Investors urge plastic producers to act amid recycling setbacks

Investors with nearly US$7 trillion of assets under management are urging petrochemical firms to cut their dependency on fossil fuels and eliminate toxic polymers, as global brands continue to face plastic recycling setbacks.

70 international financial institutions with a combined total of US$6.8 trillion in assets under management have signed a collective statement organised by NGO Planet Tracker to ask petrochemical companies to “transition to safe and environmentally sound practices, by reducing fossil fuel dependency and eliminating hazardous chemicals”.

The statement lays out five actions petrochemical firms should be taking to do their part in tackling our planet’s plastic problem: disclosing their impacts and establishing strategies and targets for transitioning to “sustainable plastic production”; committing to eliminating toxic polymers and chemicals from their products; investing in technology and infrastructure to support sustainable plastic feedstocks, ensuring board-level commitment and dedicated governance, including by linking management compensation to circularity goals; and supporting international agreements to end plastic pollution (instead of lobbying against them).

Global firms struggling to meet their plastic recycling targets

Last month, the US Plastics Pact, an initiative gathering more than 70 large companies to cut plastic waste, unveiled its ‘Roadmap 2.0’, delaying its 100% recyclability and 30% recycled or biobased content targets from 2025 to 2030.

That was the latest setback in corporate plastic recycling targets, after it was revealed that most members of the WWF ReSource initiative increased their plastic use even after committing to tackling plastic waste in their supply chains. Coca-Cola, which is a member of both ReSource and the US Plastics Pact, used 250,000 tonnes more plastic in 2022 than the previous year, the ReSource progress report showed.

For Planet Tracker and investors, there’s a need to shift the focus from recycling to changing the way plastic is produced. 

“Too often the focus when addressing plastic pollution lies with downstream solutions such as recycling. If we are to effectively tackle these issues there is a pressing need to focus on the entire plastics value chain, which includes these polymer producers,” said Planet Tracker’s Head of Engagement Nicole Kozlowski.

Petrochemical companies ‘not exempt’ from responsibility

Statement signatories include Legal & General Investment Management, Pictet Group, Nordea Asset Management, Achmea Investment Management, Robeco, MN, Abrdn (which recently reshuffled its sustainability team), Rockefeller Asset Management, Rathbones Group Plc, and Storebrand Asset Management.

Alex Burr, Senior ESG Policy & Nature Lead from Legal & General Investment Management said: “Petrochemicals are at the very source of plastic pollution, degrading our natural world and posing significant financial risks. There has been substantial progress internationally, through agreements like the Global Biodiversity Agreement and the forthcoming Global Plastics Treaty, to curb plastic use and production and we believe that effective engagement activity must consider the whole ecosystem and value chain, tackling both supply and demand of single-use plastics. Petrochemical companies should not be exempt from these policies and must understand business as usual is not an option”.

Plastic producers call for more investment

Last year, petrochemical association Plastics Europe detailed a plan to transform the industry on the continent – one that would cost €235 billion, a much higher sum than what is currently being spent on the transition (the latest public-private initiative set up to scale solutions to the plastic waste problem, for instance, has raised just US$21 million so far).

“All up- and down-stream levers need to be engaged, including reuse that reduces single use applications, design for recycling, mechanical and chemical recycling, plastics from biomass and CO2 captured in a carbon capture and utilisation (CCU) process. We need to significantly increase the collection, sorting and use of high-quality circular feedstock to reduce the dependence on fossil feedstocks and considerably lower the GHG emissions of the plastics system,” Plastics Europe said in October.