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Plastic bag floating in the ocean with seaweed

Banks loaned plastic industry $1.7tr without tackling waste problem

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Plastic supply firms were loaned more than $1.7tr by banks in the period between January 2015 and September 2019 without imposing any requirements for them to tackle the plastic pollution problem in the oceans, a report has found.

According to research network Portfolio.earth, while many banks have shown some awareness of the issue, none of the 20 banks which provide the lion’s share of funding developed any “due diligence systems, contingent loan criteria or financing exclusions”.

Plastic waste can travel thousands of kilometres in months through rivers and oceans, causing significant disruption to the local ecology that it encounters.

The amount of plastic waste generated that enters the world’s oceans, lakes and rivers is currently estimated at around eight million metric tons annually. Recent mathematical models have estimated that by 2030, the annual plastic waste of 173 countries could increase to 53 million metric tons.

Portfolio.earth accused banks of not “acknowledging their responsibility” or taking action to understand, measure and reduce the impacts of their loans within the plastic supply chain.

The banks which provided the bulk of finance included in the report are headquartered in the USA and in Europe. The ten largest financiers, which accounted for 62 per cent of the finance identified, were Bank of America, Citigroup, JPMorgan Chase, Barclays, Goldman Sachs, HSBC, Deutsche Bank, Wells Fargo, BNP Paribas and Morgan Stanley.

“What the financial sector needs now is someone to step forward and say, ‘Okay, we’re going to take a look at plastics,’ and then others will follow,” said Robin Smale, director of Vivid Economics, a consultancy which audited the report.

The report calls for a “fundamental shift” away from business models that depend on single-use packaging towards those that prioritise reuse and more localised supply chains and services is needed.

Last year was particularly bad for plastic waste, as demand soared for healthcare products such as face shields and gloves designed to minimise the transmission of Covid-19, as well as rising consumer demand for takeaway food containers and bubble wrap for online shopping.

In addition, the cost of recycled plastic is typically more expensive than newly created plastic. This gap widened in 2020 due to plummeting oil prices, which are a key component of the material.

Portfolio.earth said that, worldwide, about two million plastic bags are used every minute. Each bag is used on average for 12 minutes, but can take hundreds or thousands of years to decompose.

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