Plastics – Executive Compensation

Nearly half of plastic companies have no link between executive pay and sustainability goals, despite nearly all being publicly committed to sustainability policies. Over half (54%) of companies do not set Science-based targets. With the top 25 independent shareholders holding a combined USD 1.1 trillion and the plastic industry facing one of the longest risk registers of any sector, investors should extend pay performance policies beyond purely financial metrics and include sustainability-linked elements.

Exposing Plastic Risk

A new analysis of 8,200+ documents shows that while plastic risk disclosures are rising, this is happening  selectively, as 83% of documents from the plastic value chain still make no mention of plastic-related risks. Most plastic risk disclosures focus on circularity, accounting for 73% of all risk disclosures. References to feedstock and pollution were minimal, while mention of toxins, microplastics and refillables were even rarer.


Plastic Risk

Analysis of equity risk premia of 150 top corporates in the plastic value chain finds risk perception in industry is at its lowest level since 2011, despite a potential‘landslide of regulation’ including Global Plastic Pollution Treaty. Investors failing to forecast changes in risk profile means corporate liabilities and litigation costs in plastics could rise above USD 20 billion by end of the decade for the US alone, possibly USD 100 billion annually and beyond by 2030.

Packaging Labels

141 million tonnes of plastic packaging are currently produced every year, with the world’s leaders in plastic packaging consumption, including Coca-Cola, PepsiCo, Nestlé, Unilever, Mars and L’Oréal, using over 7.7 million tonnes in 2021. Currently less than nine per cent of plastic waste is recycled and attention is too often focused on the container’s material to the neglect of the type of label used. Increased regulation around higher recycled content in packaging has led to a rapid rise in the demand for recovered material. However, the availability of recycled plastics is not currently able to meet this rising demand. Consumer brands should adopt a self-help approach which ensures that labels are of the same material as the container. This would radically boost recycling rates and help to establish a closed loop recycling system that actively targets supply chain sustainability.

Toxic Fog

This report reveals the regulatory weaknesses around toxic releases that are currently hidden from both investors and the public – despite the clear health hazards – which the Environmental Protection Agency (EPA) is not permitted to reveal.

This report highlights ten major failings regarding toxic emissions. These are split into two categories: data that is hidden from view, but which is still allowed under current regulations, and areas where data transparency can be improved.

Barely Credible

Under the OECD’s business-as-usual scenario, global plastic waste is forecast to rise to 1,014 Mt by 2060, a near tripling compared to 2019 levels. The AEPW’s last Progress Report (2021) demonstrates that the AEPW had only diverted and recycled about 0.004 Mt since its creation in 2019, signaling that a dramatic ramp-up in recycling and recovery is needed. The USD 1.5 billion pledged by the AEPW members over a five-year period represents only a fraction of their members’ financial capacity and it is trivial in comparison to the USD 400 billion the oil & gas and chemical industry plans to spend on new plastic manufacturing capacity in the coming years.