Carbon Disclosure Project: 3,000 companies reveal plastic impacts as financial institutions call for mandatory reporting
14 Nov 2023 — More than 3,000 companies, boasting a combined market capitalization value exceeding US$31 trillion, have publicly disclosed their plastic production and usage details through the Carbon Disclosure Project (CDP), the global environmental disclosure platform. The disclosure aligns with the ongoing third round of Global Plastics Treaty negotiations in Nairobi, Kenya, this week.
Notable contributors include companies such as Unilever, Sumitomo Chemical and Johnson & Johnson. These household names provided information on the production, usage and disposal of “most problematic” plastics, spanning sectors from electronics to F&B processing.
The disclosure push is further supported by 48 financial institutions with assets totaling over US$3.5 trillion. These institutions endorsed an open letter led by CDP to global governments, requesting that mandatory corporate disclosure of plastics be included in the Global Plastics Treaty.
“Plastic-related disclosure regulation is currently in its infancy, with the policies that do exist best characterized as fragmented and piecemeal. A robust, ambitious corporate disclosure mechanism in the Global Plastics Treaty will set the guiding framework within which governments will proceed to enact harmonized and interoperable national plastic-related corporate disclosure legislation,” CDP shares with Packaging Insights.
“High-quality corporate disclosure is disclosure that covers risks, opportunities, impacts and dependencies, covers the full plastics lifecycle and extends along operations, value and supply chains. This allows companies to better understand their risks and impacts (and therefore change behavior), investors to obtain enough high-quality data to make treaty-supporting capital decisions, and policymakers to create more targeted, effective policy while accurately monitoring progress.”
The letter calls for “transparent, reliable and comprehensive” data that encompasses risk assessment, opportunities identification, dependencies and impacts, and target setting.Mandatory disclosure calls
CDP launched the plastics disclosure platform in April. In its inaugural year of reporting, companies were requested to divulge information on plastic polymers, durable plastics and plastic packaging across their value chains. The full findings from CDP’s first year of plastics disclosure will be released in the spring of 2024.
The call for mandatory disclosure reflects a broader movement within the private sector to address the financial, physical, legal, regulatory and reputational risks associated with plastic pollution. Financial institutions, including Coller Capital and Green Century Funds, underscored the value of understanding these risks and opportunities for informed investment decision-making.
“Signing the open letter was a significant signal of financial institutions’ support for corporate mandatory disclosure as part of the Global Plastics Treaty,” CDP tells us.
“Financial institutions play a pivotal role in shaping the future of industries and companies by ensuring that they have access to vital resources, particularly finance. Therefore, the financial services industry is a critical actor in determining which companies and activities are funded to thrive.”
Furthermore, the global environment disclosure platform operator details that responding to a recent consultation, 81% of capital markets and supply chain members said that the information requested by CDP on plastics would be useful to inform financial or procurement decisions.
“For example, a company’s growth prospects may be intrinsically tied to the production or consumption of single-use plastic. How the company accounts for bans on single use plastic in its growth strategies and whether it invests in solutions is vital information that can inform investment decisions and therefore influence corporate action on plastics,” explains CDP.
Data for pollution mitigation
In the letter, the 48 institutions write that they “recognize the pivotal significance of comprehensive plastic data in tackling the environmental and financial risks associated with plastics.” CDP details that 81% of capital markets and supply chain members believe information on plastics would be useful to inform financial or procurement decisions.
“Our objective is to establish robust text mandating corporate disclosure of comprehensive plastic data within the Global Plastics Treaty, covering the risks, opportunities, impacts and dependencies associated with the entire lifecycle of plastic products, from creation to responsible disposal.”
The letter calls for “transparent, reliable and comprehensive” data that encompasses risk assessment, opportunities identification, dependencies and impacts, and target setting. “There is value in understanding the risks and opportunities associated with companies’ plastic footprints,” says Adam Black, head of ESG & Sustainability at Coller Capital. “We believe that plastic-related disclosure will enhance investment decision-making and make for more informed post-investment engagement.”
With the financial institutions supporting mandatory disclosure, negotiators at the Global Plastics Treaty are urged to acknowledge the necessity of data reporting mechanisms in addressing the growing plastic pollution crisis.
“As stewards of capital and investments, financial institutions play a pivotal role in guiding industries and companies toward sustainable practices and responsible resource management. The tangible impacts of plastic pollution on financial portfolios, supply chains and the communities in which they operate are a matter of significant concern,” reads the letter.
“In this context, comprehensive plastic data is the cornerstone upon which informed decisions and strategic actions are built. To make informed choices and align our investments with sustainability objectives, including those outlined in the Global Plastics Treaty, access to transparent, reliable and comprehensive data is imperative.”
By Radhika Sikaria
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