We are living in an exponential age, where change starts to rush forward as Lenin famously noted:
“There are decades where nothing happens; and there are weeks where decades happen”
And as noted here at the start of last year, this process is now impacting major parts of the chemical industry. Plastics are leading the way:
“The plastics industry is close to being disrupted from both ends of its value chain”.
Since then, the pressure has been building. Russia’s war has accelerated the Net Zero-need to reduce the use of fossil fuels.
Gasoline/diesel cars are now moving into their endgame in Europe, the USA and China. So plastics can no longer rely on refineries for their feedstocks, and have to find alternatives.
And then there is the pressure from consumers, legislators and brand owners from the user end of the value chain:
- Global companies including Coca-Cola, PepsiCo and Unilever aim to use 25% recycled plastic by 2025; Nestle and Mars are aiming for 30%, whilst L’Oréal are targeting 50%
- In Europe, 300 players along the value chain, including the European Commission, aim to boost the market for recycled plastics to 10 million tonnes by 2025
But so far, in reality, not much has actually happened. The issue, as I noted here in January 2021 is that:
“Understandably, many people and companies hate the idea of having to leave the comfort zone of ‘business as usual’, where tomorrow is likely to be much the same as yesterday.”
But now, the moment of truth is close at hand. Investors with $10tn of assets have written to brand-owners in the FMCG and grocery sectors to demand action. As they note:
“Actions taken by companies to date have failed to have impact on the scale and at the rate required. As noted in the Ellen MacArthur Foundation’s 2022 Progress Report, signatories to the Global Commitment are not on track to meet their 2025 target that all packaging be reusable, recyclable and compostable. Efforts on reduction, implementing reuse and addressing toxicity remain very limited.”
And they make 4 very specific demands for immediate change. They expect companies to:
- “Support international efforts for an ambitious plastics treaty by joining the Business Coalition for a Plastics Treaty and advocate for legally binding measures designed to reduce production and consumption and boost reuse.
- “Publicly support the ambition of the EU Packaging and Packaging Waste Regulation reform, to refrain from lobbying to reduce this ambition and to ensure that industry associations to which they are a member act in accordance with this position.
- “Establish a clear plan of action to reduce material consumption in absolute terms, prioritising eliminating the need for single-use packaging altogether, including through upscaling reusable packaging systems, to be achieved by clearly defined timescales and subjected to external verification.
- “Commit to identifying and eliminating the use of hazardous substances in products and packaging and to publicly report their progress in doing so.”
Clearly, exponential change is underway when the owners of some of the world’s major businesses demand action on this scale.
Doing nothing is no longer an option. The plastics industry has a game-changing opportunity to take a global lead in developing a circular economy. It now needs to focus on developing the new products and services needed to create the new business model.