Bioplastics Industry Sees Unexploited Potentials in ESG Pillars - Astra ESG Solutions
Industry players are prioritizing environmental, social and governance impacts of their operations and exhibiting efforts to minimize their negative effects in these facets.
SAN FRANCISCO, May 2, 2023 /PRNewswire/ -- Bioplastics have come on the horizon to boost sustainability amidst plunging reserves of fossil fuels. Plastics based on renewable resources have fostered sustainability as environmental concerns surge with the growing prevalence of non-biodegradable plastics in landfills. Industry players are prioritizing environmental, social and governance impacts of their operations and exhibiting efforts to minimize their negative effects in these facets. A soaring number of companies are exhorting their commitment to sustainability through ESG reports. Predominantly, in December 2021, the United Nations recommended bioplastics as a sustainable alternative to non-biodegradable conventional polymers.
Plastic manufacturers are expected to count on recommended products from FAO, including fishing gear, mulch films, polymer-coated fertilizers, plant support twines, tree guards and shelters and pesticide-impregnated fruit protection bags. In essence, biodegradable mulch films can be incorporated into the soil after harvest, suggesting its influence in boosting sustainability. The global push for a circular economy has put the spotlight on bioplastic manufacturers.
Bolstering Carbon Neutrality to Foster Environmental Pillar
Business entities are responding to trends, including technological advancements and lack of resources, with investments in sustainability. Biodegradable solutions have become invaluable with the unprecedented impact of climate change on global warming. According to the Intergovernmental Panel on Climate Change (IPCC) report, emissions are required to be minimized by a minimum of 43% by 2030 (vis-à-vis 2019 levels) and at least 60% by 2035 to keep global warming within the 1.5°C limit. The UNFCCC Climate Champions assert that the net-zero transition would need USD 125 trillion by 2050 in climate investments.
Companies, such as Toray have upped their efforts to be carbon neutral by 2050. The company is committed to achieving the target by minimizing GHG in its business operations and launching carbon recycling technologies. The Japan-based company is minimizing product weight to reduce fuel consumption and explore renewable energies. Energy consumption from renewable energy sources at Toray Industries was pegged at 1.2 million gigajoules in FY 2020. The green transition is poised to usher in bullish ESG strategies in the near term.
Emphasis on Mental Health to Underscore Social Commitment
With the circular economy bringing tailwinds across business verticals, employee safety & well-being, diversity and a human-centered approach have garnered immense traction. For instance, Solvay has created a flexible working framework in its operations globally—over 7,500 employees worked in hybrid models in 2022. The company also created a November 2022 Pulse survey on well-being and inclusion.
The repercussions of the COVID-19 pandemic prompted industry leaders to prioritize mental health management and breakdown silos. The company infers it trained around 1,150 employees in well-being webinars and workshops. It also introduced the Employee Assistance Program to provide free psychological support, life coaching, mindfulness and well-being advice for all employees and members of their households. In July 2022, amidst high inflation, the Belgium-based company announced a €9.5 million (roughly USD 10.4 million) infusion for the affected employees in high-inflation countries not protected by national schemes. These financial incentives are slated to drive innovation, performance and better risk management.
Sound Corporate Governance to Stay Ahead of the Curve
Forward-looking companies have exhibited a commitment to high ethical standards, transparency and fairness to bolster brand positioning and meet social and environmental goals. Business management and decision-makers are banking on sound corporate governance to take their bioplastic initiatives to new heights. To illustrate, Toyota Tsusho is gearing up to underpin its speed and repertoire of decision-making through the establishment of the chief compliance officer (CCO), chief financial officer (CFO), chief strategy officer (CSO) and chief digital & technology officer (CDTO) positions.
The board of directors has become instrumental to enhance the corporate value and supervise the execution of duties by directors. So much so that four are outside directors at Toyota Tsusho, while the non-executive director serves as the Board chairman. In a bid to bolster corporate governance, its company-wide meeting system leverages directors and executive officers to assess countermeasures to deal with issues impacting the company.
The competitive landscape suggests that well-established and emerging players could inject funds into organic and inorganic strategies to tap into the global market. Companies will continue prioritizing environmental pillars, social justice, equity, diversity and inclusion to propel their ESG goals. In January 2022, Avantium reportedly built the first bioplastic plant in Dutch Delfzijl. Establishing the commercial plant would produce 5 kilotons of FDCA (raw material for PEF) per year. These buoyant initiatives are a testament to the fact that Grand View Research valued the global bioplastics market size at USD 10.2 billion in 2021 and could depict a 17.1% CAGR from 2022 through 2030.
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