Companies Perform Dismally on Plastics Targets
Investors can now identify the worst-performing corporates using a new scorecard released by As You Sow.
Companies are failing dramatically to meet their own plastic pollution reduction targets, highlighting an opportunity for ESG-conscious asset owners to apply more pressure on the firms they hold.
A new study by shareholder advocacy group As You Sow assessed and graded 225 large companies across 15 sectors and a wide range of geographies. It looked at six categories: recyclability, reduction of plastic use, recycled content of plastic, safe disposal of plastic, and extended producer responsibility.
The results were uniformly bad. While most companies had adopted some sort of target, As You Sow found poor progress on implementation across the board, with not a single company scoring an ‘A’ grade.
It also found every sector but one – cosmetics – was in the lowest of four possible categories, dubbed “slow-going” because they were both unambitious in their targets, and only progressing slowly towards them.
“Companies have set targets for themselves to improve the sustainability of their packaging,” said Kelly McBee, lead author of the report and Circular Economy Manager at As You Sow, at a media briefing this week. “But [they] do not appear to be on track to meet them.”
Some sectors performed better than others. Alcoholic beverages, household products and cosmetics companies were among the top performers, while hospitality, chemicals, automakers and industrials all fared poorly.
The top performing companies included The Coca-Cola Company and Keurig Dr Pepper, which both scored a ‘B’, while fashion companies Stella McCartney and H&M Group scored a ‘B+’ and ‘B’ respectively.
Carmaker Toyota and hotel group Las Vegas Sands were the top performers in their respective industries, but each scored an ‘F’ – reflecting the uniformly poor performance of their sectors.
The report provided granular detail on where each of the 225 assessed companies succeeded and fell short across the six categories, allowing investors to find firms they hold and decide which ones are most appropriate to engage with.
The plastics pollution crisis
The world produces 462 million tonnes of plastic every year, 90% of which ends up as pollution – up to 14 million tonnes of it in the ocean, according to the World Wide Fund for Nature (WWF). The NGO estimates plastic use could triple by 2040.
The UN has been working on a global, legally-binding plastics treaty since 2022, which it hopes will come into force by mid-2025. McBee said the launch of this new treaty would put more pressure on companies to act.
Meanwhile, jurisdictions have attempted to regulate plastic use through instruments like the EU’s plastic and packaging directive, which aims to reduce packaging use, increase recycling and encourage reuse and refills. But critics say these fall far short of what’s needed.
Freek van Til, Project Manager at the Dutch Association of Investors for Sustainable Investment (VBDO), is leading an engagement programme on plastics targeting 38 companies in the consumer goods and grocery retail sectors. Many of those are covered by As You Sow’s report.
Van Til is hopeful that the signatories of his campaign – which is backed by 189 institutional investors with US$10 trillion in assets – will use the scorecard to decide which companies warrant the most active engagement.
“The targets of the companies we look at are often way more ambitious than their actions, so I think we’re really aligned to the findings of the As You Sow report,” he told ESG Investor.
He added that many companies were now dialling down their ambition, rather than ramping up their efforts to meet targets – part of the ‘greenhushing’ trend among companies and investors, who are worried about accusations of greenwashing from regulators.
Blame game
Asked why companies were struggling to meet their targets, van Til explained that this varied from one to another.
“Some will say it’s a technological barrier that they’re dealing with, especially with the composition of recycled material,” he said. “Others will say they are waiting for new regulations so that there is a level playing field with other companies.”
But what van Til hears most often, is that it is down to the consumer.
“Companies often blame consumers for not being willing to adopt product refill and packaging return programmes,” he added. “This is too easy an excuse. Companies should take more responsibility.
EU regulations on plastic use are inadequate, and have been watered down by lobbying from business, van Til argued. Petrochemical companies – which manufacture plastic from petroleum, and for which limitations on use pose an existential threat – are the most aggressive lobbyists in that respect.
Meanwhile, NGO Planet Tracker is leading a campaign to mobilise investors to put more pressure on the petrochemical sector over plastic pollution.
Investors are generally easy to persuade of the importance of tackling plastic pollution, according to van Til, with impacts on ocean biodiversity often the most compelling argument. But concerns around the impact of plastics on human health are now also growing.
“There are so many chemicals of concern present in plastics – if there is a leakage, it is either coming to the environment or the human body,” he said. “I think our best bet is the global plastics treaty.”
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