Press release: 9 September 2021

Supermarkets could face legal action for failure to act on plastic

Major food manufacturing and grocery retail companies that turn a blind eye to the risks related to plastic pollution could face legal action, a new report by environmental law charity ClientEarth has revealed.

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.

But as the regulatory and cultural landscape changes at pace, ClientEarth lawyers have found that many Big Food companies are failing to recognise, report and act on the risks of continuing to rely on plastic packaging, putting them at risk of legal action, and their shareholders in line for financial losses.

ClientEarth plastics lawyer and report author Rosa Pritchard said: “The time is up for single-use plastics but Big Food is burying its head in the sand. A slew of stricter laws on single-use plastics are rapidly making our continued reliance on plastic packaging untenable, and consumers are turning their back on single-use plastic culture.

“Yet the companies behind many of our household brands are treating the plastics crisis as a PR problem, rather than a serious and escalating business risk.

“Big Food is facing major financial headwinds and yet many are not disclosing the looming financial impacts of their reliance on plastic to investors – something they are legally required to do. This omission puts them at risk of legal action.”

When it comes to plastics, the traditional triad of transition, reputational and litigation risks are related to three key impacts: waste, climate and human health.

• Plastics, especially single-use, create huge amounts of waste. Members of the public are growing more and more concerned about the impact of plastic pollution and policymakers are already under pressure to up ambition even as the first wave of single-use plastics laws is implemented. The first innovative cases on plastic pollution have already been launched, and a whole new area of legal risk is opening up as consumers, regulators and NGOs take action on plastic-related greenwashing.
• Around 99% of plastics are made from fossil fuels, and are responsible for huge amounts of climate-harming emissions. As the links between plastics and climate change become more widely understood, and as countries try to embrace circular economy models, climate policies’ pressure on plastics will affect Big Food from multiple angles.  
• Plastics are made of chemical substances that are potentially dangerous to health, particularly endocrine disruptors. Consumers are increasingly aware of these issues. The EU has plans for some drastic changes to chemicals legislation that will have knock-on effects for intense packaging users like Big Food. The risk of legal action is growing, with warning signs playing out in recent US class actions on PFAS and insurers steeling themselves for EDC-related claims.

The problem does not stop with the companies themselves. While business risks related to climate change are now well-known among investors, ClientEarth lawyers are also urging them to focus on the risks linked to plastic pollution, as these too will have a direct impact on their returns.

In the report, ClientEarth’s lawyers urge investors, asset managers and financial advisors to engage with Big Food and push for greater transparency, more ambitious targets and more effective policies from Big Food on plastics – to protect their holdings and ensure compliance with their own legal obligations. 

Pritchard added: “Investors and other financial institutions have a huge amount of leverage with Big Food. They could demand better performance from businesses on their plastic strategies, or decide to invest elsewhere to avoid plastic-related business risks – as they too are not immune to serious financial consequences.”

ENDS

Notes to editors:

Read “Material issues: Big Food and the rise of plastic-related risk” here.

In 2019, UK supermarkets produced 896,853 tonnes of plastic packaging, the equivalent of the weight of 90 Eiffel Towers.

A recent report by Break Free From Plastic assessing the actions being taken by key FMCG companies to tackle plastic waste found that out of 214 projects announced by FMCG companies, 176 were deemed false solution projects (i.e. unproven-at-scale technology, reliant on third parties to collect and dispose, based around a false narrative, or were announced but nothing happened).

45% of shareholders at U.S. grocery chain Kroger and 35% of shareholders supported proposals asking the companies to reduce the amount of single use plastic in their operations.

About ClientEarth

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.