Arlington, Va. — Concern over plastic marine pollution and waste among institutional investors has grown sharply over the last 18 months, according to the organizer of a $1 trillion campaign to pressure major consumer brands to reduce their plastics use.
The Plastic Solutions Investor Alliance, which formed in June and includes 30 investor groups, is using that newfound momentum to start dialogues with several consumer goods makers around single-use plastics, said Conrad MacKerron, senior vice president of As You Sow, an Oakland, Calif.-based shareholder advocacy group.
MacKerron told the "Business Solutions for Plastics Pollution" conference in Arlington on Oct. 16, that, until recently, As You Sow had only a handful of investor partners on the issue. It now it has more than two dozen.
"Because of the way in which this issue has exploded, we now have 30 investors with $1 trillion in assets under management and we are about to go into engagement, in the next month or two, with Unilever, with PepsiCo, with Nestle and other large companies," MacKerron said.
In an interview on the sidelines of the conference, he said ocean litter worries have moved waste from a "backwater priority" among some investors.
"Because of the ocean plastics issue, the elevation of this in the last 18 months, I started to reach out more consciously to investor colleagues and I was just floored," he said. "Within a couple of months, I had 25 investment firms, not only in the U.S. but in Western Europe. This was even a much bigger issue in Western Europe than it is here."
The alliance is pushing several points, including transitioning plastic packaging to be recyclable, reusable or compostable; having companies disclose plastic packaging use and set goals to use less plastic; developing alternatives to single-use plastics packaging; and playing a significant role in funding recycling.
It builds on agreements As You Sow has reached since 2014 with Unilever NV, Colgate-Palmolive Co., Procter & Gamble Co., Kraft Heinz Co. and Mondelez International around plastics packaging.
MacKerron told the conference, which was organized by the Alice Ferguson Foundation and drew more than 200 attendees from environmental groups, governments, businesses and universities, that As You Sow has been working on waste for at least 15 years, starting with beverage container waste and recycling.
At the time, the group brought shareholder resolutions and worked with Coca-Cola Co., PepsiCo Inc. and Nestle Waters North America Inc., and those companies made commitments to try to raise beverage container recycling rates up to 50 to 60 percent by 2018, but he said those efforts have not worked.
He said Nestle Waters, for example, publicly committed to working to get PET bottle recycling to 60 percent by the end of 2018.
As well, PepsiCo had committed to a 50 percent recycling rate for PET and glass bottles and cans by 2018.
But the recycling rate for PET bottles in the United States has hovered around 30 percent since then, industry statistics show.
He said the companies have made efforts and funded some projects. He noted that Nestle Waters "stuck their neck out" and tried to push so-called producer responsibility plans, where companies pay a fee on the packaging materials they put into the market to help pay for recycling.
But leadership at Nestle Waters changed and beverage industry trade associations pushed back strongly, he said.
"Pepsi's had seven years to try to get the recycling rate up. Nestle Waters has had eight or nine years," MacKerron said. "Sadly, we are not doing well."
He called raising recycling rates a "difficult and protracted issue" but told the conference he does not believe voluntary industry-funded programs will make enough of a difference.
They can't be scaled up and "tend to stall out" when management changes or if environmental groups cannot maintain "near constant pressure," he said.
He said he believes the beverage industry is clear on what it does not want — bottle bills or producer responsibility — but has not offered viable, scalable plans that can make a difference nationwide.
He said efforts like the Closed Loop Fund, a $100 million fund started by major retailers and consumer product companies to provide low-interest loans to support recycling, are a "credible first step" but remain too small.
As You Sow estimates that about $1.5 billion will be needed to boost recycling systems in the United States.
"What's out there are very small incremental pieces of what needs to happen to put our national recycling system in shape for the 21st century," he said. "Funds and funding are the key issues. This resource gap is still a huge problem."
MacKerron acknowledged concerns that this latest round of shareholder outreach on single-use plastics could meet the same unsuccessful fate as the earlier efforts on container recycling. But he also told the conference that he believed public attitudes about plastic waste have changed in a big way.
"I really think there has been a sea change, no pun intended, with the ocean plastics issue elevating what was this old boring recycling issue," he said. "The pressure that's building with plastics, I hope, will push us over the edge this time, so that these companies will realize they have a huge public relations risk and potential disaster on their hands if this stuff keeps ending up on beaches and choking animals."