Published 9 years ago.
About a 6 minute read.
Companies could become more sustainable by improving the way they measure, manage and report the amount of plastic they use in their business operations and supply chains, according to groundbreaking new research by the Plastic Disclosure Project (PDP), the UN Environment Programme and natural capital analysts Trucost.
The report, Valuing plastic: the business case for measuring, managing and disclosing plastic use in the consumer goods industry, which was previewed earlier this month at SB ’14 San Diego, was released today at the UN Environment Assembly in Nairobi, Kenya.
The research is the first-ever assessment of the environmental costs of plastic in business. It calculates the amount of plastic used by stock exchange listed companies in 16 consumer goods sectors and assesses levels of corporate disclosure on plastic. Its aim is to help companies understand the risks and opportunities of plastic and build a business case for improving its management.
PDP director Andrew Russell said: “The research unveils the need for companies to consider their plastic footprint just as they do for carbon, water and forestry. By measuring, managing and reporting plastic use and disposal through the PDP, companies can mitigate the risks, maximize the opportunities, and become more successful and sustainable businesses.”
Trucost calculates the total natural capital cost of plastic in the consumer goods industry to be more than US$75 billion per year. The cost comes from a range of environmental impacts including the harm done by plastic litter to wildlife in the ocean and the loss of valuable resources when plastic waste is sent to landfill rather than being recycled.
“Plastics have come to play a crucial role in modern life, but the environmental impacts of the way we use them cannot be ignored,” said Achim Steiner, UN Under-Secretary-General and UNEP Executive Director. “These reports show that reducing, recycling and redesigning products that use plastics can bring multiple green economy benefits — from reducing economic damage to marine ecosystems and the tourism and fisheries industries, vital for many developing countries, to bringing savings and opportunities for innovation to companies while reducing reputational risks.”
“Our economies are still largely fossil-fuel-based, with the environmental, economic and health costs hidden,” he added. “For example, in the polar regions, scientists have recently found tiny pieces of plastic trapped in sea ice. Transported by ocean currents across great distances, these contaminated particles eventually become a source of chemicals in our food. The key course of action is to prevent plastic debris from entering the environment in the first place, which translates into a single powerful objective: reduce, reuse, recycle.”
The research shows the value at risk for consumer goods companies if they fail to mitigate the threat by taking positive action. Tighter regulation, competition and consumer demand may force firms to pay the natural capital costs.
Among the report’s findings:
The research makes a series of recommendations for companies designed to help ensure a sustainable future for plastic. Foremost is the need for companies to measure, manage and publicly report their use of plastic as many companies already do with carbon emissions.
At present, levels of disclosure are poor with only half of the 100 consumer goods companies assessed reporting at least one item of data on plastic use. Disclosure rates vary widely, with no companies in the athletic goods and footwear sectors reporting any usable data compared to almost 90 percent of firms in the durable household goods sector.
In the longer term, progress on plastic will require companies to work in partnership with other stakeholders. This includes collaborating with government to develop effective legislation and waste management infrastructure, especially in developing countries. Innovation will require companies along supply chains to work together, possibly with an official body acting as coordinator.
The research will interest investors keen to protect and enhance the value of their investments in plastic-intensive companies. The results could help inform their engagement activities with companies on environmental issues.
“Natural capital valuation has the power to help organizations understand their environmental impacts, including pollution of the world’s oceans,” said Richard Mattison, chief executive of Trucost. “By putting a financial value on impacts such as plastic waste, companies can further integrate effective environmental management into mainstream business. By highlighting the savings from reuse and recycling, it builds a business case for proactive sustainability improvements.”
Smart, forward-looking companies can improve management of plastic by cutting costs through more efficient use of plastic, developing closed-loop business and manufacturing models that recover resources and materials, and winning customer loyalty by creating sustainable products.
Alongside Valuing Plastic, UNEP has published its Year Book 2014 reviewing progress on 10 environmental issues, including plastic waste in the ocean.
Representatives from Trucost and PDP will discuss the report in further detail in a series of webinars in the coming weeks: A private webinar for the 100 companies assessed in the report will take place on June 19 in advance of the full report release; and Sustainable Brands will host a public webinar detailing the findings on July 9. In the meantime, Trucost chief executive Richard Mattison and Mike Biddle, founder and director of MBA Polymers, will be available for questions at a press briefing this afternoon at 4-5pm ET in New York City (contact Abigail Darke for further details). Mattison will also discuss the report tomorrow at the Plasticity Forum, a one-day conference focused on the solutions, innovations and opportunities happening in industry and government to help reduce the impact of plastic on our communities.
Published Jun 20, 2014 7pm EDT / 4pm PDT / 12am BST / 1am CEST