Ending plastic pollution requires systemic changes for which shifts in the financial sector are necessary. On the other hand, global binding and non-binding rules on plastic pollution are needed to enable the financial sector to support activities that contribute to a just and safe plastics circular economy. This page is part of our Plastics and the Environment series, a set of online resources on the plastics crisis, its impact on people and the environment, and international cooperation to address this global problem. They include resources and news from organizations in Geneva and beyond, including UN-system organizations and other IOs, governmental authorities, civil society organizations, academic institutions and journals, and renowned newspapers.

Plastics and Finance

Plastics have an important economic cost from production to end of life, although estimates that include the costs of natural resource depletion, GHG emissions, health costs and waste management are often absent (European Investment Bank, 2023).

To enact the systemic changes required to end global plastic pollution, financial flows must be redirected away from the linear production of virgin plastics towards the financing of circular systems that allow eliminating the use of unnecessary or problematic plastics and hazardous chemicals in favor of environmentally and chemically safe plastic materials and products (UNEP FI, 2023). The financial sector is a key enabler of a circular economy for plastics: by making better design, reusing and recycling more financially competitive, virgin plastics production levels can be abated.

On the other hand, under business-as-usual scenarios, expected increasing trends of plastic pollution and its consequent management will pose significant costs to businesses, communities, and ecosystems, with projections of plastic pollution to amount to well over 250 million metric tons annually by 2040. In spite of this, directing financial flows to activities that contribute to plastic pollution is currently often less risky than financing activities that contribute to a just and safe plastics circular economy (UNEP FI, 2023). For these reasons, a global structure to unlock finance and decrease risks associated with initiatives to combat plastic pollution is necessary.

According to a recent report authored by the European Investment Bank, recommended financial measures to address the problem of plastic waste pollution both within and outside the European Union include:

  • Large investment programme loans for plastic producers and brand owners in the private sector aimed at improving the circularity and sustainability of these materials.
  • Framework loans for public sector municipalities or local authorities specifically targeted at scaling up plastic sorting and recycling capacity.
  • Investments in innovation in sorting and recycling technology developed by Small and Medium Enterprises (SMEs).
  • Sovereign loans for integrated waste management projects.

Global Treaty on Plastics and Financing Mechanisms

A historical turn was reached at the fifth UN Environment Assembly (UNEA-5.2) in February 2022 as countries agreed to establish an International Negotiating Committee (INC), to develop an international legally binding instrument on plastic pollution by the end of 2024 (UNEP/PP/OEWG/1/INF/1). The future international legally binding instrument (ILBI) has the potential to become the structure allowing private finance institutions (e.g., banks, asset managers, investors, and insurance companies) to redirect their financial flows towards solutions that accelerate the end of plastic pollution.
The negotiations for the instrument gathered interest and commitment from a broad variety of stakeholders, including the business sector. Businesses call for the treaty to establish policies that create a level playing field and for capital markets and businesses to be aligned.

To facilitate the identification of funding streams, the INC Secretariat prepared ahead of INC-1 and adapted ahead of INC-4 the document « Overview of existing funding currently available for addressing plastic pollution through international funding arrangements » (UNEP/PP/INC.4/INF/2). The assessment of multilateral, bilateral, private and private not-for-profit and hybrid actions, including blended finance, relevant to funding arrangements for addressing plastic pollution and of funding arrangements adopted by other Multilateral Environmental Agreements (MEAs) will be instrumental for the development of financing arrangements under the future instrument for plastic pollution.

Ad-hoc intersessional open-ended expert group on finance

At the end of INC-4, held in Ottawa in April 2024, an ad-hoc intersessional open-ended expert group was established to develop an analysis of potential sources and means that could be mobilized for implementation of the objectives of the instrument including options for the establishment of a financial mechanism, alignment of financial flows, and catalyzing finance. The expert group is co-chaired by Kate Lynch of Australia and Oliver Boachie of Ghana.

Meetings of the Expert Groups

  • The in-person expert groups meeting took place at the United Nations Conference Centre (UNCC), Bangkok, Thailand from 24 to 28 August 2024.
  • The in-person meeting was complemented by three virtual meetings per expert group. Expert Group 1 met on 16 July, 1 and 15 August 2024.

Geneva Environment Network Briefing on Resource Mobilization and Financing for the Plastics Treaty

On 7 February 2024, The Forum on Trade, Environment and the SDGs (TESS) organized with the support of the Geneva Environment Network a Geneva Beat Plastic Pollution Dialogue that painted a holistic picture of all aspects of financing that are relevant to generating the systems change and just transitions required to end plastic pollution.

Key takeaways from experts inputs include:

  • Financing needs and resource mobilization will require a combination of public and private means.
  • Costs and resource implications will vary between developed and developing countries. 
  • Funding will be necessary for:
    • Enabling activities in developing countries that allow implementation and compliance.
    • Clearing house functions like capacity building and training of focal points and industrial actors; education and awareness raising; information exchange and regional cooperation coordination.
    • Agreed incremental costs – these are additional expenses related to compliance. Their definition is linked to the obligations that will be agreed in the treaty.
    • Concessional finance for specific projects across the value chain.
  • The future plastics instrument could send a strong signal to member states and finance actors on the imperative to mobilize and re-orient financial resources. This can be done through an objective to align financial flows from all sources, public and private, with the treaty’s objective and targets. This would build on what has been done in Article 2.1c of the Paris Agreement and in goal D of the Kunming-Montreal Global Biodiversity Framework. If the same model is not followed in the plastics instrument, it would signal that plastic is a lower priority than climate and biodiversity.
  • The future plastics instruments must create a mandatory framework and environment that will enable the redirecting of financial flows. UNEP-FI and the Minderoo Foundation devoted a paper to the meaning of aligning and redirecting financial flows. It affirms that to end plastic pollution, financial flows from all sources will not only need to be mobilized but also need to be massively redirected. They will need to be reduced in certain areas of the plastics value chain like virgin production and increased in substitute production, new delivery models, collection and recycling. It will be important to set clear targets along the plastics value chain. Finance actors need to know where to increase or decrease their investments and financing along the value chain.
  • Mobilizing Resources for Ambitious and Just Transition and Transformation could benefit from the creation of new Global Funds, especially a trade and environment fund as UNCTAD has advocated for a long time.

Options for resource mobilization and financing the treaty as presented during the briefing include:

Polluter Pay Principle

Extended Producer Responsibility (EPR) is one of the mechanisms that can support the treaty implementation and a fee based on EPR is an important piece of the puzzle of financing the necessary system change.

Fee on Primary Plastic Production

fee on primary plastic production, as envisaged by the Minderoo Foundation, can be a critical complement to the other sources of funding both public and private. It could support developing countries in covering and meeting the significant and unique costs of treaty and implementation that can end plastic pollution.

Markets and Non-Markets Mechanisms

Markets are a major source of finance. They are extremely efficient at inventing and producing new forms of plastics. The global trade in plastic is currently worth over a trillion dollars per year. As it is currently impossible to establish the monetary value for the whole global production of plastic, it is mandatory to have proper disclosure to get a handle on how big the value of this sector really is. On the other hand, non-market mechanisms represent important levers to achieve desired outcomes from plastic pollution and development perspectives. A starting point for action is the common but differentiated treatment while keeping in mind that a wide range of potential sources of revenue that can be harnessed and redirected to ending plastic pollution are available.

Plastics Credits

WWF defines plastic credits as a transferable unit that represents a specific quantity of plastic waste”. This form of plastic offsetting permits the collection of a specific amount of plastic somewhere in the world to be converted into a credit, which is then purchased by companies or individuals to offset their plastic use. According to WWF, a strong and credible plastic crediting system can help finance organizations that address global plastic pollution, providing environmental and social benefits. While plastic crediting activities may serve as an additional approach to robust plastic waste reduction strategies, these should be based upon strong and credible standards and backed by strong social and environmental safeguards (WWF, 2021).

This system claiming to grant plastic neutrality bears the risks of substituting important reduction strategies, of reducing the responsibility on authorities to establish effective Extended Producer Responsibility (EPR) or municipal waste management systems. WWF also stresses the importance of matching both the types/form of plastics beng offset and the offsetting locations.

A recent analysis of existing plastic credit programs conducted by BreakFreeFomPlasitcs and the Global Alliance on Incinerator Alternatives (GAIA), found that some of these provide credits not solely for recycling, but also for plastics burning in cement kilns to produce an alternative source of energy, creating negative environmental and health impacts to surrounding communities.

Global Cooperation on Finance and Plastics

Finance Leadership Group on Plastics

The Finance Leadership Group on Plastics provides input and suggestions to the Intergovernmental Negotiation Committee (INC) on the desired outcomes for banks, insurers and investors. It will also build readiness in the finance sector to act on plastic pollution through awareness raising, capacity building, and target-setting support. Convened by UNEP FI and sponsored by the Minderoo Foundation, the group already comprises financial institutions such as Allianz, ING, ProCredit Group, and Woori Financial Group and will grow to around ten banks and insurers who will collaborate with the Principles for Responsible Investment (PRI), with the objective of mobilising a wider community of financial institutions in the medium-term on this agenda. The group will also receive strategic support from the World Economic Forum’s Global Plastic Action Partnership and ensure consistency through collaborating with other initiatives such as the Business Coalition for a Global Plastic Treaty led by Ellen MacArthur Foundation and the World Wildlife Fund (WWF).

Basel Convention Plastic Waste Partnership

The Basel Convention Plastic Waste Partnership (PWP) aims to mobilize business, government, academic and civil society resources, interests and expertise to improve and promote the environmentally sound management (ESM) of plastic waste at the global, regional and national levels and to prevent and minimize its generation. Among its working groups and projects, WG 2 on plastic waste collection, recycling and other recovery including financing and related markets is tasked with collecting information on best practices and lessons learned to set up and increase capacity for environmentally sound recycling plastic waste including on financing schemes, including conditions to enable such schemes, such as Extended Producer Responsibility (EPR), deposit return schemes, taxes, fees and other possible financial tools.

The Financing Coordination Group

The Financing Coordination Group (FCG) is an informal initiative, comprising The Circulate Initiative, UNEP FI, World Bank Group and the World Economic Forum, that brings together senior leaders and subject matter experts to inform key decision-makers in the process of the International Legally Binding Instrument (ILBI) on plastic pollution and other financial actors on financing considerations to address plastic pollution. As an informal core group of institutions that aim to join forces and synergize on financing, to facilitate knowledge exchange for key stakeholders for an effective Global Treaty on Plastic Pollution, key goals include:

  1. Advance alignment on taxonomy and approaches to financing as they relate to the treaty objectives and implementation.
  2. Create a ‘center of gravity’ for key financing-related conversations, knowledge and insights, related to the treaty process.
  3. Map and promote a holistic approach to mobilizing financing across sectors, financiers, instruments and regions.
  4. Ultimately support a financial architecture with sufficient domestic and international, public and private resources to support the objectives of the treaty.

The FCG has been hosting a series of webinars unpacking the links between finance and the plastics treaty:

Role of Geneva

Basel, Rotterdam and Stockholm Conventions (BRS)

Through its Basel Convention Plastic Waste Partnership (PWP), it acts to aims to mobilize business, government, academic and civil society resources, interests and expertise to improve and promote the environmentally sound management (ESM) of plastic waste at the global, regional and national levels and to prevent and minimize its generation. Among its working groups and projects, WG 2 on plastic waste collection, recycling and other recovery including financing and related markets is tasked with collecting information on best practices and lessons learned to set up and increase capacity for environmentally sound recycling plastic waste including on financing schemes, including conditions to enable such schemes, such as Extended Producer Responsibility (EPR), deposit return schemes, taxes, fees and other possible financial tools.

Center for International Environmental Law (CIEL)

The Center for International Environmental Law (CIEL) aims to promote human rights and ensure a just and sustainable society by using the power of law to ensure environmental protection. The organisation is engaged in actions to address the global plastics crisis. Its work on plastics focuses on advocacy for an international treaty on plastic pollution, support to communities who fight against local infrastructure for plastics, and research and publications exposing the impacts of the plastic lifecycle on health, climate and the planet.

Forum on Trade, Environment & the SDGs (TESS)

The Forum on Trade, Environment and Sustainable Development (TESS) is involved in trade policy action to implement the Sustainable Development Goals (SDGs). It seeks to strengthen the promotion and inclusion of international cooperation on trade policies that contribute to efforts to reduce plastic pollution, build waste management capacity in developing countries and promote plastic substitutes.

United Nations Environment Programme (UNEP)

UNEP’s work addresses plastic pollution in a multi-sector approach, taking into account the environmental, social, economic and health risks of plastics. UNEP is currently negotiating an Internationally Legally Binding Instrument for a Global Plastics Treaty and leads or co-leads various initiatives on plastics. Together with the Ellen MacArthur Foundation, The New Plastics Economy Global Commitment unites businesses, governments, and other organizations from around the world behind a common vision of a circular economy for plastic. The Global Partnership on Plastic Pollution and Marine Litter, to which UNEP serves as Secretariat, is a multi-stakeholder partnership that brings together all actors working to prevent marine litter and plastic pollution, among which sustainable and innovative financing is one of the tracks of action.

UNEP Finance Initiative (UNEP FI)

UNEP FI supports the Sustainable Blue Economy Finance Initiative, a global community convened by the UN that addresses the relationship between private finance and oceanic health, supporting the implementation of blue economy principles consistent with the SDGs and seeking to enable financial institutions to restore prosperity, biodiversity and the health of the oceans. UNEP FI, with the sponsorship of the Minderoo Foundation, co-leads the Finance Leadership Group on Plastics, a core group of banks and insurers with total assets of USD 9.7 trillion. Its members are working towards ending plastic pollution by supporting the development of the international legally binding instrument and building readiness across the global finance sector to respond to the future framework.

United Nations Trade & Development (UNCTAD)

The UN Trade & Development supports developing countries to access the benefits of a globalized economy more fairly and effectively by providing analysis, facilitating consensus-building, and offer technical assistance. UNCTAD monitors trade in plastics and plastics waste through its UNCTADstat plastics trade dataset, which enables detailed trade analysis over the life cycle of plastics.

World Bank Group Geneva Office

The World Bank is a key source of financial and technical assistance to developing countries worldwide. It supports countries in all regions in their efforts to address plastic pollution, at every stage of the plastic lifecycle, from stopping leakages to the environment to enabling a circular economy. For instance, the PROBLUE programme supports the sustainable blue economy, including by assessing the plastic value chains and promote investments in sustainable alternatives and solutions to plastic pollution.

World Business Council for Sustainable Development (WBCSD)

The World Business Council for Sustainable Development (WBCSD) a founding partner of the Alliance to End Plastic Waste. The initiative gathers companies that make, use, sell, process, collect and recycle plastics. This cross-value chain initiative provides a framework for companies dedicated to fighting plastic waste in the environment. WBCSD aims to offer a discussion platform to promote the engagement of the business community in the negotiations on the new plastics treaty.

World Economic Forum (WEF)

The World Economic Forum (WEF) hosts the Global Plastic Action Partnership (GPAP) which brings together governments, businesses and civil society to translate commitments into meaningful action at both the global and national levels to eradicate plastic pollutoin. The WEF also leads the Consumers Beyond Waste initiative, working with partners to scale up reuse models that will eliminate plastic waste.

World Wildlife Fund for Nature (WWF)

The World Wildlife Fund for Nature (WWF) is fighting for a world without plastic in nature by 2030, a world where oceans teem with marine life, not discarded nets, bottles and bags, a world where no humans breathe the toxic fumes of burning plastic and where every essential plastic product is recycled. WWF is leading the activation hub ReSource Plastic, which helps some of the world’s largest companies translate ambitious plastic commitments into measurable change. As part of its action during the negotiations of the Global Plastics Treaty, WWF provides resources and support for businesses who want to act towards its goal, including measures for financial support and alignment of public and private financial flows.

GEN Events

Links and Further Resources

More on the Plastics Crisis

Our special series “Plastics and the Environment” provides resources on the status of the global plastic pollution, its impact on people and the environment, and international cooperation to address the plastics crisis.