In the scorching summer heat, the sustainability departments of tens of thousands of companies are working furiously to prepare this year's CDP data. CDP is the world's largest carbon disclosure program, and this data is a crucial reference for $136 trillion in investment and $6.8 trillion in procurement, making it a highly valued priority for businesses. This year, CDP includes a "plastics" project for the first time. Nearly 7,000 companies in the petrochemical, food, and packaging industries have been invited to disclose their plastic production and recycling practices. The data is expected to be publicly available in September.
7,000 Companies Required to Disclose Plastics
With tightening global carbon emissions controls, excessive CO2 emissions may result in carbon fees and even lawsuits, all of which represent investment risks. Consequently, over 680 investment institutions worldwide, with a combined $136 trillion in assets under management, require companies to submit CDP information for investment consideration. In 2022, over 18,700 companies, representing half of the world's total market capitalization, submitted CDP questionnaires.
CDP announced that it will add new "plastics" disclosures this year, covering plastic polymers, durable plastics, and plastic packaging, which have the greatest environmental impact. The initial industries targeted include chemicals, apparel, food, and packaging, with nearly 7,000 companies invited to disclose information on their plastic production or use. Inquiries are expected to open in September.
CDP explained that 100 petrochemical companies worldwide generate 90% of global plastic waste, with plastic packaging for food and beverages being a major source of pollution. Furthermore, up to 44% of plastic is used for packaging. This year's plastic disclosure is a pilot program. CDP's website states that to allow companies time to develop plastic reduction initiatives, it will not be included in the scoring process. The scope of plastic disclosure may be expanded further next year.
The actual risks of using plastics are in the hundreds of billions, and investors are taking it seriously.
Companies may ignore environmental pollution, but in the eyes of investors, this represents financial, legal, regulatory, or reputational risks that could lead to investment losses.
CDP stated that if governments require companies to pay for plastic waste and recycling, they would face a financial risk of $100 billion annually, and nearly $400 billion in petrochemical and plastics investments could become stranded assets. Research indicates that companies' near-term exposures to plastic pollution could exceed $20 billion between 2022 and 2030.
Cate Lamb, Global Director of Water Security at CDP, stated that plastic pollution is serious and urgently requires transformation, but companies, investors, and policymakers lack reliable, comprehensive data based on consistent standards. Information disclosure will be fundamental to combating pollution.
80% of financial institutions and buyers are willing to include plastics in their investment risk assessments.
CDP is not the only organization calling for the disclosure of plastics information. CDP noted that six companies, including Amazon, ExxonMobil, and McDonald's, were also asked by shareholders to disclose their plastic reduction performance in 2022.
CDP also surveyed its capital market and supply chain members in advance, and 81% of respondents indicated that they would be willing to include CDP's plastics information in their investment and procurement decisions once it is publicly available.
Source: Environmental Information Center (https://e-info.org.tw/node/237146)
