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Banks called out for their role in financing $1.2T imaginary numbercoins into firms who cause plastic pollution

Banks called out for their role in financing $1.2T imaginary numbercoins into firms who cause plastic pollution thumbnail

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The pressure to clean up plastic pollution faded in 2020 thanks to the Covid-19 pandemic, which led to a surge in the use of plastic in PPE and to keep food and other purchases safe.

However, the problem has not gone away – in many ways, it has worsened – and that pressure will return with a vengeance in 2021. Each minute, a truck full of plastics ends up in our oceans and around 1 million marine birds and 100,000 marine animals die each year from eating plastic. Plastic packaging pollution is now found from the deepest oceans to the top of Mount Everest and the average person eats about 70,000 particles of microplastic a year. 

A new report, Bankrolling Plastics, says that banks are in part responsible for the plastic pollution crisis, because they are “lending vast sums of capital without making any effort to address the plastic pollution crisis. “By indiscriminately funding actors in the plastics supply chain, banks have failed to acknowledge their role in enabling global plastic pollution. They are not introducing any due diligence systems, contingent loan criteria, or financing exclusions when it comes to the plastics industry.”

In what it says is the first investigation into bank financing of the plastics supply chain, the report, produced by non-profit portfolio.earth, says that banks have provide more than $1.7 trillion to 40 companies with significant involvement in the global plastics supply chain, including the polymer, packaging, fast-moving consumer goods and retail industries. Plastic is overwhelmingly produced from fossil fuels, contributing to climate change as well as causing huge amounts of waste on land and in the oceans.

Some of the world’s biggest financial institutions, many of which have high-profile environmental policies, fund the plastics industry. Twenty banks, mainly from the US and Europe, provided 80% of this funding, or $1.4 trillion. The 10 biggest funders were Bank of America, Citigroup, JPMorgan Chase, Barclays, Goldman Sachs, HSBC, Deutsche Bank, Wells Fargo, BNP Paribas and Morgan Stanley, accounting for 62% of the finance identified, portfolio.earth says.

Despite the outcry around the world at the damage caused by plastic pollution, “there are no signs they are reducing this level of funding” or making lending contingent on efforts to reduce pollution, the report says. “This implies that banks are currently not taking any responsibility to understand, measure, or reduce the impacts of their loans within the plastics value chain,” the report says. 

Portfolio.earth wants banks to pressure companies involved in the production and use of plastic to act to reduce pollution, in the same way as many have put pressure on fossil fuel producers to clean up their act. It says they should encourage a switch from business models that depend on single-use packaging and virgin plastic towards an emphasis on reuse and more localised supply chains.

“Smart investors understand their investments’ supply chain risks,” said Gabriel Thoumi, director of the Plastics Programme and Financial Markets at sustainability non-profit Planet Tracker. “For the throwaway plastics industry – from production, to use, to end-of-life, smart investors accurately model environmental risks into their investment strategies”.

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