Since 2023, we have been engaging with three key players in the consumer staples sector: Danone, Henkel and Procter & Gamble. All three are part of our Impact Equities and Bond portfolios and have significant exposure to plastic pollution. Through ongoing dialogue we aim to evaluate how they are progressing in reducing plastic use, increasing circularity and improving the transparency and comparability of their disclosures.

The plastics challenge

The plastic waste crisis has reached a critical point, with oceans overflowing, ecosystems under severe strain and communities grappling with the fallout of plastics pollution. Recognising the urgency, we launched our plastics and packaging engagement project in 2023. We engage with 12 listed companies from the consumer staples sector to drive their progress on reducing plastic use. As Danone, Henkel and Procter & Gamble (P&G) are the three companies in our Impact Equities and Bond portfolios with the most significant exposure to plastic pollution, our engagement primarily focus on these three companies. 

In the articles The plastics challenge: how to reduce, reuse and recycle? (2024) and Driving change in plastics and packaging(2025) we outline our engagement approach and report progress regarding this topic.

Recalibration of ambitions

The limitations of voluntary corporate commitments have become increasingly evident. While many companies set ambitious packaging targets several years ago, the past year has seen a notable recalibration of ambitions, with some companies revising targets downward in response to operational, cost and infrastructure constraints. A prominent example is PepsiCo, which reduced both its virgin plastic reduction and recycled content targets. The company revised its plastics ambitions by dropping its target to cut virgin plastic use by 20% by 2030 in favour of an average 2% annual reduction through 2030, while also lowering its recycled content goal from 50% by 2030 to 40% by 2035. Note that Pepsico is neither part of our investment portfolio, not of our universe. Importantly, none of the companies included in our engagement programme have taken similar steps to weaken their commitments.

Investor influence has also shown signs of strain. Although plastics- and waste-related shareholder proposals gained traction in earlier proxy seasons, support levels have softened in recent years. In 2025, a shareholder resolution at Procter & Gamble on plastics disclosure received meaningful minority support (around 14%), including from Triodos Investment Management. But even though investors are concerned about these issues, it’s not easy to turn that concern into enough votes for concrete steps/change  at shareholder meetings.

The importance of regulation

In this evolving landscape, regulation is playing an increasingly important role. Extended Producer Responsibility (EPR) schemes are expanding rapidly across Europe and parts of the United States, making companies responsible for what happens to their packaging after it’s used. These rules mean companies must be more transparent and help support the EU’s goal to make all packaging recyclable by 2030. This also increases the costs and responsibilities for companies when they choose their packaging. The EU’s Packaging and Packaging Waste Regulation (PPWR) represents a step change, introducing binding targets, harmonised definitions and clearer performance thresholds. These measures are critical for addressing structural barriers, such as insufficient recycling infrastructure and limited availability of food-grade recycled materials, that engagement alone cannot resolve.

Following our initial engagements in 2023, we defined a set of objectives that continue to guide our assessment of company performance (see also our 2024 key findings). These objectives are increasingly aligned with PPWR requirements, particularly with respect to recyclability, recycled content and packaging design. Across our engagements, progress has been most visible where these objectives are supported by clear metrics, governance structures and accountability mechanisms.

Of our portfolio companies, Danone, Henkel and Procter & Gamble have the most significant exposure to plastic pollution risks. Our engagement with these companies therefore focuses on whether commitments are translating into measurable outcomes. We also discuss whether their current strategies remain credible in the face of tightening regulation, rising costs and growing scrutiny. 

The following case studies illustrate the outcomes of our engagement and the progress each company has made toward more sustainable packaging practices. 

Danone: Ongoing and meaningful progress

Our engagement with Danone has been the most frequent and constructive within this project, reflecting the company’s openness to dialogue with us and the fact that plastics and packaging are identified as a material topic under its Corporate Sustainability Reporting Directive (CSRD) disclosure. In particular, Danone has meaningfully expanded its plastics and packaging reporting following its February 2025 agreement with ClientEarth and other NGOs, strengthening transparency and governance around plastic impacts. Our discussions focus on how these commitments translate into concrete updates to the vigilance plan, as well as on the financial and operational implications of evolving EPR frameworks, potential plastic taxes and alignment with PPWR definitions.

In this context, Danone continued to show progress across key plastics and packaging metrics in 2024, though further improvements will be required to meet near-term targets. From a higher-level perspective plastic use declined by 11% versus the 2018 baseline and 2% versus 2020, while virgin fossil-based plastic fell by 8% compared with 2020. The share of reusable, recyclable or compostable packaging reached 85%, with 76% of plastic packaging meeting these criteria. Plastic recovery improved to 60%, and average recycled content increased to 16.8%, up from 14.6% in 2023. Supplier engagement now covers 43% of the packaging CO₂ footprint, strengthening data quality and emissions management.

Assessment by objective

Objective 1: ransparency

Danone continues to demonstrate strong transparency on plastics and packaging. In 2024, the company disclosed 1.40 million metric tons of total packaging, of which 670,107 tons were plastic, down from 693,156 tons in 2023 and 762,519 tons in 2022. This corresponds to an 11% absolute reduction versus the 2018 baseline and a 2% reduction versus 2020 (excluding Essential Dairy Products Russia, which was divested). Transparency was further strengthened following the February 2025 settlement with NGOs, which included commitments to improved impact assessments, clearer mitigation actions and ongoing reporting and dialogue.

Objective 2: Plastic reduction targets

Danone maintains its commitment to 100% reusable, recyclable or compostable packaging by 2030 and a 30% reduction in virgin fossil-based plastic by 2030. Progress continues, with sustained declines in absolute plastic use and an 8% reduction in virgin plastic versus the 2020 baseline.

Objective 3: Recycled content

Average recycled content increased to 16.8% in 2024, while rPET (recycled polyethylene terephthalate plastic) in the Waters category reached 29.2%, rising to 36.6% in markets with more developed recycling infrastructure. Plastic recovery improved to 60%, and Danone continues to exceed regulatory requirements for non-PET food packaging.

Objective 4: Reusable and recyclable packaging

The share of reusable, recyclable or compostable packaging increased to 85% in 2024. Primary and secondary packaging remains at 84%, with a stated ambition to reach 100% by 2025. Around 50% of Waters volumes are sold in reusable packaging.

Objective 5: Circular economy and systems change

Danone continues to invest in circular solutions, including strengthening collection systems through EPR schemes and expanding reuse models such as reusable water jugs in emerging markets. Its collaboration with CITEO in France remains a key initiative. Supplier engagement has expanded to more than 45 suppliers, and packaging cost inflation and EPR fees are now embedded into pricing strategies.

Henkel:  Transparency gap

Our engagement with Henkel has also been constructive, reflecting the company’s formal identification of plastics, packaging and circular economy as material topics under its CSRD disclosure. Our dialogue focused in particular on transparency around absolute plastic use, progress toward the company’s 2025 fossil-based virgin plastic reduction target and the alignment of recyclability claims with PPWR definitions and performance thresholds. We also discussed how Henkel is monitoring evolving regulatory requirements and definitions, and how these are integrated into internal systems and reporting.

During this period, Henkel made progress across circularity metrics, including a 6.4% year-on-year reduction in absolute plastic packaging, a 25% increase of recycled plastic content, an 89% increase of recyclable or reusable packaging and a 39% reduction in production waste intensity. These figures indicate progress toward 2025 targets, particularly on recycled content. However, the absence of a separately disclosed achievement rate for fossil-based virgin plastic reduction remains a key transparency gap.

Assessment by objective

Objective 1: Transparency

Henkel’s transparency improved with the publication of achievement rates in its 2024 ESG Statbook. The company reports 89% of packaging designed for recycling or reusability and 25% recycled plastic content. Absolute plastic packaging volumes declined from 287,566 metric tons in 2023 to 269,078 metric tons in 2024, a 6.4% year-on-year reduction.

Objective 2: Plastic reduction targets

Henkel targets >30% recycled plastic and a 50% reduction in fossil-based virgin plastics by 2025. While recycled content progress is clearly disclosed, the achieved reduction in virgin plastics is not reported separately, limiting assessment of alignment with the 2025 ambition.

Objective 3: Increase recycled content

Recycled plastic content increased to 25%, up from approximately 19% previously reported. Further progress will be required within a short timeframe to meet the 2025 target.

Objective 4: Adopt reusable and recyclable packaging

Henkel reports 89% recyclable or reusable packaging, progressing steadily toward its 100% target by 2025. Packaging redesign initiatives and clear internal definitions support regulatory readiness.

Objective 5: Implement circular economy principles

Production waste has been reduced by 39% per ton of product versus 2010, with a 50% target by 2025. Henkel supports 56 collection and recycling systems globally and continues to invest in internal training, monitoring tools and continuous improvement frameworks.

Procter & Gamble: Lagging European peers

Our engagement with Procter & Gamble has been more limited in depth compared with its European peers. While the company indicated that it is open to investor questions, follow-up discussions on plastics and packaging have remained high level, particularly in response to investor concerns raised in the 2025 shareholder resolution. Our engagement focused on the scalability and consistency of Procter & Gamble’s plastics strategy across its global operations. We also discussed the absence of interim milestones toward its 2030 targets. In addition, we expressed our concern about the discontinuation of the ESG modifier in executive incentives, which we view as a missed opportunity to strengthen long-term accountability.

Against this context, Procter & Gamble has strengthened disclosure and accelerated progress on virgin plastic reduction (21% versus the 2017 baseline), while recycled content reached 17% and 80% of packaging is designed to be recyclable or reusable. However, recycled content remains lower compared to peers and clearer interim milestones and portfolio-wide implementation would strengthen confidence in delivery on the 2030 goals. The ~14% investor support for a plastics-related shareholder resolution reinforces the case for enhanced disclosure and deeper engagement.

Assessment by objective

Objective 1: Improved transparency

Procter & Gamble discloses absolute plastic packaging volumes (691,000 metric tons) and average recycled content (17%). However, disclosure remains less comprehensive than that of its European peers and plastics are not reported through the CDP Water questionnaire.

Objective 2: Set plastic reduction targets

Procter & Gamble targets a 50% reduction in virgin petroleum plastic per unit of production by 2030. Progress accelerated to 21% in FY 23/24, supported by lightweighting and material substitution, though no interim milestones beyond the headline target are disclosed.

Objective 3: Increase recycled content

Recycled resin accounts for 17% of total resin use (116,000 metric tons). Proprietary and partnership-based recycling technologies support long-term potential, but current levels lag peers.

Objective 4: Adopt reusable and recyclable packaging

80% of packaging is designed to be recyclable or reusable, progressing toward the 100% target by 2030, though the remaining gap remains material.

Objective 5: Implement circular economy principles

Procter & Gamble approaches circularity as a system-level challenge and invests across design, collection, consumer engagement, recovery technologies and end markets. Zero manufacturing waste to landfill has been achieved and maintained since 2020.

Conclusion

Our engagement with Danone, Henkel and Procter & Gamble highlights meaningful progress across all three companies, but also clear differences in ambition, execution and transparency.

  • Danone currently shows the strongest alignment between ambition, disclosure and delivery, particularly on absolute plastic reduction, recovery and reuse.
  • Henkel demonstrates credible percentage-based progress and robust internal systems, but greater transparency on virgin plastic reduction is needed to assess delivery at scale.
  • Procter & Gamble has accelerated progress and invested heavily in innovation, but recycled content levels and consistency of implementation remain behind European peers.

For all three companies, systemic challenges, especially recycling infrastructure gaps and material availability, remain significant. Inconsistent disclosure and definitions further limit comparability.

All three appear broadly on track to meet PPWR 2030 requirements, but the 2040 targets are substantially more demanding. Achieving them will require accelerated execution, stronger system collaboration and more outcome-focused reporting.

Sources

https://blinks.bloomberg.com/screens/DOCV%20RES%20T465V8GPL4EZ

https://www.henkel.com/resource/blob/2078380/b19841ad212b676301cdb28195f81ae9/data/henkel-esg-statbook-2024.pdf

https://www.danone.com/content/dam/corp/global/danonecom/investors/en-all-publications/2025/registrationdocuments/urd2024accessibleversion.pdf

https://www.pginvestor.com/esg/environmental/waste/default.aspx

Our future engagement will therefore focus on areas where clarity remains limited, including the financial and operational implications of evolving EPR frameworks, the exposure to potential plastic taxes, the credibility of interim milestones toward longer-term targets and the consistency of implementation across global operations.

Active stewardship

Stewardship is an integral part of our investment management process, with engagement, voting and advocacy as its key pillars. Find out more about our Stewardship approach and activities.