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Sustainable Investing

A World With Less Plastic Would Be Fantastic

Promising alternatives and innovative companies are leading the way.

By Aditi Pai

Key Takeaways

Plastic never decomposes and only a small fraction is recycled. That means the amount of plastic in oceans and landfills keeps increasing, and toxic chemicals keep leaching into our food and water.

So-called “bioplastics” made from natural sources aren’t the solution. Producing them releases harmful pollutants and recycling them requires highly controlled, energy-intensive processes.

The best approach is to use less plastic, especially single-use plastics. Innovators are leading the way in personal care products, building materials, and even luxury goods.

Over 50 years ago, plastics revolutionized modern materials science, with a dramatic impact on our world and the environment. “One word: Plastics” is the famous career advice in the 1967 film “The Graduate.”

Plastics are used to create strong, versatile, inexpensive products in every imaginable shape and have brought great convenience and innovation to our lives. Look around and you’ll see plastic everywhere — in the packaging used to protect food and other products, in our electronic gadgets, medical equipment, cars, furniture, toys and much more.

Even though plastics offer many advantages, they also cause serious environmental harm, especially the impact of plastic waste on oceans and other ecosystems. The sheer amount of plastic waste is mind-boggling, and some plastics contain toxic chemicals that can leach into food and water and cause serious health problems.

Plastic’s negative impacts on the environment and human health are motivating innovative companies to look for ways to reduce plastic waste and develop more environmentally friendly materials that preserve plastic’s key benefits.

In this article, we:

  • Highlight the magnitude of the problem that conventional plastics create.

  • Discuss some promising alternatives to plastic.

  • Show how companies are reducing plastic waste.

Plastics Are a Billion-Ton Problem (and Growing)

Roughly 8.3 billion metric tons (9.1 billion U.S. tons) of plastic have been produced since the material was introduced in the 1950s. That’s equivalent to the weight of 1 billion elephants. Many people diligently place their empty plastic bottles and packaging into recycling bins but estimates show that only 5% to 15% of plastic waste is recycled. The vast majority — hundreds of millions of metric tons each year — is dumped in landfills, incinerated or leaked into the environment.

Every year, millions of tons of plastic end up in the ocean where it breaks down into small pieces that never biodegrade.1 Hundreds of marine species ingest, suffocate or become entangled in plastic waste. Seabirds, whales, fish and turtles mistake plastic waste for prey, and when their stomachs are filled with plastic they die of starvation. Floating plastics transport invasive species, threatening marine biodiversity and the food web.2

Plastic is also a significant source of greenhouse gas (GHG) emissions. University of Hawaii research shows that when exposed to sunlight, low-density polyethylene releases methane, which is 80 times as potent as carbon dioxide, for two decades.3 Plastics were responsible for 1.8 billion metric tons of GHG emissions in 2019, according to the Organization for Economic Co-operation and Development.

If the current rate of growth and methods of production continues, the U.S. Environmental Protection Agency projects that emissions from plastic will exceed 2.5 billion metric tons by 2050. That’s equivalent to emissions from 557 million gasoline-powered cars over an entire year.

How Plastic Impacts Food and Health

Plastics also have a direct, negative impact on human health:

  • The average individual ingests roughly 5 grams of plastic per week, the equivalent of eating a credit card, according to the World Wildlife Fund.4

  • Microplastics have been found in tap water, beer and salt and in samples collected in all the world’s oceans, including the Arctic Ocean. Microplastics can carry pathogens, increasing the spread of diseases.

  • Making plastics can harm workers from exposure to chemicals.

  • Burning plastic creates noxious air pollution, and dumping plastic in landfills contaminates the soil.

  • Several chemicals used to produce plastic materials are known carcinogens and can interfere with the body’s endocrine system, causing developmental, reproductive, neurological and immune disorders in humans, at an estimated cost of $100 billion per year.5

Are There Any ‘Natural’ Alternatives to Traditional Plastics?

Despite these challenges, there has been some progress in shifting attitudes about the use and disposal of plastics. For example, the UN Environment Programme is working to create an internationally binding agreement focused on ending plastic pollution.

This will include a range of alternatives to address the full lifecycle of plastics, an emphasis on designing reusable and recyclable products and materials, and a call for enhanced international collaboration. It will be a historic milestone as it will be the first legally binding global agreement aimed at ending plastic pollution.

Bioplastics are biodegradable, or created from a renewable resource, or both, and have been positioned as an eco-friendly alternative to traditional plastic. There are two main types:

  • PLA, typically made from the sugars in corn starch, cassava or sugar cane.

  • PHA, made by microorganisms that produce plastic from organic materials.

Unfortunately, we don’t see bioplastics as a viable solution. Producing them creates more pollutants from fertilizers and pesticides used to grow crops used to make PLAs and from chemical processing needed to turn organic material into PHA. Bioplastics also contribute more to ozone depletion than traditional plastics and require extensive land use.6

Furthermore, although bioplastics are technically biodegradable, this only happens if the plastic is collected and composted in carefully controlled, high-temperature industrial composting facilities. There aren’t many of these, especially in developing countries where plastic pollution is the most problematic.

If bioplastics end up in landfills without enough oxygen to break them down, they can last for centuries and release methane, just like conventional plastics.7

How Are Companies Reducing Plastic Waste?

Innovative companies are developing new approaches to help address this enormous problem and meet the growing demand from consumers and businesses to reduce plastic waste. The following show how embedding sustainability into a business model can open up new sources of revenue:

  • Start-up company Notpla (“not plastic”) makes edible and biodegradable packaging from brown seaweed. Its Ooho plastic-free, edible water “balls” grabbed attention a few years ago, but the company is now focused on sustainable packaging that is more substantial. Notpla’s seaweed-coated take-out food packaging is biodegradable within four to six weeks.

  • Lush (with over 950 stores in 52 countries) sells personal care and beauty products in solid form, including hair and body care, fragrance and toothpaste without bottles or tubes to throw away. When the company can’t eliminate packaging completely, it uses recycled, recyclable, reusable or compostable materials only.

  • Apeel’s plant-derived coating for fruit and vegetables extends shelf-life without using plastic packaging. The coating (which is odorless and tasteless) slows spoilage and therefore reduces the amount of food wasted every year by retailers and consumers.

  • MycoWorks is extracting the vegetative tissues of mushrooms and solidifying them into plastic-free leather-like products that have received rave reviews from luxury-focused media, including Vogue and Harper’s Bazaar.

  • Ecovative Design’s MycoComposite replaces plastic packaging with a waste-free mushroom-(mycelium) based alternative that biodegrades to become soil.

Plastics have improved our lives in many ways, from increased convenience and product safety to reducing costs and supporting advancements in medicine and technology. However, the widespread use of and “throwaway” attitude toward single-use plastics has created significant environmental and health problems that can’t be ignored.

In our view, this calls for a multi-pronged approach to reduce or even eliminate single-use plastics by developing sustainable alternatives. It will also require investing in more effective waste management systems to stop plastics from ending up in the ocean. Companies that find ways to retain the benefits of plastics while reducing the immense, negative environmental and health impacts can appeal to consumers who care about creating a more sustainable future.

Case Study: Starbucks

Starbucks is taking steps to reduce its plastic “footprint” without degrading the customer experience. Its efforts could foster greater loyalty among its customers. These steps include:

  • Developing compostable and recyclable hot cups in collaboration with Closed Loop Partners and the NextGen Consortium.

  • Shifting away from single-use plastics and embracing the circular economy by participating in the Ellen MacArthur Foundation’s New Plastics Economy Global Commitment.

  • Eliminating plastic straws by rolling out straw-less cup lids made with 9% less plastic. Unlike traditional plastic straws, straw-less lids can be recycled in many markets in the U.S. and Canada.

Source: Starbucks Greener Cup Timeline, 3/11/2022.

Aditi Pai

Aditi Pai

Senior Sustainable Research Analyst

Explore More Insights

Read our latest Sustainable Investing articles.

Ellen MacArthur Foundation, “Plastics and the Circular Economy: Deep Dive,” accessed June 1, 2023.

International Union for Conservation of Nature (IUCN), “Marine Plastic Pollution,” Issues Brief, November 2021.

Leslie Kaufman, “The Climate Impact of Our Insatiable Plastic Addiction,” Bloomberg, December 30, 2022.

Reuters, “The 5-Gram Problem: How Reuters Depicted Human Consumption of Microplastics,” January 9, 2020.

Andreas Merki and Dom Charles, “The Price of Plastic Pollution: Social Costs and Corporate Liabilities,” Minderoo Foundation, 2022.

Renee Cho, “The Truth About Bioplastics,” Columbia Climate School, December 13, 2017.

Jim Robbins, “Why Bioplastics Will Not Solve the World’s Plastics Problem,” Yale Environment 360, Yale School of the Environment, August 31, 2020.

References to specific securities are for illustrative purposes only and are not intended as recommendations to purchase or sell securities. Opinions and estimates offered constitute our judgment and, along with other portfolio data, are subject to change without notice.

The opinions expressed are those of American Century Investments (or the portfolio manager) and are no guarantee of the future performance of any American Century Investments' portfolio. This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.