What will the UN’s plastic treaty mean for businesses?

EXCLUSIVE: Four months on from the UN’s landmark agreement on a new treaty aimed at ending plastic pollution globally, experts from the Ellen MacArthur Foundation and Consumer Goods Forum weigh in on what developments so far mean for national policymaking and the private sector.

What will the UN’s plastic treaty mean for businesses?

The penultimate round of negotiations for the UN Global Plastic Treaty is happening this week in Ottawa.

The beginning of March saw the UN announcing that, at its UN Environment Assembly meeting in Nairobi, nations had agreed on the broad terms for a new global agreement to slow and ultimately end plastic pollution. Despite strong pushback from the petrochemicals sector and from nations including the US, Japan and China, the attendees agreed that the treaty should cover all parts of the plastic value chain rather than focusing on the end-of-life stage. In other words, scaling recycling and energy-from-waste won’t be enough – there will need to be a global decrease in plastic production.

The news was a welcome milestone for those working tirelessly to stem plastic pollution, who have seen the ‘Blue Planet effect’ dampened over the past two years as the populations relied on single-use plastic PPE and testing kits. At the same time, consumer goods businesses faced challenges implementing reusable solutions hygienically and dealt with disruption to their packaging supply chains, in trends often leading to a temporary increase in plastic production.

But the treaty is far from finalised. An intergovernmental negotiating committee will meet for the first time by the end of the year and their work should ultimately finish by the start of 2024.

With the negotiating process ongoing, edie spoke with the Ellen MacArthur Foundation’s lead for its New Plastics Economy initiative, Sander Defruyt, to look into how businesses should prepare for the treaty’s implementation.

The Foundation worked with other not-for-profits to mobilise more than 150 businesses in calling for a treaty covering all parts of the plastic life-cycle. Defruyt started by stating that he is “cautiously happy” that this approach was adopted, adding: “[This treaty] has the potential to be both the biggest disappointment ever and/or one of the most impactful things in this space ever. You never know what will come out of these negotiations. I’ve been trying to focus on that second option, of course.

“It has the potential to really set a clear direction for the whole world, a bit like the Paris Agreement on climate with the 1.5C and 2C pathways. If we get it right, it will give a common aim and goal and ask all nations for national action plans.”

A note here: The Treaty will apply to all UN member countries but, as has been the case with the Paris Agreement, each nation will need to draw up its own plans for delivery taking into account its own specific context. For example, how much plastic does it produce? Is it a net importer or exporter? What does its waste management system currently look like? National action plans will be like Paris Agreement NDCs and will include not only specific targets and action points, but act as a mechanism for measuring and reporting progress. They will also detail the technology pathway each country chooses and how these technologies will be shared internationally.

“Getting it right”, in Defruyt’s opinion, means ensuring that the treaty is legally binding and  “based on circular economy principles”. The Foundation’s principles are eliminating waste and pollution, circulating products and materials at their highest value and regenerating nature. The treaty won’t directly cover the latter.

The broad agreement gives hope that the former two principles will be taken into account, but proper embedding, and the treaty’s legal teeth, remain to be seen. edie also spoke to the Consumer Goods Forum’s sustainability director Ignacio Gavilan, who noted: “We know what happens when Treaties are negotiated; at the very end of the process, a handful of countries will oppose this being a legal requirement. We saw this at COP26 with the language about fossil fuel phase-outs and phase-downs… it was appalling.”

Confidence and collaboration

So, much of what the treaty will specifically mean for businesses remains to be seen. But businesses wishing to get ahead of the curve will need to design plans that not only improve their waste management but properly consider the design of products and packaging, the ways in which they are made and – Defruyt noted – the tricky issue of the quantities they produce. This will be particularly important for items that are not easy to recycle, and will – by necessity – involve collaboration internally beyond the board and sustainability function, as

Defruyt said: “I think for many parts of the plastics value chain, the treaty can be hugely beneficial. It will give them the guidance to tackle massive issues, like flexibles, where there are multiple potential solutions, by knowing where to invest. This clarity and sense of direction are crucial.”

Flexible plastics are believed to be the fastest-growing fraction of the global packaging sector, with the Ellen Macarthur Foundation predicting a doubling of the amount put on the market within 15 years. They are popular as they are lightweight and have benefits, for some items, in extending shelf life, or making products available in smaller formats. In recent times, they’re also being used to house refill formats. In the EU, flexible packaging  is used to house 68% of all products sold within the EU annually by volume and accounts for 44% of the bloc’s post-consumer packaging waste

March 2021 saw the Foundation publishing resources on ending flexible plastics ending up in nature, landfill or incineration. It mapped a range of pathways, including the use of paper-based alternatives; scaling chemical recycling and putting more products into rigid packets. Defruyt summarised: “The slightly grim conclusion is that whichever [scenario] we choose to go for will require unprecedented efforts by all actors in the systems – end-user businesses, governments and businesses at other parts of the value chain including collecting and recycling.”

The Consumer Goods Forum’s Gavilan also sees a joined-up approach to flexibles as a likely outcome of the treaty. He said: “Flexibles are one of the most challenging packaging types out there. We don’t feel there’s a real plan to address that, to be honest. The problem is huge and growing fast… it’s crucial that we see bold, unprecedented action in this space.”

As we wait for national action plans, Gavilan highlighted, companies would do well to collaborate. He said: “I think that working in partnership can make a profound, positive impact. The challenge is huge but it’s shared.

“I’ve seen over the past 15 years of work on sustainability that companies are more and more relaxed on these topics. Before, they were competitors… now, we need to keep these topics pre-competitve, with appropriate guardrails.”

Defruyt, similarly, said: “We hear companies saying ‘look, we can invest hundreds of millions in these solutions, but if we don’t have clarity about where our peers and the other parts of the system are moving, these are incredibly risky investments.”

“There are companies who have tried and tested alternatives to flexibles and say it’s been really hard, because the maneuvering room for innovation is almost non-existent – largely because they cannot afford for it to be temporarily more expensive or less convenient. Companies won’t compromise on anything if their peers just continue offering the same flexibles. It’s really hard to move unless we all move together.”

The Consumer Goods Forum runs a Coalition of Action on Plastic Waste that, since its launch in 2020, has garnered the support of more than 40 major companies involved in the FMCG value chain. It involves CEOs directly – a format which Gavilan believes is effective for ensuring that actions to deliver Coalition targets are implemented from the top-down at companies.

The Ellen MacArthur Foundation’s New Plastics Economy initiative is larger, convening more than 60 corporate signatories at all parts of the plastics value chain. Participating businesses pledge to create a “new normal” for plastic packaging by eliminating single-use packaging materials, increasing the amount of reused or recycled plastics in new products and innovate to ensure 100% of plastic packaging can be reused, recycled, or composted by 2025.

What will the oil majors do?

These initiatives convene many companies which, historically, one would assume would push for a weaker treaty. Now, these companies are collaborating to trial alternative materials and formats, share knowledge, engage shared suppliers and speak to policymakers.

Indeed, collaborative initiatives serve to give policymakers ‘permission’ from the private sector to set ambitious plans under the UN’s treaty. But, of course, not all companies are signed up for this kind of initiative. Some have no plastic sustainability goals at all. Policy, Gavilan and Defruyt agreed, will likely be necessary to push these laggards to act.

Defruyt has observed that the faction of the plastics value chain which is least represented in the Forum’s initiative is the most upstream part – companies involved in the extraction of fossil fuels and the initial production of plastic. He said that these firms know that “whatever levers are pulled” to create a more circular economy, demand for their virgin plastics will decrease.

His advice to these firms is for them to “ask themselves how they can transform from being part of the problem to part of the solution”.

“They can leverage deep chemistry knowledge to make the reuse and the recycling solutions of the future work, rather than keeping in the linear economy,” he added. “I know that is a fundamental shift which comes on top of already massive shifts after the Paris Agreement….it’s either that or not solving the problem. And I don’t think that can be an option.”

The International Energy Agency is forecasting that plastics are set to drive around half of oil demand growth by 2050, as oil demand dips in sectors such as road transport. Plastics are an obvious next port of investment for fossil fuel companies, despite the fact that they pose their own social sustainability challenges and that the climate impact of the plastic lifecycle is growing. But this is only because corporates keep using them and policy remains weak in a significant portion of emerging and developing countries. The UN’s treaty could well serve to change both of these trends.

Single-use Plastics: The Circular Economy Blueprint for Business

edie readers can now access a new in-depth report outlining how businesses can make their operations, value chains and products and services more circular in a bid to cut back on single-use plastics and deliver a zero-waste world.

The free ‘Circular Economy Blueprint for Business’ report has been produced by edie in association with phs Group. It outlines  all the key steps that businesses should take to eliminate unnecessary single-use plastics. As more nations and businesses commit to net-zero the report also acts as a timely reminder as to the role that phasing-out single-use plastics in favour of circular products and services can have in wider decarbonisation ambitions.

The report features best-practice case studies, actionable steps and a deep dive across key action areas of the value chain to highlight ways to ignite a shift towards a circular economy. Click here to download your copy.


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