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.

From Energy Now

By Tammy Nemeth and Ron Wallace

It is high time that Canadians discuss and understand Mark Carney’s avowed plan to re-align capital with global Net Zero goals.

Mark Carney’s economic vision for Canada, one that spans energy, housing and defence, rests on an unspoken, largely undisclosed, linchpin: Climate Finance – one that promises a Net Zero future for Canada but which masks a radical economic overhaul.

Regrettably, Carney’s potential approach to a Net Zero future remains largely unexamined in this election. As the former chair of the Glasgow Financial Alliance for Net Zero (GFANZ), Carney has proposed new policies, offices, agencies,  and bureaus required to achieve these goals.. Pieced together from his presentations, discussions, testimonies and book, Carney’s approach to climate finance appears to have four pillars: mandatory climate disclosures, mandatory transition plans, centralized data sharing via the United Nations’ Net Zero Data Public Utility (NZDPU) and compliance with voluntary carbon markets (VCMs). There are serious issues for Canada’s economy if these principles were to form the core values for policies under a potential Liberal government.

About the first pillar Carney has been unequivocal: “Achieving net zero requires a whole economy transition.”  This would require a restructuring energy and financial systems to shift away from fossil fuels to renewable energy with Carney insisting repeatedly in his book that “every financial [and business] decision takes climate change into account.” Climate finance, unlike broader sustainable finance with its Environmental, Social, and Governance (ESG) focus would channel capital into sectors aligned with a 2050 Net Zero trajectory. Carney states: “Companies, and those who invest in them…who are part of the solution, will be rewarded. Those lagging behind…will be punished.”  In other words, capital would flow to compliant firms but be withheld from so-called “high emitters”.

How will investors, banks and insurers distinguish solution from problem? Mandatory climate disclosures, aligned with the International Sustainability Standards Board (ISSB), would compel firms to report emissions and outline their Net Zero strategies. Canada’s Sustainability Standards Board has adopted these methodologies, despite concerns they would disadvantage Canadian businesses. Here, Carney repeatedly emphasizes disclosures as the cornerstone to track emissions data required to shift capital away from “high emitters”. Without this, he claims, large institutional investors lack the data on supply chains to make informed decisions to shift capital to businesses that are Net Zero compliant.

The second pillar, Mandatory Transition Plans would require companies to map a 2050 Net Zero trajectory for emission reduction targets. Failure to meet those targets would invite pressure from investors, banks, or activists, who may pursue litigation for non-compliance. The UK’s Transition Plan Task Force, now part of ISSB, provides this standardized framework. Carney, while at GFANZ, advocated using transition plans for a “managed phase-out” of high-emitting assets like coal, oil and gas, not just through divestment but by financing emissions reductions. “As part of their transition planning, [GFANZ] members should establish and apply financing policies to phase out and align carbon-intensive sectors and activities, such as thermal coal, oil and gas and deforestation, not only through asset divestment but also through transition finance that reduces real world emissions. To assist with these efforts GFANZ will continue to develop and implement a framework for the Managed Phase-out of high-emitting assets.” Clearly, the purpose of this is to ensure companies either decarbonize or face capital withdrawal.

The third pillar is the United Nations’ Net Zero Data Public Utility (NZDPU), a centralized platform for emissions and transition data. Carney insists these data be freely accessible, enabling investors, banks and insurers to judge companies’ progress to Net Zero. As Carney noted in 2021: “Private finance is judging…banks, pension funds and asset managers have to show where they are in the transition to Net Zero.” Hence, compliant firms would receive investment; laggards would face divestment.

Finally, voluntary carbon markets (VCMs) allow companies to offset emissions by purchasing credits from projects like reforestation. Carney, who launched the Taskforce on Scaling VCMs in 2020, has insisted on monitoring, verification and lifecycle tracking.  At a 2024 Beijing conference, he suggested major jurisdictions could establish VCMs by COP 30 (planned for 2025 in Brazil) to create a global market. If Canada mandates VCMs, businesses especially small and medium enterprises (SMEs) would face much higher compliance costs with credits available only to those that demonstrate progress with transition plans.

These potential mandatory disclosures and transition plans would burden Canadian businesses with material costs and legal risks that constitute an economic gamble which few may recognize but all should weigh. Do Canadians truly want a government that has an undisclosed climate finance agenda that would be subservient to an opaque globalized Net Zero agenda?

Tammy Nemeth is a U.K.-based strategic energy analyst. Ron Wallace is an executive fellow of the Canadian Global Affairs Institute and the Canada West Foundation.