Declining market share and increased governmental and public pressure should sway the plastics industry toward more sustainable practices, a recent report says. Ethan Freedman discusses in an article on The Independent website.
‘This industry is an environmental disaster’: Experts warn EU plastics industry to evolve – or die
Declining market share and increased regulation are threatening the future of Europe’s plastics and chemicals industry — and the answer may be a rapid shift toward more sustainable practices, warns a new report shared exclusively with The Independent.
As China has rapidly scaled up production, and production in the EU has largely stagnated, the continent’s global market share has declined, says the report, published by the non-profit Planet Tracker.
At the same time, governments and the public are pushing to reduce plastic waste, John Willis from Planet Tracker tells The Independent.
At stake are billions of euros of investment money that could be at risk if the industry continues to lose out — but investment firms could push the industry to capitalise on the growing demand for more sustainable products and pipelines, the report suggests.
While global chemical sales from China jumped from around €600bn ($644bn) in 2010 to around €1,500bn ($1,600n) in 2019, sales from the EU have stayed around €500billion in that same time, the report states. In addition, over that period, plastics became a smaller and smaller portion of chemical sales from the EU.
The industry is losing market share, Mr Willis says — just as regulation is increasingly moving against it. For example, the EU has started limiting single-use plastics, the reports notes, and moved toward a more circular economy. And just this year, 175 countries at the UN have agreed to create a global treaty on reducing plastic pollution.
In addition, public sentiment is also trending against the plastics industry as people search for more sustainable products, the report notes.
The question for the industry, Mr Willis says, becomes determining what is riskier — staying the same, or adapting to something new?
The report urges investment firms to push these industries to seize on the growing demand for more sustainability — by things like boosting recyclability, reducing waste and cutting emissions — to secure their own investments.
Just a few investors have a large stake — and say — in the industry, too. The report finds that just 40 firms have around €466bn ($500bn) invested in the European plastics industry but have rarely used that stake to push for sustainable initiatives.
In the past five years, there have been only nine resolutions at annual general meetings related to plastics, the report notes. In addition, very few corporate bonds and loans are linked to reducing plastic pollution, it adds.
If you have a duty to look after your clients’ investments, you need to really assess the quality and risks of that investment, Mr Willis argues — and if you see risks on the horizon, you should want to know how these companies will deal with those risks, he adds.
Beyond the immediate financial risks, the plastic industry’s business-as-usual also carries a ton of climate, health and pollution risks, the report notes. For one, plastics produce a ton of greenhouse gasses like carbon dioxide that helps warm the planet. And the production and disposal of plastics has released toxic chemicals and microplastics into the environment, which could threaten both human and animal health.
“This industry, quite frankly, is an environmental disaster,” says Mr Willis — and we’re hooked on the products, he notes. But no matter if your concern is financial, environmental or health-related, there are plenty of reasons to worry, he says.
“We need to find alternatives,” Mr Willis adds.