CDP Tackles Plastics Crisis

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    Stockholm (NordSIP) – The non-profit Carbon Disclosure Project (CDP) was set up in 2000 to create a global disclosure framework for companies, cities and regions to report on their carbon footprint to help support environmental impact management and provide information to investors and regulators.  Now simply called CDP, the organisation has broadened the scope of its reporting to cover climate change, water security and forests.  More than 18,700 companies and 1,000 cities, states and regions report via CDP.

    On April 19 2023, CDP announced the addition of dedicated plastics reporting within its disclosure system.  It is hoped this will strengthen efforts to begin tackling the issue of plastic waste that has gradually been emerging not only as a standalone crisis but also a significant contributor to the climate and biodiversity crises. Effective immediately, CDP’s reporting entities can disclose information on their production and use of the most problematic plastics.  In the first stage, the plastics-related questions will be included within the water security questionnaire, with CDP pointing to the large overlap between companies having an impact in both areas.

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    Plastics crisis has been neglected too long

    The need for additional data on plastics has been becoming clearer in recent years.  Despite only around 14% of plastic packaging being collected globally for recycling, plastic production continues to grow and is projected to triple by 2050.  Up to 12 million tonnes of plastic is added annually to oceans that are already estimated to contain roughly 150 million tonnes of the pollutant, which causes vast and costly damage to marine ecosystems, fisheries and tourism.  Moreover, almost all plastic is fossil derived, with its contribution to the global annual carbon budget estimated to hit 15% by 2050.  CDP is responding to growing market demand for greater transparency on plastic production and use by investee companies.  Amazon, ExxonMobil and McDonald’s have been the subject of shareholder petitions on the topic, and 55 financial institutions including Cardano, Triodos Investment Management and Robeco formed a Plastic Solutions Investor Alliance at the end of 2022.

    The scale of the plastics crisis is such that CDP has set a relatively narrow focus to begin with.  The questions target the most problematic areas of polymers, durable plastic and plastic packaging.  The economic sectors with the greatest impact are chemicals, fashion, food and beverage, fossil fuels and packaging.  The new plastic module was informed by the Ellen MacArthur Foundation’s Global Commitment, and CDP provides the relevant metrics mapping to help reporting organisations avoid unnecessary duplication.

    CDP seeks to nip greenwashing in the bud

    It is encouraging to see the attention that has been paid to the technical criteria and definitions in the new plastics reporting framework.  In the last 12 months alone NordSIP has covered numerous instances of plastics and recycling-related greenwashing.  CDP pre-empts such attempts by clearly distinguishing between ‘technically recyclable’ and ‘recyclable in practice and at scale’ within the reporting guidelines.  CDP also seeks to avoid grey areas by collecting data on plastic produced with either with fossil-based materials or a range of other production methods whether using virgin or recycled raw materials.

    Sustainability-minded institutional asset owners and their managers should familiarise themselves with the new plastics module of the CDP water security questionnaire.  As plastic production expands so do the associated financial, physical, legal, technological, regulatory, and reputational risks.  Plastics are also a major contributing factor in the climate and biodiversity crises, and as such should be systematically included in shareholder engagement efforts on these topics.  As the body of data builds up one could expect CDP to broaden the plastics-related questions to include all areas of the global touched by these ubiquitous and extremely harmful materials.  CDP’s work may also help inform the ongoing efforts of the UN-sponsored Intergovernmental Negotiating Committee (INC) seeking to establish a binding global plastics treaty by 2024.

    Image courtesy of Hans from Pixabay
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