In recent times, corporate alliances have taken center stage in environmental policymaking, particularly through public-private partnerships aimed at promoting Environment, Social, and Governance (ESG) objectives, which promise systemic change.
A notable example is the U.S. Plastics Pact (USPP). At a glance, it appears to be a favorable initiative aimed at mitigating plastic pollution. However, businesses involved seem more focused on making superficial changes rather than genuinely benefiting the environment.
Launched in 2020, the USPP comprises over 850 companies, non-profits, research institutes, and government organizations working towards establishing a “circular plastic economy.” Major retailers like Coca-Cola, Danone, Kraft Heinz, Target, and Unilever have committed to eliminating specific plastics, shifting to recyclable packaging, and increasing the use of recycled materials.
That said, the USPP risks merely shifting from polystyrene to other materials like polyethylene terephthalate (PET) without actually decreasing plastic waste. This transition is often justified by claims that PET is easier to recycle and aligns better with existing recycling infrastructure in the U.S.
However, polystyrene has its advantages, being more versatile and requiring less material to achieve similar functionality. On top of that, producing PET demands more energy and incurs higher costs, contributing to a rise in greenhouse gas emissions during transportation. Yet, the financial burden often doesn’t fall on the USPP participants; consumers bear the cost instead.
Currently, only 5-6% of all plastics in the U.S. get recycled. Even among PET products, the overall recycling rate is pretty low. For instance, only about a third of plastic bottles are recycled, while the recycling rate for other PET items is under 10%. Most end up in landfills.
This costly shift isn’t happenstance; it reveals the incentives embedded within the ESG scoring system that reward superficial compliance over real, impactful changes.
ESG frameworks incentivize businesses to meet narrowly defined targets, such as increasing the use of technically recyclable packaging. However, these metrics often fail to capture the broader impact of total plastic use and emissions throughout a product’s lifecycle. Even if products generate more emissions, they can still score well in sustainability metrics if the materials are deemed recyclable. This scenario exemplifies classic greenwashing.
I suppose if you take a closer look at USPP, you’ll find that major companies like Coca-Cola, Pepsico, and Nestlé are significant backers of the initiative. These companies generate massive amounts of plastic yet manage to benefit from signing onto agreements like the USPP, appearing to support green initiatives without delivering meaningful results. Reports indicate that many retailers actually increased their virgin plastic use between 2020 and 2021.
Moreover, these companies often fund the Ellen MacArthur Foundation, the non-profit behind the USPP. This situation creates a cycle where large corporations shape sustainability standards to their advantage, determining which materials qualify as “acceptable” while pushing out smaller businesses that lack the resources to comply.
By endorsing PET as a favored packaging choice, USPP essentially strengthens the supply chains of multinational bottlers while sidelining more cost-effective materials like polystyrene, tailored for specific uses. Smaller producers who can’t easily adapt will likely be pushed out of the market.
The USPP is not fostering a circular economy; rather, it’s creating a closed network of corporate players that benefit from high ESG scores at the expense of real sustainability.
This pact brings together the top corporate polluters with ESG investors, governmental bodies, and non-profits, forming a system that rewards compliance while undermining competition and innovation and raising costs for consumers.
It’s crucial for both policymakers and consumers to recognize that initiatives like the US Plastics Agreement are merely lobbying efforts masquerading as sustainability initiatives. While they may not genuinely enhance environmental quality, they certainly create the illusion of doing so.
