Plastic, the fashionable villain and how to fight it. Peace Nachon, November 2020

It’s hard to imagine the world we live in without plastic. We looked around us, in the streets, in our offices and in our homes, and found thousands of objects composed of this material. But we have to accept the reality: today, only 14% of plastic packaging is recycled, and 32% ends up seeping into ecosystems.

Faced with this challenge, both countries and companies are reacting, looking for ways to reduce their impact of plastic use and add value, while supporting activities that increase the rates of recovery and / or recycling of plastic.

For companies, this is an opportunity to make a real and permanent impact. The demand for sustainable products and services is increasing, especially in sectors such as cosmetics, food and other consumer goods. In this context, strategies around plastic are an increasingly important part of the toolbox of companies. Just as Net Zero or carbon neutrality targets are set, companies from different sectors, but especially from the consumer goods sector, are already looking for ways to achieve their plastic neutrality.

But what does it mean to be plastic neutral, and what implications does this have for the scalability, traceability, and standardization of existing recycling infrastructure? Different experts point out that, if we want to win the battle against plastic, we must mobilize the capacities of the markets.

Making a parallel with carbon neutrality and carbon markets, since, although in the case of different impacts you can learn a lot from the experience gained in voluntary carbon markets in recent decades, achieving to be a plastic neutral company will imply, for companies:

* Work to achieve a significant reduction in the amount of plastic used. This reduction is likely to be associated with major changes in supply chains, which will need to develop the infrastructure to achieve these objectives.

* After reducing as much as possible, use plastic offsets to help compensate for those uses of plastic that cannot be avoided, either due to technological impossibility or the cost of replacement.

In many ways, plastic credits will in the future likely be similar to existing carbon credits today. The company (the buyer) will acquire a volume of plastic credits in kilograms, equivalent to its plastic footprint. The money invested will be used to finance projects to recover or recycle a volume of plastic equivalent to the company’s plastic footprint, thus helping it to become plastic neutral.

As with carbon, it will be important to ensure the robustness of the mechanism, which should not be used without first making maximum effort to reduce the footprint internally.

This neutrality scheme can bring with it important co-benefits for companies, which will thus support the informal recycling sector in different countries, increasing the prosperity, health and education of the communities involved, contributing to the achievement of different Sustainable Development Goals.

To make this a reality, we must think of formulas to ensure the additionality, traceability, and permanence of these future plastic credits, as well as ensure that they do not cause any type of environmental, social or economic damage.

We are at a key moment, since the pillars on which the sector will be based in the future are now being defined, with works such as the development of the Guidelines for Leadership in Corporate Plastic Accounting.

Different organizations are already working to develop critical elements of what could be an effective and impact-oriented plastic offsetting system, such as the generation of infrastructure and investment in new recycling technologies, the development of partnerships with associations and workers in the informal recycling sector, the definition of methodologies and tools to calculate plastic footprints, the creation of standards for the generation of credits. From Vertis, we are already working with companies that seek to be pioneers in this field and we are convinced that throughout 2021 we will see how the schemes and efforts around plastic neutrality are transformed significantly.

Peace Nachon
Head of Climate Action
Vertis Environmental Finance

Company Member of the Private Company and Climate Foundation