The Global Shift Toward Sustainability

The Global Shift Toward Sustainability

April 13, 2020

We are starting to learn, or relearn, that we need to do more with less. The days of globalization are behind us, and instead sustainability will be the key driver for business in the next few decades.


As a result, there will be no return to “business as usual” whenever the coronavirus pandemic finally ends. When that occurs, the chemicals industry will, as usual, be in the forefront of the paradigm shift.


Some argue that cheap oil will undermine the case for recycled plastics, but that is to misunderstand the nature and power of the shift now underway. After all, the Stone Age didn’t end because the world ran out of stones, and the Coal Age is similarly ending with coal still left in the ground. The same will be true of oil and gas as the world transitions to renewables.


The signs of the paradigm shift are all around us, most notably with the moves by brand owners to respond to consumer pressure and step up their use of recycled plastics. As a landmark study by the University of Georgia highlighted in 2018, the debate has evolved to focus on the question, “What happens to plastic after we have used it?” As the study shows:


  • The world has produced 8.3 billion metric tons of plastic over the past 60 years.

  • Almost all of it, 91%, has been thrown away, never to be used again.

  • That waste hasn’t simply disappeared, as plastic takes around 400 years to degrade.

  • Instead, the study finds, 79% is filling up landfills or littering the environment and “at some point, much of it ends up in the oceans, the final sink.


Nobody is claiming that this waste was created deliberately. Nobody is claiming that plastics aren’t incredibly useful — they are, and they have saved millions of lives via their use in food packaging and other critical applications. The problem is simply, what happens next?  As one of the study's authors warns, We weren’t aware of the implications for plastic ending up in our environment until it was already there. Now we have a situation where we have to come from behind to catch up.



Sustainability is Replacing Globalization as a Key Driver for the Economy


Today, another side to this debate is moving into the headlines: the simple question, “How do we stop putting more and more plastic into the environment?” Cleaning up the current mess is clearly critically important, but people are also starting to realize that we need to stop compounding the problem.


As always, there are a number of potential solutions available:


  • Recycling is the obvious next step, where communities replace waste sites with resource centers where plastic from the local community is recycled back into usable products for resale.

  • These resource centers will no doubt include 3D printing, which can dramatically reduce the volume of plastic needed to make a finished product. It operates on a very efficient “additive basis,” only using the volume needed and producing little waste.

  • Digitalization offers the opportunity to avoid the use of plastics. With music, for example, most people today listen via streaming services and no longer buy CDs made of plastic.

  • The “sharing economy” also reduces demand for plastic. New business models such as car-sharing, ride hailing and autonomous cars enable people to be mobile without needing to own a car.

The world is moving to adopt the principles of the circular economy, as the Ellen MacArthur Foundation notes: “Underpinned by a transition to renewable energy sources, the circular model builds economic, natural and social capital.”


Of course, change is always difficult because it creates winners and losers, which is why “business as usual” is such a popular strategy. It is therefore critically important that companies begin to prepare today to be among the winners in the world of the circular economy. As I have said before, there is no such thing as a mature industry, only mature firms, and industries inhabited by mature firms often present great opportunities for the innovative.


As the chart here shows, the winners in the field of plastics will be those companies and countries that focus on using their skills and expertise to develop service-based businesses. These will aim at providing sustainable solutions for people’s needs in the fields of mobility, packaging and other essential areas.


Learn how to adapt to these changing conditions. Register for the webinar “Navigating A Volatile Chemicals Market Through Digitalization.”

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