As consumers, investors and regulators pressure the private sector to limit their environmental footprint — business leaders have turned to “credits” as a financial instrument to offset their footprint.
Many of us are familiar with the concept of carbon credits, a nearly billion-dollar market. Carbon credits represent 1 metric ton of carbon dioxide avoided or removed from the atmosphere. As companies strive to internally reduce carbon emissions, they often purchase credits to offset their residual carbon balance.
Plastic credits are ideologically similar to carbon credits; however, they exist in a much newer market.
What is a Plastic Credit?
A plastic credit represents 1 metric ton of plastic waste collected and/or recycled from the environment.
Each plastic credit is created through a project that collects or recycles plastic waste that is neglected by current waste management systems.
Plastic credits can serve as an excellent vehicle to direct funding into economies that desperately require waste management interventions. Additionally, this new form of finance can create various social and environmental benefits throughout the value chain.
However, there are right and wrong ways to include them in your company’s sustainability strategy.
How to Avoid Greenwashing
As with any corporate sustainability initiative, incorrect implementations are increasingly associated with greenwashing accusations.
To properly integrate plastic credits into your sustainability strategy, purchasing credits should be secondary to operational and value chain improvements. First, your company should prioritize internal footprint reductions and optimizations while seeking to avoid waste and mitigate greenhouse gas emissions.
When properly implemented, plastic credits can bolster existing sustainability strategies while financing crucial waste management advancements and interventions.
However, purchasing plastic credits to simply publish a baseless marketing claim, such as eco friendly, enforces a pay to pollute mentality. We can’t purchase our way out of the climate and plastic crisis; every company must commit to concrete action.
By communicating active footprint reductions and impact investments, rather than hollow marketing claims, companies can truly begin to connect with their customers, wow their stakeholders and minimize the risk of impending legislation.
How to Get Plastic Credits Right
Historically examining the carbon market, carbon credits were quickly followed by carbon accounting. This process helps companies transparently account for their emissions, introduce reduction efforts and invest in carbon removal and avoidance projects. Carbon accounting platforms ensure companies get carbon credits right.
Plastic credits are following a similar trend with the emergence of plastic accounting. Plastic accounting is the process that helps your company understand the environmental, social, and financial impact of its plastic use to identify opportunities for improvement.
By measuring and analyzing your company’s plastic footprint, you can decipher the best corporate action and capital deployment strategies. After all, your company cannot manage what isn’t measured.
Through plastic accounting, climate leaders can design and implement a bulletproof strategy that maximizes the impact of their internal footprint reduction efforts and optimizes the implementation of plastic credit purchases.