The Plastic Problem: Corporate Greed And Environmental Impact

Companies across the world produce over 450 million metric tons of plastic each year, with a small handful of companies and their financial backers being responsible for most single-use plastic production. The top 20 companies are responsible for over 50% of the throwaway single-use plastic that ends up as waste worldwide. The top 100 companies are responsible for 90% of global single-use plastic production. The top 5 companies identified, Coca-Cola, PepsiCo, Nestlé, Danone, and Altria, represent 24% of the total branded waste found. The main reasons for this are the low cost and convenience of using plastic, as well as the massive financial backing from global banks that these companies receive.

A small group of companies produce most single-use plastics

A 2021 study by the Minderoo Foundation, one of Asia's largest philanthropic organisations, found that just 20 companies are responsible for over half of the world's single-use plastic waste. These companies include ExxonMobil, Dow, Sinopec, Indorama Ventures, Saudi Aramco, and PetroChina. The study also revealed that 100 companies are the source of 90% of global single-use plastic production.

This research highlights the role of a small group of companies and banks in driving the global production of single-use plastics. It underscores the need for these entities to take responsibility and drive change towards a more sustainable future.

The report also traces the financial backers of these companies, finding that 20 institutional asset managers hold shares worth close to $300 billion in the parent companies of single-use plastic producers. The top three investors are US-based Vanguard Group, BlackRock, and Capital Group, which have an estimated $6 billion invested in single-use plastic production.

The study's publication marks a significant step towards addressing the plastic waste crisis and calls for urgent action from companies, investors, and governments to reduce single-use plastic production and transition to a circular economy based on recycled materials.

It is worth noting that the food and beverage industry, including companies like Coca-Cola, PepsiCo, and Nestlé, has been identified as a major contributor to plastic pollution. However, the petrochemical industry has often deflected blame onto consumers rather than addressing the issue at its source.

Fossil fuel companies are increasingly transitioning to plastic production

Fossil fuel companies are increasingly turning to plastic production as a new source of revenue as the world transitions to renewable energy sources. As public concern about plastic pollution rises, consumers are making more sustainable choices, such as using canvas bags, metal straws, and reusable water bottles. However, despite these individual efforts, the fossil fuel and petrochemical industries are investing billions of dollars in new plants to significantly increase their plastic output.

This shift towards plastics is driven by the fracking boom in the United States, which has led to an abundance of ethane, a byproduct of natural gas drilling that is used as feedstock for petrochemicals. With natural gas prices low and some fracking operations becoming unprofitable, companies are turning to plastic production as a way to monetize their ethane supplies. This trend is particularly notable in the Gulf Coast region of Texas and Louisiana, known as "Cancer Alley" due to the concentration of petrochemical plants and the associated health risks for residents.

Major oil companies, recognizing the potential impact of a global response to climate change on their fuel demand, are strategically increasing their plastics output. Companies like ExxonMobil, Shell, and Saudi Aramco are at the forefront of this transition, with plastics becoming a significant focus for their future growth. According to Judith Enck, Founder and President of the nonprofit advocacy group Beyond Plastics, "Plastics is the Plan B for the fossil fuel industry."

While the plastics industry may not be large enough to sustain the oil and gas companies entirely, it is still a significant contributor to their revenue. Additionally, the immense power of the fossil fuel lobby and the legislative and corporate efforts to curb new plastic production present challenges to reducing plastic output. As a result, fossil fuel companies are pushing plastics on the world, particularly in emerging economies in Asia and Africa, to drive growth and maintain their profitability.

Banks provide financial backing to single-use plastic companies

Companies produce so much plastic due to the high demand for single-use plastic products. According to a study, just 20 companies are responsible for over half of the "throwaway" single-use plastic that ends up as waste worldwide. These companies include ExxonMobil, Dow, Sinopec, Indorama Ventures, Saudi Aramco, and PetroChina, among others.

Banks have been criticized for providing financial backing to single-use plastic companies, contributing to the plastic waste crisis. It is estimated that nearly 60% of the commercial finance funding for the single-use plastic industry comes from 20 global banks, including Barclays, HSBC, and Bank of America. These banks have loaned approximately $30 billion for polymer production since 2011. The funding from these banks has supported the expansion of the single-use plastic industry, which is projected to grow by 30% in the next five years, exacerbating the climate emergency.

The financial backing from banks has allowed single-use plastic companies to increase their production and contribute to the global plastic waste crisis. This has led to environmental, social, and ecological consequences, as plastic waste ends up in landfills, roadsides, rivers, oceans, and streams, polluting the environment and harming wildlife.

To address the plastic waste crisis, there have been calls for greater transparency and disclosure from companies and banks involved in producing or financing single-use plastics. By revealing their data and involvement, consumers and shareholders can push for action and drive change, similar to what has been seen with climate change initiatives.

While banks have faced criticism for their role in funding single-use plastic companies, it is important to recognize that they also have the potential to drive positive change. By redirecting their financial support toward recycled materials and circular economy initiatives, banks can play a crucial role in reducing plastic waste and promoting sustainable practices.

Consumer demand for environmentally friendly products is rising

Consumers are increasingly demanding environmentally friendly products. In 2022, the vast majority of consumers across the globe reported that their purchasing behaviour had become more environmentally friendly compared to five years earlier. Specifically, over a third of surveyed shoppers noticed a modest change, while nearly 30% said they bought sustainable products significantly more often. Nearly one in 10 respondents even claimed they had turned their lives around to be environmentally sustainable.

According to a 2024 PwC survey, 85% of consumers are experiencing first-hand the disruptive effects of climate change in their daily lives and are prioritising consumption that integrates sustainability-focused practices. 46% say they are buying more sustainable products to reduce their environmental impact. 43% are making more considered purchases with the aim of reducing their overall consumption, 32% are eating different foods, 31% are travelling less or differently, and 24% are purchasing or planning to purchase an electric vehicle.

A 2021 survey by Shopify found that about 44% of consumers were more likely to buy from a brand with a clear commitment to sustainability. This trend is also reflected in the fashion industry, with consumers expressing dissatisfaction with the industry's sustainability efforts and expecting retailers to become more sustainable.

Consumers are also willing to pay more for sustainably produced or sourced goods. In 2022, the average sustainability premium consumers around the world considered acceptable for consumer goods was roughly 24%. According to the PwC survey, consumers are willing to pay an average of 9.7% more for goods that meet specific environmental criteria, including local sourcing, recycled or eco-friendly materials, and a lower-carbon supply chain. However, this willingness to pay more for sustainability may not translate into actual spend due to factors such as inflation and cost-of-living concerns.

Plastic is cheap and convenient for companies to use

Plastic is a cheap and convenient material for companies to use, and its prevalence in products and packaging is a result of financial incentives and a lack of regulation. Firstly, plastic is inexpensive to produce, as it is largely made from fossil fuels, which are cheap and accessible. This makes it an attractive option for companies looking to minimise production costs, particularly in industries with thin profit margins such as food and beverages.

Secondly, plastic is lightweight and durable, making it ideal for packaging and transporting goods. Its water-resistant properties also help protect products from damage, reducing costs associated with breakages during transit. Plastic packaging can also be designed with various features, such as resealable openings and built-in handles, which add convenience for consumers.

The convenience of plastic is further demonstrated by its versatility. It can be moulded into almost any shape, making it suitable for a wide range of products, from bottles and containers to toys and furniture. This versatility also allows for innovative packaging designs, which can enhance the marketability of products.

Furthermore, plastic production is often financially backed by major banks and investors. A significant proportion of funding for single-use plastic production comes from a small number of global financial institutions. These institutions have a vested interest in the continued use of plastic, as they hold shares in the parent companies of single-use plastic polymer producers.

While consumer awareness of the environmental impact of plastic is growing, and many individuals are actively seeking environmentally friendly alternatives, the responsibility for reducing plastic waste ultimately lies with the companies that produce it. It is crucial for these companies to transition to recycled materials and move away from virgin polymers derived from fossil fuels.

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