Global Plastic Waste - will it be acknowledged at COP 28 or not?

I was on TikTok the other day and came across a video of a river littered in waste and what appeared as various forms of non-degradable items. Including, a beach somewhere in India, not too dissimilar to the pictures shown. It looked awful; I mean horrendous. A true recipe for disaster to get infected by some rare and infectious dieses, no doubt. Then these nice people (presumably locals) decided to than clear it up and resorted it to its former glory- wow, oh my goodness, what a difference. However, a thought struck me, where did all the waste go? Landfill fill, incinerated, recycled or was it exported (dumped) into poorer countries?

With COP 28 already kicked off in Dubai, I’ve always been passionate about Climate Change and ESG issues. Having attended COP 26 in Glasgow, Scotland 2 years ago, I decided to explore a bit more about the plastic problem to understand how I can make a difference and create awareness- with a finance twist of course.

Plastic Findings

I found some useful information on the Organisation for Economic Co-operation and Development (OECD) plastics outlook database, together with their conclusions and highlights which I have tried to summarise briefly below. The information is quite frightening.

• Plastics account for 3.4% of global greenhouse gas emissions;

• Global plastic waste generation accounts for nearly two-thirds of plastic waste comes from plastics with lifetimes of under five years, with 40% coming from packaging, 12% from consumer goods and 11% from clothing and textiles;

• Only 9% of plastic waste is recycled (out of which 15% is collected for recycling but 40% of that is disposed of as decomposing residues). Another 19% is incinerated, whilst 50% ends up in landfill and 22% evades waste management systems and/ or goes into uncontrolled dumpsites, is burned in open pits or ends up in terrestrial or aquatic ocean environments, especially in poorer countries; and

• There is now an estimated 30m tonnes of plastic waste in seas and oceans, with a further 109m tonnes accumulating in rivers. The build-up of plastics in rivers implies that leakage into the ocean will continue for some time to come, even if mismanaged plastic waste could be significantly reduced.

As an accountant putting on my ESG/ TCFD and IFRS S1 and S2 hat on, plastic pollution needs a process on how to measure the waste we have created.

According to the Office of National Statistics, plastic waste has become a major environmental issue, with the United Kingdom playing a substantial role in this problem. It is estimated that UK households throw away a staggering 100 billion pieces of plastic packaging a year, averaging 66 items per household per week. In 2021, 2.5 million metric tons of plastic packaging waste were generated in the UK. In the UK (based on 2021 data) it is also estimated that 5 million tonnes of plastic is used every year, nearly half of which is packaging.

Therefore, using the UK Government (Office of National Statistics data) what would this look like for the UK? Note, the data presented comes with some scepticism from other UK Government bodies and Greenpeace over the truthfulness of the data published.

Nonetheless, despite this, I was curious to see what this data further means. Firstly, for plastic related gas emissions, 0.17 million tonnes is potentially indicated. The sources of plastic and the after waste is shown in the pie-chart below, for illustration.

Clearly based on the data published a solution is needed for plastic waste and its related pollution.

What is the solution to the plastics waste problem¹

By establishing a process for reporting on plastics, that will assist companies in accurately measuring the complete impact of the plastic they utilise and produce. This, in turn, would allow them to develop appropriate mitigation actions to address the waste they generate. Plastics reporting would also provide clarity to companies struggling with the management of large volumes of plastic waste and its negative environmental consequences, but also offers a framework for building a robust process for tracking and managing plastic waste.

Like greenhouse gas (GHG) reporting, plastics reporting will encourage engagement. Using the TCFD framework principles, whilst there is no suggested plastics KPI’s, I have seen the following along my travels:

• Use of recycled or renewable material;

• Elimination of plastic from packaging; and

• Making packaging 100% recyclable.

However, several initiatives to measure and disclose plastics are included in the Global Reporting Initiative (GRI) 306 on Waste and GRI 301 on Materials and 3R Guidelines for Corporate Plastics Stewardship (2021). Another good source is Global Sustainability Standards Board (GSSB) website.

It is important to also note that a lack of framework in defining the basis of measurement would lead to lack of comparability, if this issue is to be taken seriously. On the flip side, having a common standard would help improve the consistency and comparability of metrics and data and provide confidence to businesses that this effort is cost-effective and worthwhile, that will encourage the adoption of best practice standards and metrics.

COP 28- plastics on the agenda¹

There is one question on my mind which I would like to point out: “What is the plan for plastic waste reporting as a part of the wider ESG debate- including the what, when and how, to embed reporting to achieve sustainable reductions now and in the future”.

The reason why is because, by implementing a unified approach to plastics waste using the COP 28 Dubai conference as a forum would immensely help organise Governments’ to push companies to achieve better plastic waste management, so that there is a defined universally accepted market practice that is aligned across industries and globally, thus bringing in a wind of change in promoting efforts to reduce plastic waste so that Companies can be held to accountable- by (force of hand) making it enacted as apart of regulatory/ compliance reporting.

Plastic Reporting on Waste- the why?

By adopting a sustainability approach, it will encourage new products that are designed to minimise waste and can be broken down for reuse or recycling, e.g., Ikea’s campaign on sustainability is a marvellous example. Another is to redefine corporate strategy by looking at the future target operating model to align business aims and interests with plastics-change mitigation and adaptation¹.

“If you can’t measure it, you can’t manage it.”

Chair of Task Force on Climate-related Financial Disclosures, Michael Bloomberg.

Adopting effective plastic waste management also has several benefits, especially when consumers are likely to consider sustainability as a factor when deciding from which companies to make purchases from. If companies can demonstrate their real commitment to reducing plastic waste and drive consumer loyalty, this can only be a win-win. Investors are starting to step up too, where they are increasingly reviewing sustainability metrics to help make investment decisions. With this trend on the up, companies clearly need to communicate their sustainability efforts to attract the interest of investors. Lastly, steps taken to reduce reliance on plastic can also help promote both business and community resilience in the long term, e.g., climate change-induced natural disasters, social upheavals and the pandemic have led to increased camaraderie amongst the people in the UK, I believe – help thy neighbour in times of need.

Living very near to the birthplace of Charles Darwin, I am reminded of signposts of this great scholar, which in turn reminds me further of the time when I saw Sir David Attenborough 2 years ago from amongst the crowd at COP 26- Glasgow… saying…

“If you don’t take action, the collapse of civilisation and the extinction of much of the natural world is on the horizon.”

On that note, let’s just hope there is more of a realistic action plan (after a great deal of thought and a lot less haste) post COP 28 by our withering UK government, the Tories, where quite utterly ridiculous plans on consumer energy schemes (costing consumers literally thousands to upgrade, despite offsetting grants) have been scrapped which is also why the UK Energy Efficiency Taskforce has been scrapped, 6 months after it was established- with millions of UK tax payers money gone with the wind (no pun intended) on these hairbrained initiatives. I wonder what other greenwashing Fishy Rishi might come up with to appease the UK general public with general elections looming next year, where wasting millions if not billions of tax revenue is, in my opinion one of the real root causes of UK’s current fiscal drag.

Dee Singh Kothari is a senior partner in Kothari Partners

¹ Ideas expressed in this article are solely of the authors. The author nor Kothari Partner’s accept any liability for the incorrect application of these ideas either used by companies, employees or other individuals alike.

² At Kothari Partners, we have worked with various UK and overseas listed and PE-backed clients across various industries to consider how their business and finance services can bring them both cost reductions and performance improvement.

Our approach is to help our clients understand their current situation, identify the value and decide on the scope, vision and set of strategies for what they could achieve for their business. We help plan their implementation and support them and deliver the solution/ change needed, so it is properly and permanently embedded in their organisation. We aim to help past and future clients by delivering high-quality work to their organisation, generate real efficiencies and free up time to support better business decisions.

For a confidential discussion please free to contact us, via our corporate website: https://www.KothariPartners.com