Major investors call on petrochemical companies to tackle plastic pollution

Dozens of financial institutions with $6.8tr of assets under management are calling on the petrochemicals sector to step up in the fight to tackle plastic pollution and transition to "safe and environmentally sound" principles.

Seventy financial institutions have signed a collective statement organised by financial think tank Planet Tracker, which commits them to requesting that companies they invest in that produce plastic polymers disclose their environmental impacts and set targets for transitioning to more sustainable forms of plastic production.

The investors are also calling on companies to phase out toxic polymers and chemicals, establish dedicated governance and accountability measures at the Board level to ensure sustainability commitments are honoured, and link management compensation to circularity and resource efficiency goals.

Legal & General Investment Management, Robeco, Abrdn, Rockefeller Asset Management, Rathbones Group Plc, and Storebrand Asset Management are among the investors that have said they will step up pressure on petrochemicals companies in their portfolios.

Planet Tracker said it was important for pressure to be placed on the companies that provide the raw materials for plastic to take steps to curb their environmental impact, highlighting how too often efforts to tackle plastic pollution are focused on downstream solutions such as recycling.

Plastic production is on track to triple by 2060, with petrochemicals companies which make polymers which are formed into plastics expected to become the primary driver of oil demand as demand for the fossil fuel from transport and other industries starts to fall.

The statement is published as countries around the world are in the process of negotiating the terms of a legally binding treaty to tackle plastic pollution.

The investors that have signed the letter have also pledged to ask the petrochemicals companies they invest in to advocate for a "robust, legally binding international treaty to end plastic pollution".

Nicole Kozlowski, head of engagement at Planet Tracker, said petrochemicals companies needed to play a greater role in efforts to tackle plastic pollution. "Too often the focus when addressing plastic pollution lies with downstream solutions such as recycling," she said. "If we are to effectively tackle these issues there is a pressing need to focus on the entire plastics value chain, which includes these polymer producers". 

In a report published last month, Planet Tracker accused the plastic industry of deliberately lobbying to shift policymaker efforts to tackle plastic pollution away from upstream measures, such as limiting production and encouraging the adoption of alternative materials, and towards promoting recycling as a solution to the plastics crisis. The think tank said the push had undermined efforts to tackle plastic pollution and shifted the burden of waste treatment away from the corporates that make, process or sell plastic and on to cash-strapped local municipalities and waste management systems.

Observers have noted that in the latest round of UN plastics treaty negotiations, petrochemical companies and their allies resisted calls for a reduction of plastic production and the inclusion of polymer production in the final agreement.

Planet Tracker and other campaigners have warned that soaring demand for plastic poses a major threat to the economy, with the health impacts from exposure to three chemicals commonly used in plastic estimated at $675bn in 2015 in the US alone.

Planet Tracker has argued investors in petrochemicals companies face several "plastic-related risks", including regulatory, reputational and litigation risk, as well as risks related to the industry's failure to adequately respond to increased consumer demand for safer and more sustainable products.

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