With a landmark Global Plastics Treaty on the horizon, the time for corporate disclosure – and action – is now

Just four months in, 2024 is already a year of increasingly stark headlines warning of the perils of plastic pollution. By now, it’s common knowledge that plastic is in the ocean, soil, atmosphere and even the human body. However, the past few months represent a turning point in awareness of plastic-related impacts on the private sector – and the role that comprehensive data plays in finding the solutions.

As policymakers prepare to meet in Ottawa next week for the fourth round of negotiations towards a Global Plastics Treaty, forward-looking companies are beginning to realise that they must be actively involved in global efforts to tackle the plastic crisis.

It is becoming increasingly clear that corporate disclosure will be part of the Treaty. Based on current drafts, the Treaty would require member states to introduce mandatory corporate disclosure measures. Should this succeed, it will join a series of initiatives already driving disclosure on plastics – the European Sustainability Reporting Standards (ESRS) include the disclosure of plastic metrics, as does the recommendations of the Taskforce on Nature-related Financial Disclosures (TNFD) which has received widespread support from the market. It’s clear that plastic-related disclosures are going to be a business norm of the very near future.

Fortunately, many are acknowledging this and realising that transparency is key to tackling the plastic problem. Earlier this month, CDP launched the results from our first year of plastics disclosure, where almost 3,000 companies voluntarily reported their dependencies, impacts, risks and opportunities associated with the production and use of plastics.

Measure and act

Disclosing on plastics is a vital first step in understanding the key hotspots of plastic use, waste and leakage along value chains. That understanding must then be put into action, taking steps to reduce pollution and waste, but also the production and use of plastics in the first place.

2023 was a pilot year for plastic disclosure at CDP, allowing companies to build a solid baseline for action over the coming years. The data disclosed highlighted gaps – with only a third of companies assessing their plastic-related impacts on the environment and human health and more than half failing to assess risks associated with their reliance on plastics.

These gaps are of significant concern not only for people and planet, but also for business success. Research has found that under current trajectories, companies are likely to face US$100bn of annual financial risk by 2040.

However, there are positive lessons to be learned from the companies disclosing in this inaugural year. Of those disclosing, almost half had taken the step of mapping where plastics are produced and used in their value chains – the first step in building robust strategies to tackle impacts. 36% had also taken the next step of setting plastic-related targets, creating a goal to work towards and, importantly, a benchmark for accountability.

With a legally-binding Treaty in the making – and investors increasingly demanding evidence of best-practice plastics management – these steps are set to become the bare minimum requirement for companies wishing to thrive in an increasingly circular economy. But first, companies need the data to allow them to course-correct decades of over-consumption and pollution.

Compliance or opportunity?

Like it or not, scrutiny on corporate plastic impacts is mounting, and regulation is on the horizon. In order to remain competitive, business efficient and reputable, companies need to operate transparently.

A strong Global Plastics Treaty is not a threat to business, but an opportunity. Having global, legally-binding corporate disclosure requirements in place will bring much-needed harmonization, creating a level playing field for companies.

Many leading companies are now acknowledging this. Last month, 37 companies, including Unilever and Stella McCartney, signed our open letter demanding mandatory disclosure be included in the Plastics Treaty, recognizing the benefits it will bring.

This support, and the willingness of thousands of companies to disclose on plastics, are powerful signals that the private sector is increasingly on board to help to end the plastics crisis. In this pivotal moment, advocacy for a strong treaty from big businesses is the clearest signal negotiators need.

With fossil fuel and chemical industries registering more representatives than the delegates of 70 countries combined at INC-3 last year, it is imperative that companies committed to tackling plastic pollution boldly counter the lobbyist voice and demonstrate a proactive, unwavering commitment to supporting the implementation of an ambitious treaty.

The first step to proving this commitment – and to ensuring the future treaty will indeed be effective – is transparency. The time for hiding behind vague sustainability claims is gone. Now, companies must look to those leading the way and see that courageous corporate action on plastics is not only possible, but a necessity for any company seeking to remain competitive as we turn the tide on plastics.

From June, we are inviting all companies reporting through CDP to disclose on plastics, and I urge you to seize this opportunity to do so. As we approach the signing of the Treaty at the end of the year, now is the time for companies to get ahead of regulation and market demands through disclosure, insight and action.

Nathan Cole is the head of sustainable business at CDP

Nathan leads CDP’s strategic agenda and thought leadership across key issue areas including sustainable finance and procurement, plastic pollution and waste, and SME disclosure. Previously,Nathan led CDP’s Supply Chain and Reporter Services programmes, supporting major companies to drive action through their supply chains and tackle their Scope 3 emissions.