Companies Urged to Disclose “Plastic Footprint”

WASHINGTON, Jun 23 2014 (IPS) - The environmental cost of the plastics used by corporations producing consumer goods likely mounts to more than 75 billion dollars a year, according to a first-time valuation released Monday by the United Nations and others.

This estimate is based on the cost of everything from greenhouse gas emissions resulting from the production of plastics to the eventual impact on wildlife and ecosystems – particularly in the oceans – of the resulting trash. The environmental ramifications are also influenced by the cost of lost resources when plastic products are thrown away rather than recycled.

“Innovation can come from individual entrepreneurs, but also from the companies themselves – if they come under pressure to do so." -- Daniella Russo



Researchers say these estimates, broken down among 16 sectors, stand as a warning to corporate executives and their shareholders. Several industries are shown to be particularly vulnerable to potential new regulation, consumer demand or resource crunches regarding the future use or availability of plastic.

In order to insulate themselves from such shocks, companies are being urged to engage in a new era of disclosure around their use of plastics. In order to do so, corporate executives will first need to have an accurate understanding of the amount of plastics their companies are using in the first place – for some, a potentially new set of considerations.

“The research unveils the need for companies to consider their plastic footprint just as they do for carbon, water and forestry,” Andrew Russell, director of the Plastic Disclosure Project, an advocacy group that co-sponsored a new study on the issue, said Monday.

“By measuring, managing and reporting plastic use and disposal … companies can mitigate the risks, maximise the opportunities, and become more successful and sustainable businesses.”

The release of the findings coincided with the inaugural session of the United Nations Environment Assembly, in Nairobi. The assembly, comprising some 1300 government and industry leaders, constitutes the highest-level body the U.N. has ever brought together to discuss green issues.

“Plastics have come to play a crucial role in modern life, but the environmental impacts of the way we use them cannot be ignored,” Achim Steiner, the head of the United Nations Environment Programme (UNEP), said in a statement.

“[R]educing, recycling and redesigning products that use plastics can bring multiple green economy benefits – from reducing economic damage to marine ecosystems and the tourism and fisheries industries, vital for many developing countries, to bringing savings and opportunities for innovation to companies while reducing reputational risks.”

Efficiency competition

For the study, UNEP and the Plastic Disclosure Project collaborated with Trucost, a British consultancy that works to price natural resource use and did the related number-crunching. They say that transparency around plastics use – and, subsequently, greater efficiency in its use – could become a point of competition between corporations.

“As the impacts of plastic gain more prominence, companies may be expected by their stakeholders to improve rates of disclosure,” the report, released Monday, states.

“For example, this information is useful to inform institutional investors interested in protecting the value of their investments. Asset managers could engage with these companies to find out how they plan to manage the risks and opportunities of plastic.”

The food and soft drinks industries have the largest “natural capital” costs in terms of their plastics use, the research finds, constituting more than a third of the total. As such, these companies could be most vulnerable to risks to their reputation or sourcing.

On the other hand, toy companies, followed by manufacturers of athletic goods and footwear, have the highest proportion of their business based around plastic. Thus, they stand to experience the greatest potential economic impact from plastics-related problems.

Yet public disclosure on corporate plastics use remains poor, with only half of the 100 companies studied reporting on even a single related metric. Further, there is little pattern in terms of which corporations have made the decision to go public with this information.

“Currently, there is no correlation between a sector’s disclosure rate and its plastic intensity or absolute natural capital cost due to plastic,” the report notes.

“This means that sectors which face the most significant risks to their revenues … need to consider being more transparent about how they are managing the potentially material issue. It also suggests that disclosure may be more driven by external factors, such as legislation and reputation, rather than an internal understanding of risks and opportunities.”

Innovation opportunities

Around 280 million tonnes of plastic are manufactured globally each year, yet just 10 percent of this is thought to be recycled.

A huge amount of the resulting trash is ending up in the oceans, causing some 13 billion dollars’ worth of damage, according to new estimates from the United Nations. Just last week, President Barack Obama’s administration hosted a first-ever summit on ocean sustainability, with a key focus on plastics pollution.

For its part, the new report does not attempt to weigh out the use of plastics versus other materials, in terms of transport weight or ancillary impact on important goods such as food. Nor does it propose any great trend away from the use of plastic, urging rather that the material be used simply in the most efficient and sustainable manner possible.

Such a view is being applauded by the plastics industry. The American Chemistry Council, a leading lobby group here, “endorsed” the conclusion Monday, noting that the report overall “provides one data point that companies that manufacture and deliver a range of valuable consumer goods can use when assessing their products and processes.”

Yet some worry that the plastics industry is too fixed and insular to lead any process of innovation.

“The industry is represented by a very small set of companies that are heavily entrenched. They make most of the packaging we use, and they’re not very open to innovation and entrepreneurship,” Daniella Russo, the head of Think Beyond Plastic, a forum that pushes researchers and start-up companies to come up with new ways to address plastic pollution, told IPS.

Russo says it’s important to remember that some plastics present significant environmental challenges while others do not.

For instance, she notes, single-use packaging represents some 50 percent of plastics production and yet is destined purely for the landfill. Indeed, the UNEP report identifies such disposable packaging, along with Styrofoam, as the most significant problem plastics.

Yet Russo says that these also offer the most important innovation opportunities.

“This is a huge market, ripe for the taking,” she says. “Innovation can come from individual entrepreneurs, but also from the companies themselves – if they come under pressure to do so.”