OECD Plots Path to Sustainable Global Plastic Policy

Report calls for increased taxation of single use plastics and increased incentives for recycling capacity.  

Coherent and aligned policy intervention is needed to effectively end the world’s dependence on plastics, according to a new report by the Organisation for Economic Co-operation and Development (OECD).  

“In the absence of significantly more stringent, ambitious and coordinated action, the global community is far from achieving its long-term objective of ending plastic pollution,” the OECD said. 

Following a February report assessing global trends in plastics use, waste generation and leakage, the OECD’s new report – to be published in full later this month – outlines two policy projections between now and 2060 and their positive environmental impacts compared to ‘business as usual’. 

The ‘regional action’ policy scenario outlines “regionally differentiated engagement” and plots a path involving more ambitious targets for OECD countries than non-OECD countries. In comparison, the ‘global ambition’ scenario considers “a very stringent policy package that aims to reduce plastic leakage to near zero by 2060 globally”.  

At current rates, global plastics use could triple from 460 metric tonnes (Mt) in 2019 to 1,231 Mt by 2060. In comparison, the report noted that recycled (secondary) plastics are projected to make up just 12% of total plastics use by 2060, compared to a share of 6% in 2019.  

Without further policy intervention, plastic waste is also projected to triple from 353 Mt in 2019 to 1,014 Mt in 2060. Up to 493 Mt in plastics will have accumulated in aquatic environments, such as rivers, lakes and seas, by 2060 – a sharp increase from the 140 Mt recorded in 2019.  

“In 2060, non-OECD countries generate around two-thirds of plastic waste. Emerging economies in Asia and in Sub-Saharan Africa in particular are projected to see the fastest growth rates in plastic waste generation,” the report said. 

However, under the regional action policy scenario, global plastics use could be reduced by almost one-fifth compared to the business-as-usual 2060 level to 1,018 Mt. This can largely be achieved by taxing plastics use, thus “restraining plastic demand and production, especially on applications with short lifespans”, the OECD said.  

The Global Ambition policy scenario would reduce global plastics use by around a quarter, partly by introducing taxes in non-OECD countries to incentivise investment in more sustainable alternatives to plastic. Policies increasing recycling will also play an important part, the report said. In the global policy scenario, global recycling will have increased to almost 60%, becoming “the most favoured waste management option”, with secondary plastics projected to account for 41% of total global plastics use.  

Long-lasting change 

Institutional investors who have made commitments to mitigate the risks of climate change have previously been warned about their continued exposure to single use plastics. 

Two thirds of the world’s single use plastic was produced by just 30 companies last year, according to financial think tank Planet Tracker. In a separate study, Planet Tracker noted that the top ten equity and top ten fixed income investors, including BlackRock and Vanguard, owned 76% and 43% of the 30 companies’ equity and debt respectively. 

In March, United Nations member states adopted a resolution to create an international and legally binding instrument aimed at ending plastic pollution. The EU has also introduced a plastic strategy as part of its broader circular economy action plan, including new rules to improve the recyclability of plastics. The UK has pledged to ensure all plastic packaging is recyclable, reusable or compostable by 2025. In the US, New York state legislators proposed two bills that aim to improve plastic recycling rates.  

Companies failing to comply with existing regulations on plastic are exposed to legal risk. In November, grocery retail group Ahold Delhaize was referred to Dutch financial regulator for failing to disclose key information on its use of plastics and for failing to report on its exposure to plastic-related risk to its investors. 

Investor and climate activist initiatives are also proposing new guidance and frameworks to reduce reliance on single use plastics.  

The US Plastics Pact, supported by nearly 100 companies and led by The Recycling Partnership and World Wildlife Fund for Nature (WWF), aims to realise a circular economy for plastics by 2025. 

In April, the World Business Council for Sustainability launched a packaging sustainability framework called Sphere, which will help businesses select the most sustainable available option for their specific packaging and delivery needs. 

the UN-convened Principles for Responsible Investment published engagement guidance focused on companies in the plastic packaging supply chain. Recommendations include ensuring companies have publicly committed to tackling plastic waste and pollution, conduct risk assessments to calculate their current levels of plastics use and waste, and targets towards reducing dependence.  

At its recent AGM, almost half of Amazon shareholders backed a resolution asking the online retailer to disclose how much plastic packaging it uses and report on ways to significantly reduce its overall use of plastic for packaging.  

The practical information hub for asset owners looking to invest successfully and sustainably for the long term. As best practice evolves, we will share the news, insights and data to guide asset owners on their individual journey to ESG integration.

Copyright © 2023 ESG Investor Ltd. Company No. 12893343. ESG Investor Ltd, Fox Court, 14 Grays Inn Road, London, WC1X 8HN

To Top
Share via
Copy link
Powered by Social Snap