Turning the tide on plastic waste

With the UK government set to ban some single use plastics, and environmental law firm ClientEarth filing a case against Danone for lack of disclosure and pollution across its value chain, we’re turning our attention to the space plastics fill in the ESG sphere. We’ll look at the challenges faced, and what asset managers can do to minimise risk while optimising returns.

Plastics pose significant risks to human health and the environment. The presence of plastic in our oceans is a major issue that could have far-reaching implications for future generations. There is an estimated 75 to 199 million tons of plastic waste currently in our oceans, with a further 33 billion pounds of plastic entering the marine environment every single year.

Microplastic particles have not only been found in deep-sea marine life, but vegetables, raindrops and the human body. Environmental health and human health are inextricably linked. 

The need for change

Businesses are becoming increasingly aware of the ESG considerations around plastics use and disposal, and rightly so. To help cover the cost of collection and safe disposal, there’s potential for implementation of virgin plastic taxes or extended producer responsibility fees, which could cost up to $100 billion per year globally. Companies may also risk losing their social licence to operate.

Disappointingly, but unsurprisingly, investors and policymakers lack transparent, full and comparable data on the production, use and disposal of plastics across the global economy. In order to evaluate investment performance, corporate disclosure at scale must be transparent. There must be full visibility across value chains in order to utilise their power for delivering sustainability goals.

Maximising profits and social and environmental impact

Asset managers must become involved in this movement, as ESG risks and opportunities can have a significant impact on the returns of their investments. Asset managers should consider investing in both companies with clear recycling targets, as well as those that provide alternatives to plastics, e.g. Renewable packaging firms. With roughly half of all plastics being single-use, enforcing recycling rates will have a meaningful impact on the environment.

By raising awareness of, and tracking, the ESG-related risks associated with plastic use and disposal, asset managers can play a crucial role in influencing positive change. Doing so will not only benefit ESG portfolios but also help protect our planet. Drop us a line for support in getting started!


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