May 2019
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Closing the loop
CENTRE STAGE

Swire Coca-Cola is determined to turn the tide on single-use drinks packaging and create a more sustainable approach to plastic.


A total of 300 Bonaqua Water Stations, providing hot and cold mineralised water, will be installed at locations around Hong Kong this year.A total of 300 Bonaqua Water Stations, providing hot and cold mineralised water, will be installed at locations around Hong Kong this year.


Facing down Hong Kong's soft drink single-use plastic packaging problem might best be described as a daunting challenge. As William Davies, General Manager, Sustainability at Swire Coca-Cola puts it, "It's not something that one organisation alone can manage, once that post-consumer packaging enters the environment, it takes many stakeholders – including the government – to deliver a working collection and recovery system."

However, daunting challenges have helped fuel Swire's dynamism over the last two centuries, and this one is no different. Swire Coca-Cola's efforts to create a more sustainable drinks packaging ecosystem – whether via the measures it is taking independently, or in terms of its leadership of the multi-stakeholder initiative, ‘Drink Without Waste' (DWW) – cannot be said to lack ambition.

For an idea of the scale of that ambition, consider that Swire Coca-Cola Hong Kong is committed to achieving The Coca-Cola Company's ‘World Without Waste' vision of collecting and recycling the equivalent of 100% of the packaging in which its products are sold by 2030 or earlier. And then consider that, in 2017, over 80% of the packaging used for beverages, equating to 1.7 billion units, ended up in Hong Kong's landfills. The collection rate for PET (polyethylene terephthalate), which made up 65% of the total packaging consumed, was a paltry 6.8%, with most of this being baled and exported for processing.

"The urgency of the problem is two-fold," says Davies. "Firstly, Hong Kong's overall approach to municipal solid-waste (MSW) as it currently stands is out of date. There is no real effort to separate waste which results in most of the valuable fractions of MSW being sent to landfill rather than being recovered and repurposed. Secondly, PET is only a part of the overall problem, but it's huge in terms of social impact, for example when plastic bottles that could be recycled end up littering our country parks and beaches."

He adds: "Globally, there's a realisation that this kind of plastic packaging doesn't break down, has traditionally had poor collection rates, and can stay in the environment for 400 years. Because of the exponential growth in its use, people are waking up to the fact that there is a huge problem – not to mention the issue of plastics in our planet's waters. In Hong Kong there's still no joined-up cycle that marries collection and recovery and reprocessing."

Cross-sector cooperation

The picture is not entirely one of doom and gloom, however. According to Hong Kong's Environmental Protection Department (EPD), some 85% of metal cans in the city are recovered – a success rate that Pat Healy, Managing Director of Swire Coca-Cola, ascribes to aluminium having demonstrable monetary value, which creates an incentive for collection. But incentivisation can also work for plastic: the collection rate for PET in Germany, for example, is around 94%.

"If you look at what drives high rates, it's a system that means everybody knows what they're supposed to do with discarded bottles and there are incentives in place to keep the whole thing running," says Healy. "It's about creating the right recycling infrastructure and the right economic incentives at all stages, so that people do the right thing but also get a small reward along the way."

Swire Coca-Cola's plans to put infrastructure and incentives in place are a key driver of ‘Drink Without Waste', a cross-sector plan for drastically reducing the amount of beverage packaging that ends up in landfills.

Davies takes up the story. "In 2017, we discussed internally the idea of conducting our own research around the issue, but the more we thought about it, the more we realised it would have more credibility and impact if the research was independent. So we decided to reach out to our industry competitors, as well as a handful of NGOs and researchers, retailers and some of the big companies in Hong Kong that touch everyone, such as the MTR and Hong Kong International Airport."

"Together we formed the Single-Use Beverage Packaging Working Group and launched the initiative #Drink Without Waste. We commissioned an independent study of the issue by Deloitte and in December 2018, in parallel to the publishing of the Deloitte's study, we also published our own Positioning Paper announcing various goals and strategies. The ultimate DWW target is to achieve a 70%-90% recovery and recycling rate for soft drink beverage packaging by 2025."

Investing in four ‘R's

In fact, Swire Coca-Cola's own journey towards total life-cycle packaging has a head-start. Well over 90% of all glass bottles sold by Swire Coca-Cola HK are now reusable and recyclable, while PET packaging weight has been reduced significantly by the company since 2010. And efforts to further reduce PET output – not to mention pressure on landfill sites – will be helped by the rollout this year of 300 Bonaqua Water Stations, offering hot and cold mineralised water at locations across Hong Kong, in support of the government's ‘Bring Your Own Bottle' initiative.

Looking ahead over the next five years, Swire Coca-Cola HK plans to invest more than HK$150 million in new machinery and technology. According to Neil Waters, who is Executive Director, Hong Kong & Taiwan, of Swire Coca-Cola, and President of the Hong Kong Beverage Association, "This will enable the company to increase the mix and availability of eco-friendly packaging options across its product portfolio and also to leverage these new capabilities to grow beverage sales accordingly. We're also putting resources into developing collection facilities for recyclable waste, and in public awareness initiatives to promote waste sorting and clean recycling."

Under ‘Drink Without Waste', Swire Coca-Cola's initiatives will also be complemented by various actions taken by other stakeholders, in accordance with the "four ‘R's" of Reduction, Redesign, Recovery and Recycling. Reduction means embracing alternative means of beverage distribution, such as installing networks of refill water dispensers and introducing new reusable containers. Redesign refers to the composition of packaging and ensuring that it makes maximum use of recycled materials and is also in turn recyclable. Recovery is likely to involve not only efficient collection of waste but also value-return schemes, while Recycling will demand significant investment in local facilities.

Swire Coca-Cola HK is investing in a joint venture, state-of-the-art plastic recycling facility at the EcoPark in Tuen Mun.
Swire Coca-Cola HK is investing in a joint venture, state-of-the-art plastic recycling facility at the EcoPark in Tuen Mun.

‘Drink Without Waste’, an initiative led by a broad coalition of stakeholders focused on reducing waste from beverage consumption.
"Drink Without Waste", an initiative led by a broad coalition of stakeholders focused on reducing waste from beverage consumption.


"At its core, DWW is an acknowledgement of our shared responsibility across the industry and the community for creating a sustainable, circular economy that incentivises recovery, recycling and re-use," says Waters.

One example of that ethos of shared responsibility is provided by a recently-announced joint venture to operate a state-of-the-art recycling facility for PET and other plastic waste at the EcoPark in Tuen Mun. Swire Coca-Cola will partner with the German-owned ALBA Group Asia Limited and the Hong Kong waste collector Baguio Waste Management & Recycling Limited in the project, which is expected to be ready to commence operations in the third quarter of 2020.

"ALBA brings expertise in recycling technology, while Baguio can leverage its domestic collection network in Hong Kong," says Healy. "The plant will have sufficient capacity to treat the entire volume of Hong Kong's post-consumer beverage packaging. Whether we're able to hit that will depend on collection rates, but even a rate of 90% would be gold-standard level. We are also an end-user for the recycled PET, which can go back into our supply chain, so it's a significant step towards us becoming self-sustaining in the plastic materials we use and ensuring a closed loop for plastic beverage packaging in Hong Kong as a whole."

(Left to right): Pictured at the launch of 'Drink Without Waste' are Herbert Yung, Director, Risk Advisory, Deloitte Advisory (Hong Kong); Edwin Lau Che-feng, Founder and Executive Director of The Green Earth Hong Kong; Paul Zimmerman, Chairman of the Single-Use Beverage Packing Working Group, and Neil Waters, Swire Coca-Cola's Executive Director, Hong Kong & Taiwan, who is also President of the Hong Kong Beverage Association.
(Left to right): Pictured at the launch of 'Drink Without Waste' are Herbert Yung, Director, Risk Advisory, Deloitte Advisory (Hong Kong); Edwin Lau Che-feng, Founder and Executive Director of The Green Earth Hong Kong; Paul Zimmerman, Chairman of the Single-Use Beverage Packing Working Group, and Neil Waters, Swire Coca-Cola's Executive Director, Hong Kong & Taiwan, who is also President of the Hong Kong Beverage Association.


The right thing to do

Another contributing factor to Healy's optimism on that front is recognition that the Hong Kong government is emerging as an ally in the city's quest for a more sustainable future.

"Firstly," he says, "they're introducing a producer responsibility system, which involves a deposit being paid on different types of materials that is used to help fund collection and recycling. And they are in the process of introducing a municipal solid waste charging scheme for domestic waste, which means consumers will be asked to pay for the disposal of general waste in landfill. That would really make recycling more attractive, so there's a need to increase domestic capacity. Up until the end of 2017, a lot of waste was shipped to Mainland China for recycling but a change of policy means that is no longer an option. And frankly, there's logic to investing locally."

He adds, "With effective waste charging, there's a financial disincentive to putting recyclable material into general waste and an incentive to making sure it goes into the right bin. To make that work, however, you have to have different collection points for returning recyclable material. For example, you can have reverse vending machines that are basically paying consumers some sort of reward – cash, coupons, or loyalty points. The more collection points, the more viable the whole effort."

Healy says that the investments being made by Swire Coca-Cola make sound economic sense, both in terms of creating a value system for PET and stimulating new demand from consumers for drinks that depend on a more sustainable packaging model.

"We wouldn't be investing if we didn't believe we could make a return on the capital," he says. "But being proactive also gives us a social license to operate, because government, consumers and other stakeholders recognise we are part of the solution and not part of the problem."

For his part, Waters believes the concerted actions of industry, government and non-governmental bodies can create a momentum, driving change. He adds: "The lack of adequate and effective collection, sorting and recycling infrastructure to date has made the public sceptical about waste disposal in Hong Kong. For any waste management policy to really work, the community as a whole must be able to easily return and dispose of their waste and be confident that it will be properly treated and recycled where possible. As the biggest beverage company in Hong Kong, we have to make sure we are leading the way towards a more sustainable future and I think our consumers expect us to take that lead. It's the right thing to do."

Davies adds: "I'm a believer in the public, and I don't think it will take people very long to change their habits, assuming solutions are convenient and transparent. There is a will to change. Translating that will through the obstacles that exist is not straightforward, but the will is there."
Swire News May 2019 nissue
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