RepRisk, a leading data science firm specialized in combining machine learning with human intelligence to identify and assess ESG risks, today released its latest Special Report on the plastics industry. Using the RepRisk ESG Risk Platform, the world’s largest due diligence database on ESG and business conduct risks, RepRisk ranked the 10 companies and infrastructure projects that had the highest number of plastics-related ESG risk incidents across both developed markets and emerging markets.
The full report can be found here.
With the frequency of plastic-related ESG incidents accelerating, investment management firms, institutional investors, banks, and insurance companies are all paying close attention to how much exposure they have to plastics in their portfolios. The rankings and accompanying analysis therefore provide an effective tool for due diligence and portfolio monitoring of ESG risks.
A study by researchers at the University of Oxford found that annual production of plastic has increased nearly 200-fold since 1950, and experts estimate that around 7.8 billion metric tons of plastic were produced globally in 2015, more than one metric ton of plastic for each inhabitant of the planet.
“Given the growing pressure from both governments and consumers to dramatically reduce plastic use, there is a real threat that plastic could become increasingly obsolete and potentially even a big liability,” said Dr. Philipp Aeby, CEO of RepRisk and a trained climatologist with a PhD in Environmental Physics. “Companies and investors that are heavily exposed to the plastics industry have an obligation to understand the full extent of this challenge and to take steps to reduce material risks in their investments, operations, and business decisions.”
The Special Report also includes an in-depth analysis of the numerous facets of the plastics industry, including: extraction of fossil fuels and production of plastics, consumption of plastics, harmful chemicals in plastics, disposal of plastic waste, conversion into fuel, and ocean waste.
For a “top three” preview of the rankings, the companies and infrastructure projects across different subsegments that had the highest number of plastics-related risk incidents include:
- Companies (developed markets): Nestlé, Coca-Cola, Unilever Group
- Companies (emerging markets): Formosa Plastics Corp, Liwayway Marketing Corp, Universal Robina Corp
- Projects (developed markets): Formosa Point Comfort Plant, Cinquemetri Canal, Petroineos Grangemouth Refinery
- Projects (emerging markets): MSC Zoe, MV Ivy, Bogor Plastic Processing Facility
The rankings were calculated by looking at the frequency and severity of plastics-related ESG incidents over the last two years, as identified by the RepRisk ESG Risk Platform. This database relies exclusively on publicly available information to assess whether a company’s policies and processes are translating into actual performance on the ground. RepRisk combines artiﬁcial intelligence and advanced machine learning with human analysis in 20 languages to translate big data into curated and actionable research and metrics, using a proprietary, rules-based methodology.
On a daily basis, RepRisk screens over 90,000 media, stakeholder, and third-party sources including print and online media, NGOs, government bodies, regulators, think tanks, newsletters, social media, and other online sources at the international, national and local level. RepRisk’s methodology is issues-driven, rather than company-driven (i.e., RepRisk’s daily screening is driven by RepRisk’s research scope), allowing it to cover any company, public and private, and infrastructure project exposed to ESG risks. The scope is comprised of 28 ESG Issues, which were selected and deﬁned in accordance with the key international standards, and 58 Topic Tags or ESG “hot topics” that are speciﬁc and thematic.
Founded in 1998 and headquartered in Switzerland, RepRisk is a pioneer in ESG data science that leverages AI technology and human intelligence to systematically analyze public information and identify material ESG risks. RepRisk’s flagship product, the RepRisk ESG Risk Platform, is the world’s largest and most comprehensive due diligence database on ESG and business conduct risks, with expertise in 20 languages and coverage of 130,000+ public and private companies and 30,000+ infrastructure projects. For more than a decade, the world’s leading financial institutions and corporations have trusted RepRisk for due diligence and risk management across their operations, business relationships, and investments. Learn more at www.reprisk.com.