Disclosure system CDP invites companies to report use, production of plastic

CDP, which runs the largest corporate disclosure system globally, will start collecting data relating to companies’ plastic production and use from Wednesday (Apr 19), as its platform opens for 2023 reporting.

This comes amid rising investor pressure on plastic disclosure, as six companies – including Amazon, ExxonMobil and McDonald’s – last year faced shareholder resolutions asking for more disclosure on efforts to reduce plastic.

CDP said the new data fields are backed by more than 740 financial institutions with over US$130 trillion in assets, which the non-profit organisation works with, and will impact nearly 7,000 companies. Nearly 20,000 organisations disclosed data through CDP in 2022.

Companies invited to make plastic disclosures include 100 petrochemical companies that produce 90 per cent of all single-use plastic waste generated globally; and packaging companies, which use 44 per cent of all plastic. 

Also in the mix are fashion and apparel companies that have been slow to transition to recycled materials; and food and beverage companies, given that the plastic packaging for their products have been a major source of pollution.

They will be asked to map plastics attributable to them; the plastics’ potential impact to the environment; as well as the companies’ associated business risks and targets. The questions build on existing frameworks, including those designed by the Ellen MacArthur Foundation and United Nations (UN) Environment Programme’s Global Commitment Framework.

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Data, where publicly disclosed, will be made available from September, CDP added.

It noted that momentum has been building lately. For one thing, the landmark UN Plastics Treaty is being negotiated. “Corporate action – and data to track it – will be crucial to (the treaty’s) implementation,” it said.

In December 2022, 55 financial institutions – including CDP signatories Cardano ACTIAM, Boston Common Asset Management, Triodos Investment Management and Robeco – formed a Plastic Solutions Investor Alliance to engage publicly-traded companies on the threat posed by plastic pollution, it said.

More than eight in 10 capital markets and supply chain members that responded to its plastic consultation had indicated that plastic disclosures would be useful in making financial or procurement decisions, it added.

CDP also stressed that the plastic pollution crisis comes with significant financial, physical, legal, technological, regulatory and reputational risks for companies and investors.

As regulation is implemented, companies face US$100 billion in annual financial risk if governments require them to cover waste management costs at expected volumes and recyclability, it stated.

Investments in petrochemicals and plastics worth about US$400 billion are at risk of becoming stranded assets, while near-term exposures (from 2022 to 2030) to corporate liabilities from plastic-related pollution are material and likely to exceed US$20 billion, it added.

“Enabling the creation, collection and distribution of relevant data is a vital first step,” it said.

“It’s not good enough that many companies, investors and policymakers still lack the robust data needed to drive the rapid transformation we desperately need,” added Cate Lamb, the global director for water security at CDP. 

The data will also help companies understand how they contribute to the plastic pollution crisis and formulate equitable and just transition plans to address this, Lamb said.