Plastics currently impose a lifecycle social cost at least ten times higher than their market price. While ubiquitous plastic waste dominates public perception, threats to the climate and health are mounting. Despite rising understanding of the broad landscape of risks facing the current fossil-fueled plastic economy, the oil and gas industry is betting on a world that uses more and more virgin plastics. U.S. petrochemical producers, while claiming to take significant action against ocean plastics and climate change, cling to this worldview to justify building more virgin plastic production infrastructure and extracting fossil fuels. Simply put, we need significant reductions in the overall use of plastic; remaining production must transition from virgin to recycled polymers.
In recent years, As You Sow’s petrochemical-focused resolutions have addressed the negative impacts of climate change-induced extreme weather and the potential risk of stranded assets. Chevron Phillips Chemical (CPChem), jointly owned by Chevron and Phillips66, responded in late 2020 with a new risk report, and Dow agreed to enhance its physical climate risk disclosure. This year, As You Sow is engaging with ExxonMobil, Dow, and CPChem about their single-use plastic production, the potential impacts of virgin plastic demand disruption, and the scale of their commitments to transition to a circular plastics economy.
As You Sow’s waste program has focused on absolute reductions in plastic use with major consumer goods companies, achieving significant progress. Now, accountability is moving up the supply chain to the major polymer producers – the gatekeepers of the global flow of plastic. The Minderoo Foundation’s recent Plastic Waste Makers Index provides novel insight into the specific companies that make the polymers destined for single-use plastics (SUPs). It finds that more than half of the world’s SUPs can be traced to just 20 polymer producers, with Dow and ExxonMobil two of the largest global contributors (together they produce more than 10 percent of total global single-use plastic).
Further, the recent authoritative Breaking the Plastic Wave report details a System Change Scenario in which global ocean plastic pollution can be feasibly reduced by 80 percent relative to business-as-usual by 2040. The first-of-its-kind analysis, published by the Pew Charitable Trusts and SYSTEMIQ in collaboration with 17 global experts, found that projected demand for plastic in 2040 can be met feasibly without additional virgin plastic. Moreover, absolute reduction of plastic demand (one-third of projected demand by 2040) is the most attractive solution from environmental, economic, and social perspectives. As You Sow is asking these petrochemical companies to address how their growing investments in virgin plastic are at risk and if their proposed solutions are economically and operationally viable.
Resin manufacturers must face up to the reality that recycling is not enough. In line with the one-third reduction in demand called for in Breaking the Plastic Wave, industry must substantially reduce the amount of virgin single-use plastics in production. As the U.S. plastics industry continues to double down on its investment into new virgin plastic production, investors must ask whether this risky bet makes sense.
Joshua Romo
Energy & Plastics Associates, As You Sow
Conrad MacKerron
Senior Vice President, As You Sow