This is according to an analysis conducted by CDP, the non-profit organisation managing the global environmental disclosure system, encompassing disclosures from nearly 3,000 companies with a combined market capitalisation value exceeding $25trn.
In spring 2023, CDP opened a new function on its disclosure system enabling companies to report their plastics production and use.
Almost a year in, its analysis reveals that while almost half of these companies (42%) have taken the initial step of mapping out where plastics are produced and used within their value chains, only 21% of companies acknowledge risks associated with their plastic-related activities.
Additionally, 70% of companies have yet to evaluate the impacts of their plastic-related operations on the environment and human health, and 64% have not set targets for managing their plastic-related impacts, including plastic product usage and waste management practices.
The research underscores that these companies are vulnerable to supply chain disruptions, waste management fees and regulatory challenges, particularly with the proliferation of plastic-related legislation in more than half of G20 countries.
According to Pew Trusts, companies will 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.
Nevertheless, CDP highlights a cause for optimism, as approximately half of the companies yet to take action intend to map their impacts and establish targets within the next two years.
CDP’s head of sustainable business Nathan Cole said: “The fact that 3,000 companies disclosed voluntarily disclosed on plastics in this pilot year is an incredibly positive first step. Our findings show how much actionable data on plastics is needed.
“Governments must seize this once-in-a-lifetime opportunity and create the enabling environment companies need by agreeing an ambitious Global Plastics Treaty, with mandatory corporate disclosure as a core element.”
Corporate support for mandatory disclosures
CDP stresses that enhanced transparency regarding plastic footprints, achieved through ongoing corporate data disclosure, will assist companies in devising strategies to minimise their plastic usage and associated pollution.
It is urging governments to expedite this process by integrating mandatory corporate disclosure on plastics into the Global Plastics Treaty negotiations taking place in Ottawa, Canada, later this month. These negotiations are being held in the hopes of the Treaty being finalised before the end of the year.
About 37 companies, collectively valued at more than $270bn in market capitalisation, have endorsed CDP’s call for mandatory disclosures, asking governments to provide a level-playing field and regulatory certainty.
Cole added: “As plastic use continues to rapidly increase, our time to effectively limit its most dangerous impacts shrinks. We must accelerate action on plastics urgently by making plastics disclosure mandatory.”
Furthermore, CDP is urging all companies that disclose information, with nearly 23,000 participating in 2023, to provide reports on plastics through CDP.