Average weights based methodologies (average bill of materials) Guidelines and requirements Introduction In order to produce a Company Report for submission to Éco Entreprises Québec (ÉEQ), companies must compile the quantities of designated materials used in the containers, packaging and printed matter they generate. To do so, they must establish the weight of each packaging item and accurately classify materials according to specific categories and sub-categories. They may compile the required data by weighing each item or obtain the information from manufacturers or suppliers. However, if a company markets many different reportable products and/or the information is not available from suppliers, significant effort and resources are necessary to complete the task. From now on, companies may simplify weighing and classification tasks by using representative average weights and characteristics of reportable product packaging. This methodology, known as average bill of material (ABOM), allows a company to group together products with similar packaging weights and characteristics, and to weigh only the products that best represent the group. The resulting weight and material classes for these products are then attributed to all products in the same group (an ABOM group). Detailed methodology and requirements Once all reportable products have been identified by the company (as a brand owner or first supplier of products intended for consumers), sales figures must be extracted from the accounting system to determine quantities of products sold, directly or indirectly, in the province of Quebec during the calendar year. The resulting information should preferably be compiled in spreadsheet format. The company may find it useful to also extract identifying information along with product sales figures in order to appropriately classify the products, including a detailed chart of accounts assignment for each product, per department, sub-department or category, etc. This information may be useful to identify and group products with similar packaging characteristics. Creating an ABOM (products group) The information extracted from the sales report will be useful for identifying groups of like packaging materials and creating ABOM groups. Typically, the most detailed level of classification is used, and each classification level is examined to determine if products in the each group are considered similar in terms of types and quantities of packaging materials used. Where packaging materials differ, they can be further broken down into smaller ABOM groups. PAGE 1 OF 5
Requirements Creation of groups: When grouping products with similar packaging in terms of size, weight and material, ÉEQ minimally requires: A majority of products to have the same primary type of packaging in the same material sub-category (ex.: cardboard box, etc.) A majority of products to have similar sizes and packaging weights In order to simplify the process, ÉEQ may accept: A group that includes similar products with different packaging types, weights or sizes, as long as these products do not represent a significant portion of the total sales of each product group Establishing the characteristics of an ABOM Once ABOM groups have been defined, sample products are then selected to represent each ABOM group. The sample size for each ABOM group should be directly proportional to the diversity of items in the ABOM group. Where an ABOM group is completely homogeneous (e.g. an ABOM consisting of only 250 ml steel cans), a sample size of one is appropriate. Otherwise, samples of the most representative products (ex.: top sellers) are to be used. The ABOM method requires that you determine the weight and material sub-categories for packaging materials associated with your reportable products. Options for identifying weights and material sub-categories are: Option 1 Obtain lists of weights and technical characteristics of materials from vendors or industry associations, where available. If this method is selected, steps should be taken to ensure the accuracy of weights provided, such as random verification. This could include a discussion with the vendor as to how the weights were determined. Verify that processes are in place to obtain accurate weights (i.e. not estimated weights). Option 2 Physically examine packaging components to determine their weight and general material categories. This may require the acquisition of a weight scale accurate to 0.2 grams in order to determine the weight of each packaging component. For either option, care should be taken to include all components, such as printed materials (ex.: user guide), and to exclude packaging items that are not provided to the end consumer (ex.: secondary and tertiary packaging). Additionally, durable packaging items should also be excluded as stipulated in the 2014 Schedule of Contributions (3.3.1 f). Where the products themselves are included in classes of reportable materials (such as magazines and paper for general use ), the weight of these products should be included in reported weights. PAGE 2 OF 5
Requirements Sampled products: In establishing the weight and material sub-categories of packaging components associated with the sample products, ÉEQ minimally requires: The sampled products to be representative (in terms of packaging weight and material), of: a significant proportion of sales in their respective group; the majority of the products in their class. Delisted products or those that were not sold during the period to be necessarily excluded from sampled products. The weight and sub-categories of materials to be updated at least once every three years. The weight and sub-categories of materials relating to sampled products for which there is a change in packaging to be updated during the year in which the change occurred. The data used for sampled products to be relevant to the reference year for which it will be used. For example, if product packaging changed this year, it cannot be used to report materials in a previous Company Report. Packaging components the consumer disposes of separately from the main packaging to be considered distinctly in weight and material sub-categories. In order to simplify required efforts, ÉEQ may accept: Given that the quantity of each product sold may change, sampled products may not be among the best selling or most representative products. In that case and only in that case, ÉEQ will accept an ABOM group used in one of the two previous reports. It is understood that the ABOM group must be updated within a three-year period. The weight of each packaging material can then be incorporated into the spreadsheet. Once all the weights and material sub-categories of sampled products are determined, the average weight per material in each ABOM group can then be calculated on the spreadsheet. ABOM group weights can be calculated using a straight average or a weighted-average of the weights in each material sub-category. For example, should product A be a 50 g steel can with a sales figure of 30, and product B be a 54 g steel can with a sales figure of 10, the straight average would be 52 g and the weighted-average would be 51 g. The calculation method must be the same for all ABOM groups. Although both methods are accepted, ÉEQ recommends the use of the weighted-average (30 x 50 + 10 x 54 = 2,040 / 40 = 51 g). PAGE 3 OF 5
Once ABOM group weights have been determined, the weights associated with each material sub-category can be multiplied by total sales quantities of all products in each ABOM group. From there, the total weight for each material sub-category is determined for reporting purposes. Requirements Products with no packaging: Products that have no packaging (ex.: sold in bulk) must be carefully considered in the establishment of an ABOM methodology. ÉEQ requires that these products be appropriately compiled so as to do not distort the ABOM group. Two options are allowed: Option 1 Identify products with no packaging and exclude them from ABOM consideration. No packaging information is associated to these products, and sampled products for an ABOM group are only those that have packaging. ÉEQ recommends this option. Option 2 Should products with no packaging be included in the sampled products of an ABOM group, the ABOM amount must be applied to all products of the group, including those with no packaging. In this way, products with no packaging are attributed ABOM characteristics. Tip - Hangtags A separate ABOM group can be created to report all products that have only hangtags as packaging. Maintenance of the ABOM system Once these processes have been established and your spreadsheet developed, the preparation process for future Company Reports should be much easier. However, material weights and categories should be checked regularly to ensure that they still reflect the products being marketed. ABOM categorizations should also be regularly examined to ensure they constitute reasonable groupings and each ABOM s packaging materials profile is still accurate. If not, the ABOM grouping and calculations should be revised accordingly. As previously indicated, sampled product characteristics must be updated at least every three years, and delisted products or products with no sales are to be excluded. PAGE 4 OF 5
Requirements Information and document retention: As prescribed in the Schedule of Contributions, companies must keep all documents and information used to establish reported quantities of designated materials for at least five years. For a company using an ABOM methodology, this notably includes: Sales records for all products marketed in Quebec and ultimately intended for the consumer The specific ABOM group to which each product is associated The list of all products used as samples for each ABOM Calculations relating to each ABOM group s specifications (weights and material sub-categories) Calculations of total marketed quantities of each designated material using the ABOM methodology Other issues ÉEQ s minimal requirements for methodologies using average product characteristics, such as the ABOM methodology, are applicable starting with the 2014 Company Report. These requirements cannot be applied retroactively to prior Reports. ÉEQ allows the use of methodologies using average product characteristics in order to simplify contributors reporting process. These methodologies must not be implemented to deliberately lower quantities of designated materials marketed or payable contributions. ÉEQ reserves the right to refuse any methodology that does not adequately reflect the marketed quantities of designated materials and payable contributions. ÉEQ will be pleased to provide assistance to companies who plan to implement a new methodology based on average product characteristics or review an existing methodology, or wish to obtain ÉEQ s approval prior to implementation. Contacting Éco Entreprises Québec ÉEQ s team is available to assist you in the reporting process, from material classification, to methodology or deduction questions. Contact us at 514-987-1700 or 1-877-987-1491 or by email at service@ecoentreprises.qc.ca. Source Adapted by Éco Entreprises Québec from Multi-Material British Columbia (MMBC) reference guide: A Guide to Help Businesses Meet Their Recycling Obligations in British Columbia, Revised August 6, 2013, which was integrated into the CSSA 2014 National Stewards Guidebook. PAGE 5 OF 5