BY DASHA AFANASIEVA

PepsiCo and Unilever will have new reasons to confront plastic waste in 2022. Bans on single-use items or landfill taxes pose an increasing financial risk to companies not taking the problem seriously. Activist shareholders will mould the worst offenders into shape.

The United Nations expects plastic pollution to double by 2030. Much of that is packaging. Campaign group Break Free From Plastic in October named Coca-Cola and PepsiCo as the worst plastic polluters for the fourth consecutive year, despite both vowing to use at least 50% recycled material in their plastic packaging by 2030. Unilever, which promises to collect and process more plastic packaging than it sells by 2025, came in at number three.

Governments are getting wise to corporate heel- dragging. Unilever replacing plastic mustard sachets in Britain or Nestlé ditching plastic KitKat wrappers in Japan won’t fend off tougher government responses forever. Some are looking to introduce a levy on companies

to compensate for the environmental cost of plastic packaging, either via recycling or landfill.

In Belgium, one country leading the charge, the “extended producer responsibility fee” is 200 euros per tonne for the transparent PET-type plastics widely used in drinks bottles. Applying that to Coca-Cola’s nearly 3 million tonnes of annual plastic waste would result in a charge of nearly 600 million euros, around 7% of its 2020 operating profit. Other harder and more fiddly items, like screw-tops, carry stiffer penalties.

Taxes and bans are not the only threat. If consumers could get their hands on the same product but without plastic packaging – be it shampoo or a fizzy drink – many would quickly switch. Take PepsiCo’s SodaStream: if the syphons produced fizzy drinks as tasty as that from the bottle, they could start grabbing market share.

Most consumer goods companies still score well on environmental and social metrics. But investors are getting wiser to the link between sustainability and the bottom line, as shown in June by little-known fund Engine No. 1’s successful campaign against U.S. oil giant Exxon Mobil.

Even hard-nosed activists like Nelson Peltz, who may be eyeing an assault on Unilever, see plastic as a problem. In a previous campaign, the New York billionaire pushed Procter & Gamble to develop packaging made from materials like bamboo. In 2022, plastivism will tear off its wrapper.

First published December 2021