Global plastics consumption has increased more than six-fold since 1980. This is causing high and rapidly increasing levels of plastic pollution, which poses serious risks to human health and biodiversity. Plastics injure and kill marine wildlife, damage soils and poison groundwater. Additionally, plastics are responsible for around 3% of global emissions, contributing to climate change. Biodiversity loss and climate change, in their turn, can have a negative impact on local communities. For example, it can threaten the worldwide food production and consequently the availability and affordability of (healthy) food for lower income groups. Concerningly, plastic waste is projected to almost triple by 2060 with less than a fifth being recycled, according to the OECD’s global plastics outlook ^[1].

Plastic pollution therefore represents a growing threat to biodiversity, climate change, health, and human rights, which exacerbates system level risks. These systemic risks are major global challenges, creating serious risks for companies as they impact financial stability, therefore demanding urgent collaboration by all actors. For these reasons, Cardano participates and supports a variety of initiatives targeting different actors to address the plastic pollution crisis.

As responsible, long-term investors, we believe that companies with sound policies to reduce plastics may enjoy competitive advantages, including stronger brand performance and consumer trust as customers are increasingly worried about the impact of plastic products in the environment. Given the increase of new regulations and the rising number of lawsuits against firms, these companies will also be better prepared for upcoming regulations and legislative action.

On the corporate engagement level, Cardano actively participate in two initiatives. We are part of the Plastic Solutions Investor Alliance coordinated by the American NGO As You Sow, where we lead and support engagements with companies in the North American region. We also joined the plastic pollution program from the Dutch association VBDO, where we lead and support engagements with European companies. Both initiatives call for urgent action to reduce plastics from intensive users of plastic packaging. Being active in both these initiatives allows us to broaden our scope on companies and benefit from the local investor and NGO expertise on plastics. For instance, in the EU there is more stringent regulation to address plastic pollution compared to the US, exposing European companies to more regulatory risks.

On the policy and sovereign engagement level, we also support several initiatives. Currently, the UN-led plastics treaty negotiations are ongoing in countries which are aiming to agree on a legally binding treaty. Cardano believes a legally binding ambitious plastics treaty is essential to address the plastic pollution crisis, as this will create a level playing field, making it easier for countries and companies to scale solutions. To support an ambitious legally binding treaty, we have been a member of the business coalition for a global plastics treaty since December 2022, which advocates for such a treaty. In April 2024, we also signed a statement calling on member states to agree on an ambitious treaty that sets a clear objective to end plastic pollution and that is supported by binding rules and obligations for governments to address the full life cycle of plastic.

However, during the latest round of treaty negotiations, petrochemical companies have opposed any cut to production to control plastic pollution and pushed back against the inclusion of (plastic) polymer production within the treaty.

In July 2024, we therefore signed the investor statement calling petrochemical ^[2] companies that produce plastic polymers to take stronger action towards plastics circularity. This statement was signed by 70 investors with combined assets of USD 6.8 trillion, sending a strong signal to petrochemical companies that all actors across the plastics value chain must take action to end the plastic pollution crisis.

By using different tools and targeting diverse actors to address plastic pollution, Cardano aims to address the systemic risks of climate change, biodiversity loss, human rights and health, which fits our broader sustainability goal to encourage companies to operate within planetary boundaries and respect the social foundations of wellbeing, below which no-one should fall.

^[1] The Global Plastics Outlook: Policy Scenarios to 2060, OECD 2022 https://www.oecd.org/en/publications/global-plastics-outlook_aa1edf33-en.html

^[2] Petrochemicals are chemicals made from petroleum