When shoppers return home from Ikea and start assembling the Swedish company’s flat-packed furniture, they might notice a change in the accompanying packaging: instead of petroleum-based polystyrene, Ikea is now starting to use a mushroom-based foam.
MycoComposite, as the product is called, uses fungus to bind together agricultural byproducts such as wood chips and corn husks. The result is a plastic-free protective packing material that is produced easily, can be moulded to any shape and that decomposes within days.
Audrey Choi, Chief Sustainability Officer (CSO) at Morgan Stanley, argues that as the world rises to the challenge of sustainability, such innovations not only help the environment but also bring multiple benefits to every C-suite executive in almost every company.
“For virtually every business leader, there is something to be gained by rethinking traditional approaches to plastic,” she says. “From heavy industry and agricultural commodities to retail, the use of sustainable plastic alternatives, recycling and reduced use of plastic produces big gains, from environmental to financial.”
Plastic is everywhere. Today, there is in excess of 8.3bn tons of plastic in the world, more than 76 per cent of which has ended up as waste. More than half of the plastic produced every year is used just once — and the useful life of a single-use plastic bag is just 12 minutes, on average.
Yet Choi argues that plastic is also a business opportunity. With up to $120bn in packaging-material value lost to the global economy every year, the potential to claw back billions of dollars while adopting a more sustainable approach to the use of plastic is huge.
One company that has made plastics a C-suite issue is Unilever. The consumer-goods multinational is now rolling out concentrates for some of its cleaning and washing products. Refills of its Cif cleaning spray use 75 per cent less plastic than traditional packs. Diluting at home also means that 97 per cent less water is transported, which translates into 80 per cent fewer lorries on the road.
For chief financial officers, the resulting savings across entire product lines from changing attitudes to plastics can be hefty. “Many companies assume that changing their policies on plastics will result in increased spending, but reducing plastic waste and using alternatives to plastic can actually save on operating and capital costs,” says Choi.
For chief technology officers (CTOs), rethinking plastics is an opportunity to explore the rapidly growing market in alternative products. “Innovation is the lifeblood of all companies,” she says. “It can inspire new products and services, and even engage customers in new ways.”
As just one example of the rapidly expanding universe of plastic alternatives, Biolive, a Turkish company, is creating plastics from olive seeds, which not only helps to reduce plastic use but also addresses waste issues in the process of olive-oil extraction.
The company, whose product is fully biodegradable, cost-effective and even edible, has worked with automobile makers Porsche, Ford and Mercedes-Benz, as well as with Chobani, the yoghurt producer.
Choi points out that innovating in the use of plastic goes a long way to improving a company’s environmental credentials, a metric that is increasingly on the radar of investors and investment banks.
Roughly half of individual investors in the US taken up sustainable investing, and 80 per cent of asset-owner institutions are integrating sustainability factors into their investment processes.
At the C-suite level, Choi argues that chief marketing officers (CMOs) potentially have the most to gain by exploring alternatives to plastic — particularly now that public opinion is turning against single-use plastics.
“Chief marketing officers know how brand value depends on being on the right side of the debate,” says Choi. “Policies on plastic waste can be a powerful factor in setting your company apart from the rest.”
Dell, the computer manufacturer, has caught the eye of consumers while reducing its dependence on plastic by using bamboo as an alternative packaging material for some of its lightweight products. Among many other advantages, bamboo grows quickly and is produced close to Dell’s manufacturing facilities in China.
For chief legal officers (CLOs), Choi says that pushing for a company-wide stance on plastics that rises above the piecemeal legislation that is starting to appear across different jurisdictions can avoid lawsuits while helping to set higher standards. “Taking a proactive approach is a better strategy for mitigating risk and avoiding higher logistical and regulatory costs than trying to keep up with local rules and regulations,” she says.
In general, elevating the issue of plastic and single-use plastic to the C-suite level can also help to break down silos that often form between company departments, using a policy from which everyone can gain to improve internal communication and drive shared values.
“Taking unified action across the C-suite level breeds ingenuity, entrepreneurship and helps set common goals,” says Choi. “It can also capture millions of dollars in value while helping to put the planet on a more sustainable path.”
Click here to learn more about Morgan Stanley’s Plastic Waste Resolution
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