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- Sustainable Shift: Lego aims to replace oil-based plastics with renewable alternatives by 2032, despite higher production costs.
- Financial Commitment: The company is investing heavily in renewable materials, paying up to 70% more for certified sustainable resins.
- Market Leadership: By absorbing these costs, Lego is setting a new standard in sustainability, without passing expenses on to consumers.
Lego’s Bold Move Toward Sustainability
Lego, the iconic toymaker, is taking a significant step toward sustainability by committing to replace the fossil fuels used in its bricks with pricier renewable and recycled plastics by 2032. The company reported a 26% profit increase to 8.1 billion Danish krone ($1.2 billion) in the first half of the year, demonstrating strong consumer demand and a robust financial position.
In an interview with CNN, CEO Neils Christiansen highlighted the company’s global appeal, stating, “Our product portfolio resonates super well across ages and interests.“
Despite a challenging market environment where major competitors like Hasbro have faced declining sales, Lego’s commitment to innovation and sustainability appears unwavering. The company has tested over 600 different materials in its quest to find a suitable alternative to oil-based plastics, with a goal to fully transition by 2030. However, the shift comes with challenges, including a significant increase in production costs.
Investing in a Greener Future
Lego is now focusing on gradually reducing the oil content in its bricks by investing in certified renewable resins. This shift could see production costs rise by up to 70%. “This means a significant increase in the cost of producing a Lego brick,” Christiansen told Reuters, underscoring the financial impact of this sustainable transition.
The company plans to absorb these costs, leveraging its strong financial performance and family ownership’s commitment to sustainability. “With a family-owner committed to sustainability, it’s a privilege that we can pay extra for the raw materials without having to charge customers extra,” Christiansen said.
By 2026, Lego aims to ensure that over half of the resin it uses is certified according to the mass balance method, a sustainable approach that traces the origins of materials through the supply chain. This is a notable increase from the 30% achieved in the first half of 2024.
Challenges and Market Dynamics
Lego’s move towards renewable materials is happening amidst a surplus of cheap virgin plastics, driven by large oil companies’ investments in petrochemicals. Despite the market’s infancy, with most feedstock being allocated to subsidized biodiesel, Lego’s suppliers are innovating by using bio-waste such as cooking oil and food industry waste fat to replace virgin fossil fuels.
Christiansen remains optimistic about the future of sustainable materials. “We sense more activity and willingness to invest in this now than we did just a year ago,” he stated, though he did not disclose specifics about suppliers or pricing.
Related Article: LEGO’s New Campaign Promotes Brick Reuse and Sustainability with Expanded Recycling Programs
As the industry leader, Lego’s commitment to sustainability not only sets a high bar for competitors like Hasbro and Mattel but also positions the company at the forefront of a significant shift in the toy industry toward more eco-friendly practices. While Hasbro and Mattel have made strides, neither has committed as firmly or publicly to a full transition away from virgin plastics.
Lego’s strategic move to replace oil-based plastics with renewable alternatives reflects its long-term vision for sustainability. By absorbing the costs of this transition, the company is not only leading the market but also setting a precedent for others to follow. As Christiansen puts it, this approach is both a challenge and a privilege, one that aligns with Lego’s enduring commitment to environmental responsibility.