Report: 6 in 10 plastic packaging companies have no environmental policies
An analysis of 83 of the world's biggest publicly traded plastic packaging firms has found that almost two-thirds report no policies on sustainability-related topics like waste or carbon.
Produced by non-profit think-tank Planet Tracker, the 'unwrapping investor risk' report concludes that the global plastic containers and packaging (PC&P) sector is “at an inflexion point”, whereby it will only continue to be financially successful if it moves towards more sustainable products and processes.
It analyses the company filings and corporate websites of 83 firms in this field, all publicly listed. Each company draws at least 10% of its total annual revenue from PC&P and reports revenue of $100m and above. Collectively, the firms analysed represent annual revenues of $54bn.
The report reveals that 53 of these firms detail no policies on environmental topics through these channels, with many failing to even keep pace with changing legislation on plastics and recycling. Here in the UK, for example, plastic packaging with less than 30% recycled content will soon be taxed, and all unavoidable plastic waste must be phased out by 2042.
Planet Tracker believes that the potential risks of inaction on legislation and environmental risks will affect the biggest players the most.
The report does not shy away from the fact that PC&P is, despite ever-tightening environmental legislation and changing demands from consumer and investors, a profitable sector.
However, Planet Tracker is warning that investors could soon make a loss on PCP holdings unless the companies take stronger action to embed ESG principles in their processes, products and business models.
Should companies act appropriately in the next five years, the report states, a further $24bn of value could be unlocked. The report urges investors to request the PC&P firms they invest in to disclose their environmental risks and policies in line with nest practice. Corporates, meanwhile, should measure risks as a starting point before using them to inform transition strategies. They should also look into sustainability-linked loans and green bonds when their corporate finance is up for renewal; the report reveals that 70% of the bonds held by the 83 firms will roll over by the end of 2025.
Planet Tracker also believes policymakers can play more of a role – especially given that many firms cannot evidence plans to comply with incoming legislation. The report states that better engagement with investors, regulators and companies could help improve recyclability by reducing the complexity and variety of plastic packaging on the market, for example. Businesses could also be required to invest more in recycling infrastructure and recycled content.
“The PC&P sector cannot feign ignorance at the mounting problem that is plastic pollution,” Planet Tracker’s plastics programme lead and director of financial markets Gabriel Thoumi said.
“With policymakers and consumers advocating for change and action at FMCG companies, the pressure is on for PC&P companies to act before these problems are further compounded.
“Investors have an important role to play in encouraging and supporting PC&P companies in this transition. If they want to realise their potential investment gains, they need PC&P companies to be fully aware of the growing pressure to reduce plastics pollution and to be taking mitigating actions to address these risks.”
Navigating the PC&P landscape
The report from Planet Tracker comes the week after edie hosted its first virtual Circular Economy week – an editorial campaign designed to inform and inspire organisations of all sizes on the road to a closed-loop economy. Plastic was one of the main focus areas, along with other prominent waste streams like textiles, e-waste and construction waste.
Readers looking to better navigate the world of plastics use are encouraged to download edie’s new 2021 Roadmap on Single-Use Plastics. The free guide outlines the steps businesses can and should take to identify, reduce, replace and eliminate single-use plastics from their operations, supply chains and products and services as part of efforts to build back better from the coronavirus pandemic.