While companies from all sectors will be able to use the function, CDP is urging those in some of the industries most prominent within the plastics value chain to move first. These industries include packaging and chemicals production, fashion manufacturing and retail and food and beverage. Also included is the fossil fuel sector; around 4% of the oil and gas produced each year is used to make plastic packaging and products.
Across these sectors, some 7,000 companies disclose through CDP.
The function will be voluntary to use. It does require users to split their plastics into packaging, polymers and durable plastics categories, rather than simply providing a headline figure.
CDP is stating that, while most companies are not fully measuring and disclosing the amount of plastics they produce, they are coming under increasing pressure from customers and investors to do so.
On the investor piece, six companies faced shareholder resolutions calling for increased plastic-related disclosures and more credible plans to reduce plastic use in 2022. Included in this cohort are McDonald’s and Amazon, the latter of which also faced a resolution on the topic in 2021.
And, in December 2022, 55 financial institutions formed a new ‘Plastic Solutions Investor Alliance’. This serves to evidence that investors believe that information on plastics would be useful to inform decision-making.
Investors will only become more engaged with plastics, CDP claims, as regulation is implemented to support global ambitions to halt the flow of plastic pollution into the environment.
According to Pew Trusts, companies face at least $100bn of annual financial risk in the 2040s if governments require them to cover waste management costs at expected volumes. And the Minderoo Foundation estimates that companies are likely to be ordered to pay at least $20bn in legal costs for plastic-pollution-related cases between now and 2030.
CDP’s global director for water security, Cate Lamb, said: “The scale of the plastic pollution crisis is no secret, so it’s not good enough that many companies, investors and policymakers still lack the robust data needed to drive the rapid transformation we desperately need.
“To be able to act effectively, companies must develop a robust understanding of how they contribute to the plastic pollution crisis and formulate equitable and just transition plans to address this. In turn, investors and policymakers need access to relevant, comprehensive and comparable data across the global economy on which to make better decisions.”
Mandatory dicslosures: On the horizon?
Lamb added: “As mandatory environmental disclosure gathers momentum, we encourage governments to include plastics in their mandatory disclosure regimes.”
The UK last year became the first nation to mandate climate risk reporting from large companies and other G7 members have vowed to follow suit, as have Switzerland and New Zealand. The UK is now firming up mandatory net-zero transition plan publications too. The US is also pushing to mandate indirect emissions disclosures from businesses despite Republican backlash.
On a global basis, the International Sustainability Standard Board (ISSB) is due to publish its first two standards in June. Its initial focus has been on climate mitigation. CDP is planning to integrate the requirements of the ISSB’s standards into its platform to help streamline reporting processes.
Nature-related reporting is also taking shape. The Task Force on Nature-related Financial Disclosures (TNFD) is due to publish its final framework later this year and, like the climate version, it may be mandated in the future. Science-based targets for nature are also nearing completion.
But plastic-related disclosures are in their relative infancy in comparison.
Moreover, there is evidence that businesses are placing less onus on reducing plastics than they were pre-Covid-19, with the pandemic and cost-of-living crises causing energy efficiency to rise to the top of short-term sustainability investment priorities. edie’s recent survey of professionals at 225 organisations revealed that only one-third are prioritising investment relating to plastics this year.