By Constantina Bichta
Earth Day has its roots in the ocean. In 1970, environmental activists mobilized after the 1969 Santa Barbara oil spill released more than three million gallons of oil into the ocean, killing over 10,000 marine species. Earth Day originated as a reaction to this disaster.
Almost 50 years later, Earth Day still calls upon us to reflect on the damage our species has inflicted upon the planet, and it challenges us to do better. When we gathered for our annual firm-wide meeting at the end of 2018, we committed to take action on our individual consumption of single-use plastics. These products are rarely recycled and frequently wash up in the ocean, causing disastrous effects to marine life and putting human health at risk. How can we personally, and as an organization, change our practices to protect all species and help ensure a sustainable future?
A Sea of Plastics
Plastics are now everywhere in our lives and of the 2.5 billion metric tons of plastics sold globally each year, 275 million tons are wasted. Eight million metric tons of that waste lands in the ocean.[1] The oceans, which account for 97 percent of the Earth’s water, generate at least $2.5 trillion annually, or the equivalent of the world’s seventh largest economy, [2] and 90 percent of global goods are shipped across the ocean. [3] Yet humans are polluting the oceans at an alarming rate.
The future sustainability of the oceans will undoubtedly depend on how humans use and dispose of plastics. Each year, humans produce 150 million tons of plastic packaging waste, and that packaging is the largest source of waste in landfills and oceans, raising concerns around pollution, water quality and quality of life for humans, fish, and mammals. Plastic waste leakage into the oceans is one of the major drivers in marine contamination, as “every minute the equivalent of one truckload of plastics finds its way into the ocean.”[4]
Sea creatures eat these plastics, which ultimately work their way into our food system, putting human health at risk. A study has found that 25% of fish in California contained plastic microfibers in their stomachs. Another study in the North Pacific found that sea turtles had more plastics in their stomachs than food.[5]
Tackling the Plastics Value Chain
Boston Common understood very early the profound impact of plastics on the environment. For close to 20 years we have engaged companies on phasing out PVC from their packaging and supply chains. Beyond companies, countries and governments are now taking drastic measures to tackle plastic waste. China banned 24 types of waste including plastic in 2018. The ban causes problems for countries such as the UK, Germany, Japan and the US that used to export plastic waste to China. Malaysia, Vietnam, and Thailand announced a number of similar restrictions in the plastic import market.
The EU has banned the use of single plastic bags, and 100 other countries are working on imposing a similar ban. Policy is shifting towards a holistic approach to tacking plastic waste. The UK Resources and Waste Strategy, for example, covers schemes, incentives and penalties to consumers, manufacturers and companies alike, through a plastics tax, recycling reforms, bottle deposit schemes and movements to chemical recycling and bioplastics.
The plastics value chain, as illustrated above, is complex and might take time to identify where we can make the most impact.
Eliminate, Innovate, Circulate
Boston Common has signed on to two new commitments—the New Plastics Economy Global Commitment and the Sustainable Blue Economy Finance Principles—and will build upon our robust Water Stewardship and Eco-Efficiency initiatives in our sustained dialogues with portfolio companies.
With over 250 signatories (corporations and governments) and $2.5 trillion in assets under management, the New Plastics Economy Global Commitment envisions a circular economy where plastics never become waste. Signatories commit to a set of ambitious 2025 targets working to:
- Eliminate problematic plastics
- Innovate for safer reuseable, recycled, or composted packaging
- Circulate 25% of the plastic produced by reusing or recycling (current global average: 2%).
Several of our portfolio companies have already joined the New Plastic Economy Global Commitment including: Apple, Colgate-Palmolive, Danone, PepsiCo, Henkel, Johnson & Johnson, Target, Unilever, Veolia, and Schneider Electric. As part of our 2019 engagement focus, we will be asking additional companies to join their peers across our investment strategies.
The Sustainable Blue Economy Finance Principles create a framework for investment and development policy decisions designed to support the complex and interconnected nature of ocean sustainability, in particular, Sustainable Development Goal 14: Life Below Water. By signing the principles, companies commit to supporting economic development that “values, restores and protects our oceans.”[6]
Up to the Challenge
Companies have the opportunity to innovate and change how plastics are consumed and recycled. We joined the United Nations Principles for Responsible Investment International Working Group on Plastics, which was established to raise awareness and understand the impacts, risks and opportunities surrounding plastics. Since last September, we have worked alongside 29 global institutional investors with $6 trillion AUM to understand the plastics landscape, map out the value chain, and how we, as investors, can engage on the topic.
We joined a European-led coalition of 44 investors with collective $2.6 trillion AUM and wrote to 41 companies towards tackling plastic pellet loss throughout their supply chains. These companies represent the largest manufactures of plastics and packaging as well as transport and logistics, retailers and consumer facing companies. We also joined the US-led Plastic Solutions Investor Alliance towards engaging publicly traded companies on the threat posed by plastic pollution.
This year, we will be working with our clients, industry coalitions, and membership organizations on plastics pollution and plastics used in a circular economy towards:
- Finding ways to minimize the huge damage that is already being done to our oceans, the environment, and to human health.
- Exploring alternatives, technology, involvement, and investment required in order to catalyze change in the system.
Walking our Talk
As a company, we at Boston Common have always avoided single-use plastics, and have phased out compostable cutlery and plates in our office kitchen. Our compost bins have diverted more than 9,600 lbs. of food scraps from the garbage stream, creating 4,800 lbs. of finished compost, and offsetting more than 6,900 lbs. of greenhouse gas emissions. We have many other “Walk Our Talk” initiatives as a firm, such as carbon neutrality, responsible purchasing, and diversity, which support our commitment to a sustainable, inclusive corporate culture.
On this Earth Day, we are reminded that as individuals and organizations we all have a responsibility to evaluate and modulate our current practices toward a more sustainable future. We invite you to join us in our Plastics Challenge and ask: What changes will you make with us this year?
The information in this article should not be considered a recommendation to buy or sell any security.
[1] https://oceanconservancy.org/trash-free-seas/plastics-in-the-ocean/
[2] https://www.wwf.org.uk/sites/default/files/2018-03/Introducing%20the%20Sustainable%20Blue%20Economy%20Finance%20Principles_2018%20Brochure.pdf
[3] https://www.ipcc.ch/site/assets/uploads/2018/02/WGIIAR5-Chap6_FINAL.pdf, pg. 417
[4] World Economic Forum: How to stop plastic pollution at source, November 02 2018.
[5] Citi GPS: Perspectives & Solutions, Rethinking Single-Use of Plastic, August 2018.
[6] https://www.wwf.org.uk/updates/sustainable-blue-economy-finance-principles
