As a new plastics deal takes shape, companies must shift their business models now

Viewed through a narrow lens, plastics have been a roaring success. The industry is worth around $700 billion annually, provides millions of jobs, and has benefited societies, economies and people. But on this interconnected and fragile planet, we must look through a wider lens at a bigger picture: how humanity produces, uses and disposes of plastics is harming the environment, people, economies and, in the long term, businesses themselves.

It is this comprehensive view that led to countries agreeing to create an international legally binding instrument on plastic pollution by the end of 2024. Talks have been ongoing for almost two years. The final two rounds of negotiations this year are going to be crucial, as is the proactive engagement of all stakeholders – including the private sector, which must help negotiators get the market signals right for an economy that ends plastic pollution.

As negotiators hit the final stretch, we must remain focused on key toplines.

First, we must eliminate unnecessary, problematic and avoidable plastic products. It makes no sense to use a material so durable and versatile for items that are discarded after a single use or a few uses – particularly when these items frequently end up polluting our environment.

Second, we must redesign products, including packaging, to use less plastic and be more easily reused, refilled, repaired, repurposed and recycled. One simple example is moving from liquefied soaps, shampoos and detergents to solids delivered in non-plastic packaging.

Third, we must deploy innovation to switch to non-plastic substitutes, alternative plastics and plastic products that do not create negative environmental, health and social impacts. This includes dealing with microplastics and chemicals harmful to human health.

Fourth, we must invest in better systems to reduce, reuse, refill, repair, recycle, and manage and dispose of waste in an environmentally sound manner. Doing so will incentivise products designed to be used multiple times and ensure that all resources can be made circular. All of this must happen while delivering a just transition and decent jobs for communities such as waste-pickers.

If the deal can deliver on these toplines, it could end most plastic pollution by 2040, including in the marine environment, while unlocking social and economic opportunities. Recent studies by UNEP and others point to hundreds of thousands of new and fairly distributed jobs, billions of dollars saved in public and private funds, and trillions of dollars saved through avoided externalities such as health impacts, climate change, air pollution and ecosystem degradation.

Another issue the instrument must address is how the current market rewards inefficient resource use. Producing plastic is profitable because the externalities generated have been shifted to others and into the future. This is a market failure. The new instrument can create a level playing field in which externalities are internalized and sustainable solutions can compete.

As plastic products are traded internationally, regulatory approaches need to align at the international level. The instrument can achieve that by, for instance, setting common design guidelines on reuse and refill systems and fostering the collective action required to unlock the multi-billion opportunity presented by reusable packaging. Setting flexible and market-specific targets for reuse and refill can also generate confidence for financial actors to support the shift. Providing guidance and minimum criteria to ensure the private sector participates in Extended Producer Responsibility schemes would enhance the effectiveness of this important component.

These are just some of the actions we need member states to align on in negotiations. It is important to note, however, that countries consuming large amounts of plastic need to take more responsibility and support the diversification of those economies that depend on plastic production. The instrument must also consider ways to provide financial and technical assistance to support implementation and deal with legacy plastic that will wash up on our shores for generations, including the shores of small island developing states. And, of course, this must continue to be an inclusive process that folds in civil society, vulnerable groups such as indigenous peoples and those working in the informal waste economy.

One of the most important enablers of success is private sector leadership. If the plastics industry puts its resources and innovation to immediate work, we can turbo-charge transformation, for everyone’s benefit. This instrument is coming, and it isn’t the only market signal. The COP28 climate talks ended with a call for a transition away from fossil fuels. For me, this means that the plastics industry should not be a lifeboat for fossil fuel companies. This is crucial, because business-as-usual growth in plastics would burn through a projected 20% of the carbon budget for 1.5°Celsius by 2040 – mainly from the production of primary polymers and conversion into products.

The world is ready to break its addiction to unwisely produced, used and disposed-of plastics, alongside the related addiction to fossil fuels. People want to be more sustainable and are increasingly refusing wasteful plastics. This trend is only going to gather pace – and those companies and nations that adopt non-plastic substitutes or better use of plastic now will be the first ones to benefit.

So, industry must innovate in business models and technologies, and provide clarity on the enabling conditions that will scale up solutions. Businesses should not wait for the treaty. They can act right now through existing coalitions such as the New Plastics Economy Global Commitment – under which 1,000-plus countries and institutions have reduced their annual consumption of virgin plastics by three million tonnes – or new coalitions for other high-impact sectors such as fisheries or textiles.

Ending plastic pollution is a no-regrets pathway. If we solve this problem, we will protect nature, human health and the climate, all while creating a more prosperous economy and fair jobs. This is what the plastics agreement can help to achieve, if we deliver a strong push across the finishing line and get going on creating new markets, now.