Private sector ‘faces $100bn risk from plastic pollution this decade’
Corporations are set to face snowballing legal claims over plastic pollution this decade, with costs in the US alone likely to exceed $20bn by 2030. At the same time, the social cost of plastic pollution is set to increase dramatically.
That is the warning from a new report published today (14 October) by the Minderoo Foundation – one of Australia’s largest philanthropic foundations, with an initiative focusing on the need to stop plastic pollution.
The report documents how, increasingly, the social costs of plastic pollution are being quantified. There is an improving body of scientific research looking into how plastic pollution enters the food chain, harming animal and human health. Research into the emissions generated across the plastics life-cycle is, in tandem, evolving and improving.
It also argues that these social costs are more commonly being used in compensation claims against actors in the plastics industry, including chemicals firms and waste managers.
Its overarching conclusion is that, between 2022 and 2030, the social costs and corporate liabilities related to plastic pollution are likely to exceed $100bn. In the US alone, the Foundation is forecasting, corporate liabilities are likely to reach $20bn in that timeframe. The Foundation states that chemical additive manufacturers are likely to bear the brunt of the litigation risk, with polymer manufacturers also exposed.
The magnitude of the social costs and corporate liabilities “could be of an order of magnitude larger” post-2030, the report also warns. A previous analysis from WWF stated that the societal cost of plastic produced in 2040 could hit $7.1trn.
“For plastics producers, and above all their shareholders and insurers, now is the time to be asking yourself hard questions,” said Minderoo Foundation chairman Dr Andrew Forrest.
“What liabilities have your historical emissions left you exposed to? Are you doing enough to eliminate them in the future? What will your personal liability be for only looking at your profit and loss statement?
“The question is no longer [whether] you a good plastics industry director. It is: ‘what are you doing to help society reduce then eliminate the burden of ubiquitous and toxic plastic pollution, while you profit from its harm?’”
Calls to action
The report urges investors to demand better environmental and risk-related data from companies in the plastic value chain, and date on plastic-pollution-related risks from other companies also. Uniform disclosure of this data could, in time, be mandated, the report floats.
Insurance supervisors, in turn, are encouraged to better understand exposures to plastic risks and the most appropriate ways to mitigate them.
The report also calls for strong progress on the UN’s treaty to end plastic pollution, which it calls an “unprecedented opportunity” to prevent plastic pollution and the related social costs. Broad terms for the treaty were agreed in March, with nations agreeing on an approach covering the whole plastic life cycle. This means that, in tandem with waste management improvements, single-use plastic production will need to ultimately decrease.
A finalised treaty is set to be signed off by the end of 2024. The idea is to create a ‘Paris-Agreement-style’ deal on plastics.