By now, we all know that the overuse of single-use plastic is by no means sustainable. And yet, it’s almost impossible to avoid in daily life. Keep reading to find out how detrimental plastic really is for our environment, and how the Inyova community is trying to push big corporations like Beiersdorf to stop producing single-use plastic and offer consumers a more sustainable alternative.
Plastic is everywhere
Plastic is a synthetic material made from fossil fuels, like petroleum and natural gas. It is used to make a wide variety of products, including bags, bottles, packaging, furniture, and electronics. Plastic is a versatile material that has become essential to modern life. However, the production, use, and disposal of plastic have a significant impact on the environment, including climate change.
The world produces about 300 million tonnes of plastic waste each year. Only about 9% of this waste is recycled. The remaining 91% ends up in landfills, incinerators, or the environment. Unfortunately, a significant amount of plastic waste ends up in the oceans. (UN Environment Programme, 2022)
What’s the impact of plastic waste on climate change?
The production, use, and disposal of plastic all contribute to climate change. Firstly, the production of plastic requires a lot of energy, which releases greenhouse gases into the atmosphere. In 2019, plastic production generated 1.8 billion tonnes of greenhouse gas emissions. This is equivalent to 3.4% of global emissions. 90% of these emissions come from their production and conversion from fossil fuels. (OECD, 2022; Geneva Environment Network, 2022)
Secondly, plastic waste disposal creates a lot of greenhouse gas emissions. Plastic waste that is not recycled or reused ends up in landfills or incinerators. Landfills release methane, a greenhouse gas that is 28 times more potent than carbon dioxide. Incinerators also release greenhouse gases, although the amount released depends on the type of incinerator. (United States Environmental Protection Agency, 2018)
But that’s not all – every year, an estimated eleven million tonnes of plastic enter the oceans. This plastic can harm marine life and pollute the water. (UN Environment Programme, 2022)
What’s the role of personal-care manufacturers in plastic waste generation?
The personal care industry is a major contributor to plastic waste generation. The industry produces a wide variety of products, many of which are packaged in plastic. Products like shampoo, body wash, deodorant, toothpaste, and makeup all typically come in plastic bottles or tubes.
Figures from the United States Environmental Protection Agency (2018) found that roughly 70% of the plastic containers and packaging are landfilled and will not be recycled or reused. In addition, plastic waste from personal care products can end up in the environment, where it can harm wildlife and pollute waterways. Various studies have found that microplastics, which are tiny pieces of plastic, can be found in the bodies of fish, shellfish, and even humans.
Why is this important for your impact investment?
All these facts remind us how important it is to take action now. As impact investors, we are aware of our responsibility. That’s why, in May 2023, Inyova co-signed an investor statement to major fast-moving consumer goods companies and retailers regarding their use of plastic packaging. The initiative was joined by investors managing about USD 10 trillion in assets and was covered by the Financial Times. As part of this initiative, the coalition has reached out to 36 companies, including Beiersdorf.
Beiersdorf develops, produces, and distributes skin care products and other self-care items. The company is behind well established brands like Nivea and Labello, Eucerin, and Tesa, the tape brand.
Beiersdorf is part of the Inyova universe as a German champion and a leader in fair pay and human rights initiatives. The Science Based Target Initiative has also recognised Beiersdorf’s emission reduction goal as aligning with the Paris Climate Agreement’s target of 1.5 degrees warming.
However, as a personal care manufacturer, Beiersdorf is part of the plastic value chain and contributes to the plastic waste generation. While the company is moving in a good direction with regards to the aforementioned initiatives, more efforts are needed to reduce plastic packaging and waste. Inyova is therefore leading the efforts in engaging with Beiersdorf and has taken over communication with the company. As part of this, we sent a letter to Beiersdorf on 10 August 2023, urging for immediate action to diminish plastics from significant users of plastic packaging.
Our key messages to Beiersdorf and others in the plastic value chain are:
- Lobbying and Policy Support: We expect companies to support international efforts for an ambitious plastics treaty and advocate for legally binding measures designed to reduce production and consumption and boost reuse.
- Reduction of Single-Use Plastic: We expect companies to establish a clear plan of action to drastically reduce single-use plastic packaging, including the upscaling of reusable packaging systems.
- Tackling Toxicity: Over 3,000 potentially harmful chemicals have been identified in food packaging. We expect companies to commit to identifying and eliminating the use of hazardous substances in products and packaging and to publicly report their progress in doing so.
- Data transparency and Comparability: In order to efficiently monitor plastic reduction efforts, we encourage businesses to disclose their impact concerning plastics. For example, with the CDP’s online disclosure platform for reporting.
Impact investing is all about taking back control to create positive change. Active ownership initiatives like this one allow us as shareholders to push for change in existing companies and take back control. As always, we will keep you updated on the progress and outcome of this initiative.
Wondering what else Inyova is doing in regard to active ownership? Read about all of the Inyova community’s shareholder initiatives to date here!
Sources
- “Plastic leakage and greenhouse gas emissions are increasing.” (2022). OECD.
- “Contribution of plastic and microplastic to global climate change and their conjoining impacts on the environment – A review.” (2021). PubMed Central
- “Climate change and plastics pollution.” (2020). OECD.
- “Plastics and Climate Change | Plastics and the Environment Series.” (2022). Geneva Environment Network.
- “Would stopping plastic pollution help with climate change? How do we do it?” (2022). MIT Climate.
- “Microplastics are in our bodies. How much do they harm us?” (2023), National Geographics.
- “Big investors call on companies to slash use of plastics” (2023), Financial Times.
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