8 million tons of plastic waste ends up in oceans a year

02 December 2015 Consultancy.uk

Every year, 8 million tons of plastic waste makes into the oceans. 150 million tons of plastic is now estimated to be afloat, of which 95% is unrecoverable. In a bid to prevent plastic waste entering into ocean ecosystems, Ocean Conservancy and the McKinsey Centre for Business and Environment consider practical steps that the 5 largest polluters can do to stem the tide. Their research finds that practical solutions could decrease total waste entering oceans by 45% by 2025, and sustain effort could eliminate leakage almost completely by 2035.

Plastic waste is a blight on the world’s oceans. Estimates show that the total plastic waste that has leaked or has been dumped in the world’s oceans now stands at 150 million metric tons. By 2025, this is projected to reach 250 million tons, which means that for every three tons of fish in the oceans there will be one ton of plastic. This plastic waste persistently and negatively affects the ocean ecosystem, entering the ocean food web to cause diseases in ocean dwelling organisms. 

The production of plastic is only set to increase in the coming decades as more and more consumers start buying products encased in plastic. Plastic is in most instances part of a linear economic cycle – use and discard. The collection and disposal of discarded plastic waste is for many emerging economies a quagmire, as its population’s use of plastic lags behind the mechanisms to deal with discard. As it stands, efforts to clean waste once in the oceans is extremely problematic, even cleaning the beaches and dealing with the “Great Pacific Garbage Patch” would collect only 5% of the total 95% of waste the is unreachable below the ocean waves. 

In a recent report, titled ‘Stemming the Tide: Land-based strategies for a plastic-free ocean’, by Ocean Conservancy, the Trash Free Seas Alliance* and the McKinsey Centre for Business and Environment, the lifecycle of plastics as they move from discard into the oceans is explored and concrete measures for stemming the tide are considered.

Progress of yearly ocean plastic leakage

Plastic leakage

The report highlights that the vast majority (80%) of plastic waste entering the oceans comes from land based sources. In terms of location, the majority of waste (between 55% and 60%) comes from five countries: China, Indonesia, the Philippines, Thailand and Vietnam. These countries have been enjoying rapid economic growth in recent decades, yet in many the infrastructure to deal with the waste generated by the prosperity has lagged behind. At the moment, a total of 8 million metric tons makes it into the oceans per year, which in a ‘business as usual’-scenario will increase rapidly over the next 20 years to 30 million metric tons per year by 2035.

The profile of how waste enters the oceans differs considerably between countries, and is in part related to the economics surrounding disposal. The research shows that the largest waste enters from plastic waste that has low residual value, such that there is little incentive in recycling it. This plastic enters the oceans from a number of different sources, and collection is not always a guarantee of success.

China plastic leakage

In China for instance, where a relatively strong recycling system exists, the majority of waste flows from uncollected discard, where of the 48.1 million tons, 60% is not collected, of which 14%, or 4.2 million tons makes it into the ocean. Of waste that has been collected, only 0.8% makes it into the oceans. The loss to the sea is often the result of poorly placed and open dump sites near the ocean.

In the Philippines, the numbers disclose a different story. Of the 2.7 million tons, 84% is collected once it is discarded. However, once collected it is not properly dealt with, such that 17% ends up leaking into the oceans. Of the 16% not collected, 31% makes it into the ocean. Given that the Philippines tends to be closely located to the sea, 70%-90% of waste dumped illegally by companies looking to cut costs before it reaches dump sites tends to end up in the oceans.

Philippines plastic leakage

Stemming the tide

Besides quantifying the level of waste, the researchers sought to identify how best to stem the tide from land-based sources and identified 21 ‘levers’ that can be used to improve the level of waste that makes it into oceans. The reports models the net effect of the 21 levers to find out how easy or difficult each is to implement, and how effective they would be in reducing waste.

Interestingly, the most effective measures also tend to be the easiest to implement. The five most effective measures following from the analysis are to increase collection services, cover dump sites, and optimise the hauler system, gasification, and electrification. Improving collection would reduce leakage in the five countries considered by 23%, while improving storage would reduce leakage by a further 26%. Combining all levers would result in the reduction of 60% in the five countries, and of 45% across the world.

21 leavers to stem the plastic tide

The cost

The total cost of reducing plastic leakage into the oceans for the 5 countries by 60% would cost an aggregate $5 billion per year. Particularly collection costs add between $4.5 and $5 billion, while properly policing dump sites would add up to around $600 million per year. Not all techniques result in a net deficit, with electrification adding up to $300 million to coffers.

* The Trash Free Seas Alliance consists of Algalita Marine Research and Education, the Coca-Cola Company, Covanta Energy, the Dow Chemical Company, ITW, Keep America Beautiful, the Marine Mammal Centre, the Ocean Recovery Alliance Project, AWARE Foundation, American Chemistry Council, Bank of America, Dart Container Corporation, Georgia Aquarium, NatureWorks, Nestlé Waters NA, Procter & Gamble, REDISA, Vancouver Aquarium, World Animal Protection, and World Wildlife Fund.


Private equity firms ramp up sustainability focus

19 April 2019 Consultancy.uk

In line with business leaders across the industrial gamut, private equity firms are increasingly on board with sustainability projects. According to a new study, the investment arms for major funds are implementing a number of strategies aimed at supporting sustainable economic development in line with global goals.

While the business world has finally begun to acknowledge the danger of climate change, effective action plans remain difficult to achieve. The Paris Agreement has stipulated a clear target for the decades leading up to 2100, although massively reducing emissions while not crashing the economy could be a tall order.

Businesses that are able to acquire capital can use it to boost productivity and output, thereby creating a virtuous cycle of development. However, some businesses are better able to utilise resources than others, both in terms of their relative productivity, as well as the value of the respective outcomes relative to costs (including environmental harms). Financing can therefore provide an avenue to select businesses that are aligned with various global sustainability goals, while shunning those that drive little or unsustainable social value creation.

Top moves made by investment arms towards responsible investment

Profit has for the longest time been the central criterion for investment decisions. Yet profit at any cost is increasingly seen as creating considerable social harms, while often delivering only marginal value. As a result, the private equity sector, which was initially sluggish to change its ways with regards to sustainability, has started to see the topic as an opportunity as much as a challenge.

A new study from PwC has explored how far sustainability goals have become part of the wider investment strategy for private equity (PE) firms. The report is based on analysis of a survey of 162 firms and includes responses from 145 general partners and 38 limited partners.

Maturing sustainability

Top-line results show that responsible investment has become an issue for 91% of respondents. For 81% of respondents, ESG (environmental, social, and corporate governance) was a board matter at least once a year, while 60% said that they already have implemented measures to address human rights issues. Two-thirds have identified and prioritised Sustainable Development goals that are relevant to their investment segments.

Change in concern and action on climate-related topics over time

While there is increasing concern around key issues, from human rights protections to environmental and biodiversity protection, the study finds there are mismatches between concern and action. For instance, concern among investment vehicles around climate change has increased since 2016.

In terms of risks to the PE firm itself, concern has increased from 46% of respondents in 2016 to 58% in the latest survey. However, the number who have taken action remains far below those concerned, at 9% in 2016 and 20% in 2019. Given the relatively broader scope of investment opportunities, portfolio companies face higher risks – and more concern – from PE professionals, at 83% in the latest survey. However, action is less than half of those concerned, at 31%.

Changing climate

In terms of the climate footprint of the portfolio companies, 77% of respondents state concern in the latest survey. 28% of respondents are taking action through the implementation of measures to mitigate their concerns.

Concern and action taken on ESG issues

In terms of the more pressing issues for emerging responsible investment or ESG issues, governance concern of portfolio companies comes in at number one (92% of respondents), while 60% have taken action on it. Firms have focused on improving awareness – setting up policies and a range of training modules for their professionals around responsible investment decision making. Cybersecurity takes the number two spot, with 89% concerned and 41% implementing strategies to mitigate risks.

Climate risks take the number three spot in terms of concern for portfolio companies (83%), but falls behind in terms of action (31%). Health and safety track records are a key concern at 80% of businesses, with 49% implementing action. Gender imbalance within PE firms themselves ranks at 78%, which is being dealt with by 31%. A recent survey from Oliver Wyman showed that there is gender balance at 13% of GP teams in developed countries.

Biodiversity is also an increasingly pertinent topic, with risks from pollution and chemical use increasingly driving wider systematic risks around environmental outcomes. It featured at number eight on the ranking of most likely global risks for the coming decade, with its impact at number six. As it stands, biodiversity is noted as an issue at 57% of firms, with 15% implementing action.