The following is adapted from a keynote presentation made by Audrey Choi, chief marketing officer and chief sustainability officer at Morgan Stanley, on the opening day of Circularity 20 last month.
I know I don’t need to tell this audience in particular why plastic waste is an environmental issue; how many billions of tons of plastic waste have accumulated in our rivers, oceans and landfills; how few of those tons we’ve actually recycled and how that plastic waste is disintegrating into microparticles that are coming back to us in our food or water and salt.
I will, however, share one calculation that we did: If you took all the plastic wastes currently sitting in nature and turned it into one plastic bag, it will be large enough to literally bag the earth.
And if we continue with business as usual, in 30 years, we will have enough plastic waste to double-bag the earth.
For everyone around the C-suite table, reducing plastic waste should be seen not only as a call to action but also a market opportunity.
Even putting aside the environmental burden that represents, as business leaders, we should be offended by this irrational economic waste. We were literally throwing away up to $120 billion in economic value every year, in single-use plastic packaging alone. I can’t think of another instance in which we would think it is smart business to take a finite natural resource, turn it into a product that we use for 12 minutes on average, and then throw it away. And the damage it creates in just the marine environments alone is estimated at $2.5 trillion in lost productivity every year.
When I speak with business leaders about plastic waste reduction, I find they often care about the issue, but they say one or both of the following things. Either they can’t do anything about it because they’re not a major part of the plastic value chain, or they can’t do anything about it because the problem was just too big — plastic is everywhere.
Now, I agree that no one of us alone can solve the issue. It’s a global, economy-wide issue. But the fact that it is everywhere actually should be something that inspires us all to action.
Precisely because plastic is currently woven into virtually every single industry around the world, I believe that every single one of us has the potential to be part of the solution. Indeed, I believe that in virtually every C-suite, you could go around the table and identify why just about every C-suite officer has a reason to care about plastic waste reduction and can benefit by trying to address the problem.
Let’s leave out the CEO for the moment because, of course, at some point, all of this rolls up to the CEO. But let’s look at the other C-suite roles.
Let’s start with the chief financial officer. One of the obstacles often cited for not getting rid of plastic waste is that the alternatives are more costly, or that switching costs are prohibitive. But for CFOs, thinking about reducing plastic waste ultimately could save costs.
Here’s just one example. Consider a company that sells cleaning products or any other products where, like so many, water is actually one of the main ingredients. And when that product is used up, the plastic container it came in gets thrown away. If instead, that company were to switch to a concentrated powder that the consumer could reconstitute themselves in a reusable container, this not only would reduce plastic waste in nature, it also would reduce the company’s shipping costs and carbon footprint while potentially increasing profit margins.
In addition, investors increasingly are choosing to align investments with the issues they care about, including plastic waste reduction. As a result, we’ve recently seen corporations benefit from robust investor interest when they have issued corporate debt or the use of proceeds is targeted to plastic waste reduction. As a result, chief financial officers who are proactive about plastic waste reduction actually may realize reduced operating costs and capital costs.
What about chief legal officers? While many already are starting to realize that plastic waste is becoming a growing concern, regulators, consumers and activists are all focusing their attention on plastic waste, resulting in a rapidly evolving patchwork of state, local and federal rules, focusing on bands of various products such as plastic straws, plastic bags or plastic lids. Managing to all these different standards on a piecemeal basis is an increasingly difficult task. Whereas adopting a proactive approach for plastic waste reduction actually could be easier to implement.
Moreover, as public attention and focus on plastic waste grows, chief legal officers may need to anticipate a growing set of legal risks in the form of fines, penalties or even lawsuits if plastic waste — often indelibly emblazoned with their brand names — shows up where it doesn’t belong. As a result, chief legal officers who are proactive about plastic waste reduction actually may be able to streamline their compliance and reduce liability.
For chief innovation officers, the benefit is probably fairly intuitive. A plastic waste reduction mentality can inspire innovation. In the quest to reduce plastic waste, companies may be inspired to discover better alternative materials that use renewable sources to create a plastic-like product or plastic that is truly biodegradable or recyclable.
The iconic retailer IKEA has taken note. The company recently announced it is replacing plastic foam packaging with a mushroom-based compostable packaging material. This material can be grown in a week, reuse repeatedly and when it’s no longer needed, takes just 30 days to decompose.
For chief innovation officers, plastic waste reduction can be their muse, inspiring innovation for new products, new services and new ways of engaging customers.
For chief marketing officers, the case for action is clear and growing. Customers increasingly are voting with their purchases and seeking out products that avoid or reduce plastic waste. Being the category leader in reducing or avoiding plastic waste can be a true point of differentiation in the market today rather than just competing on price. Selling your product in a beautiful branded reusable container comes with the added benefit of the consumer looking to you and only you to refill that container.
I also believe that CMOs should see a special world for themselves combatting plastic waste, because ironically some 60 years ago, they were the ones who helped convince American consumers to embrace our throwaway plastic culture.
This image from Life magazine in 1955 was one of the first times that marketers were trying to inculcate customers into the joys of having a throwaway life, looking at all the products we could use just once and then throw away. Today, CMOs also can have a special role to play in encouraging customers not to prefer a cheap, single-use plastic product, and that they would prefer other more sustainable products instead.
For chief marketing officers, plastic waste reduction can be a powerful tool to win new customers and increase brand loyalty.
Finally, from the perspective of the chief sustainability officer, I think it’s pretty self-explanatory why we should care about plastic waste reduction. But in addition to all those sustainability benefits, it’s also an opportunity to build C-suite alliances and to bring together different partners around that C-suite table, as well as to build bridges to clients and corporate partners.
For us at Morgan Stanley, even though we aren’t in the plastic value chain per se, last April, we decided to make a firm-wide commitment to facilitate the prevention, reduction and removal of 50 million metric tons of plastic waste from rivers, oceans, landfills and landscapes by 2030. This plastic waste resolution was something we developed in partnership with everyone around the C-suite table, as well as in partnership with our clients.
For chief sustainability officers, plastic waste reduction can build C-suite alliances that bring together innovative products and programs.
I believe that for everyone around the C-suite table, reducing plastic waste should be seen not only as a call to action but also a market opportunity. Every industry, every company, every leader can do their part and make a difference. Each of us has a unique role to play and a unique ability to turn the tide on plastic waste.
Plastic became part of our daily lives because of the combination of scientific discovery, industrial R&D, ingenuity, entrepreneurship and marketing. Those same forces can and must now be harnessed to help us rethink our plastic economy and find ways that we can continue to enjoy the beneficial qualities of plastic while reducing the burden of plastic waste. We look forward to embarking on this journey together.