In his monthly column, Oliver Balch reports on a bevy of new circular packaging initiatives by brands, and a report quantifying plastic pollution by the likes of ExxonMobil, Dow and Sinopec. He also looks at the brands lobbying for greater support for electric vehicles in Europe
Single-use plastic needs to be binned once and for all. If the Brand Watch mailbox is anything to go by, the message appears to be finally beginning to seep through.
Coincidentally, two of the biggest announcements relate to toothpaste. First GSK, which is pledging to shift all its oral health brands (such as Sensodyne, parodontax and Aquafresh) from tubes made from aluminium barrier laminates to recyclable or reusable alternatives (based on post-consumer or bio-based resins, or paper) by 2025. Then came plans from Unilever (owner of Signal, CloseUp and Pepsodent), to do much the same. GSK’s move will affect more than one billion toothpaste tubes per year, while Unilever says its transition will eliminate around 12,000 tonnes of plastic per year.
Brands’ packaging practices result in vast volumes of plastic consumption, but how does that compare to the original plastic producers?
Other recent highlights include the launch of a new digital tool that allows consumer brands to make better data-based decisions about moving to a more circular, less plastic-intensive production model. Created by U.S.-based non-profit The Recycling Partnership and sustainability specialist SYSTEMIQ (with support from Walmart), the Plastic IQ tool is initially set to be used by Nestlé USA, Kellogg, Unilever, Mondelēz, and the consumer health division of Johnson & Johnson.
Also giving impetus to the fight against unnecessary consumer plastic is a new innovation fund from the (now somewhat unfortunately named) beer brand, Corona. The initiative will see a selection of startups with winning ideas for plastic alternatives receive up to $100,000 in cash support, plus six months of advisory support. The scheme is part of the worldwide 100+ Accelerator programme, which seeks to promote circular innovations among Fortune 500 consumer brands. The global scheme is backed by Anheuser-Busch InBev (brand owner of Corona), as well as Unilever, Coca-Cola, and Colgate-Palmolive (more toothpaste!).
But could the relentless attention on consumer brands be misplaced? Yes, their packaging practices result in vast volumes of plastic consumption. But how does that compare to the original plastic producers and the financiers that back them?
This politically charged question lies at the centre of a new hard-hitting global analysis by the Minderoo Foundation, a Perth-based philanthropic organisation. The 86-page Plastic Waste-Makers Index report, developed in association LSE’s Grantham Institute and financial thinktank Planet Tracker, among others, finds just 20 plastic producers are behind more than half of all the world’s single-use plastic waste. Top of the list are U.S. petrochemical giants ExxonMobil and Dow, followed by China’s Sinopec (together, the three account for 16% of all single-use plastic that is discarded). In total, around 300 companies manufacture almost 90% of the main five polymers that go into single-use plastics (in around 1,200 factories).
At one level, the findings are merely stating the obvious: the larger the plastic producer, the greater its eventual share of plastic waste. The key question is whether these producers are doing anything to support alternatives or, as the report’s authors suggest, whether they are stringing out an unsustainable production model for as long as they can. What is clear is if these 300 or so companies were to shift tomorrow from virgin polymers to recycled polymers, the implications for plastic waste would be “massive”. This small fraction of producers “hold the fate of the world’s plastic crisis in their hands”. So, why the hesitancy?
Minderoo is calling on financiers to calculate their exposure to single-use plastic waste and then set targets to radically reduce it
Money. Like for like, virgin polymers are considerably cheaper than bio-based alternatives. Add the collection, sorting and transport costs associated with recycling, and the commercial incentive to stick with the status quo increases yet more. No surprise, then, that none of the largest 100 polymer producers source more than 2% of their feedstock from recycled or bio-based materials.
To help brands and consumers alike, polymer producers should commit to disclosing how much single-use plastic they produce, both in total and as a proportion of overall production (rigid plastic is easier to recycle, for instance). This should kickstart a groundswell in policies that ban, tax or extract levies to pay for the costs of single-use plastics, the authors argue. As a result, “companies that take the lead in this space will ultimately be rewarded”.
Public attention may also choose to focus on the financial institutions to which such polymer producers are answerable. This task is now infinitely easier thanks to Minderoo’s mapping of the sector’s main backers. Vanguard, BlackRock, and Capital Group (all U.S.-based), for instance, collectively hold $6bn-worth of shareholdings directly linked to single-use plastic waste generation. Meanwhile, bank loans and bond and equity issuances for virgin polymer production topped $80bn between 2011-2020 (with JPMorgan Chase, Citibank and Bank of America among the biggest culprits). Minderoo is calling on all financiers to use its methodology to first calculate their exposure to single-use plastic waste and then set targets to radically reduce it, with the goal of ultimately eliminating it altogether.
The overall picture is not without light. The report’s authors dedicate two pages to positive initiatives to develop recyclable alternatives, such as Dow’s recent partnership with Mura Technology to purchase plastic-waste derived feedstocks. While the “light on the hill” is a sustainable alternative to single-use plastic, the report argues that the most urgent step is to turn off the tap by reducing supply and demand for single-use plastics.
If current patterns continue, the world will have generated – as waste – at least one trillion extra one-litre drink bottles and caps, one trillion extra bags and one trillion extra metres of kitchen film by 2025. Paradoxically, even if action by brands works and demand falls, the global market could be faced with a glut of virgin polymers, pushing the price down and increasing their comparative advantage over cleaner substitutes. Joining the landmark Global Commitment for the New Plastics Economy, an initiative by the Ellen MacArthur Foundation, in collaboration with the UN Environment Program, would be a good place for the plastic-producing petrochemical sector to start. The total number of signatories from the industry at present is a desultory two: Austria’s Borealis and Singapore-based Indorama.
Battery-powered mobility: progress, but far from finishing line
Over the course of the Covid pandemic, road traffic has emerged as a bell weather of the virus’s virulence. Now, as restrictions begin to ease in many major economies, congestion is back, and with it an increase in transport emissions, reckoned to amount for 15% of all Europe’s carbon dioxide (and 26% of its toxic nitrogen oxide emissions).
In a bid to cut car-related emissions (and save on the continent’s oil import bill of over €200bn per year), a bevy of businesses is calling on the European Union to issue a ban on internal combustion engine cars by 2035. Interestingly, the 39 signatories to the open letter, which also calls for more ambitious CO2 standards up to 2030, include Coca-Cola, IKEA and Sky, alongside electric vehicle (EV) advocates, automaker Volvo and rideshare firm Uber.
Such moves are giving the clean transport sector hope. Experts at market analyst BloombergNEF (BNEF) are now predicting that electric sedans will outcompete their fossil-fuel powered equivalents on price from 2026 onwards. Small cars will achieve the same inflection point in 2027. The forecast reflects a similar upbeat analysis by Swiss bank UBS, which has put the moment of price convergence at 2024. BNEF’s confidence derives from the falling cost of battery production, coupled with strong demand signals from Europe and China in particular.
Even with such confident projections, however, the market alone won’t achieve the full transition that the EV industry argues is essential to meet the landmark Paris Agreement. Without strong policy intervention, battery electric cars and vans will reach 85% and 83% market share by 2035, respectively, according to the European campaign group Transport and Environment, which commissioned the BNEF study. The above-mentioned open letter offers a sense of what such policy interventions might comprise. The list includes “smart incentives” (including government assistance to help corporations covert their fleets), an automotive transformation fund (to encourage investment by automotive manufacturers) and a ramping up of alternative fuel infrastructure.
Transforming how we get from A to B requires automakers and other key brands in the transport sector to start taking major action now
Suppose the EU were to go ahead and ban the sale of combustion engines (something 63% of EU citizens say they would be happy to see by 2030), transition to zero-emission transport is no dead cert. Transforming how we get from A to B requires automakers and other key brands in the transport sector to start taking major action now.
Take petrol forecourts. In the UK, nearly nine out of 10 (88%) of forecourts have shops (with sales of around £4.5bn per year), suggesting an opportunity ripe for EV charging. Yet, with installation costs at around £100,000, such moves are out of reach for many fuel-stop owners, says Ian Johnston, chief executive of the UK rapid-charging network provider, Osprey Charging. To get around this potential bottleneck, Osprey offer a fully funded installation deal, with profits shared with owners.
In a big boost to the firm’s innovative roll-out model, it just signed a preferred partners agreement with oil giant Shell, which has over 1,000 forecourts in the UK (many of which belong to small franchise owners). Hot on Osprey’s heels is competitor InstaVolt, which this month sealed an agreement with coffee chain Costa to install 200 charging points at its UK drive-thrus. The deal follows existing installation accords with McDonald’s and KFC in the UK.
Moves to increase consumer confidence are equally if not more important. Much of the attention hitherto has been on vehicle range, something EV manufacturers are gradually addressing as battery technology advances. Yet questions about the emissions embedded in EVs and their component parts are also rising up the agenda. In an attempt to bring transparency to the issue, high-end EV maker Polestar is launching a new distributed ledger technology to trace the sourcing of minerals used in its batteries. The project draws on the expertise of its partner, the blockchain firm Circulor.
“We’re electric, so we don’t have to worry about combustion engines producing toxic emissions – but that doesn’t mean our job is done,” said Polestar’s head of sustainability, Fredrika Klarén. It’s a message for every brand with a toe in the transport sector, automaker or otherwise.
This article is part of this month’s web-only Sustainable Business Review. See also:Grantham Institute Mindaroo GSK Unilever STYSEMIQ Recycling Partnership Corona AB InBev Minderoo BlackRock Vanguard New Plastics Economy Global Commitment electric vehicles EV charging clean transport sector Shell Costa Osprey Charging Instavolt