Plastic plays an important role in society. For example, it is used to prolong the shelf-life of food and minimise food waste, and it is also used for masks, gloves and syringes in the healthcare system and as packaging for lifesaving medicines.
But plastic also has a massive negative impact on the environment, biodiversity and the climate, with the biggest culprit being single-use plastic that ends up in the natural environment. This plastic is eaten by animals, which then die, and microplastics end up in the food we eat. Also, plastic is produced using fossil fuels, and it degrades important habitats for animals and plants.
The scale of the problem is enormous. The UN estimates that plastic waste amounting to approximately seven billion tonnes has been generated worldwide, and only 10% of this has been recycled.
This is why we support proposals put forward at annual general meetings of the companies we invest in that call for the companies to disclose their plastic consumption and to prepare plans for reducing their plastic use. By doing so, the companies are not only creating a more sustainable businesses for the future but also more sustainable investment returns for our customers. Among these companies are the American companies Amazon, Dow Inc., The Kroger Company, Yum! Brands (which operates KFC, Pizza Hut and Taco Bell) and Restaurant Brands International (which operates Burger King and Tim Hortons).
According to Mads Steinmüller, Head of Climate & Nature at Danica Pension, businesses should already be preparing for this today, otherwise they may be hit financially, which will affect the return on our customers’ pension savings.
“We want a greater transparency about the consumption and production of plastics because this will allow us to better assess how businesses will be affected by stricter regulation and to see if businesses are doing enough to stay abreast of the development in this area. More and more countries are introducing tighter restrictions on plastic, and all of us want to have more environmentally friendly alternatives – and it’s this reality that companies need to adapt to,” explains Mads Steinmüller. He continues:
“Companies need to have a strategy and set targets, for example about how they can re-design products and packaging using recycled plastic to a much greater extent. Or that the plastic they use can be recycled for other purposes thereby supporting a circular economy. At the same time, there’s also a definite need for the development of new materials that can replace plastic and that are less harmful to the environment.”
“This clearly shows that plastic is high on the agenda for investors and that people want companies to have a bigger focus on this area. We hope that the companies will take this message on board and make improvements because it’s important that they start dealing with the challenges related to plastic use as soon as possible,” says Mads Steinmüller.
“Plastic pollution affects the very foundation for operating a business, which in turn affects the investment return for our customers. It contributes to reduced fish stocks and to the extinction of plants and insects, so there won’t be enough bees to pollinate crops, for example. And this can make it more expensive and more difficult to produce food or medicine. This is why a strategy on minimising plastic use is needed because this can help to protect the natural resources that companies and the economy are dependent on,” says Mads Steinmüller.
Sources: Minderoo Foundation, Global Plastic Action Partnership, UNEP, Videnskab.dk, Wrap, WWF, Alfred-Wegener Institut, UNEP, IPEN, International Tax Review, OECD.
But plastic also has a massive impact on the environment, biodiversity and the climate, with the biggest culprit being single-use plastic that is discarded in the natural environment rather than being recycled. Plastic particles have been found in a growing number of sea birds, marine mammals, turtles and fish. The ingested plastic creates a false sense of feeling full and the intestinal blockage caused prevents the animals from absorbing vital nutrients. This ultimately means that animals can end up dying of hunger when they eat plastic. Other animals become entangled in plastic when they search for food and end up drowning.
Hazardous chemicals from plastic also pollute the natural environment, and toxic plastic particles are found in the water we drink and in the air that we breathe. Plastic also pollutes and suffocates coral reefs, the seabed and mangrove forests, wiping out important habitats for animal and plant life. For example, when plastic comes into contact with coral reefs, it triggers a disease similar to gangrene causing the coral reef to get sick and die. In addition, because 99% of all plastic is produced using gas and oil that create a lot of carbon emissions, plastic also contributes to global warming.
But plastic also has a massive negative impact on the environment, biodiversity and the climate, with the biggest culprit being single-use plastic that ends up in the natural environment. This plastic is eaten by animals, which then die, and microplastics end up in the food we eat. Also, plastic is produced using fossil fuels, and it degrades important habitats for animals and plants.
The scale of the problem is enormous. The UN estimates that plastic waste amounting to approximately seven billion tonnes has been generated worldwide, and only 10% of this has been recycled.
This is why we support proposals put forward at annual general meetings of the companies we invest in that call for the companies to disclose their plastic consumption and to prepare plans for reducing their plastic use. By doing so, the companies are not only creating a more sustainable businesses for the future but also more sustainable investment returns for our customers. Among these companies are the American companies Amazon, Dow Inc., The Kroger Company, Yum! Brands (which operates KFC, Pizza Hut and Taco Bell) and Restaurant Brands International (which operates Burger King and Tim Hortons).
"More and more countries are introducing tighter restrictions on plastic, and all of us want to have more environmentally friendly alternatives – and it’s this reality that companies need to adapt to."
Mads Steinmüller, Head of Climate & Nature at Danica Pension
Sustainable investment returns
Companies need to minimise their production and consumption of plastic so that they can comply with the stricter legislation and taxation that is expected to be introduced over the coming years. For example, world governments through the UN are currently preparing a legally binding agreement aimed at committing countries to combat plastic pollution.According to Mads Steinmüller, Head of Climate & Nature at Danica Pension, businesses should already be preparing for this today, otherwise they may be hit financially, which will affect the return on our customers’ pension savings.
“We want a greater transparency about the consumption and production of plastics because this will allow us to better assess how businesses will be affected by stricter regulation and to see if businesses are doing enough to stay abreast of the development in this area. More and more countries are introducing tighter restrictions on plastic, and all of us want to have more environmentally friendly alternatives – and it’s this reality that companies need to adapt to,” explains Mads Steinmüller. He continues:
“Companies need to have a strategy and set targets, for example about how they can re-design products and packaging using recycled plastic to a much greater extent. Or that the plastic they use can be recycled for other purposes thereby supporting a circular economy. At the same time, there’s also a definite need for the development of new materials that can replace plastic and that are less harmful to the environment.”
High level of support
More than 30% of the shareholders of Amazon, Dow Inc., Yum! Brands and the other companies supported the proposals, and hopefully this high level of support can make companies improve.“This clearly shows that plastic is high on the agenda for investors and that people want companies to have a bigger focus on this area. We hope that the companies will take this message on board and make improvements because it’s important that they start dealing with the challenges related to plastic use as soon as possible,” says Mads Steinmüller.
Damaging to biodiversity
Mads Steinmüller points out that the problems caused by plastic have a direct link to biodiversity loss, which represents a risk for businesses and for investments. When plastic ends up in our natural environments or is burnt, it pollutes and destroys ecosystems and the habitats of animals, forests and plants on land and in our oceans. Also, nearly all plastics are produced from fossil fuels that contribute to climate change – and climate change increases biodiversity loss even further.“Plastic pollution affects the very foundation for operating a business, which in turn affects the investment return for our customers. It contributes to reduced fish stocks and to the extinction of plants and insects, so there won’t be enough bees to pollinate crops, for example. And this can make it more expensive and more difficult to produce food or medicine. This is why a strategy on minimising plastic use is needed because this can help to protect the natural resources that companies and the economy are dependent on,” says Mads Steinmüller.
Sources: Minderoo Foundation, Global Plastic Action Partnership, UNEP, Videnskab.dk, Wrap, WWF, Alfred-Wegener Institut, UNEP, IPEN, International Tax Review, OECD.
About the challenge with plastic
Plastic is a smart, strong and flexible material used for many important purposes, and it is a cheap and durable product. For example, it is used to prolong the shelf-life of food and minimise food waste, and it is also used for masks, gloves and syringes in the healthcare system and as packaging to ensure that lifesaving medicines are not contaminated. It also replaces materials that are more carbon-intensive to produce such as steel, and it makes it possible for clean drinking water to be transported and stored in drought-ridden remote areas.But plastic also has a massive impact on the environment, biodiversity and the climate, with the biggest culprit being single-use plastic that is discarded in the natural environment rather than being recycled. Plastic particles have been found in a growing number of sea birds, marine mammals, turtles and fish. The ingested plastic creates a false sense of feeling full and the intestinal blockage caused prevents the animals from absorbing vital nutrients. This ultimately means that animals can end up dying of hunger when they eat plastic. Other animals become entangled in plastic when they search for food and end up drowning.
Hazardous chemicals from plastic also pollute the natural environment, and toxic plastic particles are found in the water we drink and in the air that we breathe. Plastic also pollutes and suffocates coral reefs, the seabed and mangrove forests, wiping out important habitats for animal and plant life. For example, when plastic comes into contact with coral reefs, it triggers a disease similar to gangrene causing the coral reef to get sick and die. In addition, because 99% of all plastic is produced using gas and oil that create a lot of carbon emissions, plastic also contributes to global warming.
