Season 3, Post 19: The toxic boomerang

“If we fail to take care of the ocean, then nothing else matters.” This was the dramatic sentence with which Kiril Solokoff, founder of 13D Research, began an online symposium (hosted in conjunction with JP Morgan) earlier this week, which were fortunate enough to attend. A cast of notable speakers participated in the event including renowned scientists and senior industry executives. That such a prestigious range of participants had gathered to discuss this topic speaks to its importance. Plastic pollution is something about which this author cares strongly and we have been following the topic since at least 2018.

First consider the grim statistics of which we were reminded when listening to the symposium. The equivalent of one dump truck of plastic waste finds its way into the ocean every single day of the year. On an annual basis, this quantity of waste is equivalent to around 90 aircraft carriers. More shockingly, less than 10% of all plastic that has ever been produced has been recycled. As a result, it is estimated that by 2025, there could be one ton of plastic for every three tons of fish in the ocean.

The consequences of such action is devastating. Plastic takes a long time to degrade (in some cases, as much as 10,000 years). As a result, microplastics – the small fragments of plastic that endure from its degradation – are consumed by fishes and hence by humankind. Scientists are now of the belief that the consumption of such microplastics can contribute to obesity, various cancers, neuro-generative diseases and infertility. By design, plastic is a toxin. Past and present actions that have led to the oceans filling with plastic will necessarily impact future generations, hence the “toxic boomerang,” an expression used by one of the symposium’s speakers, Dr Rolf Halden.

It’s not all bad news, since there are solutions at hand. Recycling efforts can be accelerated, but the key debate is less about changing consumer behaviour and more about altering industry choices. With the right (financial) incentives, plastic products could be redesigned so that they do not break down into microplastics. Further, alternatives to plastic (such as PHA, a naturally occurring biopolymer) could be developed, scaled and commercialised. Increased monitoring of water treatment plants would also ensure that quality standards were maintained. We were separately intrigued to read a recent article that suggested much plastic pollution originates in emerging markets (particularly the Philippines). Wealthier countries could therefore support low-to-middle income countries by helping to improve their waste management infrastructure. Let’s all try and avoid the boomerang.

12 May 2021

The above does not constitute investment advice and is the sole opinion of the author at the time of publication. The author of this piece has no personal direct investment in the business. Past performance is no guide to future performance and the value of investments and income from them can fall as well as rise.

Alex Gunz, Fund Manager