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Lindsey Hall: Hi. I'm Lindsey Hall, Head of Thought Leadership at S&P Global Sustainable1.

Esther Whieldon: And I'm Esther Whieldon, a Senior Writer on the Sustainable1 Thought Leadership team.

Lindsey Hall: Welcome to ESG Insider, an S&P Global podcast, where Esther and I take you inside the environmental, social and governance issues that are shaping the rapidly evolving sustainability landscape.

Esther Whieldon: As we heard in the last episode of this podcast, plastic plays a big part in our lives. And this has major implications for the environment, climate change and human health.

Lindsey Hall: This episode is part 2 in a miniseries we're doing on plastic. Today, we're taking a deep dive into what to expect from a fourth set of UN negotiations over a potential global agreement on plastic pollution. The treaty talks kick off in Ottawa, Canada on April 23.

Esther Whieldon: More than 170 countries will gather to negotiate a legally binding instrument on plastic pollution with a view to agreeing on a global treaty by the end of 2024. Further talks are scheduled in South Korea in November. And as we'll hear today, negotiations will center on what policies and actions need to be implemented to increase recycling and reuse of plastics and to reduce plastic pollution. And there's a lot at stake.

According to the UN, we produce 430 million metric tons of new plastic annually, a figure that could triple by 2060. The majority of plastics, or about 60%, last for less than 5 years with only 9% being recycled. 

This would be the first time that governments from around the world have agreed to address the plastic pollution problem. As we'll hear in this episode, this kind of agreement could serve as a real catalyst for change. 

We'll hear the industry perspective on the treaty talks from Stewart Harris. Stewart is Senior Director of Global Plastics Policy at the trade group, the American Chemistry Council.

Lindsey Hall: We teamed up with Jennifer Laidlaw for this series. Jennifer is a Senior Writer on the S&P Global Sustainable1 Thought Leadership Team. She's also a regular contributor to this podcast. Jennifer, welcome back. Tell us, who are we going to be hearing from today?

Jennifer Laidlaw: So I spoke to some of the stakeholders who will be present at the negotiations. I talked to Willemijn Peeters, CEO and Founder of circularity consultancy Searious Business, which works with companies to manage their plastic use. She's an Adviser to the UN on the global plastics agreement as well as to a number of other plastics-related initiatives and associations.

First up, we'll hear from Carroll Muffett. He's CEO of a nonprofit advocacy group called the Center for International Environmental Law, which is an observer to the treaty talks. Here he is explaining the background to the treaty negotiations and what they aim to achieve.

Carroll Muffett: Just over 2 years ago in Nairobi, the governments of the world meeting at the UN Environment Assembly adopted a resolution that created a mandate to negotiate a new global treaty, a new binding legal instrument to address pollution arising from the entire life cycle of plastics. And so what we're talking about is a comprehensive binding new instrument to address the plastic crisis across that entire life cycle. And this is what the parties have been negotiating through multiple rounds of intergovernmental negotiating committee sessions.

We go into Ottawa with evidence that there is really strong desire across much of the world to address the entire plastic life cycle, not just waste and not just recycling and pollution in the environment from plastic waste. But to address the effect of plastics on communities where plastics are made. And the effects of plastics on communities where the feedstocks and precursors of plastics are extracted and put into the chain of commerce and the start of that plastic life cycle.

We have seen extraordinary energy coming not only from civil society around the world but the health care community, the scientific community. And Ottawa is going to be, I think, the first moment where these negotiations are readily accessible to a much wider array of stakeholders, not only from across North America but from around the world. And so we are expecting attention on these negotiations to be higher in Ottawa than they've ever been before.

Jennifer Laidlaw: Carroll then went on to explain one of the major issues at stake in Ottawa, the need to transform and reduce plastic production if you want to rid the world of plastic pollution.

Carroll Muffett: To secure an effective treaty, we have to address the full plastic life cycle. That starts with plastic production. And that means addressing the continual expansion of the infrastructure for making new plastics. So an effective treaty has to cap that infrastructure and develop a plan for phasing it out over time.

Relatedly, we need to begin eliminating the most problematic plastic polymers and the most problematic plastic products immediately and then phase up those phaseouts over time. We need to ensure that the chemicals that are going into plastic production are properly disclosed and that the most hazardous chemicals are removed so that plastics can be safely reused at the end of their life, so we can create truly sustainable and truly reusable plastics.

The mandate for the treaty is to address the treaty on a comprehensive basis. And one of the things that, that means is that we can't recycle our way out of the plastics crisis. The only way to address the plastics crisis is to stop the continuing dramatic increase in plastic production.

And that plastic production starts with polymers. So then that means identifying the polyethylene, the polypropylene. There are about seven to eight resins that account for the overwhelming majority of plastics in the stream of commerce. We need to set caps on how much new plastic resin is being produced, address subsidies for new plastic infrastructure.

And only then can we really succeed in addressing the plastic crisis by phasing out plastic products. Because if we set phase-out targets and timelines for plastic products, which is absolutely essential, we have to ensure at the same time, that the products being phased out aren't simply replaced by other new and disposable products that simply skirt around the restrictions that are being adopted.

And so this is why you're seeing demands from countries, from civil society, from the scientific community, that any treaty has to really start at the beginning of the plastics life cycle with the polymers and monomers themselves.

Jennifer Laidlaw: Okay, right. And what kind of cap should there be on plastic production?

Carroll Muffett: The vast majority of plastics that flow through people's lives are flowing through in the form of single-use disposable products in plastic packaging that account for between 40% and 50% of all plastic demand. And that's been the biggest driver of new plastic growth.

Well, those plastics have an economic lifespan that is measured in moments or minutes or, at best, months. And there is a lot of low-hanging fruit that can be addressed by getting rid of those unnecessary plastics first and then identifying the plastics that will take a little longer to phase out and a little more effort.

And then the plastics after that, that will take a little longer to phase out and a little more effort. The goal on the other side of this is to ensure that we are not producing any more plastics than is absolutely essential. And the truth is the space between where we are and that goal is very large indeed. And so we have a lot of room for positive progress in the plastic phaseout.

Jennifer Laidlaw: So we had Carroll mention that some of the points of negotiation include putting a cap on plastic production and phasing it out over time. And another topic is around requiring greater disclosure of the chemicals used in different plastics.

Let's turn next to Willemijn Peeters, who as we heard, is an Adviser to the UN on the negotiations. You'll hear her mention extended producer responsibility, a term we talked about in our first episode on this series. Just to recap, that's when a producer bears a significant degree of responsibility for the environmental impacts of their products throughout their entire life cycle. She explained to me some of the major topics she expects will arise at the talks.

Willemijn Peeters: The topics range and the level of commitment from companies -- from countries range. So it's really interesting to try to see how to make that work. And if I've learned anything, it's that it's not a linear process. So diplomats work in a very different way from companies.

And in the global plastics treaty, there are elements discussed like extended producer responsibility, banning or phasing out of hazardous materials and chemicals of concern, reuse systems, product design and waste management. So there's five major topics there. And all of them have varying degrees to which countries are prepared and willing to have global binding rules in place or if they want to have national legislation take charge.

Jennifer Laidlaw: You heard Willemijn mention that the reuse of plastics will be an important part of the treaty talks. I asked her to elaborate on why.

Willemijn Peeters: Yes. Well, I think reuse systems are actually quite new on the agenda. Typically, when we talk about preventing plastic waste, people immediately jump to waste management. So if something is already after its use, then how do we recycle it or dispose of it? And immediately, that's the jump. Whereas actually, it starts way before that, so you can actually prevent it from becoming waste in the first place. And that really starts with product design.

So if you're thinking about how to market a product or a packaging, you need to design it with the end in mind. And that typically is most effectively if maybe you don't even need a packaging or you don't even need that product, but you can offer them functionality. Or you start thinking about reusable options. So reuse really becomes a first option after you have seen like you cannot go without it. And then only after if it's still a single-use model, how do you design it in such a way, so it can be easily recycled or used back into a circular economy?

And if you can't do that, then you will end up with a lot of waste. And how do you manage that? And so waste management really comes last. And I wanted to highlight that reuse systems are the most effective way to prevent plastic waste because you're integrating it in product design and the whole system design as well. And otherwise, it won't work.

Jennifer Laidlaw: Earlier, we heard Carroll talking about the importance of limiting plastic production if the treaty is going to work. I asked Willemijn how effective caps on plastic production could be and what other mechanisms to reduce plastic use will be discussed at the treaty negotiations.

Willemijn Peeters: Personally, yes, I think we need a cap on plastic production. I think, otherwise, it does seem like limitless growth. If there is a limited amount of plastics available in virgin format, the industry will much more stringently look at where are we going to use those plastics in? Is this going to be in medical applications? Is this going to be in applications where it's extremely hard to use any recycled content or other materials?

And I think that will create a big push towards, for instance, urban mining. If you're looking at even metals or rare materials out there, there are so many materials available still in landfills and in other types of urbanized environments. So if you demolish a building, you typically have a lot of materials out there already. And if you're having a cap on plastic, virgin plastic production, yes, then you will create also financially a big push towards reuse of materials.

If you're talking a lot more about true pricing and integrating true costs, then you can actually really compare a single-use versus a reuse. So if you want to talk about financial viability in the end, you will have to compare apples-to-apples and apples-to-pears, right? So if you're talking about single use, that's where legislation is so important. In the current system, a lot of externalized costs are not in. So legislation can fix that. So you can have levies on the use fossil resources or on the use of CO2.

These are some of the financial instruments and mechanisms that are being discussed at a global level. So how can you get packaging fees in that reflect if a material is fully recyclable or is really hard to recycle? So you can have an extra charge on materials that are not fully recyclable because it actually costs a lot more to process them at the end of their life. Yes, legislation is also that important because it can create a level playing field for circular business models, so it's not so hard to compete with the current existing ones, which don't fully integrate all costs.

Jennifer Laidlaw: So we've heard how production caps, plastic reuse and extended producer responsibility will be key topics of discussion at the treaty talks. I also asked Carroll from the Center for International Environmental Law whether there were other key issues that should be on the table in Ottawa.

Carroll Muffett: I think we would like to see the negotiations take a stronger approach to protecting the human rights and the health of communities on the front lines where plastics are being made. So I think that is one gap we're still seeing in the treaty. But most of the other things that we're looking for the treaty to include have been put forward by collections of countries.

I think one of the key things that we're missing right now is that ability for countries to take decisions together on difficult issues. And this brings us back to the underlying economic interest. 

Plastics are fossil fuels in another form. And as the oil and gas industry and, to a lesser but real extent, the coal industry faces the reality that global long-term demand for oil, gas and coal for energy and for transport necessarily has to shrink dramatically, what we're seeing is that plastics and petrochemicals have become an escape hatch for those industries and for states like Saudi Arabia, which are heavily invested in oil, gas and petrochemicals as an anchor for their economies.

And so these countries we are seeing really pull out all of the stops to block progress on these negotiations. The key is to unlock those barriers so that the vast majority of the world's countries who really are looking for progress here, can achieve it together.

Jennifer Laidlaw: There are 175 countries involved in the negotiations. And as you heard Carroll told me, most of the countries are looking for progress in the talk. I was interested in finding out more about how countries are working together to reach consensus. Here's Carroll again.

Carroll Muffett: What we find is that different countries, obviously, are taking the leadership on different aspects of this crisis. And that's actually a real recipe for progress. Because what we're not seeing is that a single country or region is driving this whole process and saying, "This is what it should look like." Instead, we're seeing many diverse countries and regions saying, "This is what's important to us, and we have to address this and we have to address it now."

That's one of the things that makes these negotiations such an extraordinary opportunity and also so significant to the business investment community. Because I think one of the clearest signals that these negotiations should be sending is that the era of unchecked growth in plastic production and use is over. It is rapidly, rapidly coming to an end if it's not already ended.

And that is going to fundamentally change the economics underlying plastic and petrochemical production. Because we are moving from an era in which these materials were continually growing and largely unregulated at a global level into an era where the cost of complying with the regulations are going to better reflect their environmental and human health and human rights costs.

Jennifer Laidlaw: The treaty would have an international reach. And there will be many different nations and interest groups at the talk. I asked Carroll, what would it take to ensure an agreement on plastic pollution is actually implemented in a consistent manner?

Carroll Muffett: The first and critical step is to set legally binding targets and to make sure that these targets are defined for the world as a whole, that they are global top-down targets that countries then have national commitments to delivering on. 

I think one of the things that we've seen from countries that are more reluctant to address this problem seriously, and the U.S. is among those, is an effort to replicate the Paris Agreement. But the problem with the Paris Agreement is the Paris Agreement is, at the end of the day, an agreement for every country to say, "All right, well, this is what we can do." And the only commitment then is to do it. And there's no solid mechanism for enforcement. So people who have been working on effective environmental agreements for decades are not looking at the Paris Agreement as a model. In fact, they're looking at Paris as a problem to be avoided.

We have a long track record of environmental treaties that work very, very well to address very large-scale issues. The Montreal Protocol is an example. The Convention on International Trade in Endangered Species is another example. And one of the things that these systems have in common is that they have clearly defined targets and commitments And those targets and commitments are embedded within a system, where it is easy to quantify when something is being violated or not.

And when you couple that with an effective compliance system, an effective facilitative system, an effective trade system, then ensuring the treaty is legally binding and effective is built into the instrument itself. And that's one of the things that we'll be working on as the negotiations move forward. 

The critical importance of this treaty is it's looking at pollution from plastics really from beginning to end of the plastics life cycle for the very first time in a global regulatory context. Plastics are unlike greenhouse gases in a very fundamental way. And that is while the Earth has natural capacities to absorb carbon dioxide that are far outstripped, but natural capacities nonetheless exist, there's nothing equivalent for plastics. We are already overwhelmed with plastic pollution. And the problem is only getting worse.

And so the only way to address that is to dramatically and rapidly reduce the amount of plastics that are entering our world. And the only way to do that is to dramatically and rapidly reduce the amount of plastics that are being made. And that is the heart of these negotiations and why these negotiations should be a wake-up call to any business that is anchored in the continuing production and use of plastics.

Esther Whieldon: We just heard how the treaty talks could play out. And this has been a big focus among energy and chemical companies. At the S&P Global World Petrochemical Conference in Houston I attended in March, the UN's forthcoming plastic treaty came up in nearly every panel I attended. And many of these companies were concerned about future limits on plastic production.

To hear more of industry perspective, I've talked on the sidelines of the event with Stewart Harris from the American Chemistry Council. Stewart said that in the three prior UN plastic treaty gatherings he attended, he heard a lot of pushback from countries opposed to restricting plastic production.

Stewart Harris: So it's unlikely that we'll see a global agreement restrict production. And from the plastic industry standpoint, we don't think that's an effective solution to addressing plastic waste in the environment.

Esther Whieldon: Why is it not an effective solution?

Stewart Harris: So it's really -- that's more focused on the supply side. And we know we need plastics to achieve the Sustainable Development Goals. And we're seeing plastic demand grow, whether it's from developing economies in Asia and Latin America and elsewhere, where people are moving out of poverty and into the middle class. But we also see and we believe that more demand-side signals are an effective way to unleash innovation and investment from the private sector.

And you've heard some of the speakers here today at World Petrochemical Conference talking about the activities that are going on. And we heard ExxonMobil, we heard Dow, we heard LyondellBasell. And there are many more examples of companies that are investing in circularity innovations. And we think there's an opportunity in this agreement to really accelerate the pace of those innovations.

And that is a more effective way to address plastic waste because you're actually creating and capturing value from plastic, which will prevent it from leaking into the environment. You're pulling it back into the economy. And that way, it's a faster feedback loop, so accelerating those investments is most important. Because if you can capture value from that waste and use it as a feedstock, you're diversifying feedstocks. You're reinforcing the behavior and the investment decisions of companies that are already doing this. And then you're encouraging others to catch up.

Reaching an agreement where the majority of countries can join is an incredibly high priority for the plastics industry. And the reason for that is because when we get all the countries sitting around the table, when we get an agreement where they can all join, that's what's going to drive and have the most impact in terms of solving this issue of plastic pollution. National policies are critical to sending those signals to the private sector.

So what we see is the global agreement could encourage governments to adopt things like recycled content requirements, could adopt policies like extended producer responsibility, could adopt design standards, other things that would incentivize circularity. And it's important to note that circularity is not just recycling. Circularity about how products are designed. It's about reuse and refill. It's really about how we think about how we're using plastics and keeping that material in the economy.

And so the global plastics agreement has the potential to send the signal, not just to the private sector but also to national governments to implement those policies, which then get the private sector to invest in local jobs and innovations that design new ways to deliver products, that support reuse and refill systems, that incorporate more recycled content into packaging and products. And so that's where we really see the opportunity of the plastics agreement in terms of impacting how governments behave. And then we've talked about how it impacts how the private sector behaves.

The last piece is how does it impact the way the public behaves? There is an opportunity for the visibility, the excitement around the plastics agreement, to help motivate behavior change within the public. And when you couple that with policy change from governments, with investments and innovation from the private sector, when you get those three things working together, that's when you really get rapid change.

Esther Whieldon: So as we heard from Stewart, the plastics treaty is a way to prompt governments to set policies and could ultimately drive companies to invest in the circularity and innovation that's needed to address the plastic pollution problem.

Lindsey Hall: We also heard today about the importance of product design, which determines whether and how products can be reused.

Jennifer Laidlaw: Both Willemijn and Carroll mentioned to me the urgent need to reduce plastic production in the world to address plastic pollution. That goes to the heart of the negotiations Carroll told me and could serve as a wake-up call for business involved in producing plastic. So it would be interesting to see what progress is made in Ottawa on that front.

Lindsey Hall: Please stay tuned for the next installment in this series this Friday, where we'll be exploring what companies and investors are doing to solve the plastic pollution problem.

Lindsey Hall: Thanks so much for listening to this episode of ESG Insider. If you like what you heard today, please subscribe, share and leave us a review wherever you get your podcast.

Esther Whieldon: And a special thanks to our agency partner, The 199. See you next time.

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