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Consumer-Products Companies Back Paper-Bottle Startups
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Welcome back. This week we look at two packaging startups that want to make bottles out of paper. Each is working with a different group of consumer-goods giants, which all say they are keen to use the technology to help meet their commitments to use less virgin plastic.
Copenhagen-based Paboco, one of the startups, says its aim isn’t to replace plastic completely but to help reduce the billions of tons of plastic accumulating in landfills. Consumers can get confused with packaging made from different kinds of plastic, but tend to know which bin paper goes in, the company says.
But the technology is some way from large-scale commercial readiness. While engineers refine paper-based packaging and other materials that could eventually become widespread, plastic waste continues to pile up. Jonghun Park, an assistant professor at Ryerson University who focuses on packaging systems and design research, says getting better at disposing of plastic is the most pressing priority.
“Companies can develop new and innovative materials, but, before that, we have to manage the current plastic waste in a more effective way,” Dr. Park said. He said these efforts can include, for example, investing in local recycling programs and public education campaigns to help people who don’t know how to sort their trash.
This week: Carbon accounting; shareholder activism; Toyota's electric-vehicle investment plan.
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Design sketches for Paboco's bottle. PHOTO: PABOCO
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Replacing plastic with paper. Paper has an obvious drawback as a material for bottles: It gets soggy. Paboco, whose investors include Coca-Cola and L’Oréal, has made a bottle derived primarily from wood fiber, but the inside still has to be lined with plastic film. Replacing that film with a plant-based material so that the whole bottle can be recycled with paper is a big challenge facing the company's designers. Another startup, Pulpex, founded by spirits company Diageo with backing from Unilever and PepsiCo, is working with chemicals giant BASF to solve the problem. Paboco and Pulpex are moving toward commercialization, but so far they have only struck deals to sell the bottles in limited
volumes.
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In Focus: Sustainability Accounting
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Emissions data remains hard to verify. More companies are reporting their Scope 3 carbon dioxide emissions—greenhouse gases related to their products and services but outside their direct operational control. But reporting remains voluntary: There is no standard for calculating Scope 3 data and it often contains holes, such as suppliers who don’t measure their emissions. The pitfalls underscore the difficulties that could arise if regulators require climate data to be audited.
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7%
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The increase in Apple's reported carbon footprint resulting from its use of better data on the electricity used to manufacture components, the company said last year.
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IASB chief considers sustainability standards. Andreas Barckow, the new head of the International Accounting Standards Board, said sustainability is one of the most pressing issues on the agenda for the international standard-setting organization.
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The IASB's parent organization is planning a new agency, the International Sustainability Standards Board, and Mr. Barckow said he expects the two agencies to work closely together.
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“Now, you could say, ‘Let them take care of ESG and concentrate on your core stuff.’ But a message that we are also hearing very consistently from jurisdictions is you should not really separate the two domains, as they go hand in hand.”
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— Andreas Barckow, chairman of the International Accounting Standards Board
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✍️ Feedback on this newsletter? We would love to hear from you, so please get in touch.
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PHOTO: KYLE GRILLOT/BLOOMBERG NEWS
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Chevron girds for activist challenge. The ripples are still spreading from the proxy fight at ExxonMobil, where hedge fund Engine No. 1 secured three board seats with the aim of pushing the company to reduce its carbon emissions and invest in clean energy. Chevron executives recently met with representatives of Engine No. 1 and shared some of the company's emission-reduction plans, Christopher M. Matthews and Emily Glazer report, citing people familiar with the matter. Engine No. 1 is considering whether to target another oil major but didn't indicate that it would target Chevron, the people said. A Chevron spokesman said the company engages regularly with shareholders and has
contingency plans for activist campaigns.
European lenders in the crosshairs. Many of Europe's largest banks have set long-term targets for cutting the financing they provide for fossil fuels. ShareAction, a London-based nonprofit, wants them to do more to show they are serious about meeting them. It says 20 of the region's 25 top lenders have promised to stop financing carbon dioxide emissions by 2050, but only three—Lloyds, NatWest and Nordea—have set the intermediate target of halving financed emissions by 2030. And no European bank has committed to completely end lending for new fossil-fuel expansion, according to ShareAction.
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On Nov. 17 WSJ Pro will be hosting the first Sustainable Business Forum, looking at the critical issues facing business professionals as they incorporate sustainability into their strategy and operations. Discussion topics will include innovation, reporting, governance, green finance, supply chain and risk models. Register to attend here.
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Covid-19 Surge in Asia Threatens Manufacture of Ceramic Electronics Parts
A rise in Covid-19 cases in East Asia is challenging the production of multilayer ceramic capacitors: electronic components used in phones, videogame consoles and cars that provide storage capacity for electrical energy and are often called the “rice” of the electronics industry. This is affecting customers’ supply-chain management given that most MLCC facilities are located in the region. Major producers of the components closed facilities due to outbreaks, pointing to shortcomings in material sourcing and efficiency, a financially material category for several sectors such as semiconductors, hardware, telecommunication services, auto parts and automobiles, according to the Sustainability Accounting Standards Board. This category addresses the resilience of materials supply chains to external impacts on the operations of suppliers. The concentration of the largest MLCC
facilities in one region could expose clients to further operational disruptions if infection rates aren’t contained.
This is a sample of exclusive analysis of sustainability news from the Journal’s environment, social and governance (ESG) research analysts, whose work is primarily published by Dow Jones Newswires to help institutional investors and wealth managers integrate ESG factors into portfolio models, risk management programs and financial advice. The commentary by our research analysts is independent of the news coverage by reporters at the Journal. For more information about Dow Jones Newswires, click here.
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We would like to hear your tips, suggestions and feedback.
This newsletter was written by Ed Ballard.
Contact the WSJ ESG research team at ESGresearch@wsj.com
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