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5 October 2022

PMI Academy Partner: T. Rowe Price Case Study - ESG Integration in Action—Plastics

Case Study: ESG Integration

Plastics

Plastics can play a positive role in some sustainability issues, including reducing food waste, reducing product weight to enable more efficient transportation, improved building materials, or better hygiene. However, their sheer volume of production and nondegradable nature means they have come to epitomize the problems of the end-to-end or linear economy.

When thinking about the three principles of the circular economy—eliminating waste and pollution, circulating products and materials, and regenerating nature—many tend to associate plastics with the first two. They view the plastics problem from the perspective of recycling and product life-cycle design. Yet, plastics fundamentally violate the third principle as they introduce a non-degrading substance into the natural world.

Less than 2% of plastics currently come from biobased materials. The remainder are derived from fossil fuels, which are broken down with energyintensive processes and then mixed with chemicals to create different types of plastics. The resulting synthetic product is not found anywhere in nature and does not easily decompose. Plastics can break into smaller parts but cannot break apart. The large-scale production and poor practices around disposal have made plastic a ubiquitous substance in nature—so much so that plastics are a marker of the current geological era1 and have given rise to a new microbial habitat known as the plastisphere.2

After climate change, plastic pollution may be the next biggest environmental crisis. Due to the multiple and cascading risks posed by plastic pollution, it is seen as a multiplier that can act in tandem with other stressors like climate change and overexploitation of marine resources to cause far greater damage than if each occurred in isolation.3

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Last update: 3 March 2023

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