t a priority when mass consumption became the norm, and many products were never designed for systematic reuse. The economic system today follows the “make, take, discard” product lifecycle, but circular design provides an opening for a sustainable economy.

Circular Design – A Definition

Circular design entails a fundamental shift from wastefulness toward sustainability from the product’s conception to its fabrication. Everything is designed for reuse multiple times instead of designing for failure or obsolescence. It’s a change that maximizes economic efficiency since products and their components are recycled instead of thrown away. Circular design enables innovation in ways that the linear economy can’t provide and entails the following principles.

Circular Design Principles

According to the Ellen MacArthur Foundation, the four principles of circular design are:

  • Understand
  • Define
  • Make
  • Release

The result is a new product lifecycle designed for sustainability with each iteration. It incorporates the three “R’s” principles – reduce, reuse, and recycle – and supports the creation and manufacturing of products that can be reused time and again.

Understand

The first principle is to understand where the most significant opportunities are ready and available. Not every product or service lends itself to circular design because the business doesn’t operate on a sustainable model.

Understanding the current product design, its shortcomings, and its lifecycle gives business leaders a direction when adopting circular design. The idea is to construct products and processes that are regenerative and restorative instead of destructive and wasteful. Changes in the model can include a more robust connection from fabrication to services where downstream recycling is regenerative and/or restorative and maintains a viable product (read: pallets) that is reusable throughout its lifecycle.

Define

The defining principle articulates the specific business processes that can benefit from circular design. The supply chain is a perfect example. The challenges in supply chain operations may differ from company to company, yet they aren’t insurmountable.

It takes a multi-disciplinary, collaborative effort between provider and customer to identify processes and transition to a more sustainable design that includes the materials used to make the products. The definition of success must be clear and attainable because the following principle relies upon clarity. If the purpose seems elusive, the proper course is to return to narrowing down and understanding the opportunity.

Make

Here is where businesses can take action and prioritize which products and/or processes are likely to succeed according to clearly defined sustainability objectives and which ones need further development. One strategy is to test concepts with rapid prototyping and to embed feedback mechanisms to optimize the design.

An easy low-hanging fruit to pluck is re-examining the raw materials that go into a product. Is it feasible to make the item with biodegradable materials, or is it a better candidate for recycling? Can it incorporate both into production? The answers boil down to what the user needs. Many times, different versions of the same product may be necessary to test and achieve circularity since the design requires innovation and creativity. This is where research and development take place, literally and figuratively. Think of the purpose of facilities like the Virginia Tech – Center for Packaging and Unit Load Design.

Release

The last principle is launching the new design, but it doesn’t stop there. Circular design demands continuous improvement and a constant focus on efficiency. That’s why it’s best to launch and learn, releasing products to redesign and refine processes, with the ultimate goal of creating a circular product lifecycle. Creating a circular economic system demands no less than a concerted, multi-pronged approach.

Circular Design and the Wood Pallet Industry

The question is: do real-world examples of circular design exist? And the answer is yes. The wood pallet industry is a prime example of how design can enable circular economics to the company’s benefit. Wood pallets don’t require new raw materials each time. Manufacturers can produce them from sustainably sourced wood, recycled wood components, or a combination of both. Another example is a pooled pallet rental system which many large enterprises rely upon in transporting their finished goods.

Either way, the pallets, and components are designed to be used multiple times, bolstering the product lifecycle with increased sustainability. The pallet industry leverages its natural advantage in sustainable processes, and companies can legitimately validate forward-thinking sustainability goals and demonstrate genuine positive action for environmental concerns. The old wasteful business model is transformed into a circular system, and companies establish trust with their customer.

Conclusion

Efficient design processes focusing on reuse can lower material costs end to end. A circular-designed product doesn’t have a single lifecycle but rather several. The overarching concept is to battle climate change by reimagining how products reach consumers, starting at the design level. The four principles of circular design provide guidance, but it’s incumbent upon business leaders to commit to the new paradigm.

Achieving Supply Chain Sustainability with Wood Pallets

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Supply chain sustainability becomes more important with the passing of new climate change legislation. Companies from every sector are identifying challenges and presenting solutions to make their supply chains more environmentally friendly.

For every industry, taking action to mitigate climate change is fast becoming a primary concern. As one of the fundamental cogs in the economic wheel of trade and commerce, supply chain management can lead the way with long-term sustainable solutions.

A More Sustainable Supply Chain

For consumer businesses, the supply chain accounts for 80-90% of environmental impacts. This includes greenhouse gas emissions and air, land, water, and other ecological impacts.

Addressing those impacts to comply with climate action regulations and consumer demand is one of the great challenges facing business today. It won’t be easy, but creating a more sustainable supply chain is possible.

Nearly every major industry already has access to a crucial part of a sustainable supply chain: the wood pallet.

One of the supply chain’s most essential components, the wood pallet is also its most sustainable. Of the 1.8 billion pallets in use in the United States, 90% are made of wood.

The life cycle of wood pallets represents a gold standard in terms of sustainability. As the holder of an Environmental Product Declaration UL Certification, wood pallets exemplify the philosophy of reduce, reuse, recycle.

Strong, long-lasting, reusable, and recyclable, wood pallets may even produce a net positive carbon footprint. They store carbon dioxide throughout their life cycle and save it from release into the atmosphere.

Today, the wood pallet represents a sustainable choice. The challenge is to realize the same level of sustainability across entire supply chains and, in effect, operate at a net zero waste capacity. Recyclable pallets manufactured from renewable resources is a key choice.

Consumers are demanding that companies make decisions based on positive environmental impact. Everyone from suppliers to end users is making sustainability a priority.

A company needs a comprehensive plan for sustainability at every level. Now is the time to examine and improve processes, but where to start? That’s where good partners can be the necessary guide with insight and metrics.

The Challenges Ahead

Sustainability challenges begin with system complexity. Companies have historically ignored supply chain areas outside their direct control. This leads to gaps in information and bottlenecks that go unnoticed until they bubble up and require action.

Sustainability is measured by the environmental and human impact of every single step of the lifecycle of a product. A company that creates eco-friendly headquarters also needs to attend to working conditions, pollution, and transportation practices abroad.

Problems vary depending on the industry. One company may identify air and water pollution from suppliers’ operations. Another may find inadequate safety measures where raw materials are procured.

Companies need comprehensive information about each step in the lifecycle of their products. That includes energy providers as well as suppliers and sub-contractors.

Once detailed information is collected, planning can begin for remediation of negative impacts. Over 80% of businesses do not have the information they need improve the sustainability of their supply chains.

Consumer businesses balance affordability with reliability and sustainability at every level of operation. Instituting sustainable practices may seem costly, but they strengthen the supply chain and save money in the long-term.

Decreasing pollution, shoring up facilities against extreme weather, and making positive contributions to healthy communities all make the supply chain more durable and more efficient. Time and materials are saved by eliminating wasteful and harmful practices.

Managing Supplier Sustainability

The most challenging aspect of creating a more sustainable supply chain is working with suppliers and their subcontractors. 75% of companies do not work with suppliers to reduce carbon emissions.

Businesses are like all customers—they have influence. A company can search for suppliers that already have sustainability goals and practices in place. They can also mandate that their suppliers bring facilities into compliance with a set of practices they determine will increase sustainability.

An even better solution is to work directly with suppliers. Using clear and verified guidelines for sustainable practices, companies can help suppliers improve operations.

The company goes from demanding customer to trusted partner. The environmental and human impact of the improved relationship strengthens to a more sustainable supply chain.

How a company works with suppliers depends on what objectives are identified. Making sure that everyone is using wood pallets is an easy first step in helping suppliers become more sustainable.

Best Practices in Sustainability

The complexity of supply chain sustainability can make it seem unmanageable. Organizations like CDP, World Wildlife Fund, The Sustainability Consortium, and others offer guidance. They help companies find issues and set goals for decreasing environmental and societal impact.

Looking to wood pallets as a framework, we can see some best practices at work.

Supply chains should use, wherever possible, renewable resources. Invest in solar, wind, and other clean energy use to build infrastructure and decrease pollution. Buy recycled wood pallets from suppliers wherever possible.

Make landfill avoidance a priority. Reduce waste, reuse materials, and recycle what is no longer useful. Wood pallets can be reused up to 15 times, and can be recycled into furniture, structures, biofuel, animal bedding, or mulch.

Studies show that 95% of wood pallets are recycled into usable materials. Even the small amount that ends up in the landfill can be used as the biodegradable top cover.

Incremental Improvements in Sustainability

The global supply chain is still far from its sustainability goals. Even the wood pallet industry can do more.

Ensuring that your wood pallets are used as many times as possible should be goal number one. Widely available recycling initiatives reduce the number of pallets that go to the landfill. Encouraging or helping suppliers switch to wood pallets improves lower-tier sustainability.

Every step gets us a little closer to a circular supply chain. Waste reduction, energy conservation, and greater emphasis on processes that benefit both society and the environment all reduce long-term costs.

Wood pallets are an important part of a sustainable supply chain. Unlike plastic pallets, they are recyclable, sustainably produced, and biodegradable.

There are places in your supply chain where sustainability requires concerted efforts with far-flung partners. Implementing the use of wood pallets across your company and its suppliers is an uncomplicated, powerful way to make a difference.

Man at laptop entering data for sustainability ratings

Are You Ready for Sustainability Scoring?

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For many companies, the economic downturn in 2020 meant that sustainability was less important than survival. Supply chains were tested, shocked, and stretched with the results being an extended wait for critical replenishment or empty shelves altogether.

The need for sustainable policies didn’t evaporate as businesses continued to call for mitigating their impact on the environment. However, keeping the lights on became the number one priority.

As the country begins to return to some sense of normalcy with the coronavirus pandemic receding and companies in recovery mode, many are looking to renew their pledge to sustainability in the supply chain. Prompted by climate change predictions that are growing increasingly extreme, they are implementing changes with a restored sense of urgency.

To accelerate their aims, many companies are utilizing third party sources to evaluate their operations in regard to sustainability. As the pallet industry can be a vital piece in these efforts, many providers in our industry are getting questions from customers about sustainable practices or are learning more about these ratings. In today’s blog post at Nature’s Packaging, we will take a look at one of these popular third-party sources that customers use to help rate and score their sustainability commitments, a company known as EcoVadis.

Sustainability Scoring-EcoVadis

To date, EcoVadis has rated over 75,000 companies worldwide. They provide a multi-dimensional sustainability rating of companies. The EcoVadis sustainability process is based on 7 core principles that are designed to measure the quality of a company’s sustainability policies, actions, and results.

  • Evidence Based – supporting documents are a critical burden of proof. These can be certifications, policy documents, reporting KPI’s. Credit is given only where evidence is provided.
  • Industry, Location, and Size – sustainability management is evaluated considering material industry issues, presence in risk countries, and the size and geographical footprint of the company.
  • Diversification of Sources – in addition to the evidence based internal supporting documents, the viewpoint of organizations around the company are taken into consideration. These can be trade unions, local authorities, and other third-party organizations that work with the company.
  • Technology – a rating system can only become reliable if supported by technology. Technology is the key to learning, growth, and scalability.
  • Assessment by International Sustainability Experts – supporting documents are analyzed by a team of sustainability experts who keep track of the latest best practices in sustainability.
  • Traceability and Transparency – every document used in the rating process is stored securely and can be traced back. Rated companies have access, if needed, to the most detailed results and to each scoring decision.
  • Excellence Through Continuous Improvement – A professional rating methodology is open to quality controls, continuous improvement, and feedback from stakeholders.

*from EcoVadis Ratings Methodology Overview and Principles

The assessment considers a range of sustainability issues, which are grouped into four broad themes:

  • Environment
  • Labor and Human Rights
  • Ethics
  • Sustainable Procurement

The evidence-based assessments are distilled into scorecards, providing zero to one hundred (0-100) scores when applicable.

  • 85-100 Outstanding
  • 65-84 Advanced
  • 45-64 Good
  • 25-44 Partial
  • 0-24 Insufficient

The scorecards provide direction on strengths and areas that may need improvement. The rated companies can use their scorecards to focus efforts and evolve plans that improve their sustainability performance. A rated company can also compare their score to benchmarks in their industry.

Through their services, EcoVadis provides a platform that drives companies to collaborate with their supplier/partners and have them rated as well. All devised to propel continuous improvement in a company’s sustainability program and bring it to a more comprehensive level.

The sustainable supply chain is a strategic directive for many executive leaders. The benefits of achieving supply chain sustainability are numerous. It can reduce the risk of disruption, serve as a guard for brand reputation, lower costs through collaboration with upstream and downstream participants, and add a significant market advantage with consumers who are much more aware of a company’s efforts to implement a green and responsible supply chain.

For our part, the pallet industry doesn’t struggle with sustainability, we embrace it. The ability to incorporate wood products and processes into a customer’s sustainability goals makes for an easy win when it comes to policies in a company green supply chain. As a service provider to companies that utilize third-party sources like EcoVadis, we have many resources available that will help provide that necessary evidence-based documentation. Visit the NWPCA’s website to learn more, download those important documents, and be ready when your customers talk to you about sustainability ratings and scorecards.

wood pallets with shrink wrapped loads

Choosing the Best Amount of Packaging for Your Product

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Products need enough packaging to prevent damage, but no one wants to spend more on packaging than needed. Packaging and pallet decision-makers alike will benefit from having a better understanding of downstream supply chain costs.

Over the last several years, consumer products supply chains have trended towards more frequent deliveries and smaller order sizes. Such an approach has enabled retailers to minimize their pipeline inventory while promoting better product availability – having the products that customers are looking for, on the shelf. However, such a strategy poses different challenges.

Smaller orders may require product suppliers to build multiple SKU pallets for inbound delivery to retail distribution centers. Such an approach translates into extra handling during the assembly of the order, as well as at the distribution center when those same orders are sorted and received. Furthermore, smaller, more frequent retail store orders may result in more case touches for distribution center personnel as they are challenged to stack stable pallets for retail store delivery.

According to experts, around 90% of product damage in the CPG supply chain occurs at the DC or retail location. Further downstream in the supply chain there are more interactions between people and products, which increases the likelihood of damage.

So what exactly is the best amount of packaging for your product? Ultimately, it is the amount that delivers the lowest total packaging cost. Take the graph below.

Packaging cost and Product damage

The connection between packaging cost and the amount of packaging is shown in white, while the interaction between the cost of product damage and the amount of packaging is revealed in red. The total packaging cost per package (the sum of packaging cost and damage cost, is outlined in purple.

The lowest cost per package is located at the intersection point of cost and damage. At this point, an extra penny spent on a package would generate a saving of under a penny’s worth of product damage reduction. In the other direction, cutting the amount of packaging by a penny would result in more than a penny’s worth of incremental damage.

While this approach seems obvious, we are left to ponder why product damage is still an ongoing issue. One reason might be a lack of visibility into supply chain damage that happens further downstream.

If the package design does not reflect all product damage costs associated with a package, then the packaging decision will be suboptimal. A suboptimal package design leaves an unrealized opportunity for supply chain improvement.

By better accounting for actual costs, the product damage cost shifts upward, resulting in a new intersection point – one that dictates an additional investment in a package, as shown in Figure 2, below.

Optimal packaging costs graph

Another way to visualize packaging optimization is with the Innventia AB Model (formerly known as the Soras Curve), shown below.

Innventia AB Model

When a product is underpackaged, excessive damage results in a negative environmental impact. When a product is overpackaged, likewise there is a negative environmental impact resulting from excessive resource consumption and residuals.

When it comes to determining whether or not your package provides the perfect amount of product protection, a collaborative supply chain process is essential. With packaging as with pallets, more accurate supply chain feedback can make a positive difference.

Armed with better information designers and decision-makers can better identify costs downstream, enabling them to select the best package – or pallet – for the job.

warehouse racks with pallets of goods

COVID-19, Supply Chain Trends, and Pallet Selection-What’s Important Now!

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warehouse racks with pallets of goods

COVID-19, Supply Chain Trends, and Pallet Selection-What’s Important Now!

The COVID-19 pandemic has impacted supply chains and consumer behaviors worldwide. It has heightened the awareness of sanitation and is accelerating shifts involving shopper format preference and palletized handling automation. Here are three changes to consider from the pallet usage perspective.

Sanitized Wood Pallets

In the wake of the COVID-19 pandemic, concern about pallet sanitation and cross-contamination briefly became a talking point during initial concerns about contact surfaces as a means of spreading the infection.

While that conversation has somewhat faded, sanitation remains an ongoing item of interest for savvy shippers. According to the U.S. Food Safety Modernization Act (FSMA Final Rule on Sanitary Transportation of Human and Animal Food, the design and maintenance of transportation equipment, including pallets, must “…ensure that it does not cause the food that it transports to become unsafe.”

As such, pallet users should ensure that pallets used for food shipments are clean, dry, and sound.

Wood pallets compare favorably to pallets made from other materials. Recently released research undertaken by Institut für Holztechnologie in Dresden on behalf of the European Pallet Association (EPAL) in Germany compared the microbial properties of wood and plastic pallets. It found that bacteria had a lower survival rate on the wooden surface than on plastic.

The wooden pallets are suitable for use in hygiene sensitive areas, including food processing and transport. As stated in the report, wood has natural antibacterial properties that prevent microorganisms from spreading. It reported that wooden pallets have an antibacterial activity that is more than 13x higher than that of comparable plastic pallets.

Consumer Behavior and Wood Pallets

Consider that in April 2020, online retail sales grew by 120%, accounting for almost 10% of everything sold. COVID-19 has acted to change shopper behavior, with more people moving to online ordering and frequenting smaller footprint retail locations.

Likewise, there has been a significant shift away from the food service sector to online and grocery retail as restaurants struggled with closures during the pandemic. Online shopping and the retail formats favored by customers could influence pallet selection in the future.

Smaller pallets can provide easier handling in the narrow aisles of convenience stores and help speed up delivery. An increase in small format retailing would suggest a greater opportunity for smaller wooden pallets.

However, a decrease in supermarket shopper traffic and more home delivery or curbside pick-up would suggest less demand for display pallets for floor and in-aisle placement. The influx of new technologies, such as automated micro-fulfillment systems at retail, increases the efficiency of ecommerce and will help accelerate this trend. Such a shopper behavior shift could dampen the anticipated growth of half and quarter size pallets, as well as point of sale displays.

Current and future consumer behavior shifts add a layer of uncertainty to optimal pallet selection in the food sector. Wood pallets, which can be easily customized to a specified size, as opposed to plastic pallets that require costly molds, provide much greater flexibility and a much quicker response to possible shifts in the wake of the pandemic.

COVID-19 and Supply Chain Automation

Another area of uncertainty is how the pandemic will influence the uptake of automation. A report from McKinsey suggests that in the short term, COVID-19 has negatively impacted capital investment. Several observers, however, feel that the pandemic will escalate interest in automated solutions.

“Automation that shields workers from sickness while ensuring the delivery of critical goods and services could initially be welcomed by workers and the public at large,” one expert observed recently. He observed that companies that invest in automation are “likely to come out faster – and perhaps stronger – as the economy rebounds.”

Automation can affect pallet requirements. Typically, automation requires a quality-controlled and uniform pallet. Issues such as poor-quality or missing bottom boards, missing or damaged components, and excessive deflection can impact pallet performance in automated systems.

If we do witness a rush to automation, pallets must be considered an element of the project design process. And after installation, a robust quality assurance program will help ensure that wood pallets will continue to perform at a high level.

The pandemic has resulted in several uncertainties for supply chain participants, and changes may impact pallet selection. Luckily, the flexibility offered by wood pallets and the industry’s professionalism will enable operators to keep pace with any shifts in customer demand as we transition into the future.

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