Businesses could significantly enhance their sustainability credentials by improving the way they measure, manage and report the amount of plastic they use in their operations and across the supply chain.
That's according to a new report from the Plastic Disclosure Project, the UK Environment Assembly and natural capital analysts Truscot which argues that tighter regulation, increased competition and more consumer demand would force plastic-intensive firms to pay the natural capital costs.
It highlights a growing concern about the threat that widespread plastic waste poses to marine life, with conservative estimates of the overall financial damage of plastics to marine ecosystems standing at US$13bn each year.
"The research unveils the need for companies to consider their plastic footprint just as they do for carbon, water and forestry," said Plastic Disclosure Project's director Andrew Russell. "By measuring, managing and reporting plastic use and disposal through the PDP, companies can mitigate the risks, maximize the opportunities, and become more successful and sustainable businesses."
This is one of two reports released on the opening day of the first United Nations Environment Assembly. It the first-ever assessment of the environmental costs of plastic in business, calculating the amount of plastic used by stock exchange-listed companies in 16 consumer goods sectors and assesses levels of corporate disclosure on plastic.
The report says that over 30% of the natural capital costs of plastic are due to greenhouse gas emissions from raw material extraction and processing. However, it notes that marine pollution is the largest downstream cost, and that figure of US$13 billion is likely to be 'a significant underestimate'.
One emerging issue is the increasing use of microplastics directly in consumer products, such as microbeads in toothpaste, gels and facial cleansers. These microplastics tend not to be filtered out during sewage treatment, but are released directly into rivers, lakes and the ocean.
Trucost calculates the total natural capital cost of plastic in the consumer goods industry to be more than US$75bn per year. The organisation's chief executive Richard Mattison said: "Natural capital valuation has the power to help organizations understand their environmental impacts, including pollution of the world's oceans. By putting a financial value on impacts such as plastic waste, companies can further integrate effective environmental management into mainstream business.
"By highlighting the savings from reuse and recycling, it builds a business case for proactive sustainability improvements."
The report notes that plastic use in the food sector has the largest impact in absolute terms, responsible for almost a quarter of the total natural capital cost. The toy sector has the largest natural capital intensity, as the natural capital cost of its plastic use is equivalent to 3.9% of its annual revenue.
The impacts of plastic vary around the world. Companies face higher natural capital costs if they purchase or dispose of plastic in Asia compared to North America, Europe or Oceania due to the higher pollution intensity of manufacturing in Asia and its lack of adequate waste management facilities.
The report concludes that smart, forward-looking companies can take advantage of opportunities from improving management of plastic such as cutting costs through more efficient use of plastic, developing 'closed loop' business models that recover resources locked up in plastic, and winning customers by creating sustainable products.
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