Executives across the plastics value chain could be underestimating the range and urgency of the ESG risks facing the sector, according to a new analysis from Planet Tracker. Although the UK-based think tank reported a near six-fold increase in the amount of relevant plastic risk disclosures over the past five years, including “a marked increase in ‘high-quality’ disclosures”, it also found that four-fifths of documents analysed made no mention of the risks faced by the industry. Planet Tracker used a natural language processing model to scour more than 8,000 regulatory filings, ESG reports, company presentations and transcripts from earnings calls and shareholder meetings. The documents were drawn from 59 firms from three plastics sectors – upstream resin producers, midstream plastic container and packaging converters, and downstream FMCG companies – covering the five years to end-2022. “The plastics industry faces one of the longest lists of risks of any sector, which should be on the mind of every executive and every financier,” said Thalia Bofiliou, Senior Investment Analyst at Planet Tracker, citing exposure to CO2 emissions, harmful toxic discharges, visible and invisible plastic pollution, and rising harm to people and nature through chemical additives exposure. “Plastic companies across the value chain are displaying a dangerous complacency to very real, and very material, risks.” A previous Planet Tracker report found that investors’ perception of risks in the plastics sector had fallen substantially in recent years. In its new report, the think tank said investors and other financial institutions needed to take steps to price risks into their investments and “should be contemplating the probability of substantial liabilities”.
📝New Report: An analysis of 8,200+ documents reveals a partial rise in #plastic risk disclosures, as 83% of plastic value chain documents omit plastic-related risks.
— Planet Tracker (@planet_tracker) August 3, 2023