Senior SRI Analyst, Aviva Investors
Eugenie is Senior Analyst on the Aviva Stewardship Funds. She co-ordinates research into social, ethical, and environmental screens, engages with companies on ESG, and develops thought leadership.
The environmental impact of single-use plastic is under scrutiny like never before, bringing new challenges and opportunities to industry.
The working life of a plastic bag is around twelve to fifteen minutes.1 Five trillion of them will be used around the world this year – equivalent to 160,000 a second.2
Most are used just once and cast aside. Then the process of breaking down gets underway. This can take more than 1,000 years1 if left to follow its own course.
In the stomachs of camels
Concern about the impact of discarded plastics on the environment is growing. They can be found on the floors of the world’s deepest ocean trench,3 in the stomachs of camels,4 guts of seabirds5 and in human food, as well as bottled and tap water. 6
Reducing plastics use is likely to depend on:
- Encouraging re-use rather than single use of packaging.
- Substituting plastics with more sustainable alternatives.
- Improving recycling infrastructure and creating demand for recycled plastics.
But a lot of waste plastics collected are never recycled due to contamination and poor sorting.
China, which once took a large proportion of the advanced economies’ plastic waste, has closed its doors to non-domestically produced waste. It’s being diverted to other countries, but developed nations are likely to see more waste heading to landfill or seeping into the environment.
Are bioplastics the answer?
Companies are seeking to address the problem with ambitious re-use targets. Coca-Cola hopes one of its plastic bottles sold in the UK could be used, cleaned, recycled, re-filled and back on the shelf within six weeks.7
New forms of plastics could also help. Bioplastics, developed from renewable sources such as sugar cane, break down after use.
But they don’t biodegrade in the sea so do nothing for marine pollution. And greater use of bio-based materials could exacerbate deforestation, as more land is given over to the cultivation of crops used in bioplastic production.
Even so, some experts believe bioplastics might eventually take substantial market share.
The future of plastics
It seems inevitable demand for traditional plastics will fall. How quickly partly depends on regulation. Some countries have already introduced bans or financial penalties to discourage single-use plastics.
The price of oil, a key ingredient in plastics production, will also have a big influence. If the price stays low, the transition will likely take longer. Bioplastics can cost as much as three times more than traditional plastics, although their price should fall as production increases.
With over 50% of consumer packaging worldwide made of plastic, but diminishing consumer appetite for it, there is little doubt the future will be different.
What might that mean for thousands of companies worldwide?
Certainly, leaner times for some. But opportunities for others. In the bio field, look out for companies aiming to utilise waste products as part of the transition to a circular economy. Companies designing for product re-use rather than single use will proliferate. Investment in greener packaging might be easier through companies producing sustainably certified or recycled wood-based products like corrugated paper. These products are easier to recycle than some plastics.
So, there are likely to be opportunities for investors, who will sleep soundly knowing they’re doing their bit in the battle against the scourge of plastic.
1 United Nations Development Programme. 20 ways to plastic proof your routine
3 Single-use plastic has reached the world's deepest ocean trench, UN environment, 18 April 2018
4 Camels continue to die of plastic in the desert
5 People apparently eat and drink micro plastics - effects unknown, Bloomberg, 2 November 2018
6 Planet or Plastic? National Geographic, June 2018
7 Our plan to recover and recycle every single can and bottle the Coca-Cola System sell