Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 412

Not so plastic fantastic: solving the single-use pandemic

We continue to hear more about the circular economy and how businesses can maximise their use of finite resources while minimising external pressures on our environment. The Ellen MacArthur Foundation has a great report titled “The New Plastics Economy, Rethinking the Future of Plastics” which highlights environmental concerns, along with potential solutions, regarding our use of the “ubiquitous workhorse material”, plastics.

Only 5% of plastic is properly recycled

The report highlights that while plastics deliver highly functional properties at a very low cost, the drawbacks are becoming increasingly apparent. Approximately 95% of plastic packaging material value, or US$80-120 billion annually, is lost to the economy due to its short first use cycle.

More than 40 years after the launch of the first universal recycling symbol, only 14% of plastic packaging is collected for recycling. When additional value losses in sorting and reprocessing are factored in, only 5% of material value is retained for subsequent use.

More worrying is the likely acceleration of this trend. The report highlights that currently at least 8 million tonnes of plastics leak into the ocean each year, the equivalent to one garbage truck every minute. If no action is taken, this is expected to increase to two trucks per minute by 2030 and four per minute by 2050. This is unsustainable and while the plastics economy is highly fragmented, the collection and recycling infrastructure must rise to help minimise this issue.

Fortunately, this issue is high on the agenda of business, governments and individuals and the general consensus is that the response needs to be accelerated but the question is how and at what cost.

Single use plastics are, as the title suggests, only used once or for a short period of time before being discarded. Consumers are increasingly rejecting the use of single use plastics prompting governments around the world to implement regulations. 

The EU Directive was passed in July 2019 with the stated aim:

“to prevent and reduce the impact on the environment of certain plastic products and to promote a transition to a circular economy by introducing a mix of measures tailored to the products covered by the directive, including an EU-wide ban on single-use plastic products whenever alternatives are available”.

Plastics and business risks

Given the short lifecycle, single use plastics are more likely to be found in our oceans and the European Union estimates that 70% of all marine litter is attributable to these 10 most commonly found single use plastic items:

  • Cotton bud sticks
  • Cutlery, plates, straws and stirrers
  • Balloons and sticks for balloons
  • Food containers
  • Cups for beverages
  • Beverage containers
  • Cigarette butts
  • Plastic bags
  • Packets and wrappers
  • Wet wipes and sanitary items

The first-ever Europe-wide strategy on plastics is a part of the transition towards a more circular economy which is focused on sustainable, nontoxic reusable products and reuse systems rather than to single use products in an effort to reduce the quantity of waste generated. Beverage bottles are one of the most common forms of litter in the EU.

In our view, any consumer branded product utilising plastics and not addressing this issue will face significant long-term business risk or conversely, develop long-term consumer loyalty if dealt with properly.

Blue Planet II aired in 2017 and since then consumers have been vocally against the irresponsible applications associated with single-use plastic. As David Attenborough stated in his closing remarks in Blue Planet:

“We are at unique stage in our history. Never before have we had such an awareness of what we are doing to the planet, and never before have we had the power to do something about that. Surely we have a responsibility to care for our blue planet. The future of humanity, and indeed all life on Earth, now depends on us."

Investment opportunities 

We have investments in companies which are at the forefront of addressing this issue however the most relevant to consumer packaging is our investment in SIG Combibloc which is based in Switzerland. SIG understands that consumers want to be loyal to a brand which clearly communicates its green efforts while being totally transparent about its processes. 

According to the 2018 European Consumer Packaging Perceptions Survey of 7,000 shoppers, three quarters of consumers now say the environmental impact of a product’s packaging affects their purchasing decisions and 90% want packaging to be easily recyclable.

To analyse the carbon footprint of its carton packs, SIG commissioned independent experts to conduct lifecycle assessments. In every assessment, the lifecycle carbon footprint of a carton pack was found to be significantly lower than other packaging alternatives - by as much as up to 70%:

Source: SIG

SIG cartons are made from 70-80% liquid packaging board (LPB), which comes from wood, a bio-based and renewable resource. Trees can grow quickly and be regenerated at a sustainable rate, absorbing carbon dioxide as they grow. This means the LPB in its packs, which are allowed to carry the Forest Stewardship Council™ certification label (licence code: FSC™ C020428), has a very low carbon footprint compared with other packaging materials such as plastic (PET).

All the materials in SIG cartons can be recovered and recycled. Carton board is often used to make high-grade tissue, helping that product shrink its carbon footprint. This is because recycled materials need less energy to produce than virgin materials. 

SIG has already taken steps towards a 100% renewable pack by creating combibloc EcoPlus - an aseptic packaging solution that has a significantly smaller lifecycle carbon footprint than the standard aseptic pack. By using a different material structure, it has eliminated aluminium, replacing it with an ultra-thin polyamide layer. This increases the share of renewable materials in the pack from 75% to 82% and cuts the carbon footprint by up to 28%.

Source: SIG

The key takeaway here is that consumers are demanding environmentally friendly packaging products, governments are regulating and limiting the use of harmful plastics and consumer branded businesses are adopting new innovative solutions. Hopefully we can show the Earth she can depend on us.

 

Bill Pridham is a Portfolio Manager at Ellerston Capital. This article is general information and does not consider the circumstances of any investor.

 

RELATED ARTICLES

Three key trends and the power of investing in decarbonisation

The green lining of COVID-19: a time for change

Unseen environmental costs of companies

banner

Most viewed in recent weeks

Raising the GST to 15%

Treasurer Jim Chalmers aims to tackle tax reform but faces challenges. Previous reviews struggled due to political sensitivities, highlighting the need for comprehensive and politically feasible change.

7 examples of how the new super tax will be calculated

You've no doubt heard about Division 296. These case studies show what people at various levels above the $3 million threshold might need to pay the ATO, with examples ranging from under $500 to more than $35,000.

The revolt against Baby Boomer wealth

The $3m super tax could be put down to the Government needing money and the wealthy being easy targets. It’s deeper than that though and this looks at the factors behind the policy and why more taxes on the wealthy are coming.

Meg on SMSFs: Withdrawing assets ahead of the $3m super tax

The super tax has caused an almighty scuffle, but for SMSFs impacted by the proposed tax, a big question remains: what should they do now? Here are ideas for those wanting to withdraw money from their SMSF.

Are franking credits hurting Australia’s economy?

Business investment and per capita GDP have languished over the past decade and the Labor Government is conducting inquiries to find out why. Franking credits should be part of the debate about our stalling economy.

Here's what should replace the $3 million super tax

With Div. 296 looming, is there a smarter way to tax superannuation? This proposes a fairer, income-linked alternative that respects compounding, ensures predictability, and avoids taxing unrealised capital gains. 

Latest Updates

Investment strategies

9 winning investment strategies

There are many ways to invest in stocks, but some strategies are more effective than others. Here are nine tried and tested investment approaches - choosing one of these can improve your chances of reaching your financial goals.

Planning

Super, death and taxes – time to rethink your estate plans?

The $3 million super tax has many rethinking their super strategies, especially issues of wealth transfer on death. This reviews the taxes on super benefits and offers investment alternatives.

Taxation

Raising the GST to 15%

Treasurer Jim Chalmers aims to tackle tax reform but faces challenges. Previous reviews struggled due to political sensitivities, highlighting the need for comprehensive and politically feasible change.

Shares

The megatrend you simply cannot ignore

Markets are reassessing the impact of AI, with initial euphoria giving way to growing scepticism. This shift is evident in the performance of ASX-listed AI beneficiaries, creating potential opportunities.

Gold

Is this the real reason for gold's surge past $3,000?

Concerns over the US fiscal position seem to have overtaken geopolitics and interest rates as the biggest tailwind for gold prices. Even if a debt crisis doesn't seem likely, there could be more support on the way.

Exchange traded products

Is now the time to invest in small caps?

With further RBA rate cuts forecast this year, small caps may be key beneficiaries. There are quality small cap LICs and LITs trading at discounts to net assets, offering opportunities for astute investors.

Strategy

Welcome to the grey war

Forget speculation about a future US-China conflict - it's already happening. Through cyberwarfare and propaganda, China is waging a grey war designed to weaken democracies without firing a single shot.

Sponsors

Alliances

© 2025 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.