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.
So that’s a big target we got to work on. We’ve got a lot of very talented engineers in our manufacturing division and they went to work and they came up with 3 very great projects. And those projects are going to take us from using 75% renewable fuel in our wood fiber paperboard manufacturing facilities to 90% renewable fuel between now and 2032. So that, combined with the natural grid greening that we’re going to see just as the world around us gets greener between now and 2032, is going to get us 70% to 75% of the way to our 2032 target. So we’re almost there. Where do we look next? Well, our next largest source of emissions comes from our scope 2 category, and it comes from our purchased electricity across all of our operations. And that represents about 30% of our greenhouse gas emissions.
So we look at transitioning half of that to renewable electricity and wrap that up with modest year-over-year energy efficiency improvements in our operations that gives us a clear line of sight to hit our 2032 target and achieve that 50% reduction. So I’m not sure you’re saying, Michelle, that’s all great. You’ve got a road map. But what is that going to look like? And how is that going to play out over time? So let me show you. Right now, we are busy completing the construction and startup of our Waco facility. You’ve heard a lot about it. But while we’re doing that, and we’re laser-focused on getting — keeping that on schedule, getting that built and up and running, our engineers, they’re working on the engineering design, they’re working on the front-end loading.
They’re working on taking those 3 projects that they’ve identified to get them into the queue to start executing against them once we get post Waco. And the great thing about these projects, I mean, I think even more exciting than the fact that they’re going to help reduce our emissions is that they are already built into our capital plan, and they all deliver a positive return on invested capital. I mean how great is that? We’re not only doing good for the planet, we’re doing good for our business, and ultimately, that’s going to be good for our customer and the end consumer. So you can’t ask for anything better than that. And then on the same time line, while we’ve got my engineers working on the capital plan and the capital execution for our 3 projects, our procurement teams are actively working on trying to identify attractive renewable electricity projects.
And given that it takes a lot of time to; one, identify them and then enter through the contract phase and then the permitting phase and then the construction phase because we don’t want to just take annual RECS off the market. We want to make sure that we’re continuing to do our part to help decarbonize, which means looking for good projects that add additionality, additional renewable generation capacity so that they are truly removing emissions and not generating — just shuffling them from one place to another. So when you look at the lead times it takes to execute against all of that, we expect and project that we’ll start to see the benefits of those projects along the same time line as our capital projects, which shows acceleration of emissions reductions following Waco in sort of the second half of our period here.
All right. So we’ll move on to Scope 3. And just for your benefit you have another waterfall chart — same approach that we followed when we looked at our Scope 1 and Scope 2 pathway starts with understanding your current footprint. And when we look at our footprint for Scope 3 emissions, there are really 4 categories where that really stand out as our largest sources of Scope 3 emissions. One comes from all the purchased goods and services that we buy every day that we need to make our products. The second 1 comes from transporting our packaging products to the brands and the retailers so that they can put their products into it and then ship it to the consumers. The next 1 comes from what happens to our packaging at the end of life when the consumer is done with it.
And the fourth category comes from the upstream emissions that are associated with all of the fossil fuels or grid electricity that we purchase. So the nice thing is that if we execute well against all that Scope 1 and Scope 2 projects we talked about just now, that automatically will reduce that bucket of emissions for those upstream emissions because we won’t be buying those fossil fuels in that dirty grid electricity anymore. And then we get to the other groups, our procurement team, they are actively at work, working on their maps to understand where are the hotspots in our category 1 purchase goods and services emissions so that we can then put together and engage our suppliers to work with them. If they don’t have science-based targets, to get them to help set science-based targets to reduce their emissions, and then help them reduce their emissions, which then benefits us.
And same thing is going to happen with our transportation network. We’re going to be working with our transportation vendors to understand where do we have opportunities to maybe shift transportation modes from truck to rail, which would have a lower footprint, or to take advantage of some of the newer emerging technologies around electric trucks or hydrogen-powered trucks or biodiesel trucks that are then going to help us get our packaging, consumer packaging shipped to the brands and the retailers, with fewer emissions than what we do today. And lastly, and probably the most exciting one is how we’re going to think about that end of life. And Waco comes back here, too, is that there’s this perception that a lot of foodservice packaging and cups, in particular, are not recyclable today.
I don’t know why this urban myth continues to persist. But I was in Starbucks recently — I mean, at the Starbucks R&D Center recently, not even just a Starbucks, but at their R&D Center recently, where they are developing their new reusable cups. And I said, “Hey, this is great, but there’re just times when consumers are going to want a grab-and-go paper cup. They’re not going to want the burden of a reusable cup. We can recycle them. Let’s talk about partnering to recycle them.” And the R&D engineer at Starbucks told me paper cups are not recyclable. And I’m like, what? You guys are in Seattle. Seattle is one of the first cities to accept paper cups into curbside recycling. How can you tell me that it’s not recyclable. So we are going to partner with many in our value chain.
We’re actively working on doing this to be able to increase cup recyclability and acceptance and bring them back and be able to transform them into new packaging in our Waco facility, where even better is that, when we do that, we can create beautiful packaging that uses fewer materials because we don’t need as many coating materials on the top surface of the packaging. And that’s going to get — so when we look at all those 4 things together, that gets us about 70% to 75% of the way to our Scope 3, 30% reduction target. So we do have a little gap, and we have some ideas right now that we’re working on and how to address that gap. The first is how do we think about using our raw materials more efficiently and improving the yield on that because if we get more out of them, then we have less waste that we have to deal with.
The second gets to the waste, okay? We do a really great job today recovering and repurposing and recycling the paperboard waste in our manufacturing facilities, almost 100%. I think we’re at 98% right now gets recovered and recycled either by us or by third parties. But we want to look at the rest of the waste that we send to landfills, and how are we going to move that out of landfills and into beneficial reuse? And then the last thing we can think about doing that we’re really looking into right now is how do we get more recycled content into our unbleached and bleached paperboard and increase the recycled content there, all getting back to that consumer need or desire to want to have more recycled content in their paperboard. And we’re convinced that with all of our very smart and talented people working on this, that we’re going to close that gap and hit that 30% reduction by 2032.
So with my last slide, I just want to bring us back to full circle. We’re talking a lot about consumers and what the consumers want in consumer packaging, how our customers are responding. Many of our customers have set very aggressive greenhouse gas reduction goals in addition to their sustainable packaging goals. The plan that I’ve just laid out for you on how we’re going to reduce our greenhouse gas footprint, not only reduces our emissions, but it helps reduce our customers’ Scope 3 emissions and helps them achieve their net zero greenhouse gas targets that many of them have set. And in addition to all of the work that we’re doing to provide them packaging, that is more recyclable, has more recycled content and meets all their expectations around what they’re trying to do to make their packaging more sustainable.
But it’s even more than just helping our customers achieve their goals. It’s helping our customers meet the end consumers’ desire. Their desire is to have more functional packaging, more convenient packaging, packaging that comes with a lower environmental footprint and packaging with less plastic. So as we do our part to get better every day, we help our customers also get better every day. And with that, I’d like to turn it over to Steve Scherger, Chief Financial Officer.
Stephen Scherger: Thank you. Thanks, Michelle. Great to see everybody, and thanks for taking the time to join us today. We’ve covered a lot, as you would expect us to, including some new things that I want to touch on here in just a moment. Mike did a phenomenal job of, of course, laying out to the transformation of what we have become as a global consumer packaging company and the path forward for us to continue to execute on that with Vision 2030. I think Maggie, Jean-Francois provided enormous confidence that we have the innovation capabilities to grow consistently, 200-plus basis points a year in real new-to-the-market growth every year, and the pipeline continues to evolve and grow. And Michelle, I think, beautifully laid out for us that our commitment to the planet, our commitment to our customers, our commitment to the consumer is real and it’s investable.
