Company: KHC
Filing Date: 2025-04-10
Form Type: PX14A6G
Source: 0001214659-25-005723
Chunk: 3

Company: Kraft Heinz Co
Filing Date: 2025-04-10
Form: PX14A6G
Chunk 3
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 circular economy for plastics.

Flexible plastic packaging is especially susceptible to becoming plastic
pollution as its multi-layer and multi-material nature makes it virtually impossible to process in conventional recycling systems. The
largest corporate collaboration on plastic pollution, the Ellen MacArthur Foundation New Plastics Economy Global Commitment (Global Commitment),
defines recyclable packaging to include only those plastics that have a 30% recycling rate across multiple regions that collectively represent
at least 400 million inhabitants. With just 2% of households in the United States able to effectively recycle flexible packaging,
the packaging type falls far below the standard for recyclability and is widely regarded and unrecyclable.

Extended Producer Responsibility (“EPR”) is a system designed
to manage unrecyclable and recyclable packaging alike in which producers are held responsible for all or most of the costs of managing
disposable packaging at its end-of-life. Nearly 70 EPR laws for packaging have been enacted in countries and jurisdictions around the
world. Corporations could face an annual collective financial risk of approximately $100 billion should governments continue,
as expected, to require them to cover the waste management costs of the packaging they produce. In just the last few years,
five new laws to this effect were passed in Maine, Oregon, California, Colorado, and Minnesota.

EPR laws for packaging have a specific emphasis on financially discouraging
the use of difficult-to-recycle materials by imposing higher producer fees, known as dues, on these materials, a process known as eco-modulation.
The operating plans in each of the five states with EPR laws are actively being written, but current drafts propose that flexible packaging
should have one of the highest ranges of fees, or dues, on producers per pound. With 13% of its plastic packaging in flexibles,
growing EPR laws pose a significant financial risk to Kraft Heinz.

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https://www.unep.org/news-and-stories/speech/closing-end-plastic-pollution

https://www.businessforplasticstreaty.org/endorsers#brand-owners-and-retailers

https://ellenmacarthurfoundation.org/the-plastics-pact-network

https://recyclingpartnership.org/film-and-flexibles/

https://www.oecd-ilibrary.org/environment/extended-producer-responsibility-epr-and-the-impact-of-online-sales_cde28569-en,
p. 10

https://www.pewtrusts.org/-/media/assets/2020/07/breakingthepl