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The ESG Shell Game Behind The U.S. Plastics Pact

Published

2 months ago

6 minute read

 

From the Daily Caller News Foundation

By Jack McPherrin and H. Sterling Burnett

In recent years, corporate coalitions have increasingly taken center stage in environmental policymaking, often through public-private partnerships aligned with environmental, social, and governance (ESG) goals that promise systemic change.

One of the most prominent examples is the U.S. Plastics Pact (USPP). At first glance, the USPP may appear to some as a promising solution for reducing plastic pollution. But in practice, it has encouraged companies to make changes that are more cosmetic than environmental—and in some cases, actively counterproductive—while increasing their control over the market.

The USPP, launched in 2020, consists of more than 850 companies, non-profits, research institutions, government agencies, and other entities working together to create a new “circular economy for plastics.” Dozens of major retailers and consumer goods companies—including Coca-Cola, Danone, Kraft Heinz, Target, and Unilever—have signed on as “Activators,” pledging to eliminate certain plastics, shift to recyclable packaging, and increase the use of recycled plastics.

Yet, rather than curbing plastic production or reducing waste, the USPP has led many companies to simply transition from polystyrene to polyethylene terephthalate (PET). This shift has been encouraged by claims that PET is more widely recyclable, easier to sort, and better aligned with existing U.S. recycling infrastructure.

However, polystyrene is more moldable, is recyclable, and has insulation properties that PET doesn’t. In addition, PET is approximately 30 percent heavier than polystyrene, meaning more material is required for the same functional use. Moreover, PET requires more energy and is more expensive to produce than polystyrene. And PET’s denser packaging increases transportation-related greenhouse gas emissions and raises costs even more—though these higher costs don’t bother USPP participants, as they simply pass them on to consumers.

Only 5 to 6 percent of all plastics in the United States are recycled. Even for PET products, the overall recycling rate remains low. Just one-third of PET bottles are recycled, while the  recycling rate for many other PET products such as thermoforms is less than 10 percent. Most PET products end up in landfills.

This ineffective, costly, and counterproductive shift was not accidental. It reflects the broader incentives baked into ESG scoring systems that reward superficial compliance over substantive outcomes.

ESG frameworks reward companies financially and reputationally for achieving certain narrow targets such as reductions in single-use plastics or increases in the use of packaging that is technically recyclable. However, these metrics often fail to accurately assess total plastic use in a product’s lifecycle, associated emissions, and real-world recovery. A package that uses more plastic and energy—and therefore generates more emissions—may still earn high sustainability marks, so long as the plastic is recyclable in theory. This is a textbook example of greenwashing.

A closer look at the USPP reveals that some of the world’s top plastic users and producers—Coca-Cola, PepsiCo, and Nestlé—are among the Pact’s strongest backers. These corporations, which produce billions of PET containers per year, benefit substantially from signing onto agreements such as the USPP, adopting ESG standards, and pledging support for various green goals—even if they do not deliver any green results. In fact, a 2022 report found that a large majority of retail signatories to the USPP actually increased their consumption of virgin plastic from 2020 to 2021.

Many of these same companies fund the non-profit that organized the USPP: the Ellen MacArthur Foundation. This creates a feedback loop in which large companies shape sustainability standards to their own advantage, defining which materials are “acceptable,” reaping the rewards of ESG compliance, and marginalizing smaller firms that lack the resources to adapt.

For example, by promoting PET as the preferred packaging material, the USPP conveniently reinforces the existing supply chains of these multinational bottlers, while sidelining other materials such as polystyrene that may be more cost-efficient and suitable for specific applications. Smaller manufacturers, who can’t easily switch packaging or absorb the added costs, are effectively squeezed out of the marketplace.

The USPP has not built a circular economy. Rather, it has constructed a closed circle of corporate sponsors that gain reputational boosts and higher ESG scores on the backs of consumers, despite increasing energy and plastics use.

The USPP unites ESG financiers, government agencies, nonprofits, and the largest corporate polluters in a mutually beneficial arrangement. This system rewards compliance, deflects scrutiny, manipulates public trust, eliminates free-market competition, stifles innovation, and increases costs to consumers—all while creating more waste.

Policymakers and consumers alike must recognize that ESG-aligned coalitions such as the U.S. Plastics Pact are nothing more than corporate lobbying groups disguised as sustainability initiatives. They do not improve environmental quality, but they do profit immensely from the illusion of doing so.

Jack McPherrin ([email protected]) is a Research Fellow for the Glenn C. Haskins Emerging Issues Center and H. Sterling Burnett, Ph.D., ([email protected]) is the Director of the Arthur B. Robinson Center on Climate and Environmental Policy, both at The Heartland Institute, a non-partisan, non-profit research organization based in Arlington Heights, Illinois.

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Elon Musk slams Trump’s ‘Big Beautiful Bill,’ calls for new political party

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By Robert Jones

The Tesla CEO warned that Trump’s $5 trillion plan erases DOGE’s cost-cutting gains, while threatening to unseat lawmakers who vote for it.

Elon Musk has reignited his feud with President Donald Trump by denouncing his “Big Beautiful Bill” in a string of social media posts, warning that it would add $5 trillion to the national debt.

“I’m sorry, but I just can’t stand it anymore. This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination. Shame on those who voted for it: you know you did wrong. You know it,” Musk exclaimed in an X post last month.

Musk renewed his criticism Monday after weeks of public silence, shaming lawmakers who support it while vowing to unseat Republicans who vote for it.

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The Tesla and SpaceX CEO also threatened to publish images branding those lawmakers as “liars.”

 

Trump responded on Truth Social by accusing Musk of hypocrisy. “He may get more subsidy than any human being in history,” the president wrote. “Without subsidies, Elon would probably have to close up shop and head back home to South Africa… BIG MONEY TO BE SAVED!!!”

Musk responded by saying that even subsidies to his own companies should be cut.

Before and after the 2024 presidential election, Musk spoke out about government subsidies, including ones for electric vehicles, stating that Tesla would benefit if they were eliminated.

This latest exchange marks a new escalation in the long-running and often unpredictable relationship between the two figures. Musk contributed more than $250 million to Trump’s reelection campaign and was later appointed to lead the Department of Government Efficiency (DOGE), which oversaw the termination of more than 120,000 federal employees.

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In June, Musk deleted several inflammatory posts about the president, including one claiming that Trump was implicated in the Jeffrey Epstein files. He later acknowledged some of his comments “went too far.” Trump, in response, said the apology was “very nice.”

With the bill still under Senate review, the dispute underscores growing pressure on Trump from fiscal hardliners and tech-aligned conservatives – some of whom helped deliver his return to power. Cracks in the coalition may spell longer term problems for the Make America Great Again movement.

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Business

Massive government child-care plan wreaking havoc across Ontario

Published on June 30, 2025

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From the Fraser Institute

By Matthew Lau

It’s now more than four years since the federal Liberal government pledged $30 billion in spending over five years for $10-per-day national child care, and more than three years since Ontario’s Progressive Conservative government signed a $13.2 billion deal with the federal government to deliver this child-care plan.

Not surprisingly, with massive government funding came massive government control. While demand for child care has increased due to the government subsidies and lower out-of-pocket costs for parents, the plan significantly restricts how child-care centres operate (including what items participating centres may purchase), and crucially, caps the proportion of government funds available to private for-profit providers.

What have families and taxpayers got for this enormous government effort? Widespread child-care shortages across Ontario.

For example, according to the City of Ottawa, the number of children (aged 0 to 5 years) on child-care waitlists has ballooned by more than 300 per cent since 2019, there are significant disparities in affordable child-care access “with nearly half of neighbourhoods underserved, and limited access in suburban and rural areas,” and families face “significantly higher” costs for before-and-after-school care for school-age children.

In addition, Ottawa families find the system “complex and difficult to navigate” and “fewer child care options exist for children with special needs.” And while 42 per cent of surveyed parents need flexible child care (weekends, evenings, part-time care), only one per cent of child-care centres offer these flexible options. These are clearly not encouraging statistics, and show that a government-knows-best approach does not properly anticipate the diverse needs of diverse families.

Moreover, according to the Peel Region’s 2025 pre-budget submission to the federal government (essentially, a list of asks and recommendations), it “has maximized its for-profit allocation, leaving 1,460 for-profit spaces on a waitlist.” In other words, families can’t access $10-per-day child care—the central promise of the plan—because the government has capped the number of for-profit centres.

Similarly, according to Halton Region’s pre-budget submission to the provincial government, “no additional families can be supported with affordable child care” because, under current provincial rules, government funding can only be used to reduce child-care fees for families already in the program.

And according to a March 2025 Oxford County report, the municipality is experiencing a shortage of child-care staff and access challenges for low-income families and children with special needs. The report includes a grim bureaucratic predication that “provincial expansion targets do not reflect anticipated child care demand.”

Child-care access is also a problem provincewide. In Stratford, which has a population of roughly 33,000, the municipal government reports that more than 1,000 children are on a child-care waitlist. Similarly in Port Colborne (population 20,000), the city’s chief administrative officer told city council in April 2025 there were almost 500 children on daycare waitlists at the beginning of the school term. As of the end of last year, Guelph and Wellington County reportedly had a total of 2,569 full-day child-care spaces for children up to age four, versus a waitlist of 4,559 children—in other words, nearly two times as many children on a waitlist compared to the number of child-care spaces.

More examples. In Prince Edward County, population around 26,000, there are more than 400 children waitlisted for licensed daycare. In Kawartha Lakes and Haliburton County, the child-care waitlist is about 1,500 children long and the average wait time is four years. And in St. Mary’s, there are more than 600 children waitlisted for child care, but in recent years town staff have only been able to move 25 to 30 children off the wait list annually.

The numbers speak for themselves. Massive government spending and control over child care has created havoc for Ontario families and made child-care access worse. This cannot be a surprise. Quebec’s child-care system has been largely government controlled for decades, with poor results. Why would Ontario be any different? And how long will Premier Ford allow this debacle to continue before he asks the new prime minister to rethink the child-care policy of his predecessor?

Matthew Lau

Adjunct Scholar, Fraser Institute
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