As you Sow
As You Sow is pleased to announce the launch of the Plastic Solutions Investor Alliance, an international coalition of investors that will engage publicly traded consumer goods companies on the threat posed by plastic waste and pollution. Twenty-five institutional investors from four countries with a combined $1 trillion of assets under management have signed a declaration citing plastic pollution as a clear corporate brand risk and pledging to interact with leading companies to find solutions through new corporate commitments, programs, and policies.
We are pleased to be joined in our alliance by notable socially conscious investors including ACTIAM, Aviva Investors, Candriam Investors Group, Dignity Health, Domini Impact Investments, Hermes Investment Management, Impax Asset Management, Mercy Investment Services, NEI Investments, Robeco, Walden Asset Management, and many others (see declaration text for full list of participants).
Focus on Packaging
The group’s initial focus will be on plastic packaging. Twenty-five percent of plastic is made into packaging, making it the largest single use category of the material, and one where much negative impact has occurred. A significant amount of packaging is used for single use applications where materials are used briefly and then discarded. These materials can persist in the environment, partially degraded, for hundreds of years, causing well-documented damage to marine life, and could have a financial material impact by causing reputational damage. For example, earlier this month, brand audits conducted by activist groups identified packaging waste from several large publicly traded international consumer brands as among the top sources of collected waste in countries with insufficient waste infrastructure. Other material financial impact could result from new policy requirements for redesign of packaging and dramatically improved mitigation of post-consumer packaging waste.
Better scientific data released in the last three years indicating the problem is far worse than previously believed has led to a series of dramatic developments in recent months, elevating plastic pollution in the public consciousness, the media, and government.
- More than 1000 global environmental and social justice NGOs formed a movement called Break Free From Plastic, demanding permanent reductions in single use plastic and adoption of zero waste principles and programs.
- Nearly 200 nations at a UN Environment Assembly in Nairobi last December signed a resolution to eliminate plastic pollution in world oceans.
- In January 2018, the European Commission released a plastics policy strategy that could require all packaging in the EC marketplace to be recyclable by 2030 and lead to reduced consumption of single-use plastic, and a tax on plastic production.
- European supermarkets are introducing plastic-free aisles. UK retailer Iceland went even further, pledging to stop using all plastic packaging by 2023.
- Just this week, five of the G7 nations (but notably not the U.S.) adopted a plastics charter pledging to recycle and reuse 55% of plastic packaging by 2030, and “recover” all plastic by 2040, and significant reductions in unnecessary uses of single-use plastic.
We believe the influence of our community of socially and environmentally concerned investors can have a positive impact in this process due to our longstanding relationships with many companies.
While plastic has many beneficial uses, its production has grown exponentially for many years without sufficient regard to its environmental impacts. Plastic production is projected to triple by 2050, yet only 14% of plastic packaging is now collected for recycling. Oceans already contain an estimated 150 million tons of degraded plastic, with four to 12 million tons added annually. Scientists predict oceans will contain more plastic than fish by 2050 if no actions are taken. Nearly 700 species have been affected, doing an estimated $13 billion damage to marine ecosystems, including losses incurred by fisheries, and costs to tourism and for beach clean-ups.
Also, nearly all plastic is derived from fossil fuels. Plastic’s contribution to global warming is substantial with greenhouse gas emissions from the plastics sector expected to grow to 15% of the total global annual carbon budget by 2050.
Need to Assess Growth of Plastic Use
The inability to recycle or safely contain significant amounts of plastic packaging in landfills suggests that corporations and society need to carefully assess the continued growth of plastic use, especially for single use applications. If governments and industry cannot manage to recycle even one-fifth of plastic packaging, it is unclear how they can make sufficient progress to keep plastic out of rivers and oceans if production of plastic triples by 2050.
Reducing plastic pollution also makes demonstrable progress towards fulfilling multiple United Nations Sustainable Development Goals: Responsible Consumption and Production (SDG 12), Life Below Water (SDG 14), Life on Land (SDG 15), Good Health and Well-being (SDG 3), and Sustainable Cities and Communities (SDG 11).
Our group will prioritize initial high-level engagement with four large international consumer goods companies: Nestle SA, PepsiCo, Procter & Gamble, and Unilever. Companies that place plastic packaging on the market need to demonstrate awareness of these challenges and prioritize actions to resolve them. We will be engaging these companies and many others to:
- Transition plastic packaging to be recyclable, reusable, or compostable to the fullest extent possible.
- Disclose annual plastic packaging use.
- Set plastic use reduction goals.
- Develop alternatives to plastic for packaging purposes, especially for single use packaging.
- Acknowledge responsibility and play a significant role in funding and facilitating collection and recycling or composting of packaging in markets where they operate (i.e. producer responsibility).
- Support public policy measures on reducing plastic waste and broadening producer responsibility.
- Accelerate research on the potential for technology and innovation to provide solutions.