The business case for measuring, managing and disclosing plastic use in the consumer goods industry
23 June 2014
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- The analysis identifies a range of risks and opportunities facing companies that are intensive users of plastic, as well as investors.
- The toy, athletic goods and durable household goods sectors use the most plastic in products per US$1 million revenue.
- The retail, restaurant and tobacco sectors use the most plastic per $1m revenue in their supply chains.
- The total natural capital cost of plastic used in the consumer goods industry is over $75bn per year.
- Food companies are by far the largest contributor to this cost, responsible for 23% of the total natural capital cost.
- The toy sector has by far the highest natural capital intensity, at 3.9% of revenue.
- Companies in the food, soft drinks and non-durable household goods sectors have the largest natural capital costs in absolute terms.
- Companies in the toy, athletic goods and footwear sectors have the highest natural capital intensity.
- Over 30% of the natural capital costs come from greenhouse gas emissions released upstream in the supply chain.
- The impacts of plastic vary around the world, based on background conditions and management practices.
- Levels of disclosure on plastic are poor. Only around half of the 100 companies assessed reported at least one item of quantitative data on plastic.
- Currently, there is no correlation between a sector’s disclosure rate and its plastic intensity or absolute natural capital cost due to plastic.
Plastic is one of the most useful and important materials in modern society. Life without the vast range of products and technologies it enables is almost unthinkable. Plastic preserves and protects food and medicine helping us lead healthy lives. It is used to make electronic devices like computers and smartphones that bring people together, and it helps make transport more fuel efficient through its use in vehicles. The versatility and low price of plastic compared with alternatives is reflected in the rapid growth of the market for the material.
But the environmental impacts of plastic cannot be ignored. Concerns are growing about its impact on the world’s ecosystems. Marine wildlife is particularly vulnerable, and harmed through entanglement and ingestion of plastic. There is a risk of microscopic particles of plastic transferring toxins into the food chain. Fields, streets and beaches are increasingly littered with plastic bottles, bags and other trash. Plastic manufacturing processes use non-renewable resources, such as oil, and release greenhouse gases into the atmosphere contributing to climate change. In addition, the use of chemical additives in plastic may be hazardous to human health. All of these impacts are gaining increased attention from stakeholders such as non-governmental organisations (NGOs), international institutions, governments, and the general public.
Why did UNEP and PDP commission this research?
The objective of this report is to help companies manage the opportunities and risks associated with plastic use. It articulates the business case for companies to improve their measurement, disclosure and management of plastic use in their designs, operations and supply chains. In order to provide a sense of scale, the report sets out to quantify the physical impacts of plastic use translated into monetary terms. This metric can be seen as the current value-at-risk to a company, should these external impacts be realised internally through mechanisms like strengthened regulation, loss of market share, or increased price of raw materials and energy. This metric can also be used to help understand the magnitude of the opportunities, and the tangible benefits to stakeholders, including shareholders, of using plastic in an environmentally sustainable way.