The Price of Plastic Pollution: Social Costs and Corporate Liabilities

The cost to society from plastic pollution exceeds $100bn per year, according to new research which sheds fresh light on the growing global plastics crisis. The harm to human health is just as damaging as plastic pollution’s more widely-recognized impact on the environment, the research shows.

A detailed study by the Minderoo Foundation and undertaken in conjunction with Praedicat, and legal firm Clyde & Co,  shows the range of harmful impacts of plastic could trigger potentially colossal liability claims, primarily against the petrochemical industry. Legal action is expected to center in the US, where the study forecasts corporate liabilities from plastics litigation triggered in 2022-30 could exceed US$20 billion. Future claims, beyond 2030, could be an order of magnitude larger. The research is supported by the United Nations Environment Programme’s Finance Initiative.

• The study finds that manufacturers of chemical additives used in plastics, many of which have well-established links with harm to human health, are the most exposed to litigation risk.
• Also exposed are manufacturers of plastic polymers, whose products ultimately degrade into micro and nanoplastic particles which persist in the environment for decades, entering the human food chain. They are rapidly emerging as major public health and environmental threats.
• These companies have been protected against financial consequences by the complexity of attributing pollution back to its source, but legal systems are evolving, and plastic pollution liabilities are expected to follow.
• The plastics industry, shareholders, insurers and regulators need to work urgently to disclose the scale of exposures and liabilities to date, to prevent further damage and set aside the resources necessary to deal with the consequences.

Just as oil and gas companies are now being held accountable for climate change, and chemicals companies for damaging the environment and human health (PFAS, glyphosates), a new wave of litigation is expected to emerge around plastics.

Bob Reville, CEO of Praedicat said: “The plastics issue is something that we’ve been referring to as the next climate. It’s something that is a very widespread environmental risk that has, in fact, more potential for insurance losses because of the way in which it’s driving direct bodily injury.”

The study’s conclusions offer a previously unheard-of chance for policymakers to address the risk and societal costs associated with plastic pollution, and they should be taken as a warning to the plastics sector that ignoring the problem at hand is no longer an option.

Read the full report here.

Webinar

Liability Risks from Plastic Pollution – Implications for the Insurance industry 

Want to hear from the experts themselves? Watch the recorded webinar with Praedicat’s Dr. Adam Grossman from October 19th, where he discussed the threat of plastic pollution with an esteemed panel of experts including Neil Beresford, Head of Global Product Liability and Recall practice, Clyde & Co, Claudia Donzelmann, Global Head of Regulatory and Public Affairs, Allianz and Andreas Merkl, Senior Advisor, Minderoo Foundation.

Building off of the findings of the report “The Price of Plastic Pollution: Social Costs and Corporate Liabilities”, the panel discussed the key themes of the research, including, the different forms of plastic pollution, the scientific consensus on the environmental, human health, and economic harms associated with plastic pollution, the viable legal pathways for plastics litigation, how to quantify plastic risks to corporates and their insurers, what kinds of mass tort litigations are likely to occur and much more.

This is not a webinar you want to miss.

Click here to watch the recording.