SMX (NASDAQ: SMX) completed a $5.35 million capital raise facilitated by Aegis Capital. That's more than excellent news for them; it also is for companies needing to reach stated goals in their mission toward accountable and sustainable packaging. That includes major brand owners like PepsiCo (NYSE: PEP), Unilever (NYSE: UL), and Colgate-Palmolive (NYSE: CL), which have recently announced that they will fall short in reaching their sustainable packaging objectives. This revelation, while disappointing, is not entirely surprising. In 2021, John Blake, a senior director analyst at Gartner, predicted this trend, highlighting the numerous challenges companies would face in pursuing ambitious environmental goals. Now, as 2024 draws to a close, it's clear that these challenges have become nearly impossible for many organizations, not necessarily because of intent but rather because of the lack of technological support needed to accomplish the transformational mission.

That's no longer the case- or an excuse. SMX (Security Matters) offers a solution to quiet the industry's growing woes. What does this mean for the future of sustainable manufacturing and packaging? A lot. And it could be one of those generational win-win propositions that both the world and investors can embrace. In no uncertain terms, SMX is offering the right things at the right time to enable sustainable manufacturing and packaging, a movement that began gaining traction six to seven years ago in direct response to increasing public awareness of global plastic pollution and the urgent need to combat climate change. In its early stages, the movement was marked by the development of bio-based plastics and programs to capture Life Cycle Assessments (LCAs) of packaging to increase recycling. However, the global financial crisis of 2007-2009 dealt a severe blow to these initiatives, as cost-cutting measures led to the increased use of multi-layer rigid plastics and high-barrier thin films—materials that, while economically advantageous, are notoriously difficult to recycle.

There's good news- although slowed, the initiative wasn't stopped. From 2018 to 2020, the industry witnessed unprecedented commitments to reduce or eliminate plastic usage, increase recycling rates, and curb reliance on single-use packaging. Many of these commitments were set with a 2025 target date. However, as Blake and his team at Gartner predicted, despite the great intentions, the global reliance on plastics and the lack of sufficient recycling and reuse infrastructure would make it nearly impossible for most organizations to meet these ambitious goals.

The Real World Reality of Complex Packaging

That's not entirely the companies' fault. The complexity of sustainable packaging is often underestimated by those outside of the packaging research and development (R&D) and converting industries. Plastics, for example, have been highly engineered over several decades to provide lightweight, safe, economical, and convenient benefits. However, these materials were never designed with easy or economical reuse or recycling in mind. Now, as companies attempt to unwind decades of innovation within a few short years, they have encountered significant technical and economic challenges.

One of the most significant issues is the shortage of high-quality, food-grade recycled plastics. This scarcity has created economic, quality, and regulatory hurdles that many companies struggle to overcome. Additionally, the supply chains and reverse logistics necessary for reusable packaging are still underdeveloped, requiring substantial investment to achieve the scale needed to make a meaningful impact.

As the year approaches 2025, many organizations are being forced to reassess their commitment to sustainable packaging. The original goals—such as making 100% of packaging reusable, recyclable, or plastic-free—were often adopted without thorough vetting by R&D, supply chain, quality, procurement, and manufacturing teams. While popular with consumers and beneficial to brand perception, these pledges are proving to be technically and economically unfeasible in the short term.

Pacing Ambition With Reality

In fact, the gap between the ambitious vision of sustainable packaging and the reality of its implementation has become increasingly evident. For packaging materials to be genuinely recyclable, they must be recycled at scale, which requires greater industry collaboration and government intervention. Moreover, the complex nature of packaging—where product safety, transport efficiency, and economics must all be considered—means that simply changing the packaging is not a viable solution.

The European Commission's recent announcement of an infringement procedure against all 27 EU Member States for failing to meet legally binding collection and recycling targets underscores the global scale of the problem. The Packaging and Packaging Waste Directive, which expected Member States to recycle 55-80% of packaging waste by the end of 2008, has been widely missed. Even today, countries across Europe are laboring to meet these targets, with the vast majority falling short of the Waste Framework Directive's 2020 goals.

The failure of EU Member States to meet their recycling targets is a stark reminder that the world needs innovative solutions to tackle the waste crisis. This is where SMX (Security Matters) marking technology could play a crucial role.

A Game-Changer for Sustainable Packaging

SMX technology is a cutting-edge solution developed by Security Matters that offers a promising approach to overcoming the challenges faced by the packaging and manufacturing industries. Unlike any other known tracking technology, SMX's invisible marker system can be permanently embedded into virtually any liquid or solid material, allowing for accurate tracking and verification throughout a product's entire lifecycle. This technology has the potential to revolutionize recycling by providing greater transparency and traceability in the waste management process.

For instance, SMX technology, which is blockchain inclusive, could help identify and sort different types of plastics more efficiently, ensuring that high-quality, food-grade recycled materials are separated and reused effectively. This would address the current shortage and improve the overall quality of recycled products. Moreover, SMX technology could facilitate better monitoring of packaging throughout its lifecycle, enabling companies to ensure that their materials are being reused or recycled as intended.

In addition to its recycling benefits, SMX technology could also support companies in meeting their regulatory obligations. By providing a reliable method for tracking and verifying packaging materials, SMX could help organizations demonstrate compliance with increasingly stringent packaging laws and regulations. This would reduce the risk of legal repercussions and enhance the brand's reputation by showcasing and following through with its commitment to sustainability.

Collaboration Aligned With Innovation

Indeed, the packaging industry's ambitious targets should be applauded for driving progress. Still, it's clear that a new approach is needed to overcome the challenges that lie ahead. Organizations must take a pragmatic approach to sustainable packaging, leveraging the lessons learned by early adopters and understanding the limitations and opportunities specific to their regions. That's a big step forward, but only one of the ones that's needed.

Greater collaboration between industry stakeholders and government bodies is also essential to developing the infrastructure needed to support sustainable packaging at scale. Investment in innovation, such as SMX technology, will be crucial to overcoming the technical and economic barriers that have hindered progress thus far. And we look to the future, what has been exposed as being undeniably vital, is that companies maintain transparent communication with stakeholders, including consumers, about the challenges they face in meeting their sustainable packaging goals. By acknowledging issue complexities and investing in innovative solutions, the industry can chart a new course toward a more sustainable future.

This time, by utilizing available technologies like the one SMX provides, major companies and entire nations have a better chance than ever to meet their recycling mandates to address the global waste crisis. Technologies like SMX offer more than a glimmer of hope; they provide the tools needed to improve recycling rates and ensure that packaging materials are managed responsibly throughout their lifecycle. With SMX technology integrating seamlessly into that intention, that goal can be accelerated, which is more than helpful to companies, it helps protect the planet for future generations. Those reasons may be why SMX stock is higher by over 88% in September. After all, great stories are often hard to contain.

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