Plastics accounting: the missing piece to the plastic pollution puzzle

Integrating plastics accounting into regulatory and policy levers is an essential element in addressing the plastic waste issue.

In brief

• The current state of plastic pollution warrants a comprehensive solution to accurately measure the waste generated and enact mitigation strategies.
• Plastics accounting can be instrumental in providing consistent, data-based insights required to mitigate and manage plastic waste effectively.

Plastic production and use has grown exponentially over the past few decades. Between 2000 and 2019, plastic production doubled to reach 460 million tons (Mt) and is expected to grow to 1,200 Mt by 2060. The resulting plastic waste is also projected to grow from 353 Mt in 2019 to 1,014 Mt by 2060.1 The United Nations estimates that 75% of all plastic produced since 1950 has become waste.2 In order to stem this growth, it is important to find effective ways to effectively track, reduce and manage plastic waste.

There is a need for a targeted solution to plastic waste and pollution

Establishing plastics accounting mechanisms can help companies accurately measure the full impact of the plastic they use and produce to create appropriately scaled mitigation actions to address the waste they create. Plastics accounting can also provide the clarity needed for companies who grapple with management of sheer volumes of plastic waste and the associated negative environmental impacts. Just as greenhouse gas (GHG) accounting has enabled corporate involvement to address GHG emissions, plastics accounting can provide companies the framework to build a robust plastic tracking and waste management process by:

• Defining plastic production and waste generation baseline metrics 
• Aligning specific reduction and mitigation strategies and targets to the generation and waste measurements, ideally in line with formal reporting processes
• Creating consistent plastic production and waste generation metrics across companies and sectors, enabling peer benchmarking, insight into industry progress on addressing plastic pollution globally, and accountability for the largest plastic polluters

Role of policymakers in plastics accounting

Given the aforementioned benefits of plastics accounting in reducing plastic waste, it is important to provide companies effective tools to mitigate the plastic crisis. Policymakers are uniquely positioned to:

• Prioritize the development of scientifically backed and internationally harmonized standards for plastics accounting — This will enable businesses to measure plastic produced and waste generated, set time-bound targets and report progress using the appropriate metrics identified in the standards.
• Mandate the disclosure of plastic metrics via reporting — The voluntary nature of the current frameworks and standards can stall corporate action on the issue of plastic waste. Therefore, it is essential that the developed standards be legally binding.
• Incentivize the adoption of standards and reporting — Use of the right incentives such as tax breaks, rebates and credits could lead to a higher degree of compliance.

As the UN Treaty on Plastic Pollution aims to address the whole lifecycle of plastics, incorporating plastics accounting into the treaty will enable relevant stakeholders to quantify the impact of plastic across each stage of the plastic lifecycle and enact mitigation strategies accordingly. Furthermore, legally mandating plastics accounting via the treaty can serve as a clear incentive to make plastic waste management a business priority, with violations potentially leading to public concern about a company’s commitment to sustainability, and of course, fines and penalties for companies that violate the treaty.

Benefits of plastics accounting to businesses and society

Effectively managing plastic waste has numerous benefits for businesses, consumers and society at large including:

• Customer loyalty: Consumers increasingly consider sustainability as a factor when deciding from which companies to make purchases. A 2022 survey demonstrates that over a third of shoppers report a modest change in their shopping behaviour, and nearly 30% said they have significantly changed their shopping habits to be more environmentally friendly.9 By adopting forward-thinking plastics accounting policies, companies can demonstrate their genuine commitment to reducing plastic waste and drive consumer loyalty.
• Investor relations: In recent years, investors have reviewed sustainability metrics to help inform investment decisions. As investors increasingly value sustainability, it is essential that companies can clearly articulate their sustainability efforts to foster interest from investors. According to a 2022 study from the Harvard Law School Forum on Corporate Governance, over a quarter of global investors reported that ESG was central to their investment approach in 2022 (26% vs. 28% in 2021).10 Taking genuine steps toward a more sustainable future can also open the door to new government incentives. In the US, regulators are introducing incentives for brands that meet certain environmental guidelines.
• Resilience: Taking steps to reduce reliance on plastic can help promote business and community resilience in the long term. Climate change-induced natural disasters, social upheavals and the pandemic have led to an increased number of supply chain interruptions. A 2021 statement from the World Economic Forum predicts that companies could face supply chain disruptions lasting at least one month every 3.7 years on average.11 To prepare for future disruptions, companies should invest in forward-thinking, sustainable sources of value.

Conclusion

The UN’s ongoing discussions on a plastics treaty represent a key moment for all industries. A unified, legally binding treaty on plastics represents an important step to manage this source of pollution. While the UN is in the negotiation process, it is essential for companies to reflect on their current plastics waste practices. Adopting effective plastic waste management is associated with several business benefits, including customer loyalty, investor trust and resilience in the long term. Industry leaders should seek to define plastics accounting frameworks that suit the needs of their industry, adopt practical measures to report plastic waste and commit to effective plastics waste management moving forward.

Nidhi Potharaju, Kristin Bianca, Ashley Pajor, Niraja Chopade and Brianna E Wren also contributed to this article.

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