n 2004, the World Bank and United Nations Global Compact published a report entitled Who Cares Wins, which is now known as the origin of ESG, a framework that focuses on environmental, social and governance considerations in financial markets. Since then, ESG has become a key component of corporate strategy, influencing all economic sectors and industries globally.

A: There have been some significant developments in recycling technology that look to have great promise to reduce plastic waste and provide clean feedstock for new recycled products that preform like virgin inputs.

For example, just a few years ago the Association of Plastic Recyclers (APR) found that, due to the plunge in oil prices, virgin plastics were being fraudulently sold as postconsumer recycled (PCR) material. What this shows us is that PCR not only holds more market value than virgin materials, but it also more effectively meets increasing demand for ESG-centered products and materials.

In fact, the APR’s PCR Certification Program directly responds to this market shift by creating a standard to verify recycled content. That certification program adheres to a clear, consistent definition of PCR and ensures that PCR receives the value it deserves on the market. This helps maintain both mechanical and chemical recyclers’ product value and re-focuses the conversation on the benefits of choosing materials made with recycled content.

So, the focused answer to this question is that plastic manufacturers should consider how they can best improve their environmental impact, which is one of the most pressing concerns this industry has to address. And the best way to do that is by engaging with certified recycled content suppliers and monitoring the improvements in chemical/advanced recycling approaches that promise to eventually accept a wider range of post-consumer mixed plastic. Learning more about and then pursuing recycled content, biobased content and chemical/advanced recycling certifications means that plastic manufacturers can demonstrate a commitment to reducing environmental harm while maximizing the benefits of market shifts toward more transparent, effective and socially responsible products.

A: I’d say that there are four primary pathways that performance plastics companies could start exploring to enhance their environmental performance specifically. And those are 1) using life cycle assessment (LCA) to look for lower impact inputs to your products and providing clear impact information to buyers through Environmental Product Declarations (EPDs); 2) understanding and reducing your product’s carbon footprint; 3) looking for alternatives to the use of phthalate plasterers and phosphorus flame retardants (PFR) and their potentially negative impacts on the environment and society; and finally, 4) designing products to increase recyclability and minimize end of life impacts.

A: While there may not be specific regulations that mandate consideration of green house gas (GHG) emissions for all manufacturers, it’s important to understand that a B2B plastic manufacturer’s Scope 1 and 2 emissions are the Scope 3 emissions of major brands that have started setting emission reduction targets for their value chain. Likewise, these major brands might need to meet future regulatory reporting requirements in places like California and Europe. Because of this, major brands are increasingly requiring their suppliers to provide information related to GHG emissions. For instance, the most major retailers and the top pharmaceutical companies have not only asked suppliers to provide Scope 1, 2 and 3 emissions but are also expecting them to set science-based targets to reduce emissions significantly by 2030.

This is a hugely critical component of the E in ESG for plastic manufacturers because it illustrates the supply chain as a series of really important “cares” — as in, plastic manufacturers must care about emissions because their buyers care because their customers and regulators care.

Simultaneous to emissions reporting requirements, major companies such as Walmart, Amazon, Target and Costco are beginning to recognize and favor products with environmental attributes. At Costco, for example, paper products must be certified to one of the three main sustainable forestry standards: FSC, SFI or PEFC — and Costco also recommends that all packaging materials be recyclable, certified compostable or biodegradable. This shift reflects broader market expectations, including labels, certifications, consumer intelligence and growing demand for sustainable products and practices.

Applicable certifications for the performance plastics industry include ISCC (International Sustainability and Carbon Certification), recycled content certifications and most recently, the SCS-115 Standard, which is a cradle-to-gate product carbon intensity standard that is applicable to chemical recycling. Certification to SCS-115, which is called “Product Carbon Intensity and Reduction for Chemicals and Co-products,” is intended for all members of the supply chain that produce or process gaseous, liquid and solid chemicals, polymers or plastics and the products made from them and who wish to make a claim about the carbon intensity of their product. This carbon intensity can then be passed down the supply chain, ultimately leading to plastic products with a reduced carbon intensity.

Even without direct regulatory obligations, maintaining awareness and reporting on GHG emissions can support business continuity and alignment with market developments. On a fundamental level, performance plastic industry leaders who are engaging with these frameworks and striving to make their buyers’ lives easier are also improving business relationships and positioning themselves to thrive in a market that is rapidly adopting third-party certification and more transparent ESG reporting. In fact, it isn’t difficult to envision a future where manufacturers need to evidence their LCA and scope 1 and scope 2 emissions to continue doing business with certain buyers or brands — in fact, this is already happening.

A: Life Cycle Assessment (LCA) evaluates the environmental impacts of a product. This can be from raw material extraction to its end of life (cradle-to-grave) or from raw material extraction to the factory gate (cradle-to-gate). For plastic manufacturers, conducting an LCA can be crucial for understanding the total environmental footprint of their products, including raw material extraction, production, distribution, usage and disposal. This comprehensive analysis helps identify areas for improvement and opportunities to reduce the overall environmental impact.

By identifying the environmental impact at each stage of a product’s life, LCA helps manufacturers pinpoint areas where they can reduce waste, improve energy efficiency and minimize GHG emissions.

For performance plastics, this means adopting more responsible practices such as using recycled materials, enhancing product design for longevity,and optimizing manufacturing processes to reduce resource consumption. Often these improvements also lead to cost savings. Additionally, LCA provides the data needed to meet regulatory requirements and consumer demands for transparency, ultimately contributing to the broader ESG goals of reducing environmental impact and promoting sustainable development within the industry.

A: Product carbon footprint is a tool for measuring the total GHG emissions associated with an individual product throughout its life cycle, from raw material extraction to disposal. So, yes, product carbon footprint does relate to LCA in the sense that LCA is an approach to measuring, quantifying and documenting a specific product’s environmental impacts where the carbon intensity (footprint) is one of the impacts.

By conducting a product carbon footprint analysis, plastic manufacturers can identify opportunities to reduce their environmental footprint, such as using recycled materials and optimizing production processes. This not only helps in complying with regulations, but it also provides important data to downstream customers and positions companies as leaders in environmental stewardship, ultimately benefiting their reputation and aligning with market shifts toward more responsible products.

A: Understanding and managing GHG emissions can be a great entry point for plastic manufacturers aiming to improve their ESG performance. Zooming out to a 30,000-foot level for a moment we can see that ESG considerations are, ultimately, ethically grounded in prioritizing ecological, social and governance concerns facing everyone on the planet. So, the point of prioritizing ESG considerations within the plastic manufacturing industry has a lot to do with measuring and accounting for the major driver of climate change — GHG emissions — which come from the extraction and use of fossil fuels, such as petroleum. So, for the plastic industry, whose primary input is petroleum, understanding, quantifying and reducing these emissions is really important — especially if plastic manufacturers would like to reduce their environmental impacts and mitigate the financial risks of future regulations.

On a basic level, GHG emissions are categorized into three scopes, which you alluded to in your question:

• Scope 1: Direct emissions from owned or controlled assets, such as emissions from the owned manufacturing plants or transportation using company trucks.
• Scope 2: Indirect emissions from the generation of purchased electricity consumed by the manufacturing operations.
• Scope 3: All other indirect emissions that occur in the value chain of the company, including both upstream and downstream emissions, such as those associated with purchased goods and services, third party logistics and end of life — to name just three of the 15 categories of these types of emissions. Scope 3 emissions make up 75% on average of the total emissions.

As a part of the supply chain, plastic manufacturers may be required to provide this information to comply with their buyers’ regulatory requirements.

A: Setting science-based targets (SBTs) involves aligning GHG reduction goals with the latest climate science to ensure that Earth’s average temperature does not increase by more than 1.5°C above pre-industrial levels. So, all science-based targets function in support of this larger goal.

For plastic manufacturers, adopting SBTs demonstrates a commitment to evidence-based decision-making and continuous improvement to reach the stated reduction goals. Setting SBTs and communicating progress can enhance their reputation as leaders in the industry. Meeting these targets not only helps mitigate climate change but also positions companies favorably in the eyes of consumers and investors who prioritize verifiable and transparent climate action.

A: In terms of the regulatory landscape, performance plastics industry leaders will want to consider deeper ESG factors such as carbon intensity, for example, and then decide the possible impacts to their business if regulatory sights are set on such factors. There are also extended producer responsibility (EPR) laws that are mostly targeted at plastic packaging at present but could be extended to other products in the future.

In one scenario, inputs — whether biobased, circular or virgin — could be taxed based on their carbon intensity, meaning buyers would voluntarily seek products with lower carbon intensity, presumably biobased or circular materials. Products with lower price points in general are always going to be in demand, so then the manufacturers must balance the costs of certain materials compared to their carbon intensity.

Environmental performance standards — and by extension, certain certifications — are also starting to focus on product carbon intensity, which is another way of describing a product’s GHG emissions. And while specific certifications may not be named or required under certain regulations, some certifications will be designed to improve environmental performance and so can help support companies looking to comply with major pieces of legislation and reduce risks of future regulation. In some cases, regulations explicitly list certification schemes that can be used to evidence compliance with legislation. I suspect we will see that for Extended Producer Liability regulations we are seeing in several states in the U.S.

Another approach for improving environmental performance is the use of biobased content in the plastic industry. Biobased content includes polymers that are synthesized from bio feedstocks — not petroleum. SCS Standards has developed the SCS Certification Standard for Biobased Content (SCS-114), which can be leveraged as another way to reduce reliance on and the use of fossil fuels.

SCS-114 is intended to ensure traceability of the biobased content from eligible sources, from initial processing into certified, value-added products and materials through the chain of custody. Only biomass raw materials — as in, materials derived from living matter such as wood, leather, paper, agricultural crops — that are third-party certified against an approved certification scheme are eligible under this Standard. And in that way this standard fills a gap in the biomass certification arena, allowing an organization sourcing its biomass from a number of third-party certified producers to undergo a single chain of custody audit that results in a truthful and accurate claim — rather than requiring an organization to undergo multiple chain of custody audits that result in different, piecemeal claims.

This audit-to-certification approach could be really beneficial to plastic manufacturers looking to make life easier for their buyers, so to speak. If buyers are facing serious pressure to comply with certain regulatory requirements, the plastic manufacturers that can tick those boxes without breaking a sweat could have a serious advantage.

And, as we’ve already seen, products with greater recycled and biobased content have more market value than virgin materials. Reusing waste, increasing recycled content and leveraging biobased content are effective means to engage the ‘E’ in a voluntary ESG framework while also demonstrating verifiable, auditable commitments to improving environmental performance that could meet serious regulatory requirements.

A: Even though we did not talk much about the ‘S,’ or social component, of ESG frameworks today, it’s worth mentioning that plastic manufacturers have a massive opportunity to engage in social issues surrounding waste collection, community engagement and better understanding the cumulative impacts of the industry. I just wanted to mention that these issues will always be in need of improvement and better solutions.

That said, the main message I hope to share is that plastic manufacturers that voluntarily elect to align with ESG frameworks or implement their own ESG programs, specifically focusing on their environmental impact — conducting life cycle assessments, understanding and reporting on GHG emissions across all scopes, replacing more toxic plasticizers and fire retardants and setting science-based targets — can achieve two really important things.

One, they can stay ahead of emerging market developments and two, they can position themselves as responsible and forward-thinking companies. This means companies will be engaging with these tougher ethical questions about what kind of world they want to help build and how they want their company to be perceived and to perform in this future world. Taking a proactive approach — getting started now — can lead to significant business benefits, including improved marketability, customer loyalty, reduced financial risk and long-term sustainability.