Plastic is forever: Investors need a more thought-through war on its production, not recycling

It’s very easy for companies to throw out big numbers about how much they are reducing their plastic footprint because it’s so awfully enormous to begin with. A WWF report found that “the production of virgin plastic has increased 200-fold since 1950, and has grown at a rate of 4% a year since 2000”. 

This week’s alarming Waste Makers Index Report by the Minderoo Foundation reports that in the next five years, global production of virgin polymers for single-use plastics could grow by more than 30%. 

By 2050, it is estimated there will be 7.2 billion tonnes of total plastic packing waste generated, and that at least 2.1 billion tonnes will end up in the natural environment. We are not just poisoning our planet and its wildlife, but doing so with a substance that also accelerates global warming, and indeed poisons ourselves. Just how dumb are we?

Thanks to the pioneering journalism of conservationists and films like Blue Planet II, these realities are penetrating into our thick skulls – the so-called ‘Attenborough Effect’. According to one survey, even consumers in the US (and the UK) now overwhelmingly want brands that do something about it (88% of them, combined). 

And focus on the producers and their financiers is intensifying. The Minderoo report found that in 2019 just 20 polymer producers accounted for more than half of all single-use plastic waste, with Exxon and Dow topping the list followed by China’s Sinopec. Significantly, the report also identifies the top shareholders in these producers and the banks lending them money. 

It is estimated that around 60% of all plastics used worldwide are used for food and drink packaging, and the main culprits were kindly listed for us by the Ellen MacArthur Foundation just before the first outbreak of Covid-19. The three biggest plastic polluters in 2019 were Coca Cola (2.97 million tonnes), PepsiCo (2.3 million tonnes) and Nestle (1.7 million). The major food retailers also play a role – according to the snappily titled New Plastics Economy Global Commitment Initiative, Walmart generates some 1.2 million tonnes.

For good reason, these sectors of the economy have therefore attracted attention from consumers, investors and governments. And yet, far too often, high-profile campaigns target issues that are frankly peripheral, and whose main purpose seems to be to make us feel better, rather than bring about real change. The UK is a particular culprit here.

Take plastic straws. Even straw activists Greenmatch argue it is barely 0.07% of the UK’s plastic waste. Likewise, we obsess about supermarket plastic bags, and yet do nothing to tackle the much larger problem of packaging in general. The UK’s largest retailer Tesco bans them completely now for its home delivery service, which can leave your groceries rolling around on the doorstep. This helps Tesco to boast about losing 3,500 tonnes of plastic, which sounds impressive until you remember that’s even less than the straws. I’m not suggesting we don’t penalise them, but stopping a few bags is not enough.

While a lot of corporate action looks suspiciously like greenwashing, government action is often also better at making headlines than affecting change. Before Covid, at least 127 countries had introduced legislation to penalise the use of plastic carrier bags. The UK Government’s Plastic Packaging Tax, which will come into effect in April 2022, will slap a £200 a tonne tax on plastic packaging with less than 30% recycled content. That sounds good, right?

Well, maybe not. Santiago Navarro, the CEO of Garcon Wines, listed the various shortcomings in a recent piece in Raconteur. “A tax of £200 per tonne on packaging that’s usually very light is also quite lightweight when it comes to its financial impact. If the average plastic packaging product weighs 50g, a penny of tax would be chargeable on that unit.” Lumping highly recyclable plastics such as PET in with problem materials such as polystyrene is also too simplistic – “not all plastics are created equal and not all have the same end-of-life performance when recycling for circular economy.”

Recycling itself may be a dangerous illusion. Even Natalie Fee, the CEO of ‘City to Sea’ told Raconteur we focus far too much on “recycling rates when we desperately need the government to take action on reducing the amount of plastic produced.” Of course, for years western countries shipped off millions of tonnes of materials to China for “recycling” in a classic ‘out of sight, out of mind’ strategy, until the Chinese stopped it. Sian Sutherland, the co-founder of A Plastic Planet went further in the FT: “Recycling is bullshit,” he said. “It is a fig leaf of consumerism – a way for us to appease our guilt.”

We need to stop using a permanent solution, plastic, for a temporary convenience, packaging. Plastic is forever. It takes 20 to 450 years to decompose. I keep thinking of that 1955 Cover of Life which showed a family with their hundreds of throw-away plastic items that "saved forty hours of washing up". 40 hours versus 450 years.

Fortunately, responsible investors are starting to take action. Activists at As you Sow scored a major victory last week after tabling a shareholder resolution to push Walmart into action. The group is also pressuring Target, Dr Pepper and PepsiCo. So far, Dr Pepper has agreed to a 25% reduction in single use plastics by 2025. A lot of As You Sow’s work is just trying to get companies to measure (and disclose) their plastic usage.

Greater clarity for shareholders is certainly needed at Amazon, which doesn’t disclose its plastic waste. There will be a shareholder vote on 26 May calling for a report to be sent to shareholders by December. Oceana accuses Amazon of putting the classic ‘chasing arrows’ recycling symbol on its plastic mailers, knowing full well that hardly any customers actually drop them off at recycling centres where they can be processed.

Shareholder pressure is also succeeding in persuading companies to explore the many alternative materials that are now out there, and that are compostable. Danimer Scientific has created a partnership with Mars Wrigley to create compostable packaging for their huge brand Skittles. Polymateria are doing some remarkably interesting work with their revolutionary ‘Biotransformation Technology.’

Not all companies are heroes in the plastics and packaging wars, however. The Guardian recently reported that chemical giants DuPont and Daikin had known the dangers of the so-called ‘forever chemicals” for years, but hid that knowledge from the Food and Drug Adminstration. These are the PFAS (or per and polyfluoroalkyl substances) – a class of about 9,000 compounds used in packaging such as fast food wrappers, carryout containers and paperboard packaging – that play an insidious role in contaminating the US water supply. It would appear that as fast as regulators move to ban a compound, chemists invent new ones that  are just as harmful to the environment. 200 million Americans’ drinking water is contaminated with them.

Did I mention how dumb we are?

Christopher Walker is a writer on business and politics. He sat for several years on the asset allocation committee of a major asset manager.