Breaking down plastic pollution



Hamish Chamberlayne, Head of SRI, explains how the responsible use of plastics is an important consideration for evaluating the sustainability of a business.


​The severity of the impact of plastic pollution continues to grow, with the time horizon for consequent irreparable damage drawing ever closer. The responsible use of plastics is an important consideration for evaluating the sustainability of a business and thus increasingly relevant to investors’ long-term decision making.

The cumulative mass of all virgin plastic ever created reached 8.3 billion tons in 2015, with estimates that 6.3 billion tonnes of this plastic ended life as waste. Almost 80% of this waste still remains in landfill or as pollution in the natural environment, with approximately 9% and 12% having been recycled and incinerated respectively. Currently, around 400 million tons of plastic are being produced each year, increasing at a compound annual growth rate of approximately 8% since 1950. Accounting for around 40% of all nonfiber plastics, plastic packaging represents a significant contributor to the problem [1]. Consider that less than half of the one million plastic bottles sold every minute globally are being recycled [2,3,4] with the most commonly polluting polymers taking over 500 years to decompose, the issue of plastic waste is proving far from short-term [5].

A year of regulatory responses and consumer-driven trends

In January 2018, coinciding with a rapid growth in media focus on ocean plastics, Chinese regulation banning imports of any paper or plastic waste came into effect. As China was the destination for approximately 50% of global paper and plastic waste, this legislation has had a major impact on governments, businesses and consumers [6] [7]. This galvanised an increase in debate on plastic waste, forcing other countries to deal with the issue. Countries around the EU set a precedent for plastic-limiting legislation, with bans on plastic microbeads and cotton buds announced in the UK and Scotland in January 2018, and a French ban on plastic cutlery from 2020 [8] [9].

The European Parliament has provided further momentum by voting in favour of a ban on 10 types of single use plastic, covering 70% of marine litter items found on EU beaches [10]. Furthermore, the new EU regulation goes beyond banning products alone to holding manufacturers to account for their impact, embodying  the ‘polluter pays’ principle central to European environmental policy. Additional reduction targets, taxes and tariffs aimed to ensure manufacturer responsibility are embedded into the legislation. As a result, manufacturers may be required to provide 80-100% of the funds required for clean-up and waste avoidance attributable to their products [11]. The extent of the impact of regulation can be evidenced by the introduction of a 5p charge for plastic carrier bags in the UK which quickly led to an 85% reduction in their usage [12]. Trends in prescriptive legislation are not limited to China and the EU; over 15 African countries have banned the use of plastic bags entirely [13].

While bans and restrictions on plastics are focussed on products seen as unnecessary (e.g. microbeads, cotton buds and disposable cutlery), and consumer preferences are shifting away from a wider range of products considered to have a large ‘plastic footprint’, the risks from the irresponsible use of plastic therefore also impact companies operating in less heavily regulated areas.

A balancing act

Identifying the primary sources of environmental impact and the most relevant investment risks and opportunities is a complex and ongoing process. Investment risks stemming from changes in regulation and consumer preference will not always align with the greatest sources of environmental damage from plastic pollution. The current regulatory trend, for example, is to focus on the restriction of plastic use that is deemed unnecessary, such as in straws or coffee stirrers, while significant pollution sources such as plastic microfibers in clothing remain unregulated.  The full sustainability impact of plastic usage is a result of many interconnected – and often unclear – factors. For instance, food packaging has been targeted by consumer groups and regulators despite evidence that the packaging helps to deliver food safely, increase shelf life and reduce food waste. Similarly, the delivery of medicines, clean water, and sterilised products relies on plastic, as do numerous resource efficiency improvements and resource efficiency improvements across transport and logistics industries.

Responsible use is likely to have a much greater positive impact than the avoidance of all forms of plastic entirely; the challenge lies in assessing the balance between the benefits of using the material and the costs of designing it out entirely. Encouraging responsible use often requires assessment of an entire supply chain, taking into account factors such as resource efficiency, product longevity and the use of circular economy initiatives. Although the regulatory and public focus on single use plastics and packaging is justified, with the most common polluting polymers being those used in bottles and bags, tackling the wider problem requires a balanced approach.

Beyond packaging

Approximately 34% of plastic resin ends life as packaging, leaving the rest to be used in other applications, including construction, transportation, electronics, consumer products, textiles and furniture. Plastic waste from non-packaging applications is also thought to be more likely to end up as ocean microplastic due to drains and sewers acting as ‘pollution vectors’. It has been estimated that 42 million tonnes of polyester, polyamide and acrylic (PP&A) pollution was in existence in 2015 as a result of use in textile fibres, making clothing a significant contributor to ocean waste [1].

Just as microfibers are being transported into the ocean by washing clothing made from PP&A, dust and debris, most notably from car tyres, is arriving from urban environments via drains and rivers. It has been estimated that 63% of primary source ocean microplastics originate from synthetic textiles and car tyres [14]. The encouragement of the responsible use of plastics must therefore span industries, as well as supply chains. The relevance of plastic use to investments varies greatly with company and industry, meaning that there is not yet one single solution or identifier for positive impact, investment risks or sustainability and investment opportunities.

Indicators of responsible use

Leading companies are likely to maximise opportunity by collaborating across industries, working within the public and private sectors. Indicators to look for in leading companies can be broken down into three broad areas:

      1.  Transparency and accountability

The level of voluntary disclosure by companies can be used as an indicator of potential resilience to consumer groups shifting their appetite away from plastic-heavy purchases. Proactive disclosure and target setting may also lower the risk of being subject to top down, prohibitive legislation. In best practice cases these targets are highly visible and embedded in company values. Integrated reporting with clear relevance to the impact, product or operations of the company should be taken with greater weight than the isolated publication of statistics.

      2.  Materials use – recycled content and the circular economy

Targeting an increase in the percentage of recycled content used by companies may be a greater driver for change than encouraging the production of recyclable items, potentially impacting practices further along supply chains by growing demand for recycled material. Although currently not universally possible, companies carrying out early research in materials’ use are likely to benefit. Types of plastic used will begin to narrow as recycling infrastructure develops, creating opportunities for leaders in the area. Until the supply of recycled polymers has both increased and stabilised, however, overambitious companies may be likely to miss targets on the use of recycled content due to the availability of recycled material.

Policies that either integrate circular economy thinking into operations or encourage the designing out of the material altogether, indicate long-term thinking in this area. The early integration of circular economy models, such as take-back initiatives, reverse logistics and modular design has the potential for significant benefit through increased efficiency, industry recognition and first-mover advantage.

      3. Collaboration

Opportunities exist owing to future increased demand for recycling facilities, new logistics solutions for circular economy or deposit-return initiatives, and new materials that will be required to replace single use plastics. As many of these developments span several industries, companies creating or joining collaborative initiatives are likely to excel, particularly those working vertically along value chains and investing in recyclable technology and infrastructure.

Those working with policymakers to influence consumer behaviour are likely to benefit from positive public image and potential government support, with programmes around improving recovery rates having the co-benefit of increasing the availability of recycled material.

A ‘win-win’ for companies and their investors

In 2018, we began to engage with McCormick and Company, a US food company, focusing on their packaging and supply chain, and were impressed by the large amount of detail the management provided on their social and environmental outreach initiatives, both current and in the pipeline. Specifically on the plastics and packaging concerns we raised, we learned that McCormick had reduced the carbon impact associated with its packaging and committed to developing an approach that would take into account the circular economy and reduce plastic waste reaching the ocean. Soon afterwards, McCormick made a further commitment that 100% of the company's plastic packaging will be reusable, recyclable or able to be repurposed by 2025.

As investors, our discussions satisfied us that sustainability issues are a priority for McCormick, with the pricing and reputational benefits inherent in their approach likely to prove advantageous both to the company’s bottom line and to our investors. More importantly, we were also reassured that there is a genuinely long-term mindset in place at the board level, which is precisely where, as socially responsible investors, we expect accountability to lie.


[1]  R. Geyer, J. R. Jambeck and K. L. Law, “Production, use, and fate of all plastics ever made” Science Advances, vol. 3, no. 7, 1 7 2017.
[2]  United States Environmental Protection Agency, “Facts and Figures about Materials, Waste and Recycling”.
[3]  Environmental Audit Committee, UK Parliament, “Plastic bottles: Turning Back the Plastic Tide” 2017.
[4]  Sandra Laville and Matthew Taylor, The Guardian, “A million bottles a minute: world's plastic binge 'as dangerous as climate change'”.
[5]  D. K. A. Barnes, F. Galgani, R. C. Thompson and M. Barlaz, “Accumulation and fragmentation of plastic debris in global environments” Philosophical Transactions of the Royal Society B: Biological Sciences, vol. 364, no. 1526, p. 1985, 27 7 2009.
[6]  UN Environment, “China’s trash ban lifts lid on global recycling woes but also offers opportunity”.
[7]  Alice Ross, Uneartherd, “China’s plastic scrap ban threatens ‘crisis’ for UK recycling industry”. Available:
[8]  Kevin Keane, BBC News, “Scotland ban announced for plastic cotton buds”.
[9]  James McAuley, The Independent, “France becomes the first country to ban plastic plates and cutlery”.
[10]  EU Commission, “Single-use plastics”.
[11]  EU Commission, “Implementation of the Circular Economy Action Plan”.
[12]  Rebecca Smithers, The Guardian, “England's plastic bag usage drops 85% since 5p charge introduced”.
[13]  UN Regional Informantion Centre for Western Europe, “Africa leads the way on plastic”.
[14]  J. Boucher and D. Friot, ICUN, “Primary microplastics in the oceans: A global evaluation of sources,” 2017.

These are the views of the author at the time of publication and may differ from the views of other individuals/teams at Janus Henderson Investors. Any securities, funds, sectors and indices mentioned within this article do not constitute or form part of any offer or solicitation to buy or sell them.

Past performance is not a guide to future performance. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested.

The information in this article does not qualify as an investment recommendation.

For promotional purposes.

Important information

Please read the following important information regarding funds related to this article.

Janus Henderson Horizon Global Sustainable Equity Fund

This document is intended solely for the use of professionals and is not for general public distribution.

The Janus Henderson Horizon Fund (the “Fund”) is a Luxembourg SICAV incorporated on 30 May 1985, managed by Henderson Management S.A. Any investment application will be made solely on the basis of the information contained in the Fund’s prospectus (including all relevant covering documents), which will contain investment restrictions. This document is intended as a summary only and potential investors must read the Fund’s prospectus and key investor information document before investing. A copy of the Fund’s prospectus and key investor information document can be obtained from Henderson Global Investors Limited in its capacity as Investment Manager and Distributor.

Issued in Europe by Janus Henderson Investors. Janus Henderson Investors is the name under which investment products and services are provided by Janus Capital International Limited (reg no. 3594615), Henderson Global Investors Limited (reg. no. 906355), Henderson Investment Funds Limited (reg. no. 2678531), AlphaGen Capital Limited (reg. no. 962757), Henderson Equity Partners Limited (reg. no.2606646), (each registered in England and Wales at 201 Bishopsgate, London EC2M 3AE and regulated by the Financial Conduct Authority) and Henderson Management S.A. (reg no. B22848 at 2 Rue de Bitbourg, L-1273, Luxembourg and regulated by the Commission de Surveillance du Secteur Financier). We may record telephone calls for our mutual protection, to improve customer service and for regulatory record keeping purposes.

Past performance is not a guide to future performance. The performance data does not take into account the commissions and costs incurred on the issue and redemption of units. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested. Tax assumptions and reliefs depend upon an investor’s particular circumstances and may change if those circumstances or the law change. If you invest through a third party provider you are advised to consult them directly as charges, performance and terms and conditions may differ materially.

Nothing in this document is intended to or should be construed as advice. This document is not a recommendation to sell or purchase any investment. It does not form part of any contract for the sale or purchase of any investment.

The Fund is a recognised collective investment scheme for the purpose of promotion into the United Kingdom. Potential investors in the United Kingdom are advised that all, or most, of the protections afforded by the United Kingdom regulatory system will not apply to an investment in the Fund and that compensation will not be available under the United Kingdom Financial Services Compensation Scheme.

Copies of the Fund’s prospectus and key investor information document are available in English, French, German, and Italian. Articles of incorporation, annual and semi-annual reports are available in English. Key Investor document is also available in Spanish. All of these documents can be obtained free of cost from the local offices of Janus Henderson Investors: 201 Bishopsgate, London, EC2M 3AE for UK, Swedish and Scandinavian investors; Via Dante 14, 20121 Milan, Italy, for Italian investors and Roemer Visscherstraat 43-45, 1054 EW Amsterdam, the Netherlands. for Dutch investors; and the Fund’s: Austrian Paying Agent Raiffeisen Bank International AG, Am Stadtpark 9, A-1030 Vienna; French Paying Agent BNP Paribas Securities Services, 3, rue d’Antin, F-75002 Paris; German Information Agent Marcard, Stein & Co, Ballindamm 36, 20095 Hamburg; Belgian Financial Service Provider CACEIS Belgium S.A., Avenue du Port 86 C b320, B-1000 Brussels; Spanish Representative Allfunds Bank S.A. Estafeta, 6 Complejo Plaza de la Fuente, La Moraleja, Alcobendas 28109 Madrid; Singapore Representative Janus Henderson Investors (Singapore) Limited, 138 Market Street, #34-03 / 04 CapitaGreen 048946; or Swiss Representative BNP Paribas Securities Services, Paris, succursale de Zurich, Selnaustrasse 16, 8002 Zurich who are also the Swiss Paying Agent. RBC Investor Services Trust Hong Kong Limited, a subsidiary of the joint venture UK holding company RBC Investor Services Limited, 51/F Central Plaza, 18 Harbour Road, Wanchai, Hong Kong, Tel: +852 2978 5656 is the Fund’s Representative in Hong Kong.

Information on this document is on Janus Henderson Investors’ best endeavours.

Specific risks

  • The Fund may use derivatives with the aim of reducing risk or managing the portfolio more efficiently. However this introduces other risks, in particular, that a derivative counterparty may not meet its contractual obligations.
  • Shares can lose value rapidly, and typically involve higher risks than bonds or money market instruments. The value of your investment may fall as a result.
  • If the Fund holds assets in currencies other than the base currency of the Fund or you invest in a share class of a different currency to the Fund (unless 'hedged'), the value of your investment may be impacted by changes in exchange rates.
  • Securities within the Fund could become hard to value or to sell at a desired time and price, especially in extreme market conditions when asset prices may be falling, increasing the risk of investment losses.
  • The Fund follows a sustainable investment approach, which may cause it to be overweight and/or underweight in certain sectors and thus perform differently than funds that have a similar objective but which do not integrate sustainable investment criteria when selecting securities.

Risk rating


Important message