La Française: Planet over Plastics - Towards a global agreement on pollution

April 18, 2024

By Frédéric Yo, ESG Analyst, La Française Asset Management

In March of 2022, a historic agreement was reached among 175 nations to forge by December 1^st 2024 a legally binding ‘Global Plastic Treaty’ aimed at combating plastic pollution worldwide. However, progress in the subsequent International Negotiating Committees (INCs) has been sluggish.

With just two INC sessions remaining in 2024 before the treaty is due to be implemented in mid-2025, the outcome of the upcoming session from April 23 to 29 will be pivotal in shaping an impactful treaty. As our planet grapples with the dire consequences of plastic pollution, swift action is imperative.

Plastic, an integral part of modern life, offers numerous benefits, but its unchecked proliferation poses significant threats. From single-use plastics suffocating our oceans to insidious microplastics infiltrating our food chain, the consequences are undeniable. Shockingly, 50% of all plastics ever manufactured has been produced since the year 2000, with projections indicating a doubling of current production by 2050.

The majority of plastic waste, a staggering 76%, ends up as environmental refuse, with a substantial portion polluting our oceans, totaling around 10 million tons annually. This pollution not only imperils ecosystems and wildlife but also jeopardizes human health through the release of harmful chemicals and negative contributions to climate change.

The Global Plastic Treaty represents an unprecedented opportunity to manage plastic pollution, but its successful enactment hinges on decisive action, global cooperation and a shared commitment to safeguarding our planet for future generations. Governments will need to enforce pivotal regulations in order to curb the use of plastics, to bolster recycling infrastructure and to hold corporations accountable for their environmental impacts.

Ahead of INC-4, the UNEP released a revised 'zero draft' outlining potential policies and actions, covering all facets of the plastic value chain. However, discord persists among delegations regarding the focus of the treaty, with some advocating for upstream measures to reduce production, while others, mainly fossil fuel producing countries, prioritize waste management, due to economic considerations.

The investment sector can affect the outcomes of the treaty through effective engagements, both on policy and company levels. Groupe La Francaise has been supporting the UN-level treaty since 2021, when it first responded to the call by PRI, WWF and the Ellen MacArthur Foundation. Then the group joined the Business Coalition for the Plastics Treaty in September 2022 when the coalition was first formed. The group has also engaged with companies operating in the plastic value chain. There will be more investment opportunities as the treaty comes into effect. Alternatives to plastics are estimated to reach a market size of more than $9 billion by 2027 with an annual growth rate of 16.8%.

Irrespective of the final treaty content, its consequences will be profound, particularly for the private sector, as the majority of activities are dependent to various extents on plastics. One study revealed that over half of the single-use plastics items discarded globally can be attributed to the actions of a mere 20 companies, almost all of which are petrochemical companies.

While waiting for a legally binding treaty, it is important for companies to take responsibility for their products and lead the way in the fight against pollution. For plastics manufacturers, embracing sustainable alternatives such as bioplastics, which are derived from renewable resources, presents a promising avenue to reduce carbon footprints.

Currently representing less than 1% of plastics production, bioplastics, a greener alternative, are poised for significant growth. For consumer-facing companies, redesigning products to encourage reuse could significantly reduce plastic waste. Research indicates that just a 10% increase in reuse could halve the amount of plastics polluting the oceans. It is also up to consumers to adopt the right behavior and to make the right decisions. On Earth Day 2024, the theme of 'planet versus plastics' reminds us that society as a whole can contribute to providing solutions to plastic pollution.