In the face of growing worldwide concern about ocean plastic pollution, companies are far too slow in adopting strong, comprehensive responses, according to a new As You Sow report. "Waste & Opportunity 2020: Searching for Corporate Leadership" analyzes the actions and inactions of 50 of the largest U.S. consumer-facing companies.
The report shows that the consumer goods industry is failing to address single-use plastics and take financial responsibility to improve recycling. The report was unable to identify leadership companies but rather found scattered leadership actions.
Out of the 50 companies in the beverage, quick-service restaurant, consumer packaged goods and retail sectors, the highest grade was for Unilever, a B–minus. Twelve companies received C grades, 22 received D grades, and 15 received F grades. The six lowest-ranked companies were Walmart, Kroger, PepsiCo, Tyson Foods, Kraft Heinz and Mondelēz International.
The report shows that the consumer goods industry is failing to address single-use plastics and take financial responsibility to improve recycling.
The high number of poor and failing grades reflects a lack of basic goal setting, strategy and planning, which must be developed to effectively address the plastic pollution crisis.
On the plus side, it is encouraging to see:
- Development of circular shopping platforms, Loop and Algramo, which offer hope for scalable delivery of products in reusable packaging, in stores and via home delivery.
- Nearly half the companies surveyed pledged that all their packaging will be reusable, recyclable or compostable by 2025.
- Coca-Cola plans to ramp up refillable bottles to 50 percent of sales in Brazil by 2030.
- Companies are starting to disclose unit sales, which is required to be able to accurately measure future reductions in plastic packaging use.
Perhaps the single most impactful action taken by a major consumer goods company to date is Unilever’s pledge to cut plastic packaging by 100,000 tons, which forces the company to innovate by designing alternative delivery systems, such as low- to zero-waste packaging. The company is developing products such as shampoo in bar form rather than bottles, toothpaste in tablets rather than a tube and deodorant on a cardboard rather than plastic stick.
Also notable is Pepsi’s pledge to cut use of virgin plastic by 20 percent for beverages by 2025, which will require it to use higher levels of recycled content.
On the downside, ambitious and financially measurable reusable packaging commitments are rare. Most companies are lagging in establishing reusable packaging models and are not moving swiftly enough to replace single-use packaging. Only two of the 50 companies analyzed — Nestlé Waters NA and Coca-Cola — reported that they generate at least 15 percent of revenue from reusable packaging products. Only two companies analyzed — Anheuser-Busch InBev and Starbucks — have set specific goals to increase company-wide reusable packaging delivery methods.
Among the other findings:
Flexible packaging. One of the biggest dilemmas in curbing plastic pollution is the widespread and growing use of non-recyclable flexible plastic packaging, including sachets, pouches and films. There is little evidence of swift movement needed to make this material recyclable in practice by the 2025 goal set by scores of companies as part of the New Plastics Economy Global Commitment process. Some brands are touting "chemical recycling" as a solution, an umbrella term for a range of processes that claim to be able to separate plastics back to the monomer level or purify them, resulting in recycled plastic that is virtually the same as virgin. However, most of these technologies have yet to prove themselves as workable at scale or financially viable, and others have environmental concerns.
Recycled content. A number of companies have made ambitious promises to increase recycled content. For example, Nestlé Waters has pledged 50 percent recycled content in plastic bottles and Diageo 40 percent, both by 2025. However, recyclers say there’s not nearly enough supply of post-consumer PET plastic to meet these goals. To achieve a uniform 25 percent recycled plastic content rate in beverage bottles, 1.6 billion more pounds of resin will need to be collected, equivalent to a 27 percent increase in the U.S. PET plastic recycling rate, which has barely budged at between 28 and 31 percent over the past decade.
Recycling system needs improvement. The inability of the U.S. recycling system to deliver high levels of collection indicates a system in trouble. Curbside systems capture just 32 percent of recyclable materials available for processing from U.S. homes and 20 million tons of recyclables are lost to landfills annually. At the same time, dramatic declines in materials value due partly to China’s ban on waste imports means communities are paying more to send materials to a recycling facility than a landfill, and many programs lack critical operating funds.
The recycling system needs an estimated $12 billion in new investment to perform properly, according to The Recycling Partnership, but cities cannot afford to finance it, and only about $870 million — about 7 percent — appears to have been raised so far from private sources. Only a handful of companies are making voluntary contributions to help improve recycling. We believe the ultimate solution is not voluntary contributions but mandated producer responsibility.
Producer responsibility. Companies placing packaging on the market must take responsibility to finance creative solutions to fix U.S. recycling systems as they are required to do in scores of other countries. However, companies are lagging badly in accepting such responsibility. In our study, the highest number of companies received failing scores in this area. Unless and until some form of mandated producer responsibility is enacted, we recommend that companies invest up to 1 percent of their annual revenue toward improving the poorly performing U.S. recycling system.
Many corporate commitments and initiatives we studied are too new to determine if company actions are the real deal. More than 200 companies have committed to reduce plastic pollution under the New Plastics Economy Global Commitment. However, this and related initiatives are not sufficiently advanced to determine whether companies are genuinely committed to systemic change and to execute on their goals. Caution and healthy skepticism are in order as there is a history of backsliding and failed promises around reusables, packaging recycling and recycled content.
Our key recommendations to companies include:
- Prioritize setting goals for reducing overall plastic use and using high levels of recycled content.
- Match packaging design to available recycling systems so more packaging can be recycled and not landfilled.
- Refrain from packaging more products in flexible plastic until these materials can be recycled.
- Contribute up to 1 percent of annual revenue to help finance the $12 billion in infrastructure upgrade needed to dramatically increase recycling yields.
- Prioritize long-term contracts with recycling processors to signal serious commitment to use of recycled plastic feedstock and create a circular economy for plastic packaging.
While we found some encouraging first steps, given the scope and seriousness of the plastic pollution crisis, far more companies must make commitments to reduce the total amount of plastic used, reduce the amount of virgin plastic used, and dramatically increase use of recycled content. These pledges need to be paired with financial support for more efficient recycling systems, enhanced recycling processing infrastructure and expanded processing markets.
As You Sow and our allies in the Plastic Solutions Investor Alliance will be following up with laggard companies to press them to develop the programs and policies recommended above.