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On the path to a circular economy, there's no straight line | Greenbiz – GreenBiz

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This article is sponsored by WestRock.

The path toward a circular economy is more of an angled one than a straight line and more nuanced than the “all or nothing” language that is often employed in sustainability conversations. 

When I joined WestRock as the company’s new chief sustainability officer in December 2020, I came with the philosophy of working toward a more circular future, one step at a time, leveraging pivotal collaborations, and celebrating incremental successes. As a leading provider of differentiated paper and packaging solutions, we at WestRock are in an important position, not only to embody sustainable change, but innovate for it in a way that encourages our customers to adapt to a more sustainable packaging model. Here’s how we’re leading the way down the winding path to circularity. 

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Defining the Circular Economy

Every step of the way on the path to circularity we are thinking about how we can generate less waste and more opportunities to extend the usefulness of materials. The relationship packaging companies and landowners have with forests truly is symbiotic. We all want to keep forests healthy, so we can continue making the best use of this remarkable and renewable resource. So, at WestRock, we start with the trees. How can the company ensure forests are growing sustainably? How can the company ensure that the 10,000 private landowners WestRock engages with annually, and their stakeholders, are adequately educated on the importance of sustainable land management? Virgin fiber is an important part of the circular economy, and responsible oversight of this sustainable forest resource is critically important to WestRock.

WestRock’s Innovative Fiber-Based Solutions for Various Companies

The very nature of WestRock’s business model is circular — from producing fiber-based packaging to recycling the fibers from packages consumers use in the production of new packages. 

The key to effectively working toward a more circular economy is so much about knowing the right people to partner with and having the patience to see that incremental progress can have a long-lasting sustainability impact.   

As an Ellen MacArthur Foundation member, WestRock is connected with some of the greatest minds collaborating to work toward a more circular economy. With partners including the American Forest Foundation and the Sustainable Packaging Coalition, we are thinking about the circular economy at large, and at every stage of a product’s lifecycle — that means the company is resourcing, designing, reusing and recycling with circular economy principles at the center of its strategy.

With its automated packaging solutions, fiber-based alternatives to plastics and a portfolio of fiber-based packaging that is rightsized — and, in many cases, reusable, recyclable or compostable — WestRock is providing brands in the CPG space, and more, with insights on how they can incorporate fiber-based solutions into their products. WestRock’s customers are coming to us for a vision and plan to develop tailored sustainability solutions that support their sustainability goals. I remember growing up as a child, cutting the plastic six-pack rings before we threw them away for fear of the impact they would have on wildlife, so it gives me great joy to see WestRock innovate a fiber-based alternative, CanCollar, that gives soda’s plastic six-pack ring a more sustainable makeover.

We have to be good listeners. What is the market telling us? We’re listening to consumers, customers and beyond, including the investment community too. Right now, investors are telling us sustainability is a priority. On that note, I’m really excited that in 2020, WestRock was named to the DJSI World and DJSI North America Indices. 

Consumers and Sustainability: Navigating Competing Priorities Amid the Pandemic 

Consumers are actively looking for ways to reduce their impact on the environment moving forward.

I was intrigued and encouraged by the results of a WestRock Pulse Packaging survey to gauge consumer attitudes where we found 82 percent agreed it is important for brands to balance safety and concern for the environment when designing product packaging; there were notable increases in the demand for packaging that is easily reused, easily identifiable as environmentally friendly, and easily recycled. While the great debate at the grocery checkout has been “paper or plastic,” that conversation is heading into the aisles where consumers are holding products to a higher sustainability standard. 

WestRock is proactively coming up with solutions that help usher brands further and further away from the tradition of single-use plastics — challenging traditional notions of what should be plastic and innovating for fiber-based alternatives that perform as well, if not better, with less impact on the planet. 

I mentioned the Coca-Cola CanCollar earlier. That’s just one example of WestRock’s fiber-based plastic replacement innovations. Solving for tear resistance and theft deterrence, WestRock produced a fiber-based package for First Alert that replaced a fully enclosed PET blister clamshell with a NatraLock®  blister card, a sturdy, flexible, more sustainable alternative to traditional blister seal and clamshell applications. In the health and beauty sector, EcoPush® is an all-paperboard package that directly houses oil-based solids such as balm, solid perfume, deodorant and other oil-based solids. Not only is the exterior fiber-based, but by lining the interior with an oil-resistant paper barrier, WestRock was able to extend the fiber-based benefits throughout the packaging. Also in the health and beauty sector, the WestRock Paper Palette replaces all plastic elements used in ordinary makeup palettes with fiber. 

Innovating for fiber-based solutions that operate like plastic is just one element of working toward a more circular economy. Companies need to get active and get clear with consumer when talking about recycled content. There are so many myths and misconceptions. 

Here’s the thing, 100 percent recycled content is not a sustainable option at scale. Fibers can only be recycled five to seven times before they simply drop out of the papermaking process. We need to incorporate virgin fibers to increase the longevity of fiber cycles in packaging. Our minds love the tidiness of 100 percent, and our hearts connect with the passion of an all or nothing promise. But the truth is, virgin fibers play a pivotal role in promoting greater sustainability and performance, which is why WestRock prioritizes sustainable forestry as an invaluable aspect of recycled content. 

How WestRock Innovates for Its Own Clients

WestRock is seeing increased interest in tamper-evident packaging and anti-microbials. Our innovation team recently developed its BioPak Protect™, a fiber-based food container that features a tamper-evident pull tab seal similar to those used on mailer packages. We’re also seeing a lot of traction around increasing the recyclability of foodservice packaging. WestRock’s EnShield® Natural Kraft paper for foodservice packaging resists grease and oil stains by providing the same protection as poly-coating without the plastic. And with the food bowl industry booming, WestRock has introduced a new automation technology for the fast-growing food bowl segment, CP eMerge™ Combo  (a fiber-based alternative to plastic food bowls).

Of course, everyone is always looking for the rightsized packaging. WestRock’s BoxSizer®  intelligent right-sizing technology is the only machine on the market that can right size multiple preloaded box footprints arriving at random to the infeed without the need for changeovers. It does this with folding, not cutting, so no material is wasted. I am really excited about the work our team will continue to do, scaling right-size packaging options for our customers without compromising the product’s value. 

The Role of Education – Both Consumer and Sustainability, at large – in the Circular Economy

WestRock has 18 recycling plants across the U.S. that recycle 8 million tons of materials per year — which eclipses its 5.5 million tons of recycled fiber consumption. The company recycles more fiber than it uses. 

Through a partnership with The Recycling Partnership, WestRock is working to increase awareness of recyclability and educate consumers. In 2019, to help dispel the myth that corrugated pizza boxes are not recyclable, WestRock commissioned a study of the availability of recycling programs in the U.S. for corrugated pizza boxes. In 2020, WestRock delved into this further, conducting a grease and cheese study that concluded normal amounts of grease and residual cheese do not negatively affect the manufacturing of new products from this recycled fiber. This study was reviewed and endorsed by industry partners that validated the findings, confirming corrugated pizza boxes could actually be recycled at least seven times. This work will be expanded in 2021 to deliver Sustainable Choices — a pizza box recycling educational program — to pizza box customers and pizza consumers across the U.S. 

This is incredibly important because Americans consume A LOT of pizza, and those boxes are made of high-quality corrugated paper, as I previously mentioned. We’re looking at more than 600,000 tons of corrugated board a year that could be recycled from pizza boxes alone. 

As the largest pizza company in the world based on retail sales, Domino’s helped share this information with the launch of Recycle My Pizza Box — a hub of information about proper pizza box recycling where visitors can input their ZIP code to find out about recycling in their municipality. 

As we move forward, many e-commerce habits are going to stick. With more recycling happening at the curb instead of at stores, investments in improving residential recycling infrastructure will be necessary. WestRock invested $2 million to upgrade its Marietta, Georgia, facility in October 2020 to improve single stream recycling efficiency. We continue to consider other areas for investment and partnership to make curbside recycling more efficient. 

I’m also looking forward to expanding efforts to engage with family forest owners about how to sustainably manage their forests. It’s astonishing to think that family forest owners comprise the largest source of wood in the U.S.—36 percent compared to just 19 percent that is corporately owned. It’s essential to equip these families with the tools, education and resources they need to understand how to protect and promote sustainable growth.

How WestRock is Addressing Its Challenges 

There’s a regulatory landscape that’s shifting with the new federal administration. WestRock’s investments in its internal capacity enable the company to meet this moment. The company’s hiring of a chief sustainability officer and senior vice president of innovation, both with growing teams, is indicative of that commitment. The sustainability team works closely with the innovation team to drive strategy, communicate customer priorities, and sustainability opportunities enabling us to general innovative sustainable packaging solutions. 

I mentioned persistence before. Working toward a circular economy requires us all to be agents of change with focus. Everything is moving so quickly — from our news cycles to our ability to click a button on our phones and have a product at our door sometimes as soon as hours later.  This is a three-, five-, 10-year journey — change doesn’t happen overnight. True, lasting, sustainable impact is incremental and endures. By listening, partnering with stakeholders and offering innovative solutions, WestRock will continue to advance the circular economy, partnering with our customers to create a more sustainable future.

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Investment

Want to Outperform 88% of Professional Fund Managers? Buy This 1 Investment and Hold It Forever. – Yahoo Finance

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You might not think it’s possible to outperform the average Wall Street professional with just a single investment. Fund managers are highly educated and steeped in market data. They get paid a lot of money to make smart investments.

But the truth is, most of them may not be worth the money. With the right steps, individual investors can outperform the majority of active large-cap mutual fund managers over the long run. You don’t need a doctorate or MBA, and you certainly don’t need to follow the everyday goings-on in the stock market. You just need to buy a single investment and hold it forever.

That’s because 88% of active large-cap fund managers have underperformed the S&P 500 index over the last 15 years thru Dec. 31, 2023, according to S&P Global’s most recent SPIVA (S&P Indices Versus Active) scorecard. So if you buy a simple S&P 500 index fund like the Vanguard S&P 500 ETF (NYSEMKT: VOO), chances are that your investment will outperform the average active mutual fund in the long run.

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A street sign reading Wall St in front of a building with columns and American flags.

Image source: Getty Images.

Why is it so hard for fund managers to outperform the S&P 500?

It’s a good bet that the average fund manager is hardworking and well-trained. But there are at least two big factors working against active fund managers.

The first is that institutional investors make up roughly 80% of all trading in the U.S. stock market — far higher than it was years ago when retail investors dominated the market. That means a professional investor is mostly trading shares with another manager who is also very knowledgeable, making it much harder to gain an edge and outperform the benchmark index.

The more basic problem, though, is that fund managers don’t just need to outperform their benchmark index. They need to beat the index by a wide enough margin to justify the fees they charge. And that reduces the odds that any given large-cap fund manager will be able to outperform an S&P 500 index fund by a significant amount.

The SPIVA scorecard found that just 40% of large-cap fund managers outperformed the S&P 500 in 2023 once you factor in fees. So if the odds of outperforming fall to 40-60 for a single year, you can see how the odds of beating the index consistently over the long run could go way down.

What Warren Buffett recommends over any other single investment

Warren Buffett is one of the smartest investors around, and he can’t think of a single better investment than an S&P 500 index fund. He recommends it even above his own company, Berkshire Hathaway.

In his 2016 letter to shareholders, Buffett shared a rough calculation that the search for superior investment advice had cost investors, in aggregate, $100 billion over the previous decade relative to investing in a simple index fund.

Even Berkshire Hathaway holds two small positions in S&P 500 index funds. You’ll find shares of the Vanguard S&P 500 ETF and the SPDR S&P 500 ETF Trust (NYSEMKT: SPY) in Berkshire’s quarterly disclosures. Both are great options for index investors, offering low expense ratios and low tracking errors (a measure of how closely an ETF price follows the underlying index). There are plenty of other solid index funds you could buy, but either of the above is an excellent option as a starting point.

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Adam Levy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.

Want to Outperform 88% of Professional Fund Managers? Buy This 1 Investment and Hold It Forever. was originally published by The Motley Fool

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Business

Netflix stock sinks on disappointing revenue forecast, move to scrap membership metrics – Yahoo Canada Finance

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Netflix (NFLX) stock slid as much as 9.6% Friday after the company gave a second quarter revenue forecast that missed estimates and announced it would stop reporting quarterly subscriber metrics closely watched by Wall Street.

On Thursday, Netflix guided to second quarter revenue of $9.49 billion, a miss compared to consensus estimates of $9.51 billion.

The company said it will stop reporting quarterly membership numbers starting next year, along with average revenue per member, or ARM.

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“As we’ve evolved our pricing and plans from a single to multiple tiers with different price points depending on the country, each incremental paid membership has a very different business impact,” the company said.

Netflix reported first quarter earnings that beat across the board on Thursday, with another 9 million-plus subscribers added in the quarter.

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Subscriber additions of 9.3 million beat expectations of 4.8 million and followed the 13 million net additions the streamer added in the fourth quarter. The company added 1.7 million paying users in Q1 2023.

Revenue beat Bloomberg consensus estimates of $9.27 billion to hit $9.37 billion in the quarter, an increase of 14.8% compared to the same period last year as the streamer leaned on revenue initiatives like its crackdown on password-sharing and ad-supported tier, in addition to the recent price hikes on certain subscription plans.

Netflix’s stock has been on a tear in recent months, with shares currently trading near the high end of its 52-week range. Wall Street analysts had warned that high expectations heading into the print could serve as an inherent risk to the stock price.

Earnings per share (EPS) beat estimates in the quarter, with the company reporting EPS of $5.28, well above consensus expectations of $4.52 and nearly double the $2.88 EPS figure it reported in the year-ago period. Netflix guided to second quarter EPS of $4.68, ahead of consensus calls for $4.54.

Profitability metrics also came in strong, with operating margins sitting at 28.1% for the first quarter compared to 21% in the same period last year.

The company previously guided to full-year 2024 operating margins of 24% after the metric grew to 21% from 18% in 2023. Netflix expects margins to tick down slightly in Q2 to 26.6%.

Free cash flow came in at $2.14 billion in the quarter, above consensus calls of $1.9 billion.

Meanwhile, ARM ticked up 1% year over year — matching the fourth quarter results. Wall Street analysts expect ARM to pick up later this year as both the ad-tier impact and price hike effects take hold.

On the ads front, ad-tier memberships increased 65% quarter over quarter after rising nearly 70% sequentially in Q3 2023 and Q4 2023. The ads plan now accounts for over 40% of all Netflix sign-ups in the markets it’s offered in.

FILE PHOTO: Netflix reported first quarter earnings after the bell on Thursday. REUTERS/Dado Ruvic/File PhotoFILE PHOTO: Netflix reported first quarter earnings after the bell on Thursday. REUTERS/Dado Ruvic/File Photo

Netflix reported first quarter earnings after the bell on Thursday. REUTERS/Dado Ruvic/File Photo (REUTERS / Reuters)

Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.

For the latest earnings reports and analysis, earnings whispers and expectations, and company earnings news, click here

Read the latest financial and business news from Yahoo Finance

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Lawmakers pan Ben Gvir for ‘unforgivable’ tweet on alleged Israeli strike on Iran – The Times of Israel

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Italian FM says Israel gave US ‘last minute’ warning about drone attack on Iran

CAPRI, Italy (AP) — The United States told the Group of Seven foreign ministers that it received “last minute” information from Israel about a drone action in Iran early this morning, Italy’s foreign minister says.

Italian Foreign Minister Antonio Tajani, who chaired the meeting of ministers of industrialized countries, says the United States provided the information at session this morning that was changed at the last minute to address the suspected attack.

Tajani says the US informed the G7 ministers that it had been “informed at the last minute” by Israel about the drones. “But there was no sharing of the attack by the US. It was a mere information.”

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Early Friday, Iran fired air defenses at a major air base and a nuclear site near the central city of Isfahan after spotting drones, part of an apparent Israeli attack in retaliation for Tehran’s unprecedented drone-and-missile assault on the country last weekend.

In a communique following the three-day meeting, the ministers urged the parties “to prevent further escalation.”

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