The 'plastic soup', the several billions of tons of plastic invisibly floating below the surface of the ocean, is a metaphor much less tasteful than it sounds. Most diners fail to realize when ordering fish soup in a restaurant, there is good chance that microplastics are on the menu.
Plastic is the poster child of the pollution problem, and with good reason. At the same time, its numerous benefits must be acknowledged. Proponents of plastic argue that, since it is designed to last, plastic is one of the most durable and sustainable materials, offering a number of advantages.
Can we keep our plastic? Are there sustainable solutions?
Plastic has created an enormous global pollution problem. The oceans will contain more plastic than fish by 2050, according to the World Economic Forum and the Ellen MacArthur Foundation[1]. The constant increase in plastic production, and its incredible lifespan, naturally have something to do with this. To put figures on this, global annual production of plastic has grown from 1.5 million tons in 1950 to 359 million tons in 2018[2]. “Disposable” plastic, as we call it, is anything but disposal. This will be with us for centuries; the decomposition time of plastic ranges from 450 years for plastic bottles to as long as 1,000 years[3] for other types of plastic waste. Academic research shows the majority of this plastic ocean waste originates in several Asian and African rivers; this does not necessarily mean the plastic was either produced or consumed in these regions[4].
Benefits of plastic include strength, light weight, and versatility, and relatively low cost given these advantages. Various types of plastics such as PET, PVC, PP, and others each offer particular properties. This brings us to the major drawback of plastic -- its disposal. Because it is so long-lasting, appropriate disposal is crucial. The solutions we have so far have been woefully inadequate, hence the Earth's unhealthy diet of plastic soup.
Sophisticated use of plastic across a range of industries is proof of the benefits of plastic. In many uses, a better alternative is too expensive or simply has not yet been found. Although some uses of plastic can or should be replaced by other materials, this is far from the case for all. The aircraft and transportation industry benefit from corrosion-resistant, strong and light-weight plastic parts; light plastic saves fuel and reduces greenhouse gas emissions. Safety equipment sector depends heavily on plastic to ensure health and protection in helmets, goggles, and other items. And food wrap? Some benefits; advanced plastic packaging can reduce food waste by extending the food’s shelf life.
Remove or Treat the problem.
To resolve this dilemma, two major paths can be followed; namely, remove the source of the pollution cause or treat its consequences. To remove the source, regulations are being added globally. The most famous is the EU Single Use Plastic Directive, an EU-wide ban of single-use plastic cotton buds, straws, plates, cutlery and other items by 2021. The EU directive is not unique. The United Nations PRI offers a graphical history of single use plastic regulations, which illustrates the rapidly increasing focus on the issue. Corporates take note.. These single-use plastic regulations are treating the pollution cause, a logical start to conquering plastic pollution.
Recycling can help avoid the consequences. There are three main categories of plastic disposal; recycling, incineration and landfill. Unfortunately, today more than 40% of global plastics end up in the landfills[5]. Trash from Western countries destined for landfills, including plastics, have for decades been shipped to poorly-regulated developing countries. Times are changing, and refuse is being refused, notably China’s ban on imported plastic waste. Western waste-exporting countries are facing new circumstances. We can’t export the problem and close our eyes anymore. Now we have to deal with it.
Collection of plastics is crucial for recycling to make a significant impact. This may be hampered by contamination, such as chemicals; or design, as colored plastics are more difficult to recycle. The current collection rate of plastics is insufficient to meet the rising demand of the recycled raw material. This puts pressure on the price. rPET (for recycled PET) plastic is currently up to 40 cents more expensive per pound compared to virgin imported resin, according to IHS Markit. Part of the solution could be bottle and consumer deposit requirements, where a returnable fee charged on sale of products in plastic containers can increase the collection rate to more than 90%, as achieved in Germany and Norway.
Investors, take note. These issues and solutions will inevitably impact the full plastic value chain, representing both risks and opportunities for investors. This starts with oil and gas companies who, while not directly targeted by new regulations, may face slowing petrochemical demand from virgin plastic producers. Chemical companies producing polymers could lose to potential disrupters such as biochemics and chemical recycling. Consumer Goods will likely see the greatest challenge, as companies directly face stricter regulation and growing consumer awareness of issues such as sustainable and recycled packaging. Further along the chain, waste management companies will naturally have their role to play in the plastic life cycle; for instance, recycling and sorting services or take-back initiatives.
Sustainable Development Goals.
Moreover, the issue of managing plastic falls squarely in line with the United Nations SDGs. The increasing attention of world leaders, consumers, and corporates illustrates the sense of Goal no 12, ‘Ensuring sustainable consumption and production patterns’. Planet Earth needs humans to develop a Circular Economy.
Investors can help develop a circular economyby helping finance companies which aim to the most urging challenges of our times and respond to the EU stated objective of implementing its Circular Economy Action Plan. Humans now require the equivalent of 1.7 planets to match their demand on natural resources every year, a number that is expected to increase to 3 by 2050. These issues are not limited to plastics, but plastics exemplify the need for, and markets for, solutions.
Plastic pollution is attracting an enormous increase in media attention while its regulatory landscape and general awareness are undergoing rapid change. The issue is not exaggerated; this is a great challenge, for which revolutionary solutions are required in the near term. To develop workable solutions, we must keep in mind that plastic is not all bad. Plastic can contribute to a more sustainable future. We must reduce its consumption, properly collect the used materials, and recycle and reuse as much as possible.
As a sustainable company, Candriam contributes to the plastic pollution solution through internal 'grass roots' initiatives, many suggested by our employees. For example, we reduce plastic consumption by progressive eliminating plastic bottles in meeting rooms and by providing water coolers directly connected to the water distribution network, rather than bottled water coolers. We share ideas through specific initiatives organized around themes such as The European Week of Waste Reduction and the Sustainable Development Week.
Plastic is designed to last. To continue to enjoy its benefits means recognizing and treating the problems arising from its longevity.
[3] https://www.wsscc.org/wp-content/uploads/2017/03/Lifespan-of-waste-in-nature-e1488885241293.png
[4] Export of Plastic Debris by Rivers into the Sea, by Christian Schmidt, Tobias Krauth, Stephan Wagner
[5] Ellen MacArthur Foundation.