Positive News for a Change on World Earth Day
The information in this blog is general in nature and is not intended to be personalised financial advice. You should consult a professional financial adviser before making any financial decisions or taking any action based on the information in this blog.
Born in 1970, Earth Day has evolved into one of the most significant civic events of all time. The theme for the 54th Earth Day on 22nd April is "Plastics vs. Planet." This follows last year’s Earth Day theme, “Invest in Our Planet.” So, it is timely to consider positive news examples of businesses from ethical funds that are investing in our planet by tackling the problem of plastics.
Substitution of plastics with more sustainable materials - Smurfit Kappa
A key challenge is to find alternative materials wherever possible, particularly in short-lived applications like packaging. An example is a fund manager backing the wider use of recycled cardboard as an alternative to plastic in packaging applications. Highly recyclable – and importantly, widely recycled – cardboard is a lightweight, biodegradable material that can substitute for various packaging applications.
Smurfit Kappa Group Plc collects, manufactures and sells recycled cardboard. The company is headquartered in Ireland and operates throughout Europe and the Americas. Smurfit Kappa is the largest producer of recycled cardboard products in Europe, with clients in food, beverages, household consumables and industrial markets. The company has developed cardboard alternatives to plastic in everything from packaging for cans to clothing. As one of the world’s largest recyclers of cardboard packaging, Smurfit Kappa directly supports the circular economy goals in SDG 12. Recycled cardboard is a preferable packaging material in many applications, and it has lower environmental impacts than other materials.
The company describes its Purpose as ‘To Create, Protect and Care,’ and its Vision as ‘To be a globally admired business, dynamically and sustainably delivering secure and superior returns for all stakeholders.’ It is a FTSE100 company operating across 36 countries, with approximately 47,000 employees in over 350 production sites and a revenue of €11.3 billion in 2023.
In 2023 Smurfit Kappa was listed as one of TIME’s World’s Best Companies and Sustainability Magazine’s Top 100 Companies.
The company published its 17th Sustainable Development Report last month. Smurfit Kappa reported it had achieved its targets on:
Waste: achieving a 35.8% reduction in waste sent to landfill, ahead of its 2025 target of 30% (24% in 2022)
Forestry: achieving 95.5% of packaging sold with Chain of Custody certification, ahead of its 2025 target of 95% (94.3% in 2022)
Communities: €25.6 million donated to support social, environmental and community initiatives, ahead of its 2025 target of €24 million (€18.4 million in 2022)
Diversity: 25.1% of management positions were held by women at the end of 2023, ahead of its 2024 target of 25% (23.5% in 2022).
The comprehensive report covers January to December 2023 and highlights the company’s progress through continued capital investment, ongoing operational improvements and collaboration with customers, suppliers and other key stakeholders.
In addition to reaching its key sustainability targets, several landmark achievements are noted in the report, including:
Becoming an early adopter of the Taskforce for Nature-related Financial Disclosures (‘TNFD’), one of only 180 companies globally
The installation of 12,000 solar panels at its Sangüesa paper mill in Spain, adding to similar green energy initiatives at plants in Spain, Colombia, Mexico and most recently, in a new facility in Morocco
The completion of a €27 million investment in a new waste management and recovery facility at the Nervión paper mill in Iurreta, Spain, removing over 70,000 tonnes of material that was previously sent to landfill
Inauguration of a pioneering purification and wastewater treatment plant in Belgrade, Serbia, the first of its kind in the country
Continued progress in its US$100 million biomass project in Colombia, which will be the largest decarbonisation project in the Group’s history and is scheduled to start up in 2025
Creating markets for recycled plastic - Advanced Drainage Systems (ADS)
Alongside reducing plastic packaging, fund managers see opportunities for companies to develop lucrative markets in recycled plastic.
Advanced Drainage Systems (ADS) has tapped into the glut of plastic packaging waste as a valuable raw material. ADS is the US’s largest plastic recycler, accounting for 28% of all recycled HDPE (High-Density Polyethylene) and turning it into long-lived stormwater sewers and other water treatment and management products.
ADS’s products directly support SDG 6, which focuses on the sustainable management of water resources and ecosystems. Newsweek named ADS one of America's Most Responsible Companies in 2024. It was recognised for its commitment to environmental, social and corporate governance efforts for the second consecutive year. It was a finalist in Fast Company’s 2023 World Changing Ideas Awards for its work protecting water by turning single-use plastics into pipes that manage stormwater runoff. In August 2023, the company became a signatory to the UN Global Compact.
ADS is listed on the NYSE. Founded in 1966, it has a vast network of approximately 70 manufacturing plants and 40 distribution centres. The company is one of North America's largest plastic recycling companies, ensuring over half a billion pounds of plastic is kept out of landfills every year.
Under the heading ‘Circularity’ in the company’s Sustainability Report 2023 states:
The circular economy, or circularity, is an economic system based on the reuse and regeneration of materials or products, especially as a means of continuing production while eliminating waste. The circular economy aims to retain the lifespan of products through repair and maintenance, reuse, redistribution, remanufacturing, or recycling.
As one of the largest plastic recyclers in North America, ADS plays a vital role in creating a circular economy for plastics. ADS products have contained recycled plastic for over 30 years. In Fiscal 2023, we purchased nearly 540 million pounds of recycled plastic for use in our products. Once again, ADS was named one of the largest plastic recyclers in North America by U.S. Plastics News in 2023. We remain confident that we will reach our ambitious goal to recycle one billion pounds of material per year by Fiscal 2032 as we continue researching ways to increase our use of recycled plastics.
With our stakeholders having identified increasing the use of recycled plastics through partnerships and innovation as material from both a financial and overall stakeholder perspective during our recent materiality assessment, we believe the work ADS is doing to promote circularity is more important than ever. ADS has vertically integrated recycling operations. ADS Recycling purchases both post-industrial and post-consumer recycled plastic materials. This material is brought into our recycling facilities where it is sorted, washed, shredded, granulated, blended and extruded into pellets. This material is then used in production to make durable goods that last 50 to 100 years…
These examples highlight businesses recognised for being part of the solution to environmental challenges.
Of course, many examples of environmentally damaging activities are caused by businesses then ‘greenwashed’ to hide their actual impact. Examples are profiled in an article titled ‘Greenwashing: How Industries Lie to You’ from the official Earth Day website. I agree with the article’s conclusion that “greenwashing is alive, well, and a growing issue,” and wise consumers and investors will “explore how to protect oneself from these tactics and distinguish trustworthy products and companies from the greenwashing type. Stay tuned. Stay green. Stay on alert!”
Earth Day is a timely reminder to examine your investment portfolio. To what extent are you invested in businesses that are ethical leaders making a positive environmental impact by addressing issues such as plastics? You can vote with your investment and aim to ensure your money matters by seeking to make ‘good’ money and making a difference.
Please take action on Earth Day – there are many suggestions on the official website www.earthday.org