"Plastics."
Who will pay for a plastic-free future? What are the alternatives to single-use plastic? How are hoteliers moving to prevent millions of pounds of plastic waste? Looking back at our ESG research and analyses from November, we’re showcasing our most essential insights on plastics.
Published: November 1, 2019
Inside Credit
Who Will Pay For A Plastic-Free Future?
The anti-plastic movement is currently at the top of the global environmental agenda, buoyed by mass media visualization of damage inflicted by plastic pollution. As public concerns escalate, plastic packaging appears less attractive to consumers and is coming under increased scrutiny from regulators and legislators. S&P Global Ratings is observing how the plastic packaging companies we rate are responding by working with their customers, who are mostly consumer goods manufacturers and retailers, to offer more sustainable packaging solutions.
In this CreditMatters TV segment, S&P Global Ratings Director Rachel Gerrish explains how rated plastic packaging and consumer goods companies are responding to rising consumer scrutiny and new environmental laws and regulations driving demand for more environmentally friendly packaging solutions.
Watch the Video
Alternatives
Pernod Ricard, other consumer companies find alternatives to single-use plastics
Consumer companies from restaurants to beverage makers are gradually turning to eco-friendly alternatives to single-use plastics — a shift that is starting to make sense from a financial perspective as well as an environmental one.
A host of technologies are making it possible to manufacture food and beverage containers using less water and drinking straws made from seaweed. Companies working with startups to scale up the items include Pernod Ricard SA and Marriott International Inc.
Key Takeaways
- Companies' investments in environmentally friendly packaging are still modest at the moment, but investors are demanding them more than they were a few years ago.
- Consumers are increasingly demanding sustainable alternatives and often choose which products to buy based on a company's stance on environmental issues.
- Companies generally recognize sustainability costs more, but even with the extra cost, there is an opportunity for companies to realize growth as a result of their environmentally friendly investments.
Recycling
BP plans new plant to recycle tough-to-recycle PET
Global oil major BP will build a new plant in Illinois to develop technology to process polyethylene terephthalate (PET) plastic waste that is largely unrecycled currently.
PET, which is used to make plastic bottles and rigid food packaging, is among the most recycled plastics, but more than half used for bottles goes uncollected for recycling, the company said in a statement. In addition, about 6% of approximate 23 million mt/year used to make bottles ends up being recycled to make new bottles.
BP said its Infinia technology is designed to convert PET plastic waste traditionally difficult to recycle - such as colored bottles or black food trays - into feedstocks that can be re-used repeatedly and be interchangeable with virgin PET.
Pricing
Global polyethylene oversupply to weigh on prices in H1 2020
The US natural gas shale boom's bountiful cheap ethane feedstock has given producers a key supply cost advantage, bringing about an infrastructure renaissance transforming the US into a global supplier, with its sights increasingly on Asia, the largest demand center.
However, with the first wave of new US crackers and polyethylene plants reaching its end, global polyethylene markets will enter 2020 facing oversupply and pressured prices, with demand expected to lag behind throughout the year.
Highlights
- PE trade flows shifting amid US-China trade dispute.
- Increased US imports pressuring European pricing.
- Asia demand growing, but below previous peaks.
Environmental Reputations
Two major hoteliers move to trash tiny shampoo bottles
Sometime in the late 1980s, 23-year-old Mike Marshall was running a Comfort Inn in Salisbury, Md., when he heard about what seemed like a revolutionary idea: wall-mounted shampoo dispensers instead of throwaway bottles.
Three decades later, though, the idea's time may have come: Two of the world's largest hotel brand companies are moving to eliminate small bottles of shampoo, conditioner, body wash and other products, in a shift they say will prevent millions of pounds of plastic waste. The pivot is unlikely to save hoteliers large amounts of money, industry observers say, but will allow brands to burnish their reputations for environmental friendliness.
Highlights
- Marriott said its move alone is expected to reduce the company's annual plastic usage by 30%, preventing 500 million bottles, or roughly 1.7 million pounds of plastic, from entering landfills each year.
- At both InterContinental and Marriott, the new dispensers will be incorporated into brand standards, meaning property owners will be responsible for installing them by specified deadlines.
- In practice,the money owners spend on installing the dispensers will likely come out of their "furniture, fixtures and equipment" budgets — reserve funds, that hotel owners pay into regularly as insurance against unplanned expenses.
