The Carbon Imperative

The Global Packaging industry stands at a pivotal moment because sustainability is no longer a choice but a critical business imperative. As requirements to measure and track carbon footprint intensify across major markets and consumer expectations evolve, packaging companies face unprecedented pressure to demonstrate environmental leadership while maintaining competitive advantage. This transformation demands more than incremental improvements. It requires a fundamental reimagining of how businesses operate, measure, and report on their environmental impact.

Enterprise resource planning (ERP) systems have emerged as the cornerstone technology enabling this transformation, evolving from traditional back-office management tools into comprehensive sustainability platforms driving both compliance and competitive differentiation. Companies that successfully manage their carbon footprint in their ERP infrastructure are positioning themselves as industry leaders in an increasingly sustainability-focused marketplace.

The urgency for manufacturers to meet net-zero targets by 2050 is intensifying. What distinguishes market leaders from followers in this environment is their ability to transform regulatory compliance from a burden into a strategic advantage.

A Complex Global Landscape of Regulations

Understanding the evolving regulatory environment is crucial for packaging companies seeking to develop comprehensive sustainability strategies. The current landscape is characterized by regional variations in approach, timing, and scope, creating both challenges and opportunities for organizations operating across multiple jurisdictions.

The European Union (EU) continues to lead global sustainability regulation with the Corporate Sustainability Reporting Directive (CSRD), which mandates detailed carbon emissions reporting for large EU companies. The CSRD’s requirements extend beyond simple emissions reporting to encompass comprehensive sustainability performance metrics, including detailed carbon emissions data across Scope 1, 2, and 3 emissions, climate-related risk assessment, and documentation of sustainability initiatives.

In the U.S., extended producer responsibility (EPR) programs are emerging at the state level, with Oregon becoming the first state to implement a comprehensive packaging EPR system in July 2025. California’s SB 54 is one of the most ambitious packaging sustainability initiatives, with aggressive targets, including achieving 100% recyclable or compostable packaging and a 65% recycling rate for single-use plastics by 2032.

The Task Force on Climate-Related Financial Disclosures (TCFD) has fundamentally transformed how organizations approach climate-related financial reporting, with more than 4,900 organizations across 103 jurisdictions supporting its recommendations. However, while 58% of companies disclosed information aligned with at least five of the 11 recommended disclosures for fiscal year 2022, only 4% of companies achieved complete alignment with all 11 TCFD recommendations.

ERP: The Technology Foundation for Sustainability Leadership

Modern ERP systems provide the technological foundation necessary for collecting, analyzing, and acting on vast amounts of sustainability-related data in real time. The transformation of ERP systems into sustainability platforms reflects the growing recognition that environmental performance and business performance are inextricably linked.

One of the most significant advantages of ERP-integrated sustainability management is the creation of a single source of truth for all material specifications, supplier declarations, and compliance documentation. Real-time data analytics capabilities enable organizations to continuously monitor and optimize their environmental performance, tracking energy consumption, material usage, waste generation, and carbon emissions across all operations.

Integrating manufacturing execution systems (MES) with ERP platforms enables manufacturers to monitor and analyze machine cycles, energy use, and other critical performance metrics in real time. This continuous oversight enables companies to optimize their machinery, reducing energy consumption and emissions without sacrificing productivity.

ERP systems excel at automating complex compliance calculations, providing early warning systems for potential regulatory issues. Automated compliance calculations provide real-time assessment of regulatory obligations across multiple jurisdictions, enabling companies to stay ahead of requirements while minimizing compliance costs.

The integration of carbon footprint calculation and reporting capabilities into ERP systems represents a significant advancement in sustainability management technology. Science-based product carbon footprints can be calculated automatically based on material specifications, production processes, and supply chain data, supporting CSRD disclosures and customer scorecards.

ERP platforms enable companies to assign carbon values to each job and product, allowing detailed monitoring and reporting of carbon emissions at the product level. This capability enables organizations to provide customers with comprehensive carbon data, which has become a significant market differentiator as transparency regarding environmental impact becomes increasingly critical.

Competitive Advantages

The relationship between sustainability performance and competitive advantage has evolved from a theoretical concept to a measurable business reality. Companies integrating sustainability into their core operations through ERP report significant improvements in market positioning, customer relationships, and financial performance.

Sustainable business practices have become a primary driver of brand loyalty and customer retention, particularly as consumer awareness of environmental issues continues to grow. Research demonstrates that consumers are increasingly willing to pay premium prices for products from companies that demonstrate a genuine commitment to environmental responsibility.

Sustainability credentials are increasingly becoming prerequisites for market access rather than competitive differentiators. Major customers across industries are implementing supplier sustainability requirements that mandate specific environmental performance standards, carbon footprint reporting, and compliance certifications. Companies with robust ERP-integrated sustainability management systems are better positioned to meet evolving customer requirements and access new market opportunities.

Operational Efficiency and Cost Reduction

Sustainability initiatives implemented through ERP systems deliver measurable operational improvements and cost reductions. The real-time monitoring and optimization capabilities of integrated systems enable companies to identify and eliminate waste, reduce energy consumption, and optimize resource utilization across all operations.

Material management improvements are among the most significant sources of cost savings. ERP systems help companies efficiently track and manage their packaging materials, monitor inventory levels, optimize material use, and minimize waste. Energy efficiency improvements provide both environmental and financial benefits, with companies reporting reductions in energy costs through optimized production scheduling and process improvements.

Future-Proof Innovation

The sustainability reporting and compliance landscape is expected to intensify further in the coming decade. Companies with ERP systems that integrate sustainability management will be better equipped to adapt to regulatory changes and maintain a competitive edge.

These systems also drive innovation by delivering the data and insights needed to develop sustainable products and processes. Real-time monitoring of environmental performance helps identify improvement opportunities and test new ways to reduce impact.

With major regulatory milestones approaching in 2026, organizations that act now will be best positioned to adapt and maintain a competitive advantage.

Craig Tait is chief product officer at eProductivity Software, which provides end-to-end ERP and MES solutions for the packaging industry, including corrugated, folding carton, label, and flexible segments. For more information, please visit epackagingsw.com.