The impact of packaging firms’ circularity practices and policies on their environmental packaging performance Open Access

Packaging waste is linked to environmental degradation, carbon emissions, waste in landfills and microplastic proliferation (UNEP, 2024). As much as 80% of packaging is incinerated, landfilled or discarded into the environment (Chamas et al., 2020; CSIRO, 2023). To address this issue, governments and businesses have embraced a circular economy (CE) approach to reduce packaging waste. CE views the environmental pervasiveness of packaging as a design problem, originating from business decisions made within supply chains about production, marketing and logistics that fail to capture value in materials and energy generated via cyclical resource flows, for example, through packaging recovery, recycling and reuse (Meherishi et al., 2019; Silva and Pålsson, 2022).

Yet, the proposition of integrating packaging circularity into supply chains relies on firms profoundly transforming existing linear business processes, systems and relationships, implying significant investments in both time and capital (García-Arca et al., 2017; Ghisellini et al., 2016). This makes it essential to assist firms in making practical decisions around packaging circularity practices and policies (i.e. the activities and strategic choices that enable packaging circularity), expediting the development of circular supply chains and hence the transition to a CE for packaging (Bimpizas-Pinis et al., 2022).

Extant research has focused on how packaging circularity contributes to positive environmental outcomes, using various life cycle analysis (LCA) measures to evaluate environmental impacts (Cozzolino and De Giovanni, 2023; de Koeijer et al., 2017; Niero and Hauschild, 2017). However, prior research has so far not adequately explored the packaging circularity strategies and practices that will be most effective in meeting regulators’ sustainable packaging requirements (Silva and Pålsson, 2022). Achieving greater clarity on packaging circularity practices within supply chains is important for effective decision-making as global regulatory pressures on packaging waste intensify. For example, the European Union is requiring the mitigation of wasteful consumption, and the United Nations is advocating for packaging innovations that reduce or eliminate packaging waste (UNEP, 2023).

Packaging import bans into China and other South-East Asian countries have accelerated waste-exporting countries’ implementation of CE packaging regulations (CSIRO, 2023; The Economist, 2019). The EU’s Circular Economy Action Plan has enlisted the European Standardisation Organisation to manage compliance with packaging waste reduction guidelines (CEN-CENELEC, 2022). In Australia, the government established a co-regulatory body, APCO (Australian Packaging Covenant Organisation), to manage firm compliance with its circularity-focused packaging sustainability framework (APCO, 2024). Empirical research is thus warranted into the packaging circularity practices required for firms to comply with the national performance standards.

This article seeks to address the following research questions: (1) What are the circularity practices and policies that firms need to integrate into their supply chains to improve environmental packaging performance and thus comply with CE packaging regulation? And (2) How does firm context affect environmental packaging performance? These are addressed in a cross-sectional study evaluating the performance of 839 companies based on their APCO reports. The study addresses two gaps in the literature. First, it identifies the salient packaging circularity practices and policies within the APCO framework that influence environmental packaging performance, aiding informed strategic and operational packaging decision-making about circularity compliance. Second, the study identifies how sectoral or jurisdictional factors, as well as whether a firm is publicly listed, affect performance, highlighting that firm context-specific strategies are required.

The next section reviews the literature on the relationship between packaging and circularity. It then discusses the integration of packaging circularity into the supply chain by comparing existing packaging sustainability frameworks. This article then describes the method and sampling approach used and provides the research findings. Finally, it concludes by discussing the implications for CE and business, as well as the study limitations and future research.

Coercive and normative pressures from governments, consumers and environmental groups are driving action towards environmentally sustainable packaging logistics (García-Arca et al., 2017) and packaging solutions (Calzolari et al., 2025; European Commission, 2020). These pressures have intensified due to continued growth and development in global supply chains using more packaging to house and transport surging demand for new products, resulting in increased material use and end-of-life packaging waste across multiple stages (European Commission, 2023; UNEP, 2023). Therefore, sustainable packaging solutions are part of the broader logistics process and are urgently needed to minimise the environmental impact of packaging, which includes single-use plastics and multi-layered packaging types, as their production and waste cause significant harm to wildlife and human health (UNEP, 2024).

Within packaging, there are focused packaging sustainability frameworks (PSFs) to operationalise the design, implementation and evaluation of packaging, forming evaluative measures of environmental performance and providing guidance to businesses on important strategic packaging decisions. PSFs usually cover all three levels of packaging (i.e. primary, secondary and tertiary). Within a PSF, there are recognised interdependencies, as a change at one level of packaging can affect other levels. For example, size design changes have logistical implications for the ways that boxes are transported. Thus, PSFs cover both design and supply chain packaging issues.

According to de Koiejer et al. (2017), PSFs have usually been classified as either generative or evaluative. Generative frameworks relate to a set of design guidelines underpinned by social, economic and environmental principles. In contrast, evaluative frameworks assess overall environmental outcomes. De Koeijer et al. (2017) highlighted that neither generative nor evaluative frameworks fully encapsulate the complexities of circular packaging systems and thus they proposed a “combined” third classification for whole-system integration.

While there are many PSFs, in this study, we use the APCO whole-system integration framework, with its seven strategic criteria as the foundation of analysis to assess other PSFs. The APCO PSF is based on Australia’s National Waste Policy Action Plan 2019 (APCO, 2024). While APCO membership is technically voluntary, member firms are required to annually report on their progress activities and targets. Its members’ self-reporting approach makes it difficult to confirm unbiased and complete firm-presented data. However, APCO is supported via national regulatory backing (e.g. the National Environment Protection (Used Packaging Materials) Measure 2011 (NEPM)), and as a result, any firm that submits false or misleading report to APCO can face regulatory fines or legal action.

In reviewing practice, we identified 10 existing PSFs (Table 1). We use APCO’s seven strategic criteria to evaluate these, as APCO’s PSF appeared to be the most comprehensive comprising the domains of governance and strategy, design and procurement, recycled content, recoverability, disposal labelling, on-site waste and problematic materials. The APCO PSF specifies design criteria and stipulates collaborating across the firm and its supply chain. It evaluates circularity across the three levels of packaging (i.e. primary, secondary and tertiary) and various stages of the lifecycle, including the supply chain and the end user. A unique APCO feature is the requirement to eliminate problematic materials and develop strategies to divert on-site waste from landfill.

However, the APCO PSF is not without its own limitations, as it lacks detailed analytical tools that help decision-makers to assess sustainability impacts in supply chains – something that other PSFs offer (e.g. Lekesiztürk and Oflaç, 2022; Camilleri et al., 2023). APCO also lacks an evaluative mechanism to assess CO₂ emissions measurements, ecological impact assessment criteria, and sustainable development criteria (e.g. Dominic et al., 2015; Mattia et al., 2021). While some differences exist, as the APCO framework adopts dimensions in other PSFs, it was therefore an appropriate basis for PSF comparisons. Within the next sections, we examine packaging circularity and its integration into the supply chain. Then, hypotheses are developed based on the literature and APCO’s seven criteria.

While sustainable packaging development is a multidimensional term (i.e. environmental, social and economic pillars), its assessment of environmental performance is often focused on enhancing eco-efficiency practices (e.g. reduced material and energy usage) (Meherishi et al., 2019). Packaging circularity practices go beyond eco-efficiency, by integrating design and process strategies that prolong and extend the productive life of packaging material to minimise primary (i.e. virgin) resource consumption and hence significantly enhance packaging environmental performance (Silva and Pålsson, 2022).

Being circular relies on a closed-loop system inspired by the regenerative cycling processes observed in nature (Stahel, 2019), where non-productive waste is designed out of the economy and remaining resources circulate in loops (EMF, 2023). Conventional and CE packaging have the same primary functions (i.e. to protect, ensure safety and reduce product waste) (Pålsson and Sandberg, 2020). Adopting packaging circularity practices minimises lifecycle environmental impacts of material flows (Cozzolino and De Giovanni, 2023). Thus, circularity-focused programs should boost recycling rates, create secondary raw materials (i.e. recycled content) and inspire circular packaging designs, while ensuring effective, efficient and safe packaging for human health and the environment (European Commission, 2020).

The fundamental building blocks of circular packaging design comprise three core dimensions: slowing, closing and narrowing resource loops (Bocken et al., 2016), mirroring the reduce, reuse and recycle (3 Rs) framework (Table 2).

Slowing relates to the reuse strategy where packaging is reused for the same purpose for which it was conceived multiple times (Bradley and Corsini, 2023). Closing is analogous with recycling. This ensures packaging can be effectively recovered as a raw material, enabling the continuity of resource re-integration (Hahladakis and Iacovidou, 2018). Closing also relates to biodegradability, where materials (i.e. bio-based plastics and compostable packaging) are made to naturally decompose (Lambert and Wagner, 2017). Narrowing aligns with the strategy to reduce, focusing on optimising materials, components and logistics efficiencies. Narrowing is also about the elimination of single-use or problematic materials (EMF, 2023).

Packaging circularity requires firms to consider the full packaging system, its interactions with the housed products and the associated logistical activities (e.g. handling and transport needs), enabling efficient movement throughout the supply chain (Molina-Besch and Pålsson, 2016). Supply chain integration (SCI) has been used as a lens to explore the degree of intra and interorganisational collaboration necessary to integrate sustainable packaging holistically and effectively (Pålsson et al., 2013). Collaboration across the supply chain considers packaging-product interactions jointly, since characteristics such as packaging and product size or weight interact to affect handling efficiency (Pålsson and Hellström, 2016). Such integration is reliant on collaborative processes that enable full system optimisation encompassing all three levels of packaging – primary (packaging for products), secondary (packaging for primary packaging) and tertiary (usually on pallets or crates), thus improving overall environmental performance (Pålsson and Hellström, 2016).

However, circular supply chain management builds on SCI by encompassing systemic coordination and alignment of processes and actors along supply chains, external of the focal firm from an upstream (e.g. suppliers, manufacturers, etc.) and downstream perspective (e.g. logistics, third-party waste management actors, customers, etc.) (Hazen et al., 2021; Meherishi et al., 2019; Verghese et al., 2012). Crucially, circular supply chain management factors in additional reverse integration processes and actors (Bimpizas-Pinis et al., 2022). Reverse logistics involves collaborative planning, information sharing and system coupling to orchestrate partnerships along supply chains (vertically) and between different sectors (horizontally), enabling secondary resource-sharing and reverse material flows between one another, which in turn creates viable substitutes for primary (i.e. virgin) material sourcing (Bimpizas-Pinis et al., 2022; Calzolari et al., 2025). Given the added complexities of packaging circularity adoption, successful integration depends on firms’ capacity to manage effective and efficient circular supply chains.

The aim of this work is to assess the extent to which the seven APCO’s PSF criteria affects environmental packaging performance. We elaborate on each of these criteria below and develop hypotheses.

Eight of the ten PSFs identified a governance and strategy criterion, which requires firms to strategically embed packaging circularity into their decision-making (APCO, 2024). Aziz et al. (2012) suggest that unsuccessful packaging circularity implementation has been attributed to poor alignment with goals and commitments.

Both Mattia et al. (2021) and Lekesiztürk and Oflaç (2022) highlighted that the effectiveness of a circular packaging system is directly related to the strength of a firm’s strategic alliances. Additionally, collective decision-making, supported by strategies that enable knowledge and information sharing, can boost cooperation to better ensure effective implementation (Hazen et al., 2021; Bimpizas-Pinis et al., 2022). For example, Camilleri’s et al. (2023) PSF included analytical tools that encourage collective strategic decision-making and planning. Supporting this, Zhu et al. (2022) PSF emphasises making trade-offs accounting for firm, customer, regulator and supply chain synergies. The first hypothesis therefore suggests that the extent to which firms adopt governance and strategy policies improves environmental packaging performance.

Nine of the ten PFS’s incorporated design and procurement characteristics as part of their PSF circularity components (APCO, 2024). Stipulating design features for optimising packaging to minimise resource use is thus important. In fact, the APCO PSF incorporates a requirement to minimise litter and hazardous materials, emphasising designs that use recycled and renewable materials (APCO, 2026). A unique feature of the APCO PSF is guidelines for using non-hazardous and renewable materials. It also considers supply chain actors by including additional design factors such as ergonomics and labelling for better handling and accessibility (Aziz et al., 2012), thus making it more comprehensive.

Based on these design and procurement features, the APCO PSF requires that firms make percentage commitments to reviewing their packaging. We would therefore logically expect that the extent to which firms commit to reviewing their packaging systems based on these features will positively affect their performance. Therefore.

Packaging circularity practices relating to design and procurement work to narrow resource loops, highlighting the need to design or procure packaging that “reduces” (Mattia et al., 2021) or “optimises” (Camilleri et al., 2023; Lekesiztürk and Oflaç, 2022; Zhu et al., 2022) material efficiencies throughout the supply chain. Therefore.

Recycled content integration is a focal closed-loop strategy, since it aims to displace dependency on primary resource production by minimising virgin material usage, while also reintegrating recovered end-of-life packaging waste (Bocken et al., 2016). Recycled content is recovered in the by-products of networked downstream industrial activities, synergistically combined to be reinserted as secondary resource inputs in the production process (Aziz et al., 2012). Recycled content is only included in three of the PSFs in Table 2. The APCO criterion measures the extent to which various recycled content is integrated into manufacturing, or packaging is made with recycled content (APCO, 2024). While both the SPA (2002) and Aziz et al. (2012) acknowledge the importance of recycled content integration, APCO’s PSF requires firms to measure recycled content across all three packaging levels. The third hypothesis is.

APCO’s recoverability criterion relates to packaging practices and policies that increase recycling rates (APCO, 2024), requiring firms to integrate into their supply chains upstream (e.g. suppliers and manufacturers) and downstream recovery (e.g. waste recovery partners) processes. APCO’s PSF includes two closing resource loops packaging circularity practices – recoverability (i.e. the proportion designed to be recoverable) and compostability (i.e. the proportion of packaging that is biodegradable).

The APCO specifications also include reusability, a slowing of the resource loops practice, wherein packaging is returned or refilled for repeated use, doing away with the need to produce new material (Bradley and Corsini, 2023). These recoverability measures conceptually align with the intentions of the other four PSFs that evaluate the recovery, recycling and reuse of packaging (Camilleri et al., 2023; Lekesiztürk and Oflaç, 2022; SPA, 2002, SPC, 2005). Hypothesis four is.

Six of the PSFs included this criterion, which focuses on labels about recycling and composting (APCO, 2024). This information is intended to improve recovery rates, with some PSFs (Lekesiztürk and Oflaç, 2022; Mattia et al., 2021; Zhu et al., 2022) stipulating consumer disposal information to guide the end-user on the most effective packaging disposal. Therefore.

Only APCO and one other PSF included this criterion, which focuses on the amount of waste created and collected on premises by firms and how they divert this waste from landfill (APCO, 2024). Lekesiztürk and Oflaç (2022) also incorporates measures for sorting and recovering packaging waste in supply chains, but does not specifically require firms to calculate the diversion rate for the waste they generate on-site, as in the APCO PSF. Nevertheless, it is expected that practices and policies employed to divert waste from landfill (a closing resource loops strategy) positively correlate with performance; therefore.

APCO’s PSF is the only one to expressly require the phasing out of toxic, hazardous, unnecessary or single-use materials (APCO, 2024). Eliminating problematic materials prevents hazardous materials from having to be dealt with at other stages in the supply chain; hence.

The seven APCO criteria discussed can each be used to measure aspects of a firm’s environmental packaging performance and packaging circularity. Many of the PSFs focus on firms’ voluntary actions, rather than mandatory compliance, as arises in the case of APCO’s PSF, which is governmentally mandated. As prior research suggests that voluntary rather than mandated pressures are inadequate in widespread adoption of circularity practices (Calzolari et al., 2025), the APCO PSF would seem to be most suitable for measuring actual environmental packaging performance.

The next section describes the methodological approach taken to address these questions.

This study analysed publicly available data of 839 annual APCO firm reports collected in June 2023. From 2,165 listed signatory firms on the APCO website, 808 of these had not yet provided their first-year membership reports. The remaining 1,357 reports were screened to exclude those that did not provide adequate data on percentage commitments to be used for analysis, leaving a sample of 839 reports for analysis.

A content analysis (Krippendorff, 2018) of the reports was then undertaken to transform text and visual content into quantitative items to measure each firm’s environmental packaging performance (Mora-Contreras et al., 2023). Each report was classified based on: (1) country where the firms were headquartered in the largest represented regions (1-Australasia, 2-EU countries, 3-North America or 4-other); (2) or economic sector the firms operated within (1- food, 2-electronics, 3-health and scientific, 4-other) and (3) whether they were listed on their respective country’s stock exchange (0-no, 1-yes).

There were 6 items that measure governance and strategy, 13 for design and procurement, 3 for recycled content, 6 for recoverability, 2 for disposal labelling, 2 for on-site waste and 1 for problematic materials. Two types of measures were created. First was performance in percentage terms (i.e. a continuous variable), for example, the percentage of recycled content (i.e. 0–100%). The sample included eight discrete percentage variables. Two of such variables measured firm commitments to review existing sustainable packaging performance and their commitment to having on-pack labelling. The other six relate to the slowing (4), closing (1) and narrowing of resource loops (1) (Bocken et al., 2016). There is one packaging circularity practice that narrows resource loops (the percentage of all packaging components designed to be reusable. There are four that relate to the closing of resource loops (the percentage of packaging made using some level of recycled material, the percentage of packaging designed to have all components recoverable, the percentage of Australian standards certified compostable packaging and the percentage of on-site waste to be diverted from landfill). And, finally, the APCO PSF contains one packaging circularity practice that narrows resource loops (the percentage of our packaging to be optimised for material efficiency). Percentage variables were coded from 0 to 100, depending on the relevant firms’ disclosed value. A zero was awarded where a report failed to include a value for any item.

Criteria that contained multiple dichotomous items were coded as summative items. The summative items represent an ordinal scale measuring the sum of the total number of policies reported on within a section of the APCO reports, where the greater number reflects a higher level of firm compliance. One such example is the construct on problematic materials (criterion 7), which asked whether nine materials were being phased out, with firms indicating yes or no for each item. Thus, the summative score ranged from not phasing out any problematic materials to phasing out all nine (0–9). The summative-type approach has been used by Abed et al. (2016) and Ottenstein et al. (2022), and thus, was deemed appropriate. The weakness with the summative scores is that if the issue (or a component of the measure) was not relevant to the organisation, this would reduce the calculation of a score.  Appendix provides the full list of original and summative measures.

To assess whether the assumption of linearity was met, we generated partial regression plots for all continuous independent variables to visualise each of the variable’s relationship to the dependent variable. Visual inspection of the scatter of points around the fitted trends for all independent variables was approximately linear, suggesting that the assumption of linearity was reasonably satisfied (Hair et al., 2006).

Multiple linear regression models were then run for the overall sample, which included controls for the firm characteristics, as well as separate regressions based on the control variables. The approach assesses the robustness of models by providing an assessment of the generalisability of the findings in multiple contexts (Atlay and Ramirez, 2010). Each model allows a simultaneous analysis of characteristics that act as significant predictors of performance (Field, 2013; Hair et al., 2006), with control models supporting the broad generalisability of the findings.

The dependent variable in this study is environmental packaging performance. APCO provides an overall rating from five categories: 0.0 to 0.9 (getting started); 1 to 1.9 (making good progress); 2 to 2.9 (advanced); 3 to 3.9 (leading) and 4 to 5 (beyond best practice). Graphically, the overall score is presented as a line on this continuum (see Figure 1). Using the same computer with the same Internet settings to ensure consistency, we manually measured each firm’s aggregate performance as a proportion of the maximum aggregate performance value (i.e. 5.00). Figure 1 shows a performance rating of 2.66 as an example.

This criterion was made up of an aggregated measure comprising six dichotomous items to assess whether firms had: (1) a strategic-level commitment to achieve APCO’s National Packaging Targets, (2) a strategy with goals related to the Sustainable Packaging Guidelines (SPGs), (3) a commitment to integrate circularity into business processes, (4) a plan to communicate packaging circularity objectives internally, (5) a plan to engage with external stakeholders about packaging circularity and (6) a plan to promote circularity externally (i.e. 0 to 6 mean = 4.64; SD = 1.60).

Three variables were used to assess this criterion – an aggregated measure of 11 packaging design characteristics and procurement policies (designing for recovery, optimising material efficiency, designing to reduce product waste, eliminating hazardous materials, the use of recycled and renewable materials, designing to minimise litter, designing for transport efficiency, accessibility, the provision of sustainability information for end-users and SPGs in procurement) (i.e. 0 to 11, mean = 8.62; SD = 2.76). This domain also included two continuous measures, assessing the percentage of commitments (percentage of goods involved in packaging review (i.e. 0 to 100, mean = 61.65; SD = 38.4) and one about material efficiency optimisation undertaken (i.e. 0 to 100, mean = 49.58; SD = 38.11)).

Recycled content (i.e. secondary resource inputs) was assessed using two measures. The first was a summative measure of five items assessing whether recycled content was used for primary, secondary or tertiary packaging, or within the products themselves, and whether firms had a policy to buy packaging with recycled content (i.e. 0 to 5, mean = 3.33; SD = 1.35). A higher score indicates a more responsible packaging system. The second measure was a percentage of the integration of recycled material into packaging manufacturing (mean = 56.12; SD = 37.67).

Four items assessed recoverability, three of which relate to the percentage of packaging: (1) designed for recoverability (mean = 56.31; SD = 36.79); (2) that is compostable (mean = 7.50; SD = 23.23); and (3) designed to be reusable (mean = 20.79; SD = 32.77). The fourth variable was a composite of three items assessing firm policies on recoverability (recyclability for kerbside collection, commitment to investigating opportunities to use reusable packaging and participation in a collaborative closed-loop recovery program) (0–3, mean = 1.56; SD = 0.95).

Two items were included in this criterion. The first was a percentage of packaging with on-pack disposal labelling (mean = 53.63; SD = 40.18). The second was a dichotomous measure about providing end-users with information on recoverability to assist in correct disposal.

Two items were used to assess this criterion. The first is the percentage of waste not going to landfill (i.e. diverted) based on in-house recycling strategies (mean = 54.02; SD = 30.51). The second item was a summative measure of whether any of seven common packaging waste materials (paper/cardboard, soft plastics, rigid plastics, timber, glass, metal and textiles) were recycled on-site (0–6, mean = 3.05; SD = 1.57).

The problematic materials criterion was a single composite item that evaluated whether the firm used any of nine common single-use, hazardous or unnecessary packaging types. These included plastic bags, fragmentable plastics (e.g. oxo-degradable bags), expanded polystyrenes (EPS) loose-fill (small pieces used during transport), larger EPS (e.g. cups, trays) and other problematic materials such as rigid PVC (polyvinyl chloride) or PS (polystyrene), multi-material soft plastics and carbon black packaging (APCO, 2024) (0–9, mean = 1.08; SD = 2.16).

Table 3 below summarises sample characteristics. These are used as controls in the models, but separate models are assessed based on groupings within control models to assess the robustness of results. The first was based on whether the firm was listed on any stock exchange (e.g. the Australian Stock Exchange/ASX, or the New York Stock Exchange/NYSE), region and sector.

Just over a quarter (n = 242, 28.8%) of firms were listed on a stock exchange, with such firms expected to undertake more rigorous disclosure of packaging performance based on pressures from regulatory bodies (Fitzpatrick et al., 2012). Firms were headquartered across 29 countries, grouped into four geographic regions. Given the Australian focus of APCO, it is not surprising that most companies were based in Australasia (n = 597, 68.3%), followed by North America (n = 102, 12.2%), EU countries (n = 89 10.6%) and 8.9% across other regions (n = 75).

Based on ACPO’s ten sector classification scheme, we focused on firms in the three largest sectors: food (n = 145, 17.3%); electronics (n = 94, 11.2%), and healthcare and scientific (n = 88, 10.5%), with the remaining 512 firms (61%) spread across other various sectors or listed in multiple sectors.

As we relied on secondary data, we used Gaussian copulas to assess for endogeneity in the data (Eckert and Hohberger, 2023). This approach has benefits over other methods, as using copulas does not require additional data or the identification of an appropriate instrumental variable (Park and Gupta, 2012). The process involved including copulas for each non-binary independent variable in the regression following recommendations of Liengaard et al. (2025) and Yang et al. (2025).

Those that were significant indicated that endogeneity arose for the associated independent variable, supporting the inclusion of that copula. Its inclusion adjusted the coefficient of the associated independent variable for endogeneity. A copula measure for an independent variable that is insignificant suggests there is no endogeneity for that measure. Thus, the copula adjustment is not needed, and the copula can be removed.

The overall regression was then re-run, including all independent variables and their copulas, if they were significant. The copulas’ inclusion adjusted the independent variable’s beta coefficient for endogeneity. This process was applied to the overall sample and each sub-sample.

Based on the aggregated maximum score of 5.00, the average was 2.64 (SD = 0.86), which is in the “advanced” performance classification. Across the firm characteristics, average performance results were listed (2.65), not listed (2.6), Australasia (2.62), North America (2.75), EU (2.62), other regions (2.60), food (2.80), electronics (2.44), healthcare and scientific (2.43) and other sector (2.67). There was no statistical difference based on being listed or regions, although there were statistical differences across sectors (χ² = 27.18 (n = 835, p = 0.01)).

The analysis included all 15 independent variables, with the environmental packaging performance variable used as the dependent variable. The data were evaluated across 12 regression models (Table 4), firstly with the results for all firms based on the 15 independent variables and copulas that were significant as identified in the endogeneity test. A second model included all firms, the 15 independent variables, the copulas that were significant as identified in the endogeneity test, and the dummies (1a and 1b). To better assess the robustness, other regressions were then run based on whether the firm is publicly listed or not (2a and 2b), across four regions (3a–3d) and the four sectors (4a-d)^[1].

As shown in Table 4, recycled content_p showed a consistent significant positive effect on performance across all the models. Designed recoverable_p had a positive impact on 11 of the 12 models. There were 4 variables (governance and strategy_a; reviewed_p; optimised_p; on-pack labelling_p) that positively impacted the results of 10 of the models. Diverting materials from landfill positively impacted eight models. Design and Procurement_a and reusable_p packaging positively impacted seven models; disposable information_d positively impacted six models, with on-site waste_a and problematic materials_a being positively significant in 2 models, suggesting that these two practices are least important.

However, there are three measures that reported inconsistent significant effects across models. The aggregate measure recycled content (i.e. recycled content_a) positively significantly impacted 2 models but negatively impacted one model. Likewise, the aggregate measure, recoverability_a, positively impacted two models and negatively impacted two models. Finally, the percentage variable compostable_p showed the most consistent negative results, impacting negatively on four models and positively impacting one model.

The following subsections discuss the results of the regression models. In instances where coefficients are coloured green in Table 4, these had a positively statistically significant effect on performance. The results in red indicate a negative statistically significant effect. Variables showing mixed results for a measure (recycled content_a, recoverability_a, compostable_p), with positive and negative effects in some models and no effect in others, are coloured yellow.

Across the control variables, these were generally insignificant and in fact when these were significant, they were negative (1b, 2a, 4c). For example, as can be seen in model 1b, being an electronics firm reduced the overall environmental packaging performance. This highlights that there are some organisational factors that are important, although they may have a limited impact in terms of performance.

This variable showed statistically significant effects in all models except EU (3c) and other regions (3d). It was anticipated that there would be significant effects on models within the governance and strategy criterion, as these actions set the sustainability policy agenda across firms and thereby should have a positive impact on environmental performance (Aziz et al., 2012), supporting H1.

Design and procurement_a is a composite measure with 11 design and procurement policy requirements. The variable showed positive statistically significant effects on all models except North America (3b), EU (3c), Food (4a), and Health (4c). These findings suggest that there is more variation in terms of the role of design and procurement activities impacting performance. Therefore, it appears that H2a is partially supported.

As expected, the percentage variable reviewed_p showed more consistent results with only the EU (3c) and other regions (3d) being insignificant. Similarly, the percentage variable optimised_p was significant on all models except other regions (3d) and health (4c). These results indicate a high likelihood of these packaging circularity practice impacting environmental packaging performance across diverse firm types. Therefore, H2b and H2c are broadly supported.

The composite variable recycled content_a, which was used to measure a firm’s integration of recycled content into their procurement policy and at all three packaging levels (i.e. primary, secondary and tertiary), showed mixed results. It was positively statistically significant on performance across two models (3b, and 4c) and negatively statistically significant on one model (4b). Therefore, H3a is not supported.

However, recycled content_p, which denotes the proportion of a packaging composite derived from secondary rather than primary (i.e. virgin) resources, was found to predict performance in all models. These results align with the expectation that substituting primary raw materials for secondary raw materials improves circularity and hence enhances performance. Thus, H3b is supported.

The recoverability criterion consisted of four measures, including one composite and three percentages. In terms of recoverability_a, this measure showed mixed effects—negatively statistically significant on 1a (all firms) and 4d (other sectors) and positive on 1b (all firms with dummies) and 4b (Electronics). Thus, this result suggests that H4a is unsupported.

Surprisingly, compostable_p was found to reduce environmental packaging performance in the four models in which it was statistically significant, while it had a positive statistical significance in North America (3b). Whereas reuse_p was more consistent. It had a statistically significant influence on performance across seven models, suggesting variation in its applicability across diverse regions and sectors, including outside of Australasia (i.e. E.U, North America and other regions). This result was somewhat unexpected, as reusable packaging is a slowing resource loops strategy that enhances circularity (Bradley and Corsini, 2023). Designed recoverable_p was even more consistent. It showed positively significant effects across 11 models. Only other regions (3d) showed a statistically insignificant result.

Therefore, these results suggest that there are important differences between these three packaging circularity practices’ effects on performance. Firstly, while H4b is broadly supported due to designed recoverable_p being positively significant across 10 models, H4c is unsupported given the fact that compostable_p had several negative effects. Finally, H4d is partially supported as reuse_p had positive effects on seven of the models.

The disposal labelling criterion contained one dichotomous (disposal information_d) and one percentage (on-pack labelling_p) variable. Disposal information_d was significant in six models (1a, 1b, 2a, 2b, 3d, 4d). The results suggest that while this variable has partial support (H5a), there may be regional or sectoral inconsistencies in the application of the criterion. This contrasted with on-pack labelling_p, which positively impacted all models except 3b (North America) and 4b (Electronics), supporting H5b.

On-site waste_a, which relate to in-house policies to recycle various packaging materials, including paper and plastics, was found to have a positive significant impact on two models—4a (food) and 4c (health), suggesting H6a is marginally supported. Whereas, the percentage variable, diverted landfill_p, had positive statistically significant effects for eight models (1a, 1b, 2a, 2b, 3a, 3b, 4a, & 4d). Therefore, the results suggest H6b is broadly supported.

Problematic materials_a was significant on 3a (Australasia) and 4d (other sectors, thereby suggesting limited support for H7. APCO has the only framework to include this criterion, yet it would be assumed that firms addressing this would have a broader impact on their performance.

The APCO PSF aligns with other frameworks (e.g. Camilleri et al., 2023; Lekesiztürk and Oflaç, 2022; Liu et al., 2023) that combine design criteria (i.e. generative features) with a performance measure (an evaluative element) (de Koeijer et al., 2017). The APCO framework places considerable importance on concrete, objective commitments toward packaging circularity practices. While results broadly confirm that components of the six criteria affect environmental packaging performance, these appear to have differing effects based on a range of company features.

The following sections elaborate on the most salient packaging circularity practices that firms should apply to improve their performance and hence meet environmental packaging requirements. It then discusses key policies that will enable a successful implementation, which includes the corresponding differences between firm regions and sectors.

Based on the slowing, closing and narrowing resource loops dimensions of circularity (Bocken et al., 2016), environmental packaging performance is more strongly affected by narrowing and closing dimensions, which are operationalised via practices and policies that change packaging design and use recycled content. Specifically, narrowing resource loops requires design practices that optimise material flows throughout the supply chain. Closing resource loops can be achieved by designing for recoverability and by integrating recycled content, which relates to using secondary rather than primary (i.e. virgin) resources across the packaging system.

It was not unexpected that these three circularity practices more consistently predicted performance. The economic benefits they can create are well-known, based on technological maturity, market readiness, regulatory incentives and customer acceptance (Geissdoerfer et al., 2017; Ghisellini et al., 2016). In line with this, there is more urgency and importance being placed on design interventions that reduce the need to source raw materials upstream while mitigating the cumulative effects of packaging waste downstream (Reike et al., 2022).

The other three packaging circularity practices (compostable, reuse, and diverting on-site waste from landfill) showed less consistently significant effects on performance across the examined contexts. Compostable presented curious results as it was insignificant in most models, and when it was significant, it was mostly negative. It may be that the adoption of compostable packaging is more dependent on broader waste stream management in the supply chain, with fewer compostable packaging alternatives available (Lambert and Wagner, 2017).

Reuse showed more consistent results. Yet it did not impact performance in regions outside of Australasia (i.e. North America, the EU, other regions), or the electronics sector, showing that reuse as a slowing resource loops strategy is a less reliable predictor of performance than narrowing and closing strategies (i.e. optimising material efficiency, integrating recycled content and design for recoverability).

The lack of consistent influence of reuse is surprising. Reuse is a slowing resource loops strategy, considered to be highly effective circularity strategy when the same or multiple supply chain actors (e.g. pallets) and consumers (e.g. bottles) are given the opportunity and incentive to reuse, refill or return the same packaging (Bradley and Corsini, 2023; Mahmoudi and Parviziomran, 2020). A reuse system would circumvent the need to recreate the same packaging in the case of single use. Yet despite the circularity benefits, this study’s results suggest that the APCO framework does not necessarily reward reuse (i.e. slowing resource loops) strategies as consistently as design and secondary resource sourcing solutions (i.e. narrowing and closing). The reason for this could be that reusable packaging in some sectors faces challenges such as health and safety issues (Williams and Wikström, 2011), or that there are challenges in the establishment of reverse logistics packaging systems (Bimpizas-Pinis et al., 2022; Bradley and Corsini, 2023).

Lastly, diverting on-site waste from landfill was similarly consistent with reuse in its capacity to predict performance, although it did not impact on EU, other regions, as well as the electronics and health sectors, suggesting that this packaging circularity practice may not be applicable to a broad range of contexts. This is another surprising result, as it was expected that efforts of waste management within supply chains would result in greater circularity in all examined contexts.

Collectively, these results suggest that boosting performance in line with the APCO framework more profoundly depends on adopting upstream strategies that involve changes in packaging design (i.e. via optimisation and designing for recoverability) and the use of recycled content (Liu et al., 2023). The results also suggest that combining these upstream strategies with the downstream strategies (e.g. reuse and diverting on-site waste from landfill) may strengthen overall environmental packaging performance, since the complementary effects of both an upstream and downstream packaging circular system approach is likely to improve the overall packaging circularity, creating less waste in closed loops (Cozzolino and De Giovanni, 2023; de Koeijer et al., 2017; Niero et al., 2017).

This study’s results have highlighted several enablers that may enhance performance and facilitate supply chain integration. First, environmental packaging performance is strengthened by integrating circularity into strategy, which was shown to be significant across 10 models. These findings align with former research suggesting that circularity requires a holistic and collaborative organisational approach, emphasising the need to integrate new packaging processes, policies and practices at the strategic level (Fitzpatrick et al., 2012) along with well-coordinated routines for effective integration internally and externally within the supply chain (Hazen et al., 2021).

A second factor that impacts performance was the design and procurement policy. The results showed broad support across eight models, suggesting that improving environmental packaging performance in line with APCO’s PSF requires that packaging firms deliberately adopt the stipulated features, which include packaging designing or procuring packaging that minimise resource use, avoid hazardous materials, incorporate renewable materials, as well as design features that consider labelling standards for better handling and accessibility (APCO, 2026). Sustainable design and procurement policies align with conventional packaging design protocols (Aziz et al., 2012; Fitzpatrick et al., 2012).

A third factor impacting performance relates to disposal labelling. This criterion showed broad support for the adoption of on-pack labelling. Existing PSFs show strong support for the adoption of information to inform consumers and supply chain partners about appropriate and accurate packaging disposal, with some showing that its adoption improves recovery rates and reduces unnecessary landfilling (Lekesiztürk and Oflaç, 2022; Mattia et al., 2021; Zhu et al., 2022).

The results suggest that the Australasian firms were positively influenced by more of the assessed variables. This is most likely because these firms are more embedded within Australian packaging regulations and thus would be expected to show greater alignment with Australian sustainable packaging standards. Although there were differences across the modelled regions, Australasian, North American and EU-based firm performances were all commonly affected by three packaging circularity practices: optimising material efficiency, integrating recycled content, design for recoverability; however, North America firms showed positively significant effects of composability and diverting waste from landfill, whereas EU-based firms instead showed that on-pack labelling affected their performance. The differences between these regions may suggest a possible misalignment between the packaging standards in these regions and the requirements of the APCO PSF. Such misalignment has implications for Australasian firms wishing to comply with foreign packaging standards. However, these firms could adopt the three common packaging circularity practices of optimising material efficiency, integrating recycled content and design for recoverability as a global strategy to align packaging design with various jurisdictions. Local requirements can then be tailored depending on the targeted jurisdictions.

In terms of sector-level performance, the food sector’s performance was more consistently impacted by the APCO PSF compared to other sectors. The sector shared similarly positive results with the electronics and health sectors in several areas, including adopting governance and strategy policies, as well as integrating recycled content and design for recoverability practices.

Variation across regions and sectors may relate to contextual impediments. For example, health and hygiene waste restrictions may preclude certain packaging options, including recycling and reuse (Ramos et al., 2023). Nevertheless, the central theme of APCO to preference design and recycled content-focused circularity practices (i.e. optimising material efficiencies, integrating recycled content and designed for recoverability) facilitates decision-making in multiple sector-types, allowing them to focus their efforts to develop upstream, design-focused interventions for greater environmental packaging performance.

This study supports existing literature on the importance of adopting an integrated approach to the packaging development process (Pålsson and Hellström, 2016; Molina-Besch and Pålsson, 2016). Firms would be best served to avoid pursuing a circularity practice in isolation; instead, the results suggest the importance of firms adopting a strategic approach to packaging circularity, integrating a portfolio of circularity practices and policies that complement one another. By adopting the three packaging design and recycled content-focused practices concurrently (i.e. optimising material efficiency, integrating recycled content and design for recoverability), firms could reinforce priority outcomes by simultaneously contributing to reductions in virgin packaging material inputs upstream, while ensuring greater integration of reverse flows of packaging waste downstream (e.g. by ensuring easier recovery) (Cozzolino and De Giovanni, 2023; Fitzpatrick et al., 2012). Such an integrated approach to packaging circularity could enable a transition away from linear supply chains (i.e. which focus on efficient forward material flows) into circular supply chains, which seek to find economically viable structures that capture value from reverse material flows (Bimpizas-Pinis et al., 2022; de Koeijer et al., 2017).

Nevertheless, circular supply chain management has multiple practical implications. Firstly, as the packaging development process needs to consider logistical activities for efficient handling throughout the supply chain (Pålsson and Hellström, 2016; Molina-Besch and Pålsson, 2016), a portfolio of circularity practices requires cooperation and coordination policies that enable the alignment of multiple functions and partners to enhance environmental performance without compromising on core packaging functions along the supply chain at all packaging levels (Pålsson and Sandberg, 2020). By coordinating upstream with the needs of diverse internal (i.e. cross-functional) actors and external actors downstream (e.g. reverse logistics service providers that enable recovery and resource-sharing), firms can make trade-offs about effective packaging choices to enhance overall performance (Hazen et al., 2021; Pålsson and Hellstrom, 2016). Firms can adopt on-pack labelling standards to maximise recovery rates by facilitating between-partner handling.

Firms are recommended to adopt the practices and policies that develop circular supply chain management that focuses on collaboration. Stumpf et al. (2023) argue that collaboration bridges information asymmetries and process challenges to improve recoverability. Collaborating with supply chain members and designers to optimise material efficiencies can be done by reducing unnecessary physical attributes (Zhu et al., 2022). In addition, collaborative design strategies that homogenise materials, modularise components and avoid hazardous materials can reduce process challenges (e.g. end-of-life) such as mixed post-consumer recyclables, enabling more effective reverse integration (Liu et al., 2023). By adopting APCO’s design and procurement policy, firms can prevent unsustainable features such as hazardous and harmful materials, while ensuring adherence to best practice in packaging design and procurement.

By collaborating within circular supply networks, firms can minimise resource uncertainty and resource dependency, such as low demand and high costs, that cause a lack of supply of secondary resources (Bimpizas-Pinis et al., 2022). Establishing such viable circular supply networks may require firms, especially SMEs, to expand the scale of their collaborative partnerships to achieve the volume necessary for self-sufficiency and viability (Stumpf et al., 2023). This may involve forming new supply chain and sector alliances beyond familiar boundaries, a strategic attitude that is necessary to improve the interconnectedness of network resource cycles, which if not managed effectively, can accumulate significant uncaptured value (Koh et al., 2017). Additionally, such alliances should embrace blockchain technologies or big data analytics to boost traceability and transparency, enabling more effective intra- and inter-firm SCI (Kouhizadeh et al., 2023).

This study is not without its limitations. First, while the APCO PSF was useful in determining important predictors of sustainable packaging performance, the research did not have access to APCO’s specific weightings, making it difficult to determine the reasons for preferred practices. Future research should investigate the underlying priorities of regulators in other jurisdictions to determine which packaging circularity practices are considered most urgent.

Second, this study did not consider between-variable effects to understand how various continuous independent variables related to other comparable variables within or between different dimensions. This would have allowed for a more complex picture of the specific interactions among circularity practices. As the environmental impacts of actions can vary, having an improved packaging rating may not necessarily translate to a substantive improvement in the firm’s overall performance, mainly if packaging reflects only a small part of its environmental impact. Future research could examine interactions between variables to gain clearer insight into environmental impacts.

Third, this study did not factor in objective environmental implications regarding tons of waste or carbon impacts. While it was assumed that following the APCO PSF would ultimately improve the environmental outcomes, the models have no direct connection to these impacts. Future research should go beyond simple packaging rankings to explore the broader environmental consequences of such actions.

Fourth, there are multiple approaches to quantifying qualitative data related to corporate reports and communication (Beattie et al., 2004). In this study, we assessed robustness by comparing alternative models of subsets of data (Altay and Ramirez, 2010) as well as adjusting the regression models for endogeneity; yet, future research might consider undertaking other approaches such as fuzzy-set qualitative comparative analysis (fsQCA), which may allow the identification of archetypes within the data (Reimann et al., 2017), for example, firms that performed well or poorly.

Finally, while this study sought to factor in firm type (i.e. by examining whether a firm was publicly listed, where they were headquartered, and their sector), it is important to determine the developmental pathways required by firms to transition towards high-performing, fully integrated circular supply chains (Bimpizas-Pinis et al., 2022). Future research should seek to verify across regions and sectors how firms progress from linear to circular supply chains, for example, by exploring whether more mature CSC can more effectively adopt more difficult circularity practices such as reuse and compostable packaging.

As governments worldwide turn to circularity to regulate packaging, firms need greater clarity around the packaging circularity strategies required for compliance. This article contributes to the literature by identifying salient packaging circularity practices that firms should consider in transitioning to a circular packaging economy. The results suggest that environmental packaging performance in Australasia is predominately predicted by three key packaging circularity practices that (1) narrow resource loops by reducing packaging use within supply chains, and close resource loops by (2) facilitating downstream recovery through circular design and (3) by replacing primary (i.e. virgin) resource inputs with the insertion of more secondary (i.e. recycled) resources.

The results provide firms with clarity for the CE packaging development process, facilitating decision-making for the supply chain integration of essential circularity practices and policies that enhance environmental packaging performance, and hence assist with compliance with CE packaging regulation. Design changes that reduce packaging use and enable downstream resource recovery will require collaboration with multiple supply chain actors to enhance circularity. Additionally, collaboration within and across supply chains is needed to create reverse flows of secondary resources, reducing resource dependency and enabling viable replacement of primary (i.e. virgin) packaging inputs.

Similarities in packaging design specifications between regions may embolden decision-making for Australasian firms and other regions aiming to comply with global trade standards on sustainable packaging. This article assists a diversity of firms in understanding the prominence that packaging circularity practices have gained in determining regulation around sustainable packaging. Firms worldwide should apply circularity practices that predict strong performance in particular regions or sectors.