Stockholm (NordSIP) – The fifth session of the Intergovernmental Negotiating Committee to develop an international legally binding instrument on plastic pollution (INC-5) will begin on 25 November in Busan, Republic of Korea. Awareness of the major role played by plastic in the twin crises of climate change and biodiversity loss has been steadily growing over the past 24 months. As institutional investors shift their capital away from coal, oil, and gas, the fossil fuel industry has been investing heavily in its petrochemical capabilities and is on track to triple the production of raw plastics by 2060.
Environmental non-profit Planet Tracker is seeking to draw investors’ attention to this mounting problem and encourage them to use their collective influence to compel plastic producers and consumers to move away from the harmful raw material. On 5 September the NGO published a new shareholder engagement guide covering petrochemical companies and plastic pollution, which it hopes will provide a comprehensive framework for investors to engage with the sector and urge companies to adopt sustainable practices and reduce their environmental impact.
Alongside background information on the nature and scale of the problem, the Planet Tracker guide provides investors with a series of targeted engagement questions covering the five core petrochemical company ‘asks’ as laid out in the Investor Statement that was co-signed by more than 70 international financial institutions in July 2024.
Transparent Disclosure and Target Setting: Investors should urge companies to disclose their environmental impact transparently and set clear, measurable targets for reducing plastic pollution. This includes reporting on the production and use of plastics, as well as the environmental footprint of their operations, which can be done via the CDP disclosure platform or by using the Taskforce on Nature-related Financial Disclosures (TNFD) guidelines.
Addressing Polymers and Chemicals of Concern: Companies should identify and address the polymers and chemicals in their products that pose significant environmental and health risks. 4,000 of the approximately 16,000 chemicals used in plastic production have already been identified as toxic. Manufacturers should urgently transition to safer, more sustainable alternatives and reduce the use of hazardous substances.
Building Suitable Infrastructure for the production of sustainable materials: Companies should be directed to immediately begin directing capex towards the appropriate infrastructure, given the typically long lifespan of such facilities. This should include developing recycling and waste management capabilities, as well as adopting new technologies that minimise environmental impact.
Establishing Dedicated Governance: Planet Tracker points to the plastics industry’s tendency towards ‘Greenlighting,’ which occurs when company highlights a particularly green feature of its operations or products, however small, in order to draw attention away from environmentally damaging activities being conducted elsewhere in its value chain. Effective governance structures are crucial for countering this type of corporate greenwashing, while ensuring accountability and driving progress. Investors should advocate for the establishment of dedicated governance bodies within companies to oversee sustainability initiatives and ensure compliance with environmental standards.
Supporting Policy and Regulation: INC-5 will be the final meeting before the anticipated plastics treaty is signed during 2025. Companies should be encouraged to publicly support this ambitious, legally binding international agreement aimed at ending plastic pollution. According to Planet Tracker INC-4 saw a 37% increase in petrochemical-linked lobbyists and industry representatives versus the previous such meeting. Investors must therefore put pressure on companies to commit to ceasing this type of negative and obstructive lobbying.
Planet Tracker hopes its dedicated guide will provide investors with a comprehensive strategy for effective engagement with petrochemical companies, founded on thorough preparatory research, the use of targeted questions, collaborative engagement, and a clear process of monitor companies’ progress and holding them fully accountable.