Tony Perrotta on Wharton Business Daily

Dan Loney: As the discussion around hitting sustainability goals continues there are a variety of challenges out there. How can firms reach sustainability goals? PA Consulting has taken a deeper dive into some of the issues that bigger companies are having right now in terms of trying to hit some of these goals. And believe it or not, one of the reasons that they could be having problems is the use of recycled plastic on a variety of different fronts. How are efforts around sustainability are in general at the moment?

Tony: I think there's massive opportunity coming to the forefront. Obviously, there are significant challenges. We're all no stranger to the news that we see day in and day out, but there are amazing and promising technologies on the horizon that should help us get to where we all need to get to.

Dan: So where are the greatest areas of focus then in terms of these firms when they are having issues of trying to hit these sustainability goals?

Tony: I would offer three approaches that most companies can look at in the world of recycling and alternative materials. First, we have to lean into better mechanical recycling practices leveraged by AI and robotics. Second, new advanced recycling methods are coming on the scene. Companies like Eastman Kodak and TerraCycle here in the US are doing exactly that. And then finally, what I'm most excited about is a move away from plastics in general into alternative materials like seaweed and plant-based fibers.

Dan: So the move away from plastics in general, reading part of the reporting that you guys have done, it seems like there are issues in some cases where being able to get enough to recycle is a bit of an issue in some cases.

Tony: Absolutely. There's a battle raging for recycled content of all kinds. Plastics of course, but also cardboard, aluminum, and rare earth metals. Plastics are particularly challenging given recycling processes around the world and here in the US. Some quick estimates say we can supply around 60 million tons of recycled plastic by 2030. The demand in the same timeframe is 90 million tons, so we're already in a 50% shortfall without technology beginning to leverage and amplify.

Dan: What are some of the ways that companies are trying to get around plastic bottles to be able to package products but not have to use plastics?

Tony: Great question. There's a number of options and alternatives becoming available. Here at PA we worked with a company called NotPLA, they won the Earth Shot Prize last year. In essence, they're using a seaweed based material to replace plastic films in some ridges. We're also working with a hugely promising technology called PulPac. It's a dry molded fiber process that uses tree and plant-based fiber under heat and pressure to create a packaging material that looks and feels like plastic.

Dan: I'm a big soccer guy, and I remember seeing Adidas working to produce jerseys for some of the global soccer clubs using recycled plastic as part of that process. How much are we able to use recycled plastic in something like clothing in general?

Tony: That's an interesting debate that's raging in multiple industries right now. When you look at the world's largest food and beverage companies, they've all made very public claims for 2025 and 2030 goals with regard to recycled content. They're faced with a number of challenges. Not only are they looking at using additional recycled content and growing that demand, they're now competing with industries they never had to compete to for this material before. Like fashion. Some would argue, as amazing as it sounds to turn a PET plastic bottle into a T-shirt, when you do that, you are now locking that material into a piece of apparel that can no longer be recycled using existing technology. So there's a very interesting dynamic playing out between those two key industries.

Dan: One of the areas that I'm always interested in when you talk about sustainability and recycling are the products that we get at the grocery store, and obviously a lot of them are packaged in a paper product, but there are still quite a few that have plastic content to them. What do you see as the future there for companies that are dairy producers for milk, and how they try to move away from plastic?

Tony: The goal, where possible, is to consider a move away from plastics where you can still have and maintain an enormously high quality of your product and still bring that amazing consumer experience to life. A shift away from plastics should not be a landscape of trade-offs. Available technologies include some of the amazing work done with Tetra Pak. There's reuse and refill models that have been in play for a number of years, so they're coming back into fashion, if you will. And again, there are new alternative materials being built and scaled now as we speak. Again, just some examples of that. Seaweed, alginates, plant-based fiber, alternative materials, lightweighting of glass. There are a number of options. The challenge becomes ensuring that your customers and consumers still appreciate that switch, and it can be done at the speed, scale, and cost that most global organizations need to make it a success.

Dan: How are some of these efforts impacted by how some local governments are approaching the issues around recycling and sustainability? And I ask that because my township here in the suburbs of Philadelphia recently made the shift to try and go away from plastic straws and also plastic bags at the grocery store. How is that impacting efforts around the country?

Tony: In my opinion, it's massively impactful to the benefit or the detriment of organizations. The US right now is a patchwork quilt of regulations regarding waste and waste materials. That's an enormous challenge for companies to navigate. If you take a simple example like the deposit return scheme or the refund you get when you return a plastic bottle, it's been pegged at 5 cents since I was a child 30 years ago. Interestingly, Connecticut just raised it 10 cents. That's a doubling. Changes like that have massive impact to both the recycling rate and the ability for consumers to feel as though they have a real role to play.

Dan: There's kind of a poly product that's being discussed for the use of bottled products?

Tony: As we mentioned before, PET is now becoming a very valuable input material for those in the fashion and apparel world. PET is recycled into polyester that turns into most of the fashion and the clothing that we wear day in and day out. Again, that has got huge benefits and every company should be applauded for a move in that direction. It just has ramifications in other areas of the grocery store to your point before. Food and beverage companies in particular are feeling that pressure and are trying to find ways to mitigate that.

Dan: What other areas are of greater focus for you and others about this issue of sustainability?

Tony: At PA, we do a lot of work with consumer electronics and medical device companies. There's a huge move there. When you think about buying a new iPhone, they now offer phones created using recycled material and captured rare earth metals. We're seeing a similar move in the world of medical devices where how might we consider a reuse model for these very elegant, sophisticated devices. They should not be one and done. We should find, and many companies are finding ways, of cleaning, repurposing, and reusing those medical devices.