The negotiations for a global plastics treaty in Busan last year ended in a disappointing deadlock. Countries and companies that lobby against a production cap on virgin plastics drag the world further into the environmental and health disaster created by plastic pollution. The ball is now with the financiers. The Plastics Banks Tracker,  published by Profundo, Plastic Soup Foundation and BankTrack, tackles the disaster at its source: the banks that fuel plastics production and processing.

The failed negotiations in the fifth round for a global plastic treaty in Busan, South Korea, at the end of November last year, concluded an already very dark year for Mother Earth. Ravaging wars and the election of an American president who is quitting the Paris Agreement, all have devastating impacts on nature, human health, and biodiversity. What could have brought some light – a binding global plastics treaty to curb another major disaster - ended in a frustrating deadlock as a result of a great divide between two major camps.

 On the one hand, there was the group of countries that advocated for reducing the production of virgin plastics and for banning hazardous chemicals. On the other hand, there were the oil-producing countries that only wanted to talk about waste management and recycling. As the latter group blocked the treaty, national interests and corporate power prevailed over human health and the natural environment. This is the saddening result after five rounds of negotiations.  

Upstream measures

Approaching plastic pollution purely as a waste management problem will not yield sufficient result. Between 2018 and 2022, 88% of the total private investment capital aiming at ending plastics pollution in emerging markets, amounting to US$3.6 billion, was destined to fund recycling and recovery activities, according to The Circulate Initiative. These efforts completely failed: less than 10% of the plastic waste produced worldwide is being recycled (mostly downcycled). This figure also demonstrates the lack of investor interest in reducing the production of fossil-based virgin plastics. It's time to turn these percentages around. We can do this by addressing plastic finance, mapping and engaging the financiers and convincing them that the production of fossil-based plastics is a dead-end road. 

Upstream measures, including a production cap, are essential to reduce pollution, as proven by research from the University of California, Berkeley. Their research shows that a cap on global virgin plastic production at 2020 levels would yield a reduction of mismanaged plastic waste in 2050 from 121 to 72 Mt. The International Science Council states that “Setting clear primary and other problematic plastic production reduction targets and timelines, combined with the promotion of circular economy principles based on globally agreed, science-based safety and sustainability criteria for both plastic products and alternative solutions” is critical to address the drivers of plastic pollution.

If corporations refuse to take responsibility by reducing the production of plastics, we should revert to their financiers to push their clients to do so. Financial institutions are a major enabler of the plastics industry as they finance companies all throughout the plastics life cycle, from extraction to petrochemical -, polymer - and packaging production. And they will continue to do so if nothing is done. Plastic use is expected to increase by 37% by 2050, with a decrease in the proportion of recycled plastic and a doubling of mismanaged plastic. A systems change can only be realised if financial flows are redirected from the production and utilisation of problematic plastics and chemicals towards a more circular economy.  

Plastic Banks

Financial institutions are not yet taking the plastics problem very serious, as has been shown by the recently launched Plastic Banks Tracker. This joint initiative of Profundo, Plastic Soup Foundation and BankTrack, aims to move the financial sector towards responsible behaviour. However, our first assessments of twenty banks, done in 2024, show that most international banks still fail to acknowledge the plastics problem and do not make any clear commitment to support solutions for the plastics crisis.

Furthermore, the assessments reveal that most banks do not require their clients to develop alternatives to radically reduce the production and consumption of plastics. This undermines their own climate- and biodiversity related commitments and makes the banks part of the problem. Banks must acknowledge their role and responsibility and use their leverage over clients to help tackle this crisis.

Finance solutions

We need safe and environmentally responsible packaging materials to pack our food, drinks, medicines and goods. Food and consumer goods industries should invest in alternatives for packaging and plastic components, new forms of logistics, and deposit systems. Financial institutions should support that. For banks to become agents of positive change, they should first acknowledge the plastics problem and their role in it, commit to finance solutions, develop stringent policies and implement those rigorously in their financing relationships with companies in the plastics lifecycle. They should also stimulate collaboration in the field of plastic waste collection, sorting and recycling systems and capacities. All this will drastically bring down the production and consumption of plastics.  

The Plastic Banks Tracker aims to map the landscape of companies in the plastic value chain and their financiers. We will assess the policies of these financiers, inform them about the risks of plastic finance and engage with them to find solutions. Meanwhile we continue telling stories on the impact of plastics on nature, human health and climate.  

No time to waste

While awaiting the outcomes of the negotiations for a global plastics treaty being resumed this year, we should not waste any time anymore. We increasingly understand the severity of plastic's impacts. Evidence is mounting that plastic pollution is literally altering habitats, landscapes, soil structures, and natural freshwater flows by deeply penetrating the earth’s system. Plastic pollution triggers unexpected changes through interactions among those dynamics.  

Plastic pollution amplifies its impacts and transgresses planetary boundaries, seriously affecting the stability and resilience of the earth's system. This increases the risk of generating large-scale abrupt or irreversible environmental changes threatening people and the global ecosystem.

Banks can and should play their part, take responsibility and help turn the tide.

Re-published from the original news article on the Profundo website here.