“No straw, please!” If you’ve stopped by Starbucks or Dunkin’ Donuts lately, you probably noticed an empty bucket where the plastic straws used to be. Whether it’s a ban on foam cups or a change from plastic to paper, the popular coffee chains are not the only ones jumping on the sustainability trend. Most major cities have also banned plastic bag and straw usage. India has even pledged to ban single-use plastic across the entire country by 2022. Similarly, countless brands such as — Norwegian Cruises, Evian, United Airlines and Red Lobster have recently made similar environmentally conscious decisions.
Why plastic bans?
Despite all the recent buzz about sustainability, single-use plastic’s popularity began well over half a century ago. In the 1950s, manufacturers began to replace paper and glass products with plastic as a more affordable alternative. Since then, more than 8.3 billion metrics of plastic have been produced, with half of it coming in the past 15 years.
Since single-use plastics have been around for 70 years, you may wonder why the sudden spike in bans? It’s likely because 91 percent of plastic is not recycled! Combine this with our increasing reliance on plastic products and there lies the conundrum. If you weighed our waste from single-use plastics from only one year, it would equal half the weight of the entire human population! That’s a lot of plastic and it’s finding its way into oceans, wildlife and even our food chain.
In response to the growing Great Pacific Garbage Patch — which has been accumulating due to plastics that cannot be broken down — bans have become increasingly popular. Fortunately, they have started to succeed in lowering coastal pollution, increasing consumer awareness and reducing waste.
What does this mean for my portfolio?
Plastic bans not only succeed in reducing waste, they also lowering consumption. As a result, environmentally conscious companies with strong sustainability commitments have grown in popularity as have the opportunities to invest in them.
For instance, China has historically imported plastic waste from other countries. However, as of 2020, they implemented a ban on accepting plastic. Previously the US had shipped a whopping 4,000 containers to them per day! Plastic bans nation-wide have now become more ubiquitous and vital. Simply put, there is nowhere to put our throwaway plastic. In response, our culture is shifting to support more sustainable alternatives. This has created new opportunities for Green investment as newfound demand for greener companies in the realms of recycling services and processes along with innovative waste-limiting packaging have come to the forefront.
To reduce plastic accumulation and incineration that adds to the growing CO2 emissions dilemma, manufacturers must either stop making it or make sure it’s properly disposed. This has incentivized consumer companies to invest in the waste management sector. For example, Circulate Capital, a New York based investment firm, has raised over $90 million to develop innovative waste collection infrastructure. Among the companies involved are Coca-Cola, Procter & Gamble, Danone, Unilever and Dow.
However, as with any policy a company supports, sometimes their statements do not necessarily correlate with their actions — particularly behinds the scenes. For instance, a company’s public stance on single-use plastic does not automatically make them an environmentally friendly one. Some companies might implement such policies to mask deeper issues or to simply appeal to the new wave of consumers that support the Green movement. As always, proper due diligence and research before investing is advised.
When investing in companies with genuine green mindsets and sustainable commitments, not only might it enhance your portfolio, it’s a contribution to a cleaner, waste-free future. If you’re looking to make a more impactful change with your investments, reach out to one of our advisors to learn more about the ‘Demand Green’ portfolio and open an account today.
This report is a publication of Demand Wealth. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author as of the date of publication and are subject to change.