This content was paid for by an advertiser and produced by FORTUNE Brand Studio. FORTUNE editorial staff was not involved in its creation or production.
What companies need now to drive a circular economy for plastics
Amidst a paradigm shift on sustainability, corporations across the globe are stepping up efforts to drive circular recycling practices.
While every individual action can make a difference in the fight against plastic waste and our changing climate, it is going to take large-scale movement to prevent environmental disaster. This is precisely where global businesses play a role. In order to truly mitigate climate change and the waste crisis in the timeframe necessary for preserving our planet, impact at scale is the most viable path forward. Multinational companies have the size, reach, and capabilities for decisive, bold action—before it’s too late.
The role of business in delivering scalable action in waste reduction is profound. Imagine what could be achieved if multinational companies, with global footprints—manufacturing sites, infrastructure, product development and more—banded together to advance targeted sustainability goals. Working together, the global business community could make a significant impact toward ambitious climate goals. Recognizing the need to address these issues, corporations, governments and consumers have begun to take notice and take steps in that direction.
Across the world, new, evolving, and established companies are working to solve the challenge of plastic waste with ingenuity and vigor. And they’re doing so in significant numbers: More than 13,000 companies from 160-plus countries have adopted the United Nations Global Compact aimed at achieving UN Sustainable Development Goals by 2030.
Whether it’s due to an intrinsic belief in doing the right thing, a desire to be on the right side of history, or a recognition of possible reputational risks, corporations are demonstrating a newfound willingness to find sustainable solutions. As further incentive, recent government regulations also reflect a heightened focus on the environment, with protocols requiring companies across the plastics value chain to rapidly expand recycling and repurposing efforts.
Circling the economic wagons
Put all this together and a trend emerges—a growing appetite to transition plastics to a sustainable “circular economy.” Broadly defined, a circular economy is a system aimed at eliminating waste and making continual use of existing resources—as opposed to a linear economy, which sees products disposed of after they are used. But in order to create and support a circular economy for plastics, bold approaches are needed. According to the Sustainability Institute by ERM, just 14% of the plastic packaging used globally is recycled. About 40% ends up in landfills, 32% in natural environments, such as the ocean or other waterways, and the remaining 14% is incinerated or recovered as energy.
For its part, Dow is committed to accelerating its sustainability goals to protect the climate and reduce waste on a massive scale. The company intends to curb plastic waste by enabling 1 million metric tons of plastic to be collected, reused, or recycled through its direct actions and partnerships by 2030, enabling 100% of Dow products to be sold into reusable or recyclable packaging applications by 2035.
“We’re committed to creating advanced materials for a circular world,” says Kevin Kolevar, Dow’s vice president of global government affairs, “so that from design to disposal, we retain the value of plastic while eliminating the burden it places on the environment.”
A circular economy for plastics starts at the top
Companies across the plastics value chain face several hurdles as they develop and execute strategies for a circular economy, but a majority of the 300 C-level executives in a recent Dow survey consider it imperative, saying that recycling (71%) and waste reduction (68%) have had a “substantial” or “very large” influence on their organization’s strategic direction over the past two years.
Jeff Wooster, global sustainability director at Dow, is encouraged by the finding. “It’s great to see that executives recognize the need [to address plastic waste],” he says. “They’ve figured out that it’s not only the right thing to do, but also that a sustainable business model is in fact essential to their enterprise.”
The Dow survey found that 70% of C-level executives have been treating recycling as a higher priority since the beginning of the pandemic, and 68% are doing the same for waste reduction.
Executives’ own actions at home may help account for the spike in interest around circularity. At the height of the pandemic, the demand for food delivery in takeout containers rose sharply, the Ellen MacArthur Foundation reports. So did the appetite for single-use plastic grocery bags, as some retailers temporarily banned reusable bags. Some jurisdictions even halted policies aimed at cutting the number of single-use plastic products. All of this led to people becoming more conscious of plastic waste during the pandemic, which may have also catalyzed them to rethink how they dispose of it. That’s the view of Lee Ellen Drechsler, a senior vice president at Procter and Gamble and leader of the company’s R&D initiatives.
“People have more options for how they are ordering, buying, and receiving things now,” she says. “They have a bigger voice.” As consumers become more aware of sustainability within their own households and beyond, companies can take bolder steps in building a circular economy. One example: Drechsler says that her company has initiated HolyGrail 2.0, a project that aims to increase plastic recycling rates by adding imperceptible digital watermarks to product packaging that make the materials more readily scannable for proper sorting.
Innovation and sustainability go hand in hand
To truly solve the plastic waste problem, collaboration across the value chain is essential. Developing economically viable materials and recycling technologies are major technical challenges, and the Dow survey reflects the complexities executives face in this regard: Some 56% of them cite difficulty collaborating across the value chain as one of the top three obstacles to the development of a circular economy for plastics.
Curbing plastic waste—with the ultimate goal of eliminating it—is essential to the health of the planet. But sustainability is now a key component of business success overall as well. There was a time, for instance, when innovation and sustainability were viewed as separate from one another. That’s no longer the case. We are in the midst of a paradigm shift, and there are a few basic principles companies should use when making the leap to circular recycling practices:
- Measure the impact of your company’s plastics circularity efforts using existing tools, then act quickly.
- Make use of new tools coming online.
- Invest in R&D and reconfigure processes throughout the value chain that demonstrate the business case for reducing plastic waste.
- Align with firms using artificial intelligence and other digital technologies to advance the cause.
- And by all means, start now—and build on success.
Ron Cotterman, vice president of innovation and sustainability at packaging company Sealed Air sums up the goal of a worldwide circular economy for plastics succinctly. “We used to say, ‘We want to leave the world better than we found it.’ Now we say, ‘We want to make the world better than we found it.’”
Click here to read the full results of the Dow survey in the proprietary white paper The Path to a Circular Economy for Plastics.