Petrochemical Groups Urged to Back Plastics Treaty

Major asset owners and managers call on oil and chemicals giants to stop lobbying against curbs on plastic production.

A group of 70 global investors has called on the petrochemicals industry to stop blocking progress on reducing plastic pollution, after the sector successfully lobbied to be excluded from discussions over a global plastics treaty.

The statement, published on Thursday by environmental think tank Planet Tracker, is aimed sector giants including ExxonMobil, Chevron, Total, PetroChina and Saudi Aramco. It urges them to support an ambitious international legally-binding instrument and “refrain from lobbying and obstructing ambitious outcomes”.

Signatories included Achmea, Abrdn, LGIM, Nordea Asset Management, Pictet and a long list of international pension funds, representing a total of US$6.8 trillion in assets under management.

Petrochemical companies are the first link in the global plastics supply chain, turning oil and other fossil fuels into polymers, which are then turned into plastic packaging and other products further downstream. Without petrochemical companies, there would be no plastic.

The UN is working on implementing a global plastics treaty next year to curb plastic pollution. But at the penultimate talks in April this year, negotiators decided to exclude primary plastic polymers from discussions after heavy lobbying from petrochemical firms – a move described as “hugely disappointing” by environmental groups.

The decision to exclude polymers prompted Planet Tracker to launch its campaign, the organisation’s Head of Engagement Nicole Kozlowski told ESG Investor.

“Petrochemical companies don’t want polymer production to be part of the treaty,” Kozlowski said. “They want the focus to be on downstream solutions such as recycling, and they managed to get production off the agenda. So we are concerned that it will not be part of the plastics treaty.”

Business as usual

Plastics pollution is on an upward trajectory. The world already produces 462 million tonnes of plastic every year, 90% of which ends up as pollution – including 14 million tonnes in the ocean, according to the World Wide Fund for Nature (WWF). The NGO estimates that plastic use could triple by 2040.

Planet Tracker has warned that in a business-as-usual scenario, fossil fuel-based plastics will continue to dominate in 2060, while recycled plastics will only make up 12% of total production globally. As a result, lifecycle greenhouse gas emissions from plastics will more than double, growing to 4.5% of annual global emissions by that date.

The risk to the population is also serious. Of the 16,000 chemicals present in plastics, only around a third have been tested – of which 73% have been shown to be hazardous to human health, Planet Tracker said.

“Growing plastic polymer production is therefore a significant threat to the plastic pollution crisis, climate change, biodiversity and human health,” the investor statement read.

Lobbying for survival

But as petroleum companies face a structural decline in oil demand with road transport going electric, they increasingly see plastics as key to their survival and are energetically lobbying to protect against curbs on production.

Analysis by the Centre for International Environmental Law (CIEL) found 196 lobbyists for the fossil fuel and chemical industry were registered at the plastics treaty talks in April in Ottowa, Canada, known as Intergovernmental Negotiating Committee (INC)-4.

That was up 37% on the previous talks, and more than the total delegation from the EU. It was also three times greater than the number of independent scientists from the Scientists’ Coalition for An Effective Plastic Treaty, and seven times greater than the number of representatives from the Indigenous Peoples Caucus.

“Seeing the fossil fuel and chemical lobbyists at INC-4 outnumbering all EU diplomats put together gives you a taste of their influence,” said Barnaby Pace, a Senior Researcher in CIEL’s Fossil Economy Program who has conducted similar studies on the presence of fossil fuel companies at UN climate conferences.

Lobbyists from the oil and chemical companies usually attended the meetings as part of trade association delegations, he explained. ExxonMobil, Eastman, Dow, and BASF had among the highest number of lobbyists present at INC-4, while petrostates often had company representatives as their delegates.

Despite accrued lobbying efforts, Pace is hopeful that the treaty will include plastics production, rather than just “tinkering around the edges” with downstream measures.

“Hopefully, negotiators have taken lessons from the UNFCCC process, and from the fact that it took 28 meetings after the first one to even mention ‘fossil fuels’ as part of the problem,” he told ESG Investor.

Broader aims

While the global plastics treaty negotiations was a key focus of Planet Tracker’s statement, the campaign has broader ambitions. It has called on petrochemical companies to develop a transparent roadmap to reduce production of fossil fuel-based polymers, and direct capital expenditure to sustainable alternatives.

The campaign demands companies commit to identifying and eliminating the production and use of hazardous chemicals, and called for governance reforms such as linking executive pay to plastic reduction targets and increasing board-level oversight of the issue.

“There has been substantial progress internationally … to curb plastic use and production,” Alex Burr, Senior ESG Policy and Nature Lead at LGIM, said in a statement. “Petrochemical companies should not be exempt from these policies and must understand business as usual is not an option … We look forward to collaborating to discuss our recommendations with companies on what next steps they can take.”

The fifth and final meeting of the INC on the plastics treaty will take place between 25 November and 1 December 2024 in Busan, South Korea, where it is hoped the details of the agreement will be reached.

The Planet Tracker-led campaign hopes to persuade petrochemical groups to back a more ambitious treaty that includes polymers before the deadline. “Nothing is set in stone yet, so we still have time to do it,” Kozlowski said.

The post Petrochemical Groups Urged to Back Plastics Treaty appeared first on ESG Investor.