Plastic Waste Makers Index

Executive Summary

Single-use plastics – the cheap plastic goods we use once and then throw away – epitomise the plastics crisis. Today, single-use plastics account for over a third of plastics produced every year, with 98 per cent manufactured from fossil fuels.

Unsurprisingly, single-use plastics also account for the majority of plastic thrown away the world over: more than 130 million metric tons in 2019 – almost all of which is burned, buried in landfill, or discarded directly into the environment.

The cost of single-use plastic waste is enormous. Of all the plastics, they are the most likely to end up in our ocean, where they account for almost all visible pollution, in the range of five to 13 million metric tons each year.1,2,3  Once there, single-use plastics eventually break down into tiny particles that impact wildlife health – and the ocean’s ability to store carbon.4  Single-use plastics contain chemical additives such as plasticisers that have been found in humans and are linked to a range of reproductive health problems.5  And if growth in single-use plastic production continues at current rates, they could account for five to 10 per cent of the world’s greenhouse gas emissions by 2050.6

Despite these threats, the plastics industry has been allowed to operate with minimal regulation and transparency for decades. Government policies, where they exist, tend to focus on the vast number of companies that sell finished plastic products. Relatively little attention has been paid to the smaller number of businesses at the base of the supply chain that make “polymers” – the building blocks of all plastics – almost exclusively from fossil fuels.

These companies are the source of the single-use plastic crisis: their production of new “virgin” polymers from oil, gas and coal feedstocks perpetuates the take-make-waste dynamic of the plastics economy. The economies of scale for fossil-fuel-based production are undermining transition to a “circular” plastic economy, with negative impacts on waste collection rates, on end-of-life management and on rates of plastic pollution. The focus needs to be on producing recycled polymers from plastic waste, on re-use models and on alternative substitute materials.

Part of the problem is that we can’t manage what we can’t measure. In this report, we identify for the first time the companies that produce from fossil fuels the five primary polymers that generate the vast majority of single-use plastic waste globally (“virgin single-use plastic polymer producers”) – and which investors and banks are funding them. We also assess which companies are making real efforts to create a circular plastics economy, and estimate how virgin polymer production is expected to grow or decline in the future.

The five major findings of our report

1

In 2019, just 20 polymer producers accounted for more than half of all single-use plastic waste generated globally – and the top 100 accounted for 90 per cent.

ExxonMobil and Dow – both based in the USA – top the list, followed by China-based Sinopec, with these three companies together accounting for 16 per cent of global single-use plastic waste. Of approximately 300 polymer producers operating globally, a small fraction hold the fate of the world’s plastics crisis in their hands: their choice to continue to produce virgin polymers, rather than recycled polymers, will have massive repercussions on how much waste is collected, is managed and leaks into the environment.

2

Major global investors and banks are enabling the single-use plastics crisis.

Twenty institutional asset managers – led by US companies Vanguard Group, BlackRock and Capital Group – hold over US$300 billion worth of shares in the parent companies of these polymer producers, of which an estimated US$10 billion comes from the production of virgin polymers for single-use plastics. Twenty of the world’s largest banks, including Barclays, HSBC and Bank of America, are estimated to have lent almost US$30 billion for the production of these polymers since 2011.

3

There has been a collective industry failure to transition away from fossil-fuel-based feedstocks.

The 100 largest polymer producers all continue to rely almost exclusively on “virgin” (fossil-fuel-based) feedstocks. In 2019, production of recycled polymers from plastic waste – a “circular” model – accounted for no more than two per cent of total output. Over 50 of these companies received an “E” grade – the lowest possible – when assessed for circularity, indicating a complete lack of policies, commitments or targets. A further 26 companies, including ExxonMobil and Taiwan’s Formosa Plastics Corporation, received a “D-” due to their lack of clear targets/timelines.

4

Planned expansion of virgin polymer production capacity threatens to overwhelm hopes of a circular plastics economy.

In the next five years, global capacity to produce virgin polymers for single-use plastics could grow by over 30 per cent – and by as much as 400 per cent for individual companies. An environmental catastrophe beckons: much of the resulting single-use plastic waste will end up as pollution in developing countries with poor waste management systems. The projected rate of growth in the supply of these virgin polymers is in line with the historical rate of growth in demand for single-use plastics – which will likely keep new, circular models of production and re-use “out of the money” without regulatory stimulus.

5

Single-use plastic waste is an entrenched geopolitical problem.

Transitioning away from the take-make-waste model of single-use plastics will take more than corporate leadership and “enlightened” capital markets; it will require immense political will. This is underscored by the high degree of state ownership in these polymer producers – an estimated 30 per cent of the sector, by value, is state-owned, with Saudi Arabia, China, and the United Arab Emirates the top three. In addition, it will likely require concerted action on the international political stage to resolve deep-rooted regional imbalances and inequities. High income countries are typically supplying low and lower-middle income countries with significant volumes of polymer; and while this latter group of countries generates far less single-use plastic waste per person, the reverse is true in terms of mismanaged waste and plastic pollution.

Recommendations

This report has major implications for the main stakeholders in the single-use plastics crisis:

  • Polymer producers
  • Investors and banks
  • Policymakers
  • Other companies in the supply chain

Polymer Producers

Polymer producers represent an extraordinary leverage opportunity in the fight against plastic pollution, as the “gatekeepers” of plastic production – particularly because they are relatively few in number. As policymakers and investors recognise this fact, the disruptions and risks facing these companies will only grow. Polymer producers wishing to maintain a competitive advantage should:

  • Disclose levels of virgin versus recycled polymer production and their associated single-use plastic waste “footprint”.
    The estimates presented here are only as good as our data. Polymer producers should use our methodology to estimate – and then disclose – their contribution to single-use plastic waste as a material business risk.
  • Quit paying lip service to sustainability and seize the opportunity to re-tool.
    Set real, quantifiable and time-bound commitments to reduce reliance on fossil fuel feedstocks and shift to circular recycled polymers.
  • Commit to using circularity measurement and reporting tools.
    One example is the Circulytics initiative from the Ellen MacArthur Foundation, which supports a company’s transition towards the circular economy, and reveals the extent to which a company has achieved circularity across its entire operations.7

Investors and Banks

Institutional asset managers and global banks are providing billions of dollars to companies that produce polymers from fossil fuels – as much as 100 times more than they provide to companies trying to shift to a circular economy. This asymmetry urgently needs to be reversed. Investors and banks should:

  • Disclose the level of lending and investment in virgin versus recycled polymer production and the associated generation of single-use plastic waste.
    Shareholders and customers have a right to know if their money is being invested or lent to entities whose products have negative impacts on people and the planet – a measure of single-use plastic waste must be included in annual environmental, social and governance reporting.
  • Commit to funding a circular plastics economy.
    Adopt policies and targets that shift capital away from virgin polymer production and towards companies using recycled plastic waste as feedstock. Phase out entirely investing in and financing new virgin single-use plastic capacity.
  • Use measures of circularity to inform capital allocation decisions and shareholder action.
    Active fund managers should be using circularity as a screening criterion for investments in polymer producers. Passive fund managers can use the same tools to take action at shareholder meetings and exert influence over boards and management. Banks should link lending to circular business outcomes.

PolicyMakers

Solving the single-use plastic problem will take more than the actions of progressive polymer producers or the influence of capital markets. It will also require policymakers to display great political will and practical action. Policymakers should:

  • Target policies at polymer producers.
    With the knowledge of which companies are at the source of the single-use plastic waste crisis, policymakers can now draft effective regulatory responses, such as policies that require recycled polymer production from plastic waste feedstocks, and therefore incentivise greater waste collection; or economic incentives that accelerate the transition from virgin to recycled polymers, such as a levy on virgin production.
  • Accelerate a global treaty on plastic pollution.
    A Montreal Protocol or Paris Agreement-style treaty may be the only way to bring an end to plastic pollution worldwide. The treaty must address the problem at its source, with targets for the phasing out of fossil-fuel-based polymers and encouraging the development of a circular plastics economy.
  • Require full disclosure from producers and users of single-use plastics in order to better monitor the supply chain.
    Insist on “single-use plastic footprint” being a mandatory reporting metric – as per the equivalents that are rapidly becoming mandatory in carbon accounting.8

Other companies in the supply chain

While not the focus of the analyses in this report, other companies in the single-use plastics supply chain share responsibility for ensuring that the promise of a circular plastic economy becomes a reality. Converters of plastic polymers, packaged goods brands, and retailers should:

  • Convert voluntary commitments to use more recycled single-use plastics into firm market signals.
    Long-term forward contracts for recycled polymers and products will create the stability needed for investment in recycling infrastructure. Contracts should also account for the full cost of collecting, sorting and recycling waste, and accept the price premium over virgin polymer and plastics.
  • Design for recyclability.
    Users of plastic have a responsibility to ensure their products are easy to recycle. This means phasing out many hard-to-recycle multi-material single-use plastics, as well as the use of problematic performance- or appearance-enhancing additives. Creating common standards for recycled material quality, specifications and authentication will also improve the efficiency of waste management and recycling systems.
  • Reducing unnecessary single-use plastics.
    This is perhaps the most significant means to reduce single-use plastic waste in the short-term. Opportunities include: redesigning packaging and single-use products to use lower volumes of plastic; scaling innovative re-use models; and using substitute materials.
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  7. Ellen MacArthur Foundation 2020, Circulytics – measuring circularity. Available from: https://www. ellenmacarthurfoundation.org/resources/apply/circulytics-measuring-circularity [8 January 2021]
  8. (For business and governments) Greenhouse Gas Protocol 2020, Calculation Tools. Available from: https://ghgprotocol.org/calculation-tools [8 January 2021]
     
    (For financial institutions) Partnership for Carbon Accounting Financials 2020, The Global GHG Accounting and Reporting Standard for the Financial Industry (First edition). Available from: https://carbonaccountingfinancials.com/files/downloads/PCAF-Global-GHG-Standard.pdf [8 January 2021]