Erick Hernández Gallego, Greenberg Traurig, Shareholder- Environmental, ESG and Energy & Natural Resources Practice, VP of the Environmental and Natural Resources Commission-ICC México. Co-Chair Global Circular Economy Group – ICC
Paula De Uriarte, Greenberg Traurig, Associate- Environmental, ESG and Energy & Natural Resources Practice
“One of the biggest and most current environmental problems worldwide is plastic pollution”
A value chain can be understood as a business model that describes the set of activities and procedures carried out by a company, from the manufacture of a product to its delivery to the consumer. In relation to the preceding, a value chain is global when the company’s production process is carried out in different countries around the world.
Although cross-border production is not new, it has recently expanded in many industries, which relocate their operations for competitive reasons. It has become common practice, for example, to relocate labor-intensive production stages to developing countries. This is because these countries have a high supply of labor at lower costs. On the other hand, production for export implies a series of benefits not only for the companies, but also for the exporting country, such as job creation and economic growth through the generation of tax revenues.
Despite the benefits, the implementation of value chains, whether local or global, entails a series of negative impacts, including possible damage to the environment. The most significant negative environmental impacts include: (i) consumption of water and other natural resources during the production process; (ii) generation of greenhouse gas emissions associated with the production process and transportation of goods; (iii) waste generation, including plastics; and (iv) implementation of practices that pollute and degrade natural resources, compromising biodiversity.
When a value chain is global, some of the negative impacts listed above may be aggravated. For instance, the cross-border transportation of goods can lead to increased greenhouse gas emissions, as well as a greater use of resources in the generation of packaging, which in turn leads to an increase in the generation of plastic waste, posing an ever-increasing risk to biodiversity and human health.
One of the biggest and most current environmental problems worldwide is plastic pollution. This material can travel long distances and be transported from industrial areas, where most waste is generated, to the oceans, through the wind, rainwater, drains and by direct action of people, thus affecting habitats, reducing the ability of ecosystems to adapt to climate change.
The Plastic Pollution Report, published on October 21, 2021, by the United Nation´s Environment Program, highlights that plastic pollution in aquatic ecosystems has grown considerably in recent years and is expected to double by 2030. It also points out that plastic represents 85% of the waste that reaches the oceans and warns that by 2040, the volumes of plastic in the seas will triple, reaching 37 million tons per year. Further, the article “Impact of plastic pollution on Mexico’s biodiversity and biocultural heritage“, prepared by the Heinrich Boll Stiftung Foundation, points out that microplastics affect more than 700 species, as well as reef areas and other ecosystems.
In addition to the above, several studies have shown that plastics can also produce direct risks to human health through exposure to endocrine disruptors, which can result in alterations in the reproductive system and immune response. This is because the disruptors have an effect similar to that of certain hormones.
This highlights the urgent need for both individuals and companies to adopt more sustainable practices. As far as the business sector is concerned, there are several ways to transition to a sustainable value chain, whether local or global. In order to reduce plastic pollution, companies must recycle plastic waste generated from their production processes into a new product, eliminate the use of single-use plastics, set plastic reduction targets, and invest in the development of alternative materials to plastic, such as bioplastics. In addition, companies should consider climate change in their operational and investment decisions, eliminate the use of substances that are highly toxic to the environment, limit the use of natural resources, take actions to reduce carbon emissions, properly manage their waste and adopt environmentally friendly technologies.