Some of the world’s leading financial institutions have withdrawn their support from the global coal industry. Pressure to act on climate change is one key factor. The emergence of new energy technology is another one. Now a new group called Portfolio.earth is applying similar pressure on lenders to stop financing plastic pollution and do something more beneficial with their dollars. In effect, they seek to make plastic the new coal.
Portfolio.earth is a collaborative effort launched by a group of environmental consultants last year, with the goal of raising public awareness on the role of financial stakeholders in biodiversity loss.
In an email to TriplePundit, the Portfolio.earth team explained that its focus on finance is a singular approach that complements the broader policymaking work undertaken by other environmental organizations.
“Because there are so many excellent groups engaging in more policy led agenda with Banks and finance, we are focusing our attention on telling the story about the financial sector’s role in destroying nature, and helping those progressive voices on the inside have impact,” they said.
Portfolio.earth does have a running start on its campaign, especially in regard to single-use plastic packaging.
Public awareness of the connection between single-use plastics and their impact on oceans and marine life has been skyrocketing, thanks in part to legacy media and conservation organizations including National Geographic and Sierra Club. Newer organizations like the Surfrider Foundation and Lonely Whale are also providing business leaders with new opportunities to connect with the issue.
Major consumer brands, including Unilever, Nestlé and Coca-Cola, have begun highlighting their efforts to reduce or eliminate virgin plastic, partly through new recycling initiatives and bio based packaging. Some are also diving more deeply into the issue by promoting the circular economy through the reusable container firm Terracycle.
Sports and entertainment venues have also been contributing to the sustainability theme in recent years, and they could play a larger role in raising awareness on plastic pollution in the future.
On a broader level, business leaders are beginning to organize around global efforts such as the new Plastic Pact, which recently launched a chapter in the U.S. They are also coalescing around support for global action through the United Nations.
The U.S. has been slow coming to the plastic pollution table in terms of national policy, but the incoming Biden administration is expected to pay more heed to environmental issues than the outgoing Trump administration. Meanwhile, there has been a recent burst of state and local activity in the area of banning single-use plastic bags.
The new bans have the potential to irritate some segments of the U.S. public, but the overall impact will be to raise awareness on plastic pollution even higher.
All of this activity is meaningful, but none of it addresses the problem at its source, namely, the role of manufacturers and consumer products companies have in fueling the world’s single-use plastic packaging.
Among the group of 40 key plastic packaging companies identified in the new report are many familiar names and leading brands including Anheuser-Busch, Coca-Cola, Dow Chemicals, CVS, Home Depot and Unilever.
As noted by Portfolio.earth and other organizations, the COVID-19 outbreak has revived demand for disposable items. Even without the virus, the global transition to electric vehicles will put more pressure on oil and gas producers to move their wares into the plastics and petrochemical market.
The potential for growth in the single-use plastic industry makes it imperative to engineer a more efficient strategy on plastic pollution, and that is why Portfolio.earth is focusing on the global financial firms that support the plastic supply chain.
As described in the new “Bankrolling Plastics” report, Portfolio.earth places banks at the top of the plastics industry pyramid.
“Between January 2015 and September 2019, banks provided loans and underwriting of more than $1.7 trillion to key actors in the global plastics supply chain,” the organization writes, referring to 40 leading companies in the plastic supply chain.
Steering those dollars away from the plastic supply chain will be a monumental task, but the report makes the case for an effective campaign that applies pressure on the leading financial stakeholders.
They have their work cut out for them.
“While many banks have shown some awareness of the issue, none of the 20 banks which provide the lion’s share of funding have developed any due diligence systems, contingent loan criteria, or financing exclusions when it comes to the plastics packaging industry,” they explain.
According to the report, 10 leading global banks alone accounted for 62 percent of the finances linked to the top 40 supply chain stakeholders. The U.S. and Europe dominate the group, which includes Bank of America, Citigroup, JPMorgan Chase, Barclays, Goldman Sachs, HSBC, Deutsche Bank, Wells Fargo, BNP Paribas and Morgan Stanley.
Much as the financial industry has pivoted from coal to renewables, Portfolio.earth advocates for financial institutions to steer their dollars into the circular economy.
That still leaves ample room for banks to become more proactive supporters of the circular economy.
“To address plastic pollution, a fundamental shift away from business models that depend on single-use packaging towards those that prioritize reuse and more localized supply chains and services is needed,” Portfolio.earth states, adding that banks must also make their support for plastic supply chain actors contingent on international agreements that increase reusability and reduce the use of virgin plastic.
The emphasis on local supply chains and services suggests a focus on small businesses. In that regard, banks in the U.S. may see new opportunities to support the transition to new business models after President-elect Biden takes office on January 20.
Last Thursday - just one day after President Trump incited a lethal assault on the entire U.S. Congress - President-elect Biden announced that his nominee to lead the Small Business Administration is Isabel Guzman, who is known for her work in arranging small business loans under California’s COVID-19 relief program.
Biden has also nominated Rhode Island Governor Gina Raimondo as Commerce Secretary. Governor Raimondo also has a strong track record on small business loans, especially for women and people of color. Her strong advocacy for clean power also dovetails with a new emphasis on local jobs and local production.
If banks don’t act soon, plastic really will become the next coal.
Here in the U.S., for example, energy policies and market forces have combined to force large, centralized coal power plants out of the power generation sector. The national energy trend now includes a large measure of rooftop solar panels, home energy storage and other small and community-centered renewable energy sources.
A similar transformation could upend the single-use plastics industry. The movement toward banning single-use bags could be just the start of a broader shift in policies and practices that creates new opportunities for small businesses, entrepreneurs and innovators.
Image credit: tanvi sharma/Unsplash
Tina writes frequently for TriplePundit and other websites, with a focus on military, government and corporate sustainability, clean tech research and emerging energy technologies. She is a former Deputy Director of Public Affairs of the New York City Department of Environmental Protection, and author of books and articles on recycling and other conservation themes. She is currently Deputy Director of Public Information for the County of Union, New Jersey. Views expressed here are her own and do not necessarily reflect agency policy.