Investor-Backed Project Plans to Call Out Corporate Litterbugs
byAug 16th 2011 5:00PM
More than 40 years ago, The Graduate added the iconic phrase, "Just one word: plastics," to pop culture. Today, plastic's everywhere. Its durability and low cost has made it the go-to material for disposable packaging. But that convenience also has led company after company to produce piles of plastic, choking landfills and endangering our environment.
Now, the public is about to find out exactly which of those businesses aren't cleaning up after themselves.
Watch Out, Corporate Plastic Junkies
We produce about 300 million tons of plastic annually, and a mere 10% of that gets recycled. Where does the rest go? Experts believe that about 7 million tons of plastic end up in the ocean every year. That's how horrifying areas like the Great Pacific Garbage Patch, a morass that may encompass roughly 3.5 million tons of trash, have come to pass.
You may be personally vigilant about tossing your plastic bottles into the recycling bin. You may even know which of your neighbors to approach about getting on the recycling bandwagon. But what about the companies you patronize -- or the ones you invest in?
When the Plastic Disclosure Project launches next month, it may become easier to find out which companies are doing their part when it comes to plastic waste. In effect, the project will call out some of the biggest plastic producers for their abuse of the petroleum-based substance. This initiative will question many companies and other entities on their use of plastic, and most likely raise general awareness of the material's downside.
This Is No Enviro-Hippy Movement
Surprisingly, the Plastic Disclosure Project enjoys strong backing from investors.
Big shareholders have become increasingly aware that sustainable practices benefit companies' bottom lines, and that how well or poorly a company treats the environment can affect its potential liability and its goodwill among consumers. Thus, a backlash against a company outed as a plastic junkie could besmirch plastic abusers' reputations -- and profits.
Big Corporations Getting on Board
In response to this growing trend, some companies are making varying degrees of progress in reducing waste, increasing recycling and ultimately lessening exposure to the risk of a plastic glut.
Environmental activist and shareholder advocacy organization As You Sow recently released its third Waste and Opportunity: U.S. Beverage Container Recycling Scorecard and Report, which gave beverage giants PepsiCo (PEP) and Coca-Cola (KO) overall B- grades on their overall recycling efforts.
Pepsi boasts the highest levels of recycled PET, clocking in at 10% across its product lines, and says it's committed to increasing this percentage. Meanwhile, both Coke and Pepsi are trying to launch plant-based bottles for their products. Metabolix (MBLX) is teaming up with giant Archer Daniels Midland (ADM) to bring bioplastics to the market.
Investors should be relieved if they own shares of the companies that are already trying to take responsibility reduce the world's plastics glut. Soon, big business's plastic junkies will be exposed. And the results probably won't be pretty.
Motley Fool analyst Alyce Lomax owns no shares of any of the companies mentioned in her personal portfolio. The Motley Fool owns shares of PepsiCo and Coca-Cola. Motley Fool newsletter services have recommended buying shares of PepsiCo and Coca-Cola, as well as creating a diagonal call position in PepsiCo.