Plastic pollution is a complex global issue that needs collaboration between governments, the corporate sector and wider society if the issue is to be tackled effectively. Collective investor action, to complement individual, company-specific engagements, has the potential to provide a powerful expression of investor willingness to exercise influence and support change.
Sometimes engagement alone is not enough; business leaders need practical tools. To catalyse a supply-chain response to reduce plastic pellet pollution, a new auditable best practice framework is required. In a proactive step, the Investor Forum brought together a number of its Members to co-sponsor a new BSI “Publicly Available Specification” (PAS). These investors are providing financial resources to fast track the creation of a new standard, which signals to companies and policy makers the desire of investors to have a positive impact with measurable outcomes.
Evidence of Investor Stewardship in Action
In 2018, McInroy & Wood asked for the Forum’s assistance in coordinating an engagement with the standard setting agencies. With the Forum’s help, 18 investors signed a letter calling for new standards to be written which would codify best practice and equip companies to address a problem throughout their supply chain.
The British Standards Institution agreed that a standard was required, and suggested that a “Publicly Available Specification” (PAS) be sponsored to enable a fast-track delivery. Without this PAS, plastic pellets may not have been on BSI’s agenda for some time.
For the first time, investors have come together with government (Marine Scotland) and industry bodies to form an innovative multi-stakeholder co-sponsor group to deliver a new standard. In December 2019, nine investors committed to provide financial support, to commission a PAS and provide grant funding for conservation charity Fauna & Flora International to act as an expert on the steering committee on their behalf.
The investor co-sponsor group comprises:
Allianz Global Investors, Brewin Dolphin, Environment Agency Pension Fund, Generation Investment Management, LGPS Central, McInroy & Wood, Man Group, Ownership Capital, and Troy Asset Management.
A Small Part in Addressing a Big Problem
By supporting the development of the PAS, investors are making a contribution to a multifaceted approach being taken by stakeholders to reduce plastic pellet loss.
For example, the Scottish Government has formed a steering group of industry, regulators and NGOs to develop a certification system design which would allow for auditing against the requirements which will be set in the PAS. Their steering group will test proposed system designs with businesses across the supply chain and share final recommendations internationally.
What are plastic pellets?
Plastic pellets – otherwise known as nurdles – are bits of plastic that are the building blocks of the plastic industry. Plastic pellets, powder and flakes can escape at various points in the cycle of production, manufacturing, storage, transportation and recycling. Escaped pellets are then washed into natural waterways, negatively impacting the ecosystem and threatening wildlife.
Who is BSI?
The British Standards Institution (BSI) is the national standards body of the UK, operating independently under Royal Charter. BSI is a member of the European Committee for Standardization (CEN) and the International Organization for Standardization (ISO).
Why write a new standard?
Standards are strategic tools, based on definitions, measurements, metrics for testing and other specified parameters agreed by consensus. They are drawn up by a group of experts following a certified process and define best practice in many different areas.
A supply chain approach for pellet management will increase the accountability of, and confidence in, all companies using or buying plastic products that pellets are handled responsibly at all stages of production. Companies are used to implementing technical standards. Compliance with a standard would allow companies to demonstrate that their entire supply chain has put measures in place to prevent plastic-loss, and give investors a means to evaluate and hold companies to account for their activities.
What is the targeted outcome?
Creation of a standard is a practical an impactful way to change behaviour throughout the supply chain. The Sponsor Group favours such an approach as the solution does not require innovation or a complex, systemwide co-ordinated response, and can deliver demonstrable outcomes within a finite time scale (12-18 months).
The PAS could be a starting point to enable EU-wide legislation, and adoption by ISO would have a high global impact.
A Multi-Stakeholder Approach
Investor Forum Investor Group
(Investor Forum and 9 Investors)
BSI PAS PROCESS
Governed by BSI Standardisation Procedures
NEW PAS DELIVERY
(Fauna & Flora International)
BSI Project Manager
(Pellet producers / recyclers / transporters / plastic using brands / retailers / technical advisers etc.)