Plastic pollution poses serious systemic risks to economies, the environment and biodiversity, and to people’s health and livelihoods. The recent meeting of an intergovernmental negotiating committee marks an initial step towards achieving a legally binding international agreement to end a problem affecting almost everywhere on Earth, from the Mariana Trench to Mount Everest.
To address the global plastic waste crisis, the UN Environment Assembly adopted a resolution in March 2022 that sets the path to a global treaty to end plastic pollution.
The resolution requests the drafting a legally binding instrument on plastic pollution, including in the marine environment. The aim is to complete this by the end of 2024. The first committee meeting took place from 28 November to 2 December 2022.
About 8.3 billion tonnes of plastic waste have been generated since 1950 (see Exhibit 1), of which 9% has been recycled, 12% incinerated and 79% – more than 6.5 billion tonnes – disposed of in landfills or in the environment. [1]
Plastic pollution has a devastating effect on many marine and terrestrial species, and on those people who have to live surrounded by it. The leaching of microplastics into the environment is known to have wide-ranging health impacts. They have been found even in breastmilk. [2]
Without effective controls, plastic production is set to double in 20 years and plastic waste leaking into the ocean is projected to triple by 2040. [3]
Most plastics are not designed with the principles of a circular economy in mind. Yet, the best available scientific analysis shows that circular economy solutions applied at scale can reduce annual volumes of plastic pollution by at least 80% by 2040 compared to business-as-usual, and could even achieve near-zero plastic pollution by 2060 globally. [4]
Actively supporting a binding solution
At BNP Paribas Asset Management, we believe that as a ‘future maker’, we have a duty to try to avert such environmental and health crises and help create better economic systems and societies.
That belief underpins our active support for effective international policies to address such challenges. In 2018, we endorsed the New Plastics Economy Global Commitment launched by the Ellen MacArthur Foundation and the UN Environmental Programme, followed by the call for implementation of Extended Producer Responsibility schemes for packaging. We are also a member of the PRI Plastic Investor Working Group.
We are among the 85 businesses and financial institutions that are members of the Business Coalition for a Global Plastics Treaty. Launched in September 2022, this coalition is committed to supporting the development of an ambitious, effective and legally binding UN treaty to end plastic pollution. It also serves as a voice to counter other business and investment opinions that do not welcome or advocate for a global legal solution.
The Business Coalition’s vision:
- Reduction of plastic production and use by moving to a circular economy model, focusing on those plastics that have high-leakage rates, are short-lived, and/or are made using fossil-based virgin resources
- Circulation of all plastic items that cannot be eliminated, keeping them in the economy at their highest value
- Prevention and remediation of remaining, hard-to-abate micro and macro-plastic leakage into the environment, including robust waste management practices and tackling legacy pollution.
Pinpointing effective change
The following are the key characteristics that we believe the global treaty to end plastic pollution needs to embody:
- An ambitious timeline to phase out those plastics that pose critical health and environmental risks, thereby helping to address the interrelated climate and biodiversity crises
- A legally binding commitment: The planet and communities that suffer most from the effects of pollution don’t have time for voluntary or non-binding measures. The treaty needs to be legally binding on all parties
- It should underpin a fundamental systemic shift towards a circular economy
- It needs to be data and science-based
- It is critical that the treaty be effective, truly incentivised and enforced by nation states
- It must be far-reaching, and tackle the whole value chain, addressing both upstream and downstream activities
- It should have global rules that all signatories are required to implement nationally
- It should be designed to harmonise rules, goals, obligations and regulations across jurisdictions. Crucially, it must avoid a ‘race to the bottom’ i.e. competition between nations to attract companies, facilities and technologies by undercutting each other with weaker standards
- We urge the negotiators tocreatean international policy framework that enables the conditions for much-needed private sector and government investment in infrastructure, innovation and skills worldwide
- Finally, it must be just. That is, its provisions must protect and respect the livelihoods, health, labour and human rights of all people involved in the value chain to achieve a safe and socially just circular economy.
The talks on a global treaty to end plastic pollution come at a time when the European Commission is proposing new EU-wide rules on packaging to tackle waste. Packaging is one of the main users of virgin materials: 40% of plastics used in the EU goes into packaging.
The rules aim to end unnecessary packaging, limit over-packaging and provide clear labels to support correct recycling. On bio-based, compostable and biodegradable plastics, the rules set out for which applications such plastics are environmentally beneficial and how they should be designed, disposed of and recycled. They should put the packaging sector on track for climate neutrality by 2050.
As part of our corporate social responsibility [5] and net zero asset manager5 efforts, BNP Paribas Asset Management is taking waste reduction initiatives to lower our operational emissions. Our goal is to raise the recycling rate from 35% to diverting 100% of our waste. Under a multi-year action plan, we are working on switching from single-use plastic, running paperless competitions and establishing recycling streams for specialised waste such as coffee capsules, lightbulbs and other electronic waste.
Also read: Plastic waste: Is recycling the answer?
References
[3] Breaking the Plastic Wave, The Pew Charitable Trusts and SYSTEMIQ, 2020
[4] See footnote 3
[5] Also see the 2021 Sustainability Report and Committed to climate: Our net zero roadmap
Disclaimer
Please note that articles may contain technical language. For this reason, they may not be suitable for readers without professional investment experience. Any views expressed here are those of the author as of the date of publication, are based on available information, and are subject to change without notice. Individual portfolio management teams may hold different views and may take different investment decisions for different clients. This document does not constitute investment advice. The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial outlay. Past performance is no guarantee for future returns. Investing in emerging markets, or specialised or restricted sectors is likely to be subject to a higher-than-average volatility due to a high degree of concentration, greater uncertainty because less information is available, there is less liquidity or due to greater sensitivity to changes in market conditions (social, political and economic conditions). Some emerging markets offer less security than the majority of international developed markets. For this reason, services for portfolio transactions, liquidation and conservation on behalf of funds invested in emerging markets may carry greater risk.
Environmental, social and governance (ESG) investment risk: The lack of common or harmonised definitions and labels integrating ESG and sustainability criteria at an EU level may result in different approaches by managers when setting ESG objectives. This also means that it may be difficult to compare strategies integrating ESG and sustainability criteria to the extent that the selection and weightings applied to select investments may be based on metrics that may share the same name but have different underlying meanings. In evaluating a security based on the ESG and sustainability criteria, the Investment Manager may also use data sources provided by external ESG research providers. Given the evolving nature of ESG, these data sources may for the time being be incomplete, inaccurate or unavailable. Applying responsible business conduct standards in the investment process may lead to the exclusion of securities of certain issuers. Consequently, fund performance may at times be better or worse than the performance of relatable funds that do not apply such standards.
