CDP is to expand its global environmental disclosure system to help solve the plastic pollution problem. Its expanded disclosure frameworks have been developed with expertise and support from The Pew Charitable Trusts, Minderoo Foundation, and the Ellen MacArthur Foundation.
- CDP is to include plastics alongside its carbon, water security and deforestation disclosure frameworks.
- Companies face $100 billion in annual financial risk if governments require them to cover waste management costs at expected volumes and recyclability.
- Reporting on plastics financing and production is an effective to shift the needle on operational performance and the industry needs to prepare for change.
Despite the scale of the plastic pollution problem and extent of its impacts, many companies still have a limited understanding of how they contribute to it and their exposure to related commercial, legal, and reputational risks. However, plastic pollution has been shown to be an important issue for companies and capital markets.
What is the plastics problem?
There are growing numbers of countries and companies signing up to agreements to address the plastics crisis. There are negative impacts both on climate and on nature and biodiversity. If growth in single-use plastic production continues at current rates, it will account for 5 – 10% of global emissions by 2050. At the same time, plastic waste is entering the ocean at a rate of about 11 million metric tons a year, harming marine life and damaging habitats.
Winnie Lau, project director for Pew’s preventing ocean plastics project, said: “Solving the plastic pollution problem benefits both people and the planet, but it requires a comprehensive and thorough understanding of the issue and can only be achieved through system wide change.” This finding is detailed by the first-of-its-kind global modelling in Pew’s report “Breaking the Plastic Wave.”
Mindaroo Foundation chair and co-founder Andrew Forrest added: ”We cannot fix a plastic pollution problem we do not wholly understand or see.” Understanding who is responsible for the finance of plastics is part of the problem, in the same way that investors might pay lip service to Paris Agreement emissions goals but continue to finance fossil fuel exploration.
2021 saw a move forward with the publication of the Plastic Waste Makers Index. This was an attempt to identify who is financing the single-use plastic industry. Single use plastics represent about one third of global annual plastic production, and about 130 million tonnes of plastic waste per year. According to the Mindaroo Foundation research, almost 98% of single use plastics is made from fossil fuel – little to no recycled content.
The work on single use plastics highlights how critical plastics management is going to be to address global emissions. A great deal of work remains to be done and wide-spread demand for reporting on the plastics industry should help bring transparency to the sector.
Driving plastics reporting at scale
Pew, CDP, the Ellen MacArthur Foundation and Minderoo Foundation have come together with the collective ambition to build a plastics disclosure initiative that will rival those in existence for carbon emissions, helping companies understand and tackle their plastic footprints and, in turn, guide governments and financial institutions on their policy measures and sustainable investments.
Nicolette Bartlett, Chief Impact Officer at CDP, said: “With over 13,000 companies worth 64% of global market capitalization already disclosing through CDP, our disclosure system is uniquely positioned to scale disclosure on plastics across the global economy.
“Not only will this drive corporate action to reduce plastic pollution, but it will also be critical in boosting transparency and accountability, redirecting capital towards sustainable activities and supporting governments to develop robust and ambitious policies.”
Despite the scale of the plastics problem many struggle to address it
Despite the globally accepted scale of the problem and extent of its impacts, many companies still have a limited understanding of how they contribute to plastic pollution and their exposure to commercial, legal, and reputational risks linked to plastic pollution. That situation is changing rapidly however.
Responding to a consultation run by CDP in 2022:
- 88% of companies said plastic was a relevant issue
- A third (32.5%) did not have plastic-related targets
- 81% of responding capital markets and supply chain members said that the information requested by CDP on plastics would be useful to inform financial or procurement decisions
CDP will integrate plastics into its reporting disclosure as it expands across new factors
This expansion will include the addition of questions and metrics on plastics into CDP’s annual disclosure questionnaires, beginning with a pilot in 2023. The full details of CDP’s first year of plastics disclosure, including which companies will be requested to disclose initially, will be released in early 2023, prior to the April launch of the disclosure platform.
This is a significant step forward in delivering CDP’s 2025 strategy, announced last year, which will see the not-for-profit widen its scope to cover planetary boundaries, including oceans, land use, biodiversity, food production and waste.
CDP has the potential to drive voluntary disclosures at scale. In 2021 over 13,000 companies worth over 64% of global market capitalisation, disclosed data through CDP on climate change, water security and deforestation. Meanwhile so far in 2022, more than 680 financial institutions worth over $130 trillion in assets requested companies to disclose through CDP.