Paris-style treaty for plastic’ falls flat – what does it mean for investors?

Efforts to establish a global treaty limiting plastic pollution have failed, as more than 170 countries fail to reach an agreement, despite projections that plastic production is set to triple by 2060.

Joshua Sherrard-Bewhay, ESG analyst, Hargreaves Lansdown:

“After three years of talks, countries have not been able to agree on the provisions of a binding global treaty that reduces plastic consumption. 

The treaty aimed to set legally binding caps on plastic production, improve waste management, recycling and product design, remove hazardous chemicals from plastics, and create funding mechanisms to support developing countries. 

While the adoption of the Paris Agreement a decade ago showed that international cooperation and consensus was possible on sustainability issues, today’s political climate suggests responsibility will fall onto individual countries and companies. 

How does this affect companies?

Companies in the oil and gas sector will have been especially interested in the outcome, as upstream production was in scope of the treaty. Equally, consumer goods and staples, as well as many other producers of products, are likely to view this as a signal that policy is not likely to change any time soon. 

It is reported that 56 companies are responsible for 50% of the world’s plastic pollution. Investors that wish to encourage positive action on plastic should look beyond companies that only have recycling schemes and towards those that focus on phasing out single use and virgin plastics. Engaging with companies to provide transparent reporting and progress on reduction plans will be key to encouraging progress.”