Extended Producer Responsibility: Why the bigger picture matters

Beyond the first wave of Extended Producer Responsibility (EPR) compliance, a bigger picture is emerging, one that creates as much opportunity as it does risk for businesses.

Many companies are now past the first major compliance milestones under U.S. EPR environmental regulations. This past year, organizations producing physical goods were required to track data and prepare reporting for a growing pipeline of EPR commitments across seven states in anticipation of the May 31 reporting deadline. Teams are still actively preparing California’s first source reduction plans due later this year in August, and organizations selling textile-related materials into California are registering with the producer responsibility organization, or PRO, by July 1 or risk losing their right to sell in the state.

On any given day, it is entirely appropriate (and necessary) to focus on getting this front-loaded compliance work right. Deadlines, reporting, registration, data validation and submission mechanics all matter, particularly since this work is subject to audit. But it is also increasingly easy to get stuck in the short-term details.

Managing this risk requires taking a step back to ask strategic questions: What is the bigger picture of EPR? And what does it mean for the future of doing business? When we zoom out, some compelling themes stand out.

The compounding effect of EPR

At a surface level, EPR compliance can feel like a state-by-state exercise, where each state designs its own framework, defines its own in scope materials, and sets its own reporting and fee structures. EPR is inherently fragmented because waste management has historically been handled at the state level, and there is little indication that a single, unified national approach will ever emerge (other than unified reporting deadlines). But this narrow view misses the compounding nature/force of the challenge. The perspective needs to shift from “this is a state-level exercise” to “this is a nationwide problem, happening at a disaggregated state level” in order to properly capture the real complexity of EPR.

For companies operating nationally, this means compliance does not scale linearly; it compounds. Each new state adds another layer of requirements and financial burden. What may feel manageable now across seven implemented states quickly becomes much more material as compliance obligations stack upwards of a dozen jurisdictions.

The momentum in adoption will only continue to increase. Despite emerging legal challenges aiming to stall or overturn EPR programs, such as recent lawsuits in Oregon, these efforts are unlikely to materially slow broader adoption. Despite being environmental in nature, EPR legislation has received notable bipartisan support, making it politically durable. Over the next three to five years, the number of states adopting EPR and implementing reduction goals is expected to increase significantly, indicating we are only past the first hurdle.

If we zoom out even further, the challenge intensifies for multinational organizations. What begins as multistate compliance is also multijurisdictional compliance, spanning countries and regions. Each jurisdiction may cover different materials, require different forms of reporting and different PROs to report to, and have different timelines.

The expansion of materials in scope

EPR is relatively new to the United States; globally, EPR has been around for a long time and has proven to be an effective policy tool for managing all sorts of waste streams.

While current U.S. EPR programs are focused largely on packaging and paper, this is not the endpoint. Other jurisdictions provide a clear preview of what comes next: more materials and deeper producer responsibility, including enforced material reduction objectives.

California’s emerging focus on textile waste flags exactly this kind of expanding scope and is widely viewed as the next frontier for EPR in the states. SB 707, the Responsible Textile Recovery Act of 2024, is the United States’ first EPR legislation focused primarily on textiles. Organizations with over $1 million in state-level annual revenue will need to fund end-of-life solutions for the products they place on the California marketplace, beginning as early as 2028. This approach mirrors similar legislation being proposed or already in place in other jurisdictions, including France, Spain, Portugal, the Netherlands, Ontario, Mexico and Chile (to name a few). Textile companies are already familiar with complex global supply chains, but EPR introduces new accountability at end-of-life, an area where visibility has historically been weak.

SB 707 also represents a departure from the historical use of a single PRO in the U.S. To date, packaging EPR programs have been managed by the Circular Action Alliance. As California expands EPR beyond packaging and into textiles, it has also selected a different PRO, Landbell USA, to manage this program.

Reframing EPR: From compliance risk to strategic opportunity

The third, and perhaps most important, shift required is conceptual: every regulatory risk has a corresponding opportunity—two sides of the same coin.

EPR legislation introduces very real financial and operational risks for companies that fail to adapt. For some organizations, total EPR fees will be large enough to force uncomfortable but necessary conversations about packaging strategies, plastic reduction, supplier selection, logistics models and product design. While these pressures may initially be viewed as burdens, they are intentionally designed to drive structural change. These hard conversations, forcing companies to reexamine how they operate, are one of the main objectives of EPR rules.

This level of market disruption is intended to create space for innovation. Companies that proactively rethink materials, reduce packaging weight, improve recyclability or simplify packaging structures can materially lower long-term exposure.

Indeed, a recent Ellen MacArthur Foundation report found that policy levers such as EPR are reshaping business models, noting that companies able to move beyond the initial regulatory hurdle and into more strategic decision making can either retain resulting cost savings to improve margins and competitiveness against linear models, or pass those savings on to consumers through lower prices to capture greater market share.

The potential upside can be difficult to recognize in the moment, particularly when organizations face significant EPR invoices and their focus is on determining how and where those new costs will be absorbed internally.

Looking ahead

As EPR continues to evolve, success will depend less on reacting to requirements and more on anticipating where they are headed. Organizations that embed this perspective into core business decisions will be better equipped to stay ahead of both risk and opportunity.