Plastics and Sustainable Investments – an information brief for investors

Abstract

Plastics have become ubiquitous in modern society. It is a group of materials that is versatile and useful in many types of applications and have thus become extremely popular. Plastics are thus important for many industries and value chains as well as for everyday practices of most individuals – and should thus be also for investors and financial actors. A transition to sustainable plastics will require investments in production, management, and recycling – and investments need to transition towards sustainable practices as argued by many international organisations and governments. A transition towards a sustainable production and use of plastics must deal with several important environmental issues related to plastics: the complete dependency on fossil resources and energy for their production; low rates of recycling – also of material that is collected for recycling; unsustainable waste management which contributes to plastic pollution of terrestrial and aquatic environments. To this list could also be added health concerns related primarily to the use of different types of additives. Public pressure – currently primarily driven by the concern for marine plastics – will necessitate legislative action which will impact the sector in the next five to ten years. Plastics are thus becoming a key concern for global policy making for several different reasons. Historically the sector has not been subject to strict and specific governance, but that is likely to change as it is becoming scrutinized both in the EU and globally. Legislation is thus likely to affect the sector in many different ways, as shown in this report. Recycling is the domain where pressure is likely to develop most rapidly, both from new and stricter policy instruments and civil society. This will affect not only plastic waste management but all producers of plastic products who likely will have to ensure recyclability of their products. Biobased feedstocks for conventional plastics as well as new biobased plastics and materials are likely to grow as pressure also regarding the climate impact of the sector increases. Investments in plastics and related sectors must acknowledge the risks associated with the industry and consider how to evaluate and mitigate them. Plastics will remain important for many years to come, and investments to make the sector more sustainable are thus crucial.