Earth Day 2018 is focused on ending plastic pollution and “fundamentally changing human attitude and behavior about plastics.” Although more work is needed, some positive change is already happening. In this blog article, we examine some of the impacts of plastic pollution on our oceans, the regulatory and industry developments being implemented to curb it, and the role investors can play to reduce plastic ocean waste.
Earth Day is a time to reflect and to act to protect the health of our planet. In 2018, it is also a suitable moment to reflect on plastic, the harmful impacts of plastic waste on our environment and society, and the ways industry can curb consumer plastic use and waste.
The EU Commission reports that 322 million tonnes of plastic was produced globally in 2015. This amount is expected to double over the next two decades. Of particular concern is discarded plastic that is not reused or recycled but becomes ocean waste. It is estimated that between 5 and 13 million tonnes of plastic enter our oceans each year, mainly via rivers from China, Indonesia, Vietnam, Thailand and the Philippines, according to the Ocean Conservancy.
In a marine environment, plastic waste breaks down into smaller particles and may be ingested by marine life, potentially endangering hundreds of ocean species. In addition, plastic particles have been found in people’s food and water as well as in the human body, and the impacts of this exposure on human health are unknown.
Plastic Pollution is Growing
Excessive plastics production and consequent plastic waste is a complex problem requiring coordinated action from government regulators, non-governmental organizations, businesses and consumers. Single-use plastics such as bottles, plastic bags, straws, utensils and coffee pods are receiving particular attention from regulators. However, microplastic particles, which can come from textiles, personal care products or from larger plastic products like bottles, are present in the ocean in the trillions and are far more difficult to manage.
Fortunately, there are signs of positive, multi-stakeholder momentum towards finding solutions to the global problem of plastic ocean waste, which should give us cause for cautious optimism.
Notable regulatory or international developments
Regulatory action on plastic reduction is not new. Bangladesh, for example, banned plastic bags in 2002, mainly because they contributed to severe flooding. However, heightened awareness of the effects of plastic waste on marine environments, as shown in documentaries such as the Blue Planet series, is now spurring broader action to reduce plastic ocean waste. In December 2017, almost 200 nations signed a U.N. resolution to eliminate plastic ocean waste. (This non-binding resolution fell short of setting specific plastic reduction targets).
Below are some other examples of significant regulation action in recent years:
EU: The European Commission launched the European Strategy for Plastics in a Circular Economy on January 16, 2018. This is intended to lead a transition to a more circular model of plastic production. The strategy aims to make all plastic packaging reusable or recyclable by 2030 and calls on business to make commitments toward this goal.
China: New restrictions on the importation of plastic waste came into force in China on January 1, 2018. These new rules have put pressure on developed nations in the EU and UK to increase their own plastic recycling efforts.
Taiwan: An example of positive momentum in Asia, Taiwan has introduced surcharges for single-use plastic bags and plans to ban plastic drinking straws, starting with food and beverage outlets in 2020. By 2030, the country plans to ban plastic bags, utensils and cups.
France: The country’s groundbreaking ban on plastic single-use plates, cups and utensils will come into force in 2020. France has also pledged to recycle 100% of plastics by 2025.
UK: A recent study suggests that the UK’s plastic bag tax, implemented in 2015, has successfully reduced plastic ocean waste. The UK is also considering a deposit scheme for plastic bottles.
US: Not all governments are aligning toward policy intended to reduce single-use plastic. For example, US states Michigan, Arizona, Idaho and Missouri have passed legislation preventing municipal bans on single-use plastic bags in recent years.
Focus on innovation
The Ellen MacArthur Foundation has been instrumental in raising awareness of the issue of plastic waste as well as other circular economy issues. Aiming to create “a New Plastics Economy”, the foundation has catalyzed action from both regulators and industry. In January 2018, the foundation announced another round of winners for its New Plastics Innovation Prize. Prize-winning technologies include packaging created through nanoengineering, packaging using recyclable magnetic coatings, and packaging composed of wood, plant waste or seaweed, for example. Companies that commercialize such innovative solutions are likely to provide sustainable investment opportunities in the years ahead.
Consumer Goods companies are taking broad industry action to reduce their “plastic footprint”. Industry partnerships such as the Bioplastic Feedstock Alliance may accelerate knowledge-sharing and innovation among industry participants, resulting in new methods for reusing or recycling plastics. Companies transitioning to sustainable packaging can benefit from savings in packaging and transportation costs. These companies are also likely to receive a reputational boost as environmentally consciousness businesses and can stay ahead of the regulatory curve on plastic packaging.
Notable company commitments aiming for 100% sustainable packaging by 2025 or sooner include Amcor, Evian (Danone), L’Oréal, Marks and Spencer, PepsiCo, The Coca-Cola Company, Unilever, and McDonald’s.
What can investors do?
Investors can continue to engage with Consumer Goods companies on their commitments and initiatives to reduce plastic packaging or to ensure 100% renewable/recyclable plastic packaging where plastic is used. In addition, investors should look for annual reporting on progress against commitments.
Investors should ensure that companies developing or using bioplastics are also promoting the reuse/recycling of plastics through takeback or recycling programmes. Biobased plastics, though less emissions-intensive than traditional plastics, can become plastic ocean waste if not properly recycled.
In addition, investors can inquire whether companies are engaging in consumer awareness and education campaigns on plastics reuse and recycling, as changes in consumer behaviour are needed to reduce plastic ocean waste.
Learn more about the Earth Day 2018 campaign to End Plastic Pollution.
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