What I want to say is that when I look at the pipeline of opportunity, we are having, sometimes as I’m wondering when I see the volume. I’m just scratching a bit my head because I have never been exposed and you have to be balanced in what you promise because the opportunities are so big that you want to be careful. But, it’s something where we are fairly confident. And what we try to do at the same time, it’s to manage the resource in an appropriate manner because when it hits the ground and when the things go, you better be ready to manage the growth of the innovation. And I just want to make the last comment on that slide because I have had that before. When we talk about petro-polymer substitution in Europe, some people think it’s a myth, I was right, because…
Mark Connelly: Myth is good.
Jean-Francois Roche: If you understand a myth, it’s different. And I just want to tell you, KeelClip was shrink replacement. PaperSeal is CPET tray replacement. Boardio is blow molding technology replacement. And what we have done with Unilever is rigid plastic replacement. So it’s just the reality of what’s happening right now and which is driving the innovation.
Mark Connelly: Jean-Francois, switching gears a little bit. Every couple of days, the Wall Street Journal has a story that says that sustainability is over. It’s too expensive. It doesn’t make any sense. Nobody wanted it in the first place. And lately, they’re pointing to the German and French protests and saying, even Europeans have figured it out, this stuff just costs too much. So have we seen our 15 minutes of fame for sustainability? Are we on to the next thing?
Jean-Francois Roche: Yes. So I — Just a small adjustment. It’s not the French, it’s a French, it’s the German, the Italian, the Spanish, the Czech and the Polish. And they are not — because it has been a bit noisy in Europe. And they are not — they are not against the regulation. They might have some questions around the pace of the regulation but not — because the understand that certain things have to be done. I think if you look at the demonstration, they are more about the fairness of the regulation because what’s happening today is that you can import goods from outside Europe, which are not under the same regulation. So they feel a bit disadvantage. So that’s the first point. So I don’t see that as something slowing down.
Then when you deal with multinational company in Europe, and I can guarantee, I live with that every day. The first thing is you have to be competitive. The second thing they ask you is what is your ASG strategy and capability. The third thing and it’s by order of important. The third thing is what are your innovation capability and how can you help us to – to match what the market is demanding. And the fourth one is the market — your capability to supply the market. Those are the key elements which are in any discussion you are having in Europe. And if you are not able to take all of them, then you — you are a bit gone. And then if you look at the top 10 food multinational company in the world, 5 of them are European based. And it’s in the DNA.
I live with that dichotomy every day between what — how much we are pushed from those companies in Europe, and I might see the difference as well from North America. And I don’t see any reason for them to slow down on that process. And I will even say what I feel, especially if the packaging waste regulation is coming into as a law, it’s my conviction. The large multinational company will push because they believe that at least the European — they want to be sure as a virtuous company. They understand that it’s part of their brand equity, and they further understand that is what customer wants.
Mark Connelly: So if I understand what you’re saying, the European CPGs are simply giving consumers what they want if they’re not backing away. We heard Maggie say that U.S. consumers want more sustainable packaging, and that’s what the U.S. CPGs and our customers are doing, and that’s what we’re working with them to provide. So it sounds like a change in U.S. administration if it were to happen, it doesn’t have a whole lot to do with what Graphic Packaging is doing today and where we’re going.
Jean-Francois Roche: Yes. You just wrap it up in a way that I would never have been able to do so — you are spot-on.
Mark Connelly: All right. Well, unfortunately, that’s all we’ve got time for. So next up, we’re going to hear from Michelle Fitzpatrick, our Chief Sustainability Officer.
Michelle Fitzpatrick: Thanks, Mark. Good morning. I can’t tell you how excited I am to be here and to be able to talk about one of my favorite subjects and be able to share with you all of the amazing things that we’re doing to transform our sustainability program and approach and the goals that we’ve got in front of us between now and 2030. So as we think about where we want to start with updating our strategy and how we best build that strategy into our business strategy and have it become part — an integral part of Vision 2030. It starts with first understanding what that global landscape looks like. What are those external sustainability trends that have the potential to create both opportunities and challenges for consumer packaging.
And as we look at that, we see 4, actually, I said 3 before, or major goals that are really where we see there’s the potential to create impact on consumer packaging. The first is population growth. Talked a lot about people want packaging. Well, we’re going to have a lot more people on this planet in the very near future. Most recent study by the United Nations that was released in November of 2023 says that there’s going to be 8.6 billion people on our planet in 2030, and that’s going to grow to 9.8 billion people by 2050. That’s a lot of people. And not only are we going to have more people, but we’re also seeing growth in socioeconomic status. So the middle class is getting bigger. And those people are moving from rural communities into cities.
And so what does that mean for packaging? Well, that means they’re going to want more goods. They’re going to need more food. They’ve got more buying power, they’re going to want more consumer goods, and those goods are going to have to travel further to get from where they’re produced to where they’re going to be consumed, and that means we need more and better packaging to safely get those products to those consumers. And as Maggie laid out and Jean-Francois has laid out our stakeholders, our customers, the brands, the regulators, they’re all taking action in response to these trends and thinking about how they’re going to adapt and we have the solution for them. Our innovative packaging is going to provide the solutions to help them embrace the opportunities in front of them and mitigate any potential challenges that they may have.
I got to have a sip of water. Okay, so our promise in how we think about sustainability. You’ve heard Mike share our purpose statement that we package life’s everyday moments for a renewable future. And what we want our promise to be is that every single one of those moments is going to be better for people and for the planet. And we’re doing this through taking action in our 3 pillars that you see up there. We’re creating better packaging by innovating our packaging and our manufacturing operations to drive out waste, improve recyclability and circularity of our packaging and really fuel a circular economy. We’re doing better for people. We’re creating safe and engaging workplaces that foster people’s growth and development, and we’re engaging our communities while we do this.
And we’re creating a better future for our planet, by taking action to mitigate climate change in our contributions and reducing our footprint as well as by being responsible in the way we source forest products so that we’re protecting valuable forest ecosystems. And as we do this, we’ve got a really good plan in place to achieve all of our goals in each of those 3 areas. And we’ve laid it out so that step by step, we’re going to make life’s everyday moments better every day. Okay. So how are we going to do that? You’ve already seen like lay out for you, our Vision 2030 plans, along with 3 impacts of better packaging, better for people and better future. And when we think about this, not only are our goals tied to delivering against those 4 global sustainability trends we talked about.
They’re also embracing and addressing some of the broader societal aspirations for us to have a more fair and just and equitable society. And they are underpinned by our commitment and our long history of operating it with integrity and with responsible business practices, and they’re reinforced by our commitment to the United Nations Global Compact to implement the 10 principles of the Compact that address human rights and protection of the environment into the way we operate and also to help do our part to advance the goals of the United Nations, like the sustainable development goals. And I hope that you can see the connections that we have to our contributions to those UN SDGs come through in how we’ve mapped our 2030 goals to where we can drive impact.
And where we think we’re going to deliver the most impact is with providing decent work and economic growth through our better for people and our better future pillars and how we’re going to advance progress against responsible consumption and production, climate change and life on land through our better packaging and better future goals. Mike, Maggie and Jean-Francois have already really laid out a good road map for you for better packaging and better for people pillars. And I’m going to be spending my time with you today talking about how we’re going to bring our better future goals to life. Okay. But before we dive in, I want to just take a step back and say, we know that being a sustainable company, it’s about a journey, and we’ve been on this journey for quite a while.
And I just want to share a few milestones. We’re really proud of the fact that in 2021, we joined as a participant to the UN Global Compact, really solidifying our commitment to embrace and act on those principles. Last year, we delivered on our commitment to have set new science-based targets and have them validated by the science-based target initiative. We’re very pleased that our progress has been recognized with favorable ratings by MSCI, Sustainalytics and ISS, and we are committed to continuing to assess our progress and transparently share how we’re doing through participation with organizations like CBP and EcoVadis. Okay. So now let’s dig in a little bit, pivot our conversation and talk more about our better future platform. And through this, just spend a little more time on our climate goals in particular and help them come to life for you.
As we think about our better future pillar and our forest goals and our climate goals. The great thing about them is the way that we’ve structured them, they’re going to touch packaging at every single point in the life cycle of packaging. It’s going to start with how we source our raw materials, to find more sustainably sourced materials, that are more renewable materials or recycled materials that go into the beginning to start that circularity engine from the very start. Then we’re going to look at how we optimize our manufacturing operations to make sure that we’re using resources efficiently, the reducing emissions. We’re generating less waste. You’ve heard a lot about our innovation team, and they’re awesome. And how they are thinking about designing packaging that is going to be a more sustainable alternative to nonrenewable packaging formats that are out there today.
And then we think about how we transport our packaging products to our customers, to the brands and the retailers that then use our packaging to ship their products to the consumer. We look at not only how do we optimize the transportation footprint, as it’s moving through that cycle. But also we kind of get back to our forest goal that the packaging that we purchased to ship our packaging products into, has to be just as sustainable as the packaging we produce. And then lastly, when we think about that end-of-life piece of it and how do we design our packaging to be more recyclable and more easily recovered or to help put the infrastructure in place to recover and take it back so we can close that loop and drive the circularity of fiber-based consumer packaging.
The paper-based packaging is a great story, roughly 80% of paper-based packaging in the United States and Europe are collected to recycle today. And once collected, that packaging has 5-10 lifetimes, that can be recovered and recycled. And that is just something that is just amazing. I mean a paper-based packaging has the highest recovery rate of all packaging materials, more than aluminum and metal packaging, more than glass and far more than in plastic packaging. So we are really invested in making sure that our commitments to put facilities in place like Waco, to further drive the circularity make sure that we can take back even more complicated types of packaging and reprocess them and put them back in there and just continue to close the loop and fuel the circularity of paper-based packaging.
Okay. So now let’s talk more about climate. When we think about how our commitment to climate action is, we’re looking to reduce our carbon footprint, and we’re going to do that in a way where we are reducing our greenhouse gas emissions and increasing our use of renewable energy. And if you look back to where we’ve been, we’ve had climate goals for quite a long time. Our original goals were set in the 2016, 2017 time frame. They are intensity-based goals, which were the right goals to set at that time, we achieved those goals 3 years early in 2022, and then we followed up with that by delivering on our commitment to set new science-based targets and have them validated by the science-based target initiative. So that the world could see that, yes, these are the right goals.
They’re in line with what’s needed and we’re doing the right thing. Now if we look forward, how are we going to actually achieve those goals? And what are we going to do? Well, our plan is we’re going to reduce our Scope 1 and Scope 2 emissions by just a little over 50% by 2032. And I know 50.4% is a weird-looking number. That’s all about a science-based target initiative. They’re very precise, but that is what we’re going to do. And then we’re going to reduce our Scope 3 emissions, emissions out in our value chain, not within our direct control, so it’s going to take a lot of collaborative effort, to work with our partners to reduce those emissions by 30%. And then through that process, we’re going to look to increase the amount of renewable energy we use, both in the fuels that we source, as well as the efficiency that we purchase for our operations.
Okay. So I heard finance people really like a waterfall chart. So I decided to put it in a familiar format as I break down for you our decarbonization pathway for our Scope 1 and 2 emissions. As we think about how do we approach that? Because 50% reduction between now and 2032, it seems really daunting. That’s a lot of work we have in front of us. So it all starts with understanding where you are today. And when we look at our footprint, we see that about 60% of our Scope 1 emissions come from using fossil fuels in our paperboard manufacturing facilities. I mean, we’ve done a lot of good work to decarbonize those operations don’t get me wrong. I mean they’re currently at about 75% renewable fuel, but we still — 60% of our Scope 1 emissions, or combined Scope 1 and 2 emissions come from burning fossil fuels.
