Green investors push plastics industry on bag ban policy

Washington — Shareholder activists are pressuring the plastics industry to abandon a key plank in its political strategy to protect plastic bags. Their efforts have convinced one company, medical device maker Becton, Dickinson & Co., to quit the Plastics Industry Association.

At issue is an industry strategy of lobbying legislatures around the country to pass state laws that overrule bag bans and fees adopted by cities and counties.

Right now, the investors said, 10 states with 70 million residents have such statewide bans to prohibit local governments from passing bag fees or bans. Cities in more than 20 states have passed bag laws.

In a campaign announced Oct. 26, Boston-based social and environmental investment firm Walden Asset Management wants the plastics industry ​ to drop what it calls the industry's "preemption" campaign, and it's hoping to enlist global brands to ramp up the pressure.

Walden said it wrote to nine companies, including Clorox Co., Coca-Cola Co., Deere & Co., ExxonMobil Chemical, Ford Motor Co., General Motors Co. and PepsiCo Inc., arguing that their "continued acquiescence" to the industry's plastic bag preemption runs counter to other public commitments they've made to reduce plastic pollution.

In response, Franklin Lakes, N.J.-based Becton, Dickinson & Co. said it would leave the plastics association.

"BD joined the association in good faith on the basis that it would be a source of information useful to our business," the company said in a letter to Walden.

"As you note in your letter, though, recent lobbying positions taken by the association are inconsistent with BD's views on sustainability and our commitment to promote environmentally sound practices," the letter said. "Accordingly, we plan to withdraw from the association."

Bill Carteaux, head of the Washington-based plastics trade group, said in a statement that bans on plastics bags reduce consumer options and do not reduce litter and waste. He also said the industry supports efforts to increase recycling.

"The Plastics Industry Association supports comprehensive policies that encourage recycling, expand recycling infrastructure and make it easier for individuals to recycle, without penalizing consumers or taking away options they want," he said.

"Bans don't address the problem of litter," Carteaux said. "Bans and taxes have never been shown to reduce overall litter and waste and in some cases have actually increased waste. What we need to do is invest in and expand recycling technologies and waste management systems."

In letters released by Walden, none of the other companies said they were leaving the association.

Resin maker ExxonMobil, for example, pushed back and said it did not support bag bans or a blanket ban on single-use plastics. It noted it worked with the association and others on using plastics to develop sustainable solutions for problems.

"Plastics provide significant value to society; however, more needs to be done to address the challenge of plastic waste," ExxonMobil wrote, noting that plastics make cars lighter and more fuel-efficient, and plastics packaging cuts down on food waste by extending shelf life.

Clorox said it participates in the association's recycling and sustainability committees and said it had reduced plastics use in its products and taken other actions toward its sustainability goals, like having nine of its facilities be zero waste.

"We would be pleased to discuss our 2020 sustainability goals with you, as well as your questions about our participation in PIA," Clorox wrote.

In its letter to the companies, Walden said the companies' participation in the association's bag lobbying effort could harm their brand image.

"The preemption laws effectively strip 70 million Americans of their democratic rights to make decisions on bag ordinances and litter management at the local community level," Walden said. "As you know, it is difficult and costly to recover from a reputational failure."

It said such laws are on the books in Arizona, Florida, Idaho, Indiana, Iowa, Michigan, Minnesota, Mississippi, Missouri and Wisconsin, and they are being considered in other states, including South Carolina.

Walden is the socially responsible investment wing of Boston Trust and Investment Management Co., which has $8.4 billion in assets under management.

The American Progressive Bag Alliance, which is part of the plastics association, said it supports statewide preemption laws because it opposes having a patchwork of local bag taxes and bans.

ABPA, which is a self-funded part of the plastics association, refers to its campaign as uniformity in regulation.

"Across the country, activist organizations pressure local governments to ban common products Americans rely on every day like grocery bags," Matt Seaholm, ABPA executive director, said.

"This has resulted in a patchwork of burdensome and expensive local ordinances that don't reduce litter or waste and are harmful to our members, consumers and small businesses," he said. "We are proud to be part of broad coalitions that support statewide efforts to create and maintain uniformity of regulation."

Carteaux said plastic bags are "the most environmentally friendly and sustainable option. They're lightweight, efficient to manufacture and recyclable."

Addressing Walden's point that preemption is bad sustainability policy, he said that "companies that oppose bans on a product like this aren't contradicting their sustainability goals — they're fulfilling them."

But Tim Smith, senior vice president at Walden, responded that since local communities have the responsibility to pay for litter cleanup, preemption removes a tool they can use.

"While the APBA may see business profit in eliminating community rights, there is no credibility to the APBA's argument that retail businesses are only able to operate with statewide rules," he said.

"There are numerous examples of local regulation on signage, building codes, parking lots, liquor sales, hours of operation and wage laws that retail companies manage in every state," he said. "The retail companies operate well in the 'patchwork' of local laws on much more complex issues than distribution of plastic bags."