• The growing plastic pollution and packaging waste crises pose increasing risks to Constellation Brands (“Constellation”). Corporations could face an annual financial risk of approximately $100 billion should governments require them to cover the waste management costs of the packaging they produce.[1] New laws to this effect were recently passed in Maine, Oregon, Colorado, and California,[2] while the European Union has enacted a $1 per kilogram tax on all non-recycled plastic packaging waste.[3]
• A circular economy for packaging, whereby packaging is designed for reuse or recycling and kept in the economy and out of the environment, plays an important role in a net-zero emissions world. Constellation states it is committed to emissions reductions, yet has taken virtually no action to ensure the circularity of its product packaging,[4] despite the fact that its sold products and packaging contribute significantly to Scope 3 emissions at their end-of-life (“EOL”).[5]
• More than 100 leading companies have committed to promoting a circular economy for packaging by taking financial responsibility for the collection, sorting, and recycling of packaging at EOL, a policy known as Extended Producer Responsibility (“EPR”).[6] In areas lacking EPR, companies should make voluntary financial contributions to improve recycling rates.
• The Recycling Partnership (TRP), the leading NGO working to improve recycling, finds that $17 billion is needed to modernize and expand recycling infrastructure, and that doing so will save the equivalent of 710 million metric tons of CO2 over ten years.[7] To improve plastic recycling infrastructure alone, TRP recommends that companies contribute at least $88 for every metric ton of plastic used.[8]
• Competitors Molson Coors, Heineken, Diageo, and at least 26 other major companies make voluntary contributions to expand recycling infrastructure.[9] Constellation is not known to voluntarily contribute financial resources to help ensure its packaging never becomes waste.[10]
• Competitor Diageo is exploring reuse opportunities, has endorsed EPR, and set goals to use 100% recyclable packaging, incorporate recycled materials, and reduce unnecessary packaging. Constellation lacks each of these goals and earned an “F” grade on a recent report evaluating corporate packaging sustainability.[11]
• Our Company could avoid regulatory, environmental, and competitive risks by adopting a circular economy approach to packaging and by contributing to necessary recycling infrastructure.
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