Etica Funds, together with 160 international financial institutions from 29 countries, has signed the Finance Statement on Plastic Pollution issued by UNEP FI (a collaboration between the United Nations Environment Programme and the global financial sector), UN PRI, Finance for Biodiversity Foundation, the Business Coalition, the Dutch Association of Investors for Sustainable Development (VBDO), and CDP (formerly known as the Carbon Disclosure Project).
The aim of the statement is to urge governments worldwide to support the financial sector in tackling plastic pollution and to craft a historic and ambitious treaty that recognises the challenges and costs associated with this global issue.
Plastic pollution, climate and biodiversity are closely interconnected
Climate change, biodiversity and pollution are intrinsically linked elements. In a “business-as-usual” scenario and without concrete action, it is estimated that by 2050, plastics will represent 15% of greenhouse gas emissions. The Declaration signed by Etica highlights the intricate ties between climate and the environment, accentuating the mutual advantages of tackling plastic pollution for climate action and a fair and equitable transition, as well as for conserving and restoring biodiversity, acknowledging the substantial systemic risks from both financial and economic angles.
Addressing plastic pollution is a key aspect of the seventh goal outlined in the Global Biodiversity Framework (GBF), a comprehensive global strategy defining measurable biodiversity targets. This goal specifically emphasises “prevention, reduction, and efforts to combat plastic pollution”.
Plastic pollution: the responsibility of the financial industry
Each year, mankind produces 430 million tons of plastic, with two-thirds of this amount being used in short-lived products that rapidly turn into waste. Some of this plastic finds its way into the food chain, posing a potential threat to human health. Recognising the pressing need to address the crisis linked to plastic pollution, an increasing number of financial institutions are actively participating in promoting measures to mitigate this threat to the environment and society. Undoubtedly, the financial sector is instrumental in guiding both private and public financial flows and influencing international policies to establish an effective regulatory framework and mitigate financial risks linked to plastic pollution.
Conscious of the importance of mitigating, addressing, and managing financial, regulatory and transition risks related to plastic pollution and changes in the industry and its regulatory framework, the financial institutions that signed the Declaration commit to addressing these challenges through their financial assets, financing and investment activities.
The goals of the Declaration
The Finance Statement on Plastic Pollution calls on governments to endorse an International Legally Binding Instrument (ILBI), backed by mandatory regulations and responsibilities for nations to oversee the complete life cycle of plastics and put an end to pollution from this material. Based on a scientific approach, the foundation of this agreement should create a framework to align all economic players sharing these objectives. The principal components of the agreement consist of:
- Establish a target to harmonise public and private financial flows, with the aims of the ILBI, drawing insights from parallel initiatives such as the Paris Agreement;
- Define unified targets and mandatory obligations across the entire plastics production chain to enable companies and financial institutions in making policy-driven investment choices concerning plastics;
- Encourage organisations to assess and disclose risks and opportunities associated with plastics;
- Promote the development of a conducive policy framework to facilitate the transition to a sustainable and fair economy addressing plastic pollution, which may include, for example, the effective and efficient implementation of collection, sorting, and recycling systems;
- Stimulate further private investment in ending plastic pollution, for instance, through the establishment of public-private partnerships.
Through these points, the statement reiterates the importance of addressing the entire life cycle of plastics and providing guidance to companies in assessing and disclosing the risks and opportunities related to managing this material.
Etica Funds is committed to combatting plastic pollution
By signing the Statement, Etica Funds demonstrates a key advocacy initiative that champions a shift towards a circular economy free from plastic pollution.
Given that the private sector accounts for 90% of investments in the plastics value chain, financial organisations hold a crucial position in driving forward this change.
“Etica takes pride in being one of the 160 signatories of the Finance Statement on Plastic Pollution. Presented during the fourth round of negotiations for the creation of a legally binding international instrument to combat plastic pollution (INC-4), the declaration urges governments to set ambitious targets for reducing plastic pollution.”
Aldo Bonati, Stewardship and ESG Networks Manager
