In June 2022, EU legislators reached a political agreement on the new Corporate Sustainability Reporting Directive. Under this Directive, EU companies will have to disclose information on material environmental impacts and risks, including circular economy and pollution. Companies will have to report against harmonised, European Sustainability Reporting Standards (ESRS) to ensure reliable and comparable information. Well-designed reporting standards can radically increase transparency in the plastic value chain and contribute to addressing the sources of plastic pollution. This requires they cover all stages of the plastic value chain — from polymer and additive production through to waste.
With almost half of plastic produced being used only once before being discarded,1 the world has experienced an exponential rise in plastic waste over the past 60 years. This waste is, on the whole, poorly managed — and discarded plastic gradually breaks up into smaller micro- and nano-plastics, contaminating air, water sources and soils. Microplastics are now found in the most remote places on land, in the ocean and the air, threatening nature and human health on a global scale, with enormous economic cost as a result.2,3
Despite the environmental and human health risks posed by plastic, the industry has thrived for decades with minimal regulation and transparency. While some users of plastic — including some major brands and retailers — have started disclosing their plastic footprint,4,5 there is still limited visibility for other parts of the value chain. For example, we know very little about the large petrochemical firms that produce polymers, the building blocks of plastic.
These companies generally do not disclose their virgin (fossil-fuel) polymer footprint or strategy related to virgin plastic production growth.6 Voluntary corporate disclosure initiatives are also often limited in scope and primarily focus on plastic packaging, excluding other high-risk sectors such as textiles or agriculture.
Finally, the largest and most concerning data gap relates to plastic chemicals — of which there are over 10,000, comprising monomers, additives, and processing agents.7 While there is increasingly robust scientific evidence that a subset of these plastic chemicals — including the monomer bisphenol-A, phthalate plasticisers, halogenated flame retardants and per- and polyfluoroalkyl substances or “PFAS” — are harmful to human health, detailed information on the types and volumes of additives used for plastic production is generally absent.8
The lack of publicly available, easily accessible data makes it difficult for policymakers, NGOs and consumers to assess the industry’s progress toward sustainability claims and commitments — with historically poor performance. In 2019, none of the top 100 producers of single-use plastic polymers sourced more than 2 per cent of its feedstock from recycled content.5 By 2025, global capacity for fossil-fuel plastic production could grow by 30 per cent.5 Insufficient data also prevents investors and financiers from calculating their exposure and re-allocating the billions of dollars needed to achieve a safe, circular plastic economy.9
To accelerate a circular and safe economy for plastic, we need more visibility on how companies’ business strategy, profits, and financial commitments relate to the production and use of virgin plastic. This includes data on companies’ virgin plastic footprint, the revenues derived from virgin plastic and planned investments in new production capacity compared to recycling, re-use or development of new materials that are safe and sustainable. Similarly, we need better data on the types, volumes, hazards and risks of the monomers, additives and processing agents used to make plastic products.
Under the new EU Corporate Sustainability Reporting Directive, EU-based companies must disclose information on material environmental impacts and risks, including circular economy and pollution. To ensure reliable and comparable data, companies will report against harmonised, mandatory European Sustainability Disclosure Standards (ESRS). The EU will adopt two sets of standards: a set of sector-agnostic standards, for which a first public consultation has just closed;10 and sector-specific standards, which will be developed in the next phase.
Plastic-related impacts and risks should be addressed first and foremost through sector-agnostic ESRS. Plastic is used across various industries — from food to agriculture, automotive to medicine — as a light, versatile material. While the exposure of a company to plastic may vary across sectors, similar risks and impacts apply. In light of this, harmonised performance metrics on pollution, circular economy and resource use — as well as marine resource impacts — can go a long way in closing the existing data gaps. These metrics should be supplemented with specific standards for high-risk and high-impact industries such as petrochemicals, packaging, food and beverage, and textiles.
Encouragingly, the draft sector-agnostic ESRS address plastic as a distinct issue, covering aspects like circularity, waste, and microplastic pollution. The ESRS also set general requirements to disclose the use of ‘substances of concern’; that is, substances posing a chronic effect on human health and the environment.
Including plastic in the draft ESRS is a welcome step in the right direction. Yet several issues remain unaddressed in the drafts.
First, the ESRS11 only focus on one part of the value chain, by requiring disclosure of plastic volumes ‘used’ (as opposed to ‘produced’ or ‘used’). This approach overlooks the critical role that polymer producers and converters can play in addressing the sources of plastic pollution.
Second, to properly assess a company’s impact on the environment and human health, a more detailed breakdown is needed between i) polymer type; ii) chemical composition; iii) the source of feedstock used (virgin fossil-fuel plastic, bio-based, or post-consumer recycled content); iv) the type of application (e.g. durable goods versus packaging); and v) whether the product is recyclable or reusable. The ESRS only cover part of this information.11
Third, we support the inclusion in the ESRS of an ambitious requirement to disclose volumes of micro- and nano-plastic releases to water and soil from production processes and during the product lifecycle.12 To ensure its effectiveness, the EU could consider harmonised standards for measuring micro- and nano-plastic releases from key product categories — e.g. tyres, textiles, food packaging, agriculture, construction and medical applications.
Fourth, the ESRS require companies to disclose aggregate production or use of volumes of substances of concern. However, the definition of ‘substances of concern’ is very broad and covers substances that i) pose a chronic effect for human health and the environment; and ii) hamper safe and high-quality recycling. The ESRS do not require companies to further identify the (classes of) chemicals that fall into these buckets.13 At the same time, the substances which pose an ‘acute’ effect for human health or the environment are not covered.
Fifth, the ESRS require companies to describe how their business model and strategy are compatible with a circular economy transition. This includes the financial resources allocated to circular economy action plans. A perhaps more meaningful disclosure would be how the allocated resources compare against the company’s earnings and investments linked to the extraction or use of virgin resources — e.g. investments in new virgin plastic production.14
Minderoo Foundation calls on EU policymakers to design a coherent set of reporting standards addressing plastic-related impacts and risks across different sectors, covering the entire plastic value chain. This includes:
Finally, reliable information on the production and use of plastic chemicals — by volume — including monomers and additives, is essential to understand and mitigate the impact on the environment and human health. If mandating disclosure of this detailed information is not appropriate under sector-agnostic standards, we recommend its inclusion in relevant sector-specific standards — for example, those applicable to the chemical and packaging industries.
Minderoo Foundation’s No Plastic Waste initiative aims to eliminate the negative effects of plastic on people and the planet. To this end, we are working to increase greater levels of transparency for the plastic supply chain and elucidate the human health impacts of plastic. Our Plastic Waste Makers Index identifies the largest producers of single-use plastic, and the financial institutions enabling them. Minderoo Foundation is also partnering with the Carbon Disclosure Project (CDP), PEW Charitable Trust and Ellen MacArthur Foundation to develop a key set of voluntary reporting metrics on plastics for CDP’s 2023 questionnaire.16
Established by Andrew and Nicola Forrest in 2001, we are a modern philanthropic organisation seeking to break down barriers, innovate and drive positive, lasting change. Minderoo Foundation is proudly Australian, with key initiatives spanning from ocean research and ending slavery, to collaboration in cancer and community projects.