"Life in plastic, it's fantastic", as Barbie already knew. And indeed, hardly any other raw material is as omnipresent in our everyday lives as plastic. Whether packaging, children's toys or medical devices - plastic is a lightweight yet robust and comparatively inexpensive material that we simply cannot imagine life without. To meet the demand for plastic, 430 million tons of plastic are currently produced worldwide every year, with a positive trend. Experts predict that plastic production will triple by 2060 if companies continue to use plastic in their products as they do now. Around 2/3 of the amount produced is short-lived plastic, which quickly turns into waste.
However, plastic does not have a good reputation. It is based on fossil fuels; it is difficult to recycle and it degrades very slowly in the environment. It can also have a negative impact on our health: 16,000 chemicals have been found in plastics, of which at least 4,200 (26%) pose a risk to health and/or the environment. And every year, the problem of plastic pollution continues to worsen, with around eight million tons of plastic waste being dumped into the oceans by coastal states.[1] So how do we deal with plastic in the future when it has a poor environmental footprint but is difficult to replace as a material? For some years now, companies have been looking for ways to limit the amount of new plastic and use materials for longer, on the one hand, and to increase the recycling of plastic that has already been produced, on the other. They therefore have a crucial role to play in the fight against plastic pollution, but they also face enormous challenges, especially financial ones.
First attempts at regulation
In everyday life, we can already see where the first regulatory attempts to avoid plastic waste and promote more recycling are having an impact. For example, plastic bags in supermarkets are no longer free, plastic lids must be attached to bottles and certain single-use plastic products such as straws are banned throughout the EU. This is the result of various directives from the European Union, which has been trying to curb the problem of plastic waste in Europe since 2015. However, Asian countries such as China, Indonesia and the Philippines, as well as individual states in the USA, have already banned plastic bags and single-use packaging.
In 2022, 175 countries decided at the UN Environment Assembly to negotiate an international and legally binding agreement to end global plastic pollution. Negotiations on the content are now entering the decisive phase and are due to be concluded at the end of the year. Experts agree that the industry's transition is complex and far-reaching, and that the financial industry should play a crucial role in the successful implementation of the agreement.
To define the role of the financial sector in this, the UNEP FI (United Nations environment program | Finance Initiative) has established a Finance Leadership Group. ING has been a member from the outset and is also the first signatory of the Finance Statement, which calls on governments to adopt an ambitious agreement so that companies can also play their part in the fight against plastic waste. "For us as a bank, it is extremely important to be involved right from the start and to have the opportunity to get involved. This is the only way we can ensure that we are future proofed in good time and can provide our customers with the best possible support in the transition," says Joost van Dun, Circular Economy Lead Sustainable Finance at ING.
(Unusual) collaborations lead to success
One company that ING has been supporting on this path for some time is BASF. As one of the largest chemical companies in the world, the company is developing solutions with which it can contribute to a circular economy and recycle materials. It can be worthwhile entering into partnerships with innovative start-ups that have already developed ideas for recycling. BASF has therefore been cooperating with ARCUS for a number of years and purchases a pyrolysis oil from the start-up that is produced from mixed plastic waste. BASF then uses the oil as a recycled raw material, similar to crude oil, in its production. These innovative start-ups are in the process of developing their pilot plants into commercial and scalable technology but need the appropriate funding. This is where banks and other investors can help. "It is all the more important that financial institutions are committed to financing such projects and investments," says Christoph Gahn, responsible for chemical recycling at BASF. René Höhnlein, Head of Energy Germany at ING, adds: "This is our aspiration and at the same time an incentive as a bank to provide companies with the financial freedom they need to implement their projects. When it comes to the circular economy and reducing plastic waste, we as a bank look at the entire value chain. Every company can make a decisive contribution at different points to using plastic more efficiently and avoiding waste. That's why it makes sense to support this type of cooperation financially."
The issue of plastic shows once again how important cooperation is in achieving climate targets and more environmental protection. As a bank, ING wants to continue to make its contribution in the future and lead the way together with other companies and banks.
Society is transitioning to a low-carbon economy. So are our clients, and so is ING. We finance a lot of sustainable activities, but we still finance more that’s not. See how we’re progressing on ing.com/climate.
[1] Plastic pollution facts and information (nationalgeographic.com)