Reversal seen as 'blip'
Single use plastic on rise as consumers seek protection
Shoppers have become more reliant on supermarkets
Single use plastic has increased as food producers, retailers and consumers seek protection from the deadly coronavirus.
Market intelligence firm Wood Mackenzie has predicted a 5% increase in demand for consumer “flexible packaging” in Europe this year, although analysts at Schroders believe it is just a “blip” in the long-term trend.
Flexible packaging is mostly single-use plastic such as bags, liners and wraps.
Plastic-free shopping has become harder due to coronavirus lockdowns and retailers have banned re-usable coffee cups over health fears. The price of virgin plastic has also plummeted due to the fall in oil prices, making it more appealing.
With the closure of cafes, fast food outlets and restaurants, shoppers have been more reliant on supermarkets and other grocers – a sector where 37% of packaging is single-use plastic, according to EY’s Unwrapping the Packaging Industry report.
Plastic’s protective and hygienic appeal during the pandemic has boosted consumption in developed markets such as Europe and the US.
But Schroders’ sustainable investment analysts, Holly Turner and Louise Wihlborn, say a complete u-turn on plastic waste commitments is unlikely.
They have been researching the potential winners and losers from the war on plastic, and look at how businesses need to renew their vows.
“The over-riding priorities of the COVID-19 crisis have, at least in the short term, constrained efforts to tackle the challenge, both from a corporate prioritisation and from a hygiene perspective,” they say.
“But in the long term a circular economy for plastics is inevitable. This means not simply making, using and disposing of plastic but removing unnecessary plastic, making innovative products and circulating items back into use.”
We believe the recent reversal of progress is a blip– Schroders team
They have identified 60 new regulations attempting to tackle single-use plastic and had discussions with more than 100 companies about their commitments and responses to increasing regulation.
“We believe the recent reversal of progress is a blip. As our latest report on progress – Forging a new future for problematic plastic: are companies prepared? –shows, businesses need to urgently ramp up disclosure, ambition and action.”
But some companies have been slowing efforts, including Carrefour supermarkets, Starbucks, Dunkin’ Brands fast-food chain and Canada’s fast-food chain Tim Horton’s.
Ambitious recycled content targets look under threat from the virus crisis, particularly in the waste management sector – as evidenced in the already “at-risk” populations of waste pickers in the informal sector in South and Southeast Asia.
Recyclers are simultaneously being hurt by downward pressure on the value of their commodities. This is thanks to the drop in oil prices, driven by a price war between Saudi Arabia and Russia, which is making virgin plastic cheaper.
“These developments aside, we think a complete u-turn on company commitments is unlikely given consumer scrutiny and regulatory focus. The scale of plastic pollution, its negative impact on global ecosystems and potential human health risks linked to microplastics are all too important to ignore,” say the Schroders researchers.
“Although some stakeholders are lobbying for governments to lift restrictions on single-use plastic items and some regulation has been delayed, we believe the regulatory pressure will continue.”
They note that the European Commission has already confirmed that deadlines for the EU-wide ban on single-use plastic items, set to come into force by 2021, must be respected.
Likewise, the UK government is not budging on the Plastic Packaging Tax, which will apply to plastic packaging that does not contain at least 30% recycled plastic from 2022.
However, they also say it is hard to ignore the benefits of plastic within the healthcare industry during the COVID-19 crisis. Almost all PPE (personal protective equipment) is made from plastic, with some items such as aprons and gloves even counted as single-use.
As the hospitality sector re-opens for business and regulators review their pre-COVID agenda, “it will become clear that – unlike with carbon emissions – ocean plastic pollution has not fallen.
“The long-term risks remain. We believe consumer and regulatory pressure to transition to a more circular economy will continue, although it may not necessarily proceed at the desired speed.
“COVID-19 should provoke a stronger response, not weaker. The crisis has underscored the need for the business community to focus on long-term solutions, not quick fixes.
“Business models and infrastructure can endure and even prosper in times of crisis if they act decisively. It is time for businesses to renew their vows.”