message from trucost Dr. Richard Mattison, Chief Executive, Trucost This is an exciting time for Trucost, the world’s leading natural capital valuation company, to be working with the Plastic Disclosure Project (PDP) and the UN Environment Programme. Plastic is an essential material for many businesses, yet its environmental impacts cannot be ignored. Nor would any responsible company want to. This report lays the foundations for the Plastic Disclosure Project’s drive to convince companies of the need to disclose information on their annual use and disposal of plastic. Trucost’s analysis demonstrates a sound business case for disclosure as the first step on the road to making companies’ use of plastic environmentally sustainable. This business case includes a range of risks and opportunities for intensive users of plastic. For the consumer goods sector, protecting brand reputation is crucial and plastic is an issue that presents significant reputational risk. There are also bottom-line benefits from cutting the costs of excessive packaging and turning plastic waste into a useful resource. Yet plastic is just one of a host of environmental issues that companies must cope with alongside climate change, water scarcity and air pollution. Of course companies should measure and report data on plastic, just as they already do on these other impacts. But how can they make sense of this blizzard of information? How can they turn it to their advantage? Companies need a single tool that measures environmental impacts in an integrated way together with other business issues. This is where natural capital valuation comes in. As demonstrated in this report, the technique enables companies to put a financial value on a range of impacts, including plastic, so environmental management can be fully embedded within the business. Investors can also use it to assess their exposure to environmental impacts through the equity they own in companies. One of the most important insights revealed by natural capital valuation in this study is the ‘value at risk’ in consumer goods companies. This is the proportion of revenue that could be lost if companies are held accountable for the damage caused by plastic use and disposal. Toy manufacturers have the highest plastic intensity in the consumer goods sector, at 48 tonnes of CO2 equivalents per US$1 million revenue, due to their use of plastic in products. As a result, they have the highest value at risk at 3.9% of annual revenue. This would wipe out the profits of several companies if they had to pay the full cost of environmental damage caused by plastic. That is a finding that should make the chief financial officer sit up and take note. Companies can also use natural capital valuation to identify ‘hotspots’ of pollution or resource use in their supply chains. This report shows that sectors such as retail and food have the highest supply chain plastic intensity, while soft drinks and personal products have the highest plastic-in-packaging intensity. This analysis can be used by companies to target efforts to optimise plastic use and reduce end-of-life impacts. We all urgently need to address the issue of irresponsible production, consumption and disposal of plastic. I encourage businesses to embrace the Plastic Disclosure Project’s ethos of measuring, managing and disclosing their plastic use; and welcome the businesses interest in using natural capital valuation to weigh their impacts on the environment.
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