Press release: 19 October 2021
Banks’ unconditional support to plastic-heavy business must end – new report
Many banks funding major supermarkets and food corporations largely have no policy to mitigate their exposure to plastics-related financial risk, according to new findings.
Blue chip fast-moving consumer goods companies (FMCGs) and grocery retailers – collectively known as ‘Big Food’ – are responsible for the bulk of single-use plastics on the market.
A new report from Belgian sustainable finance experts FairFin reveals that over the last 6 years, banks in Belgium including BNP Paribas, Deutsche Bank and ING invested €78bn in nine ‘Big Food’ corporations, without interrogating how these plastic-centric companies will deal with the ballooning risks associated with single-use plastic packaging.
Of all the banks FairFin looked at in its report, none of them has a concrete policy on single-use plastics. Similarly, not one of the banks identifies plastic as a financial risk . The report argues that this blind spot could have serious financial repercussions for banks and demands urgent action.
FairFin’s Frank Vanaerschot said: “It’s disconcerting to see that banks are blind to their role in the plastics crisis – and the financial losses they could sustain as a result. Banks are offering recycled credit and debit cards yet they’re making the plastic mountain bigger every day by investing tens of billions in the food industry without having a policy attaching conditions to the use of plastics. By supporting ‘Big Food’ unconditionally, banks are financing plastic pollution.”
There are serious financial risks attached to plastics:
- New EU laws and policies aimed at reducing plastic waste and carbon emissions will impact any company whose business model relies on plastics. This will make it more expensive for companies to pollute the planet and slow-moving firms will be hit the hardest.
- In addition to the series of new laws on plastic, the EU is also introducing an extra tax on plastic packaging. Some goods could become 3 to 8% more expensive, a cost that would likely have to be absorbed by the industry.
- The first innovative cases on plastic pollution have already been launched, and a whole new area of legal risk is opening up for ‘Big Food’ as citizens and NGOs take action against companies on plastic-related greenwashing.
ClientEarth, which commissioned the report, released a report earlier this year about Big Food’s role in the plastics crisis and the financial risks the sector is exposed to.
Rosa Pritchard, plastics lawyer at ClientEarth, said: “Financial risks relating to plastics are snowballing. Policy changes, consumer attitudes and the threat of lawsuits are closing in on single-use packaging. Banks need to wake up to this crisis and take action -- or face financial consequences.”
The report points out that some banks have got as far as implementing sustainable packaging or reuse policies in their office canteens, or are pushing biodegradable credit cards – but that their wider, systemically influential investment strategies fail to deal with plastics. Similarly, whilst banks may have a climate risk management strategy, they do not incorporate plastics as part of this strategy despite plastics being made of fossil fuels and therefore causing climate change. This inconsistent approach is denounced in the report.
Notes to editors:
Read “The Unbearable Cost of Single-Use Plastics” here.
ClientEarth is a non-profit organisation that uses the law to create systemic change that protects the Earth for – and with – its inhabitants. We are tackling climate change, protecting nature and stopping pollution, with partners and citizens around the globe. We hold industry and governments to account, and defend everyone’s right to a healthy world. From our offices in Europe, Asia and the USA we shape, implement and enforce the law, to build a future for our planet in which people and nature can thrive together.