From Pollution to Solution: The Importance of Circular Plastic Systems in Corporate ESG Reporting

Industry and Plastic Pollution

Plastic is everywhere. It is estimated that almost 300 million tons of plastic is produced globally each year¹ and only about 9% of that waste gets recycled². To make matters worse, many plastic materials are made from toxic chemicals that can take up to 1,000 years to decompose in the landfill or ocean, and leach hazardous waste into the air and groundwater as they do so.

Plastic isn’t just for making children’s toys and sandwich bags; plastic is used as a reliable and durable material for multiple industries. Plastic is used to make construction materials, billboards, fabrics, electronics, and so much more. Plastic is incredibly functional, but the waste has gotten out of control. The good news is that corporations are beginning to move towards a more circular plastic lifecycle and are documenting their every move in annual Environmental, Social, and Governance (ESG) reports. These in-depth reviews of a company’s sustainability initiatives offer transparency to investors and consumers and accountability for the company and its officers.

Circular Plastic Systems as the Solution

Since plastic is so industrially useful, completely removing plastic from the supply chain might not be a reasonable solution. What companies can do is be more intentional about the plastic they are sourcing and how they dispose of it at the end of its lifecycle. The resources to purchase less toxic, recycled plastics and ensuring that they enter back into the production line at the end of their lifecycle are available to corporations right now.

Circular plastic systems are gaining traction with companies small and large. Renegade Plastics offers innovative recyclable plastic fabrics that are free from PVC, lead, phthalates, dioxins, PFAS, and heavy metals that are applicable across industries. At the other end of the spectrum, Sumitomo Mitsui Banking

Corporation (SMBC) just joined organizations such as LyondellBasell, NOVA Chemicals, and Chevron Phillips Chemical in investing in the Closed Loop Circular Plastics Fund, a program working to improve plastic recovery and recycling throughout the U.S. and Canada³. These steps forward are encouraging as no one corporation, government or person can tackle plastic waste on their own.

Circularity in ESG Reporting

Corporations are being held to higher standards than ever in terms of sustainability initiatives, and the ESG report is where you can find the nitty-gritty details of these plans and actions. As a result, a company’s ESG report has become one of the most important annual reviews for all stakeholders. Surveys point out that a whopping 78 percent of investors think that businesses need to address ESG goals before profits⁴ and that customers spanning generations seek out companies that have sustainability initiatives⁵. Any company that is not taking a serious look at their plastic waste reduction and other environmental initiatives each year will have a hard time keeping up in the years to come, regardless of the industry.

Analysts at EY, the global accounting firm, point to circularity as one of the most essential aspects of ESG reporting. Their report highlights several benefits to the implementation and transparent reporting of circular plastic systems, including reducing environmental footprint, keeping up with new regulations, feeding consumer demand and gaining recognition for their efforts⁶. ESG reports have become so essential that most large corporations are presenting this type of data. Even Dow Chemical, one of the largest suppliers of raw materials for numerous industries, spotlights plastic circularity in their ESG report⁷.

Transparent ESG Reporting Improves Bottom Line

One common misconception about ESG reports is that sustainability initiatives are expensive and will cut away from profits, but industry reports paint a different picture. According to an in-depth study conducted by McKinsey & Company, a strong ESG strategy can improve corporate metrics on a few levels, including top-line growth, investment returns, cost reductions, employee productivity, consumer preference, and more⁸.

Corporations are in a unique position to move the needle regarding some of the world’s largest environmental concerns. From plastic waste to greenhouse gas emissions, companies have the capacity to innovate solutions and implement them in a way that makes significant impacts. An ESG report is an ideal place for a company to start. Initiating an annual ESG report defines the starting point from which all sustainability goals can blossom. Publishing the report in the public forum gives the company the accountability to make them happen.

¹ Ritchie, H., & Roser, M. (2018, September 1). Plastic pollution. Our World in Data.

² Plastic pollution is growing relentlessly as waste management … – OECD. (n.d.).

³ Closed Loop Partners. (2023, May 30). Sumitomo Mitsui Banking Corporation invests $10 million in closed loop partners’ Circular Plastics Fund, accelerating more capital toward innovation and infrastructure for plastics recovery and recycling.

⁴ Corson, M., Bober, D., Thornam, H., Ivanova, V., McLay, P., Taylor, B., Gordon, T., & Bell, Dr. M. J. (2022, November 11).How can corporate reporting bridge the ESG Trust Gap?. EY.

⁵ Petro, G. (2022, October 12). Consumers Demand Sustainable Products and shopping formats. Forbes. Retrieved January 6, 2023

⁶ Weick, M., & Ray, N. (2023, February 6).Circularity elements for nonfinancial reporting: Ey us. EY.

⁷ Advancing Circular Economy: ESG: Dow Corporate. Advancing Circular Economy | ESG | Dow Corporate. (n.d.).

⁸ Five ways that ESG creates value – mckinsey & company. (n.d.). Retrieved January 6, 2023