An Investigation of the Plastic Crisis and Investing Solutions

1. An Investigation
of the Plastic
Crisis and
Investing
Solutions
Why should companies and investors
care about the plastic crisis and what
are ways to solve the issue?

2. Brief History
 1867 – John Hyatt invented celluloid made from
cellulose in cotton, which replaced wood, ivory, &
metal used for combs.
 1907 – Leo Baekeland invented Bakelite, the first
synthetic plastic (made entirely in a lab with no
molecules from nature.
 Post WWII – plastic was found in many goods.The
constant flow and proliferation contributed to the
“rapid social mobility that took place after the war.We
were a nation of consumers now, a society increasingly
democratized by our shared ability to enjoy the
conveniences and comforts of modern life.”
 1960s – environmental awareness kicked up with oil
spills, chemical pesticides, and plastic found in the
ocean.
 1980s – recycling was introduced as a solution.
Only 9% of
Plastic is
Recycled

3. Negative Externalities
 Plastic takes thousands of years to decompose and as it does, it
decomposes into microplastics (plastic particles).
 It is estimated that there are currently 150 million tons of plastic in the
ocean and by 2050 if business carries on as usual, there will be 3x that.
 Marine life is the most heavily impacted. Animals are strangled,
suffocated, poisoned, starved, and suffer in many other ways because of
plastic waste.
 Toxic particles from plastic can spread through the food chain and end
up on our plate.
 Based on several studies, it is said a person consumes 74K particles/yr or
5 grams/wk (equivalent to 1 credit card) by inhaling, consuming, or
absorbing through skin from packaging, cosmetics, detergents, and
other materials. The chemicals in plastic has links to many health effects,
such as cancer, reproductive issues, nervous system issues, weakened
immune systems, just to name a few.
 Most of the production of plastic and the portion that is incinerated after
its life cycle emit GHG emissions, contributing to climate change.

4. Contributions to the Problem
 Until recently, much of plastic waste was shipped to China,
where it was incinerated or dumped into a landfill. Storm
wind and rain would blow it into rivers which lead to the
ocean.
 Plastic litter that isn’t collected and recycled due to lack of
infrastructure are carried by wind or rain into drainage
networks or rivers which then flow into the sea.
 Plastics can be flushed down toilets or drains which can end
up flowing into the ocean.
 Thousands of tiny plastic pellets wash up on UK shorelines
each year from lax standards in industrial processes.

5. Economic
Solutions
Reusable packaging offers:
customersincreased
functionality andquality;
reducescostofproductionand
logisticsthrough
standardizationofpackaging
formatsandsupplyofcompact
refillsforreusablecontainers;
increasessalesthough
customerloyaltywith
opportunitiesforcustomer
personalization
New Plastics Economy by Ellen Macarthur Foundation identifies six
points to a vision for a circular economy. 1,000 organizations are
united behind this vision with actionable target of 2025 through the
Plastic Pact Network.
1. Eliminate unnecessary plastic packaging – beyond
eliminating single use bags and straws. Products can
maintain their utility and quality.
2. Packaging should be designed to be reusable to design out
waste.This provides new opportunities for companies,
reduces GHG emissions, and keeps the material in the
economy with its embedded energy and value.
3. All packaging should be designed to be 100% recyclable,
reusable or compostable to fit existing infrastructure.
4. All packaging should be designed to be 100% recyclable,
reusable, or compostable in practice. Governments are
essential to creating policies that enable establishment of
better infrastructure and self-sustaining mechanisms.
Businesses have a responsibility to contribute to the
collection and recycling, composting or reuse of their
products, beyond design.
5. The need for virgin plastics needs to be drastically reduced
and those that do need to be made should be made from
renewable resources.The entire system (production,
transportation, cleaning and recycling) should be powered
solely by renewable energy.
6. All plastic should be free from hazardous chemicals and
respect the health, safety, and rights of all people. More
research and greater transparency needs to be provided on
the health effects of chemicals that are added intentionally
or unintentionally to plastics.

6. Investing
Solutions
Plasticwasteposesa
materialrisktobrand
reputationforcompanies.
Future increasedsocial
backlashandpotential
regulationshiftscouldaffect
sustainableearningsfor
plasticcompanies.
There is little development in the space of circular
economy solutions for plastic focused mutual funds and
ETFs.
1. There is more opportunity currently for private
investors to invest directly in start up companies
that are focused on plastic alternatives or are
contributing to a circular economy.
2. Shareholders can encourage companies to invest
in firms that are focused on circular economy
solutions through venture capital via advocacy and
engagement avenues and resolutions.
AsYou Sow has been engaging public companies on these
issues, leading resolutions.They also initiated a
declaration which several asset managers have signed,
including Trillium. With increased advocacy, managers
may take note and begin to create funds that address this
issue.
“International equity markets have generally reduced the
valuation multiples to plastic packaging companies and
increased the multiples ascribed to traditional packaging
companies to the point where both groups are trading at
similar levels.The speed of this change is interesting and
could continue.”AdvisorVoice, September 2020
The Circular Plastics Alliance includes a declaration of
over 245 organizations, private actors from European
plastics value chain who are ready to actively commit
to 'take action to boost the EU market for recycled
plastics up to 10 million tons by 2025’.