Plastic perils mount
Plastic pollution is a global crisis.
There is now an estimated 30 million tons of plastic waste in seas and oceans and 109 million tons in rivers.
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The presence of plastic in fish living in even the deepest, darkest oceans is an indication of how pervasive this human-made material has become.
A report by the Minderoo Foundation indicates that 2022-2030 is likely to see a wave of plastic-related corporate litigation.
This could reach $20bn-plus in the US alone, it estimates.
Produced in partnership with Praedicat and law firm Clyde & Co, The Price of Plastic Pollution notes that litigation is mainly expected to affect the petrochemical industry.
Still, claims could be brought against major consumer companies.
Human health exposures
Depending on where your company sits on the spectrum of the plastics industry, it could be at risk of claims from human health exposures to chemical additives, environmental damage or human health exposures to ‘MNP’.
These are microplastics, less than 5mm or one-fifth of an inch in length, and nano plastics, which measure around 1nm to 1mm (4e-8 to 0.04 inches).
They can enter the environment through industrial processes, plastic waste, cosmetic products, or degradation.
Another potential area of legal action lies with directors and officers who ‘greenwash’ their sustainability claims.
The first warning shots have been fired.
Last year, an American coffee company settled in the US and Canada with a consumer and regulator respectively, after being challenged on claims about the recyclability of its disposable coffee pods.
Earth Island Institute, a California-based environmental group, has also filed three separate lawsuits against producers of plastic goods.
It made a name for itself by suing renowned brands for creating a plastic pollution ‘nuisance.’
In January this year, three NGOs filed a lawsuit against a food company in France, claiming the firm’s failure to set a plastic phaseout strategy goes against France’s 2017 corporate duty of vigilance law.
The NGOs are looking to force the company to assess its plastics use and update its vigilance report with a plastics strategy.
This is one example of litigation moving from the petrochemical industry to other downstream sectors, such as food and beverage.
There have not yet been any large losses in judgments or payouts.
However, the risks companies are exposed to will vary depending on whether they manufacture resins, use plastics to make or package products, how prevalent they are in the consumer supply chain, and how rigorous their risk management is when it comes to reporting, communication, compliance and transparency.
PFAS (per- and polyfluoroalkyl substances), or ‘forever chemicals’ barely degrade in the natural environment.
Many of the most hazardous chemicals – phthalates, bisphenols, and fluorinated compounds – are found in many items people use daily, including disposable food packaging from takeaway restaurants and supermarkets, non-stick cookware, cosmetics, textiles and electronics.
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Mitigation of plastic pollution is a complex issue
They have even been found in drinking water and the blood and breastmilk of humans and wildlife worldwide.
Sectors exposed could include companies in the consumer goods industry that use chemicals in food-contact materials, clothing, cosmetics or toys.
For MNPs, it could include companies that add microplastics to products, such as personal care products.
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Other sources of MNPs can arise from the breakdown of microplastics [larger than 5mm] during use or disposal, such as the wearing down of rubber tires.
Plastic pathways must be identified
Liability risks are likely to be first evident in bodily injury claims sought by workers.
Plastics are ubiquitous.
With many companies involved in the production chain, potential implications are high.
However, identifying source points or responsible parties for alleged damages or injuries will be challenging.
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Companies can protect themselves by identifying how the plastic pathways connected to their processes could cause pollution and how they can be eliminated, including in product design, R&D, waste and chemical management.
Mitigation should also include looking to transition to sustainable alternatives, particularly for MNPs.
For companies involved in the chemical side, it’s stopping the use of substances tied to adverse health effects.
However, that substitution with alternative materials could incur higher costs and the possibility of knock-on effects such as higher greenhouse gas emissions.
So finding a one-size-fits-all solution is not straightforward.
UN finance group to tackle plastic scourge
In March 2022, United Nations member states agreed to negotiate a legally binding global treaty by the end of 2024 to end plastic pollution.
Companies in the finance and insurance sector expressed expectations of the treaty, inspiring others in the sector to take action on reducing plastic pollution and production.
The group will gather feedback from a range of stakeholders, including governments, the private sector and other parties, to develop a perspective on the future agreement, offering input to the Intergovernmental Negotiation Committee.
Mitigation of plastic pollution is a complex issue that requires all parties contributing to the plastics issue to work together to find innovative and sustainable solutions.
Together, we can protect the world so future generations can live and thrive.
The writer is the Head of Global Environmental Impairment Liability at Allianz Global Corporate & Specialty