How can investors tackle plastic pollution?

Discover the role investors can play in tackling plastic pollution.
September 2021

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Our linear economy model of ‘take, make, dispose’ is deeply unsustainable, creating a giant amount of waste that is harmful to people and the planet. Our addiction to single-use and disposable plastic is a particularly pressing environmental issue that must urgently be addressed. Although it is a useful and valuable resource, the pollution linked to plastic is damaging and unnecessary – consider the fact that of the 9.2 billion tons of plastic ever manufactured, almost 7 billion tons have become waste…and 91% of this has never been recycled. Clearly, governments, companies and investors must work to find sustainable solutions.

Plastic pollution threatens ocean health

Our ocean hosts most of Earth’s biodiversity, regulates our climate and feeds billions of people. It’s also key to our economy, generating $2.5trn of economic value annually, while c.40 million people are expected to be employed by ocean-based industries by 2030. Clearly, the ocean is an extremely important natural resource – and ocean health is a highly interconnected issue, integral to the achievement of the UN Sustainable Development Goals. SDG 14 – Life Below Water – is the most directly linked to ocean health, but so are a range of others, from Zero Hunger to Climate Action. Clearly, any threats to it have wide-ranging consequences for people and the planet…and yet this precious resource is in crisis thanks to human activity – of which plastic pollution plays a central role:

  • More than 8 million tons of plastic reach the ocean annually.
  • The Great Pacific Garbage Patch – which is three times the size of France – is almost entirely made up of microplastics.
  • Without action, by 2050 there could be more plastic than fish in the ocean.

How can we close the loop?

To reduce the amount of waste we produce, we need to think beyond our linear ‘take, make, dispose’ mindset and transition into a circular economy – restorative and regenerative by design, whereby waste is eliminated and resources are circulated around a ‘closed loop’ system. Such a transition would help us tackle the global challenges we’re facing, from climate change to biodiversity loss.

Turning again to plastic, there are three key steps to creating a circular economy here:

  1. Eliminate the plastic we don’t need (e.g. stop the excessive use of plastic packaging).
  2. Innovate to ensure that the plastics we do need are reusable, recyclable or compostable.
  3. Circulate all the plastic we use to keep it in the economy and out of the environment.

Engaging companies on plastic pollution

At BMO Global Asset Management, we recognise our role in stopping plastic pollution, and are committed to playing our part within this global effort. We are a signatory to the manifesto calling for a UN treaty on plastic pollution, whereby we’re asking UN member states to commit to urgently begin negotiations on such a treaty to ensure a coordinated, international response to tackle the crisis.

We also use our investor influence to engage companies to adapt their business practices to reduce plastic pollution. Specifically, we ask companies to reduce the amount of unnecessary single-use plastic, improve the recyclability of plastic, invest in packaging redesign and new materials, implement circular economy models and improve recycling infrastructure.

One such company we have engaged is Vitasoy International Holdings – a food and drinks company operating within the consumer staples sector, primarily in Asia. The company sells a variety of products – notably soy milk – in 30 markets, and its revenues are linked to SDG 2.1: ending hunger and ensuring that everyone has enough safe and nutritious food. We have engaged with Vitasoy on several issues, including its consumer-facing packaging – which has concerned us in terms of ocean sustainability. Having encouraged the company to increase its use of recyclable packaging, eliminate single-use plastics, and invest in its local waste-management infrastructure, we were pleased to achieve several milestones in our engagement targets.

Vitasoy has enhanced its approach to addressing the environmental impact of packaging, including carrying out a lifecycle assessment of the plastic, glass and carton paper used in its operations in mainland China. It has also improved the packaging of some of its recyclable plastic bottles to make them lighter, which helped to reduce the company’s plastic use by 90 tonnes last year.

Overall, the company was receptive to our engagement on this issue and, with our conversations continuing, these results show what can be achieved when all parties work together.

Jamie Jenkins

Jamie Jenkins

Managing Director and Co-Head of Global Equities
Marcus Wilert

Marcus Wilert

Vice President, Responsible Investment team

Risk warnings

The value of investments and any income derived from them can go down as well as up and investors may not get back the original amount invested.

The information, opinions, estimates or forecasts contained in this document were obtained from sources reasonably believed to be reliable and are subject to change at any time.

Views and opinions have been arrived at by BMO Global Asset Management and should not be considered to be a recommendation or solicitation to buy or sell any companies that may be mentioned.

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Get to know the authors

Jamie Jenkins

Get to know the authors

Jamie Jenkins, Managing Director, Co-Head of Global Equities

Jamie joined the firm in 2000, and is now Co-Head of the Global Equities team, Lead Portfolio Manager of the BMO Responsible Global Equity Fund and Lead Portfolio Manager of BMO SDG Global Equity Fund. Prior to joining BMO, Jamie focused on Japanese equities, and he holds an MA in History from the University of Edinburgh.

Marcus Wilert

Marcus Wilert, Vice President, Responsible Investment

Marcus joined the Responsible Investment team at BMO GAM in 2020 and is focusing on labour standards and biodiversity. Before joining BMO, Marcus spent a decade and a half in supply chain sustainability across the world. When not working, he enjoys sailing and Filipino martial arts.

Risk warnings

The value of investments and any income derived from them can go down as well as up and investors may not get back the original amount invested.

The information, opinions, estimates or forecasts contained in this document were obtained from sources reasonably believed to be reliable and are subject to change at any time.

Views and opinions have been arrived at by BMO Global Asset Management and should not be considered to be a recommendation or solicitation to buy or sell any companies that may be mentioned.
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