Investors must look hard at the future of plastics

Newton Abbot aims to be a plastic-free community. The Devon town is one of 569 communities in Britain to have joined a campaign led by environmental charity Surfers Against Sewage to stamp out single-use plastic. The nearby towns of Dawlish, Ashburton and Bovey Tracey are already accredited. Efforts such as this build on the public’s awareness of plastic pollution, heightened by programmes such as the BBC’s War on Plastic series, fronted by Anita Rani and Hugh Fearnley-Whittingstall.

Consumers are demanding less throwaway plastic, such as the toys that come with McDonald’s Happy Meals. They also want more information on whether an item can be recycled, and for supermarkets and their suppliers to switch to reuse and refill systems. Government at local and national level is tackling plastic pollution, using targets for recycling and restrictions on particular single-use items. Against this backdrop, the plastics industry is intent on expansion, driven by cheap shale gas and an expectation of rising demand from millennials and consumers in emerging markets.

This conundrum, and its implications for the petrochemical and fossil fuel industries, has received little attention from investors. They have focused instead on the companies most immediately at risk from the backlash against plastic: those involved in single-use packaging. Read Full Article - Financial Times, July 15, 2019