June 2019

Waste Generation andRecycling Indices 2019
Overview and findings

Changing the perspective on risk

maplecroft.com

June 2019
Waste Generation and Recycling IndicesContents

Overview

2

Waste Generation Index

3

Recycling Index

4

Summary of findings

5

US tops list of countries fueling the mounting waste crisis

5

Analyses

8

Analysis 1: A global snapshot of waste issues

8

Analysis 2: Where to send the world’s waste?

11

Analysis 3: The proliferation of plastic policies

17

Analysis
Will Nichols
Head of Environmental Research

Niall Smith
Senior Environmental Data Analyst

Overview
The Waste Generation Index and Recycling Index are two 2019 additions to the Verisk Maplecroft Environment
Dataset, which now consists of 52 indices capturing key risks relating to climate change, environment
and natural hazards. This dataset forms part of the wider portfolio of global risk indices offered by Verisk
Maplecroft, which spans 150+ political, human rights, economic and environmental risk issues.

Cover photo: iStock.com© Verisk Maplecroft 2019 | maplecroft.com

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Waste Generation and Recycling Indices

Waste Generation Index
Definition of the Index
The Waste Generation Index (WGI) provides a quantitative assessment of the rate of waste production bycountry, considering a selection of key waste types including municipal solid waste (MSW), hazardous waste,
food waste and plastic waste. Elevated rates of waste generation occur in countries with high levels of
consumption. This combination can be unsustainable and leave companies operating in these locations toface reputational, physical and regulatory risks.

Definition of the Issue
Population, urbanisation and economic growth, in addition to increasingly unsustainable consumer behaviour,
have caused rates of waste generation to rise exponentially in recent decades. These patterns of production
and consumption have led rates of waste generation to become a high priority concern for both humanhealth and preservation of the natural environment. Since a variety of business activities are either directly
responsible for or indirect drivers of solid waste generation, there is a likelihood that risks can be transferred
to companies in these operating environments.
As economic growth continues, waste flows have diversified with new waste types presenting distinct
challenges. Materials like plastic polymers are particularly alarming as environmental pollutants considering
their durability, long residence times and tendency to interact with marine trophic systems upon reaching theoceans. Food waste is of concern as this highlights the inequity of the global food system, with a total of one
third of produced food being lost or wasted, disproportionately in high income countries. Hazardous wastewith properties that are toxic to biological organisms present significant threats to human health, biodiversity
and the provision of ecosystem services.
In addition to better understanding risk exposure, the index can help highlight where opportunities exist forcompanies to start developing action plans to mitigate risks associated with waste generation, or address
problems with specific waste types that might be central to their business.

Implications for businessHigh rates of solid waste generation impose pressure on public waste management systems, increasing
the likelihood that waste is not disposed of responsibly. This presents potential health and safety risks toresidents, damage to ecosystem services, and management challenges for local and national governments.
Consumers and NGOs are increasingly aware and vocal on issues such as waste generation, plastic pollution,
overproduction and resource consumption. Companies are often linked to these issues either directly throughtheir operations and supply chains, or indirectly through the consumption of their products. Reputational
damage can arise when companies are deemed to be a key driver of high rates of waste generation and thus
partly responsible for any subsequent impacts to human health and the environment.
In countries where waste is produced at high rates new or more stringent regulations have a greater likelihoodof being established to reduce the levels of resource consumption. If this occurs, regulatory risks would
present additional costs to businesses, especially in industries considered to be primary drivers of the issue.
Physical risks can arise from elevated rates of waste generation when damages occur to the environment,
causing issues such as resource constraints. An example of this is plastic pollution impacting marine
ecosystems and subsequently disrupting fishing or tourism industries.

© Verisk Maplecroft 2019 | maplecroft.com

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Waste Generation and Recycling Indices

Recycling Index
Definition of the Index
The Recycling Index assesses a country’s willingness and ability to manage solid waste in a manner which
promotes circular material flows. This index identifies countries where the inability to recover and recycle
solid waste is likely to result in risks to businesses. These risks are quantified by considering the proportionof a given country’s solid waste that is collected, adequately managed and recycled, in addition to the level ofgovernmental commitment measured through compliance with international waste-related treaties.

Definition of the Issue
The management of solid waste is one of the largest and fastest growing sustainability challenges emerging
alongside global development. Economic and population growth, urbanisation, globalisation and industrialisation
have caused rates of waste generation to accelerate in recent decades. However, the mechanisms that societies
have put in place to properly manage and dispose of solid waste have not grown or evolved in tandem.
On a global scale, it is widely recognised that an urgent transition is needed towards circular material flows
or a ‘closed loop’ system, where raw material extraction and waste generation are minimised, and resource
use efficiency is maximised. In this system, concepts like long-lasting design, repair, reuse and recycling
help to achieve this narrowing of material flows. This contrasts with the existing model of production andconsumption where goods and products are used and disposed of in a predominantly linear fashion.
With populations projected to continue growing and becoming increasingly concentrated in urban
agglomerations, it is critical that governments improve waste management systems and tailor them towards
society’s need for a ‘closed loop’ system. Waste streams in modern economies have also diversified greatly,
generating larger quantities of problematic pollutants. Some of these specific waste streams, like plastic forexample, can be reintegrated into the economy at what is currently the end-of-life stage of the life cycle.

Implications for businessIn economies where a large proportion of solid waste is mismanaged rather than recycled, waste is likely to
end up in environmental reservoirs or sinks where it presents significant threats to the provision of ecosystemservices, biodiversity and human health. Businesses with a direct presence or an indirect association withthese locations can face significant reputational risks as a result. Responsible consumers increasingly
express a preference for goods and services from socially responsible companies, and hence negative brandreputation related to a lack of recycling can impact consumer perceptions and compromise revenues.
Companies can also face operational risks when operating in locations with a weak propensity for recycling,as this can increase the overall costs of managing and handling waste, particularly if facing landfill taxes.
Similarly, legal risks can also be presented to companies that do not meet their waste management
obligations, depending on the products or services. Certain industries have a legal obligation for responsible
disposal of waste. Failure to ensure compliance through measures such as recycling can result in fines,
penalties or litigations.

© Verisk Maplecroft 2019 | maplecroft.com

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Waste Generation and Recycling Indices

Summary of findings
US tops list of countries fueling the mounting waste crisis
America’s thirst for consumption is not matched by an appetite for recycling, reveals new a new index
identifying the country is the world’s top producer of waste and one of the worst of any industrialised nation
for managing its trash.
In two new global risk indices, Verisk Maplecroft has measured the waste generation and recycling
performance of 194 countries to uncover a global picture of how countries are dealing with the waste they
produce at a time where the world is facing a mounting crisis, primarily driven by plastics.
The research calculates that over 2.1 billion tonnes of municipal solid waste (MSW) are generated globallyeach year – enough to fill 822,000 Olympic-size swimming pools, which would stretch 41,000 kms if laidout end-to-end. However, only 16% (323 million tonnes) of this is recycled each year, while 46% (950 million
tonnes) is disposed of unsustainably.
The gulf between what we produce and what we recycle is creating profound challenges for governments andpopulations. But it is the companies producing large volumes of waste that may find themselves footing thebill if they do not find sustainable solutions to drive a more circular economy.

US creates three times the global average of waste
Verisk Maplecroft’s Waste Generation Index (WGI), which captures per capita rates of MSW, plastic, food andhazardous waste production, shows that US citizens and businesses are the largest contributors to the waste
problem across the four indicators measured. At 773kg per head, the country generates 12% of global MSW,
approximately 239 million tonnes, while only accounting for 4% of the world’s population.
Figure 1: Share of global population and Municipal Solid Waste (MSW) for G20 countries
20%

Share of global population (%)

18%

The US represents 4% of the
global population but generates
12% of global municipal waste

16%
14%

Share of global MSW (%)

12%
10%
8%
6%
4%
2%

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© Verisk Maplecroft, 2019

Source: Verisk Maplecroft, 2019

© Verisk Maplecroft 2019 | maplecroft.com

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Waste Generation and Recycling Indices

In contrast, China and India make up over 36% of the global population, but generate 27% of global municipal
waste. American citizens produce over three times as much waste as their Chinese counterparts and 7 times
more than the people of Ethiopia, the lowest risk country in the index.
The US is not alone though. Highly developed European and North American countries are disproportionately
responsible for the highest levels of waste generation. The highest risk countries in the Waste Generation
Index feature the US, the Netherlands, Canada, Austria, Switzerland, Germany, France and Australia.
The UK ranks 14th in the WGI, with its residents generating 482 kgs of household waste each per year.

US circling the circular economy
Given the US is the world’s largest economy it may not be surprising that it is one of the largest producers ofhousehold waste, but what is significant is its lack of commitment to offsetting its waste footprint.
Verisk Maplecroft’s Recycling Index (REI) captures the willingness and ability of countries to manage solid
waste and promote circular material flows by measuring national rates of recycling, collection and adequate
disposal, as well as government’s commitment to international treaties on waste.
The index shows that the US falls well behind all other industrialised nations. The country only recycles 35%
of its MSW. In comparison, Germany, which has the world’s most efficient record on waste management
according to the REI, recycles 68% of MSW. Even in the best performing countries there is plenty of room for
improvement though. Progress in the UK for instance has stalled for the best part of a decade. While it is the
7th best performing country in the REI globally, it still only has a recycling rate of 44%.
In Figure 2, it is evident that many developing economies do not have the resources to recycle efficiently, while
the United States is shown as a laggard on the global stage.
Figure 2: The US lags behind other developed countries in recycling performance, despite having the highest levels of
consumption globally
10

Germany

9
United States

8
7
Recycling Index

Low income
Lower middle income
Upper middle income
High incomeJapan

Low risk

Russia6
5High risk

4

China

3
2

India

1
0
0

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6
Waste Generation Index

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© Verisk Maplecroft

Source: Verisk Maplecroft, 2019

© Verisk Maplecroft 2019 | maplecroft.com

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Waste Generation and Recycling Indices

The US is the only developed nation whose waste generation outstrips its ability to recycle, underscoring ashortage of political will and investment in infrastructure. The country’s seeming lack of resolve to deal with
waste domestically may become a mounting problem in the face of plastics import bans from China andmany developing countries, where the US currently exports a large proportion of its plastic waste.
China, Thailand, Vietnam and Malaysia have all banned, or are set to ban, imports of solid waste, including
a host of plastics. Additionally, in May, almost all the world, with the notable exception of the US, agreed torestrict shipments of hard-to-recycle plastic waste to developing nations.
These emerging shifts in policy are going to make it all the harder for countries such as the US who areunderperforming in relation to recycling.
The world is also witnessing rising number of international incidents between developing and developed
nations over waste shipments. Most notably tensions have risen considerably between Canada and thePhilippines’ government, which has sent 69 shipping containers of waste back Vancouver after a diplomatic
spat escalated over imports of trash.

Companies could be on the hook to join the circular economy or pay the price“With the world’s attention firmly fixed on the problem of waste, we expect governments to act, withbusinesses footing the bill,” says Niall Smith, Senior Environmental Analyst at Verisk Maplecroft. “Beyond thepotential financial impacts, the reputational risks for business are high if they ignore intensifying interest in theissue from consumers and investors.”
Using data from its suite of waste indices, Verisk Maplecroft identifies the Netherlands, the US and the UK as
the most likely countries to pass new regulations on plastic materials that could hit companies in the pocket.
But, France, Canada, Australia and Belgium are also flagged as jurisdictions to watch.
“It’s going to be vital for companies to get ahead of these issues,” adds Smith. “Investing in circular economy
measures can not only mitigate risk but can open up new markets and improve brand reputation.”© Verisk Maplecroft 2019 | maplecroft.com

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Waste Generation and Recycling Indices

Analyses
Analysis 1: A global snapshot of waste issues
The global garbage glut
The rate at which society extracts raw materials from finite resources to produce goods has had to increase
exponentially to satisfy the demand from rising populations. Furthermore, the rate of raw material extraction
per capita has also risen, as consumers have steadily grown to demand larger amounts of products. Waste
streams have diversified over this period too, introducing previously unheard-of categories like plastics ande-waste. The result is a society which produces more waste overall, more waste per person, and a wider
variety of waste types.
Transitioning to a more resource efficient economy will not come entirely from command and control
legislation. Both consumer behaviour and actions from the private sector will play pivotal roles in facilitating
this transition. More than ever, companies need to understand their exposure to waste issues, and put thenecessary protocols in place to align their operations with the circular economy.

Who’s generating all the junk?
A snapshot of the current global dynamic is made possible using the Verisk Maplecroft Waste Generation
Index, which measures the rates of waste production by country, looking at several key waste streams. Europe
and North America dominate the list of highest risk countries in the index. While these countries have reaped
the benefits of being ahead of the curve in terms of economic development, their rates of waste generation
have soared as a result.
The United States is an exceptional case. It is the most extreme risk country overall and ranked in the top 10
highest risk countries in all four of the indicators which capture municipal waste, plastic waste, food waste
and hazardous waste. Municipal waste generation per capita is four times higher in the United States than inIndia - a striking difference.
In the chart below, G20 countries are ranked by their share of global population (blue bars). The countries’
respective share of global municipal waste is shown by the yellow bars. While China and India together
comprise over 36% of the global population, they together generate 27% of global municipal waste. The UnitedStates, on the other hand, comprises 4% of the population yet generates 12% of municipal waste.

© Verisk Maplecroft 2019 | maplecroft.com

8 of 17June 2019
Waste Generation and Recycling IndicesFigure 1: Share of global population and Municipal Solid Waste (MSW) for G20 countries
20%

Share of global population (%)

18%

The US represents 4% of the
global population but generates
12% of global municipal waste

16%
14%

Share of global MSW (%)

12%
10%
8%
6%
4%
2%

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© Verisk Maplecroft, 2019

Source: Verisk Maplecroft, 2019

Countries moving to ‘close the loop’
Transitioning from a linear to a circular economy can help avoid ecological catastrophe and maintain a healthyliving environment. A circular economy is one that minimises resource extraction and material inputs andmaximises efficiency, through regenerative design, recollection and recycling. Clearly, not all countries are
moving at the same pace to achieve this. The Verisk Maplecroft Recycling Index was launched to quantify
the performance of countries at managing solid waste in a manner which maximises resource efficiency andminimises waste.
Figure 2: Proportion of countries per risk category
Waste Generation

Recycling
Western Africa
Central Africa
Southern Asia
Eastern Africa
OceaniaSouthern Africa
Southeastern Asia
Central Asia and Eastern Europe
Middle East and North Africa
Central America
Caribbean
South America
Eastern Asia
EuropeNorthern America

Northern America
EuropeCaribbean
Oceania
Eastern Asia
Middle East and North Africa
South America
Central Asia and Eastern Europe
Central America
Southeastern Asia
Southern Africa
Eastern Africa
Central Africa
Southern Asia
Western Africa
0%20% 40% 60% 80% 100%Extreme0%
HighMedium

20% 40% 60% 80% 100%

Low

© Verisk Maplecroft

Source: Verisk Maplecroft, 2019

© Verisk Maplecroft 2019 | maplecroft.com

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Waste Generation and Recycling IndicesFigure 3: The US lags behind other developed countries in recycling performance, despite having the highest levels of
consumption globally
10

Germany

9
United States

8
7
Recycling Index

Low income
Lower middle income
Upper middle income
High incomeJapan

Low risk

Russia6
5High risk

4

China

3
2

India

1
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2

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Waste Generation Index

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© Verisk Maplecroft

Source: Verisk Maplecroft, 2019

The global pattern under this index is diametrically opposite to that of Waste Generation, with developed
countries exhibiting low risk profiles and low-income countries mostly rated as high or extreme risk. Eightof the 10 lowest risk countries are in Europe, with Singapore and Australia also featured. Germany tops the
ranking with exceptionally high levels of waste collection, recycling, compliance with international treaties anda low proportion of waste mismanaged.
Developing countries in Africa and Asia perform poorly in the index. These countries are experiencing higher
rates of population growth and urbanisation. Waste generation is increasing in these locations as a result,underlining the importance of improving waste management systems which enhance reuse and recovery.

Mind the gap
Considering how strongly countries perform in the Recycling Index relative to their rates of waste generation
helps to determine laggards who generate disproportionately high volumes of waste without recycling
performance to match.
Figure 4 demonstrates the strong negative relationship between the two indices, which broadly aligns with
global patterns of economic development. Many developed countries sit in the upper left quadrant, with both
high volumes of waste generation and strong performance in recycling. The vertical distance below the trendline indicates how much a country’s recycling performance is lacking, relative to its level of waste generation.
Once again, the United States emerges as an underperformer on the global stage. While several other major
economies possess a strong negative intercept, the US is the only one of which that is in the high income
group.
The Philippines, Malaysia and Thailand are three Southeast Asian countries who also fall well below the mark.
China and India have less pronounced recycling ‘shortfalls’, but the sheer size of their respective populations
make this highly concerning.

© Verisk Maplecroft 2019 | maplecroft.com

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Waste Generation and Recycling Indices

Analysis 2: Where to send the world’s waste?
Wasting away
Throwing something out kicks off a complicated, global process. Many waste streams, including plastic,
are difficult to deal with because the necessary infrastructure is not in place. And, even if the object can berecycled, there may not be a market for the treated material. Material that cannot be sold or treated is either
landfilled or sent abroad.
But as long as China was willing to buy these exports, Western nations had no incentive to invest in their own
treatment facilities.
So, when China banned imports of 24 varieties of solid waste on January 1 2018, including a host of plastics,
global waste flows were overturned. Another 16 categories were prohibited from the end of the year andanother 16 will be from the end of 2019.
Banning so-called ‘foreign garbage’ aligns with Xi Jinping’s ‘Beautiful China 2035’ policy amid a broader pushtowards a greener economy, but by 2030 will create an 111-million tonne mountain of waste that will need to
be treated – much of it plastic.
Other waste importing countries have also moved to limit the material they accept, ban it outright, or return
it. Thailand is set to ban foreign plastic waste from 2021, Vietnam is due to follow in 2025, and Malaysia isweighing up longer term options after issuing a temporary halt to imports in 2018. This year, the Philippines
came close to causing an international incident by pressuring Canada to repatriate waste falsely labeled asplastic scrap. It was no surprise when, in May, almost all the world’s nations, with the US a notable exception,
signed an amendment to the Basel convention that would restrict shipments of hard to recycle plastic waste
to developing nations.
Meanwhile, companies face growing domestic pressure to deal with waste, notably plastic: more than 60
countries and a host of regions are introducing – or have already brought in – legislation aimed at reducing
the use of plastic bags and other single use plastic materials (see Figure 4).

© Verisk Maplecroft 2019 | maplecroft.com

11 of 17June 2019
Waste Generation and Recycling IndicesFigure 4: Single use plastics

The Trump White House has pledged
to fund ocean cleanups and calledon other nations to do the same

China, Thailand, Malaysia andVietnam all restricted waste plastic
imports in 2018

The UK and EU are both aiming tophase out single use plastics by 2020
Local

National

Announced© Verisk Maplecroft 2019

Source: Verisk Maplecroft, 2019

A global problem
Companies’ responsibility for their waste does not end when it is collected. Pushing materials overseas where
they may not be disposed of properly, heightens the risk that companies will see branded bottles washingup on pristine beaches. Plastics are the most high-profile source of reputational risk related to waste, given
consumers, politicians and investors are all highly engaged in the global marine pollution problem. But interest
in other streams is growing, which means companies need a solution to avoid brand damage and regulatory
action.
Using the Waste Generation Index (WGI) we can see that those countries exporting large quantities of waste
are also producing large volumes. Following China’s ban, major waste exporters like the EU, US and Australia(see Figure 5) will not be able to manage much of the plastic waste they generate domestically without
concerted investment in treatment infrastructure.
Upgrading infrastructure comes at a high cost to governments and in many developed nations responsibility
has been passed to the private sector. So, companies, or groups of companies, could have to finance theirown disposal facilities and processes.
In nations where infrastructure is already struggling to cope with waste management pressure, finding newdestinations for waste will be paramount. But taking the UK plastic waste exports as an example, large
swathes are already going to countries set to introduce import bans.

© Verisk Maplecroft 2019 | maplecroft.com

12 of 17June 2019
Waste Generation and Recycling IndicesFigure 5: Source of waste imported to China

UK
Belguim

GermanyJapan

USA
Hong Kong
ThailandPhilippines
Risk legend
ExtremeHigh
MediumLow
Imports of plastic waste
10,000 tonnes
50,000 tonnes

Indonesia
Australia© Verisk Maplecroft 2019

Source: UN, 2019; Verisk Maplecroft

Figure 6: UK waste exports

China andHong Kong
EU
USA

Proportion of waste
inadequately disposed of100%South Korea
Pakistan
India
Philippines
Malaysia
VietnamIndonesia
Turkey0%
Exports of plastic waste
10,000 tonnes
50,000 tonnes© Verisk Maplecroft 2019

Source: UN, 2019; Verisk Maplecroft

Figure 6, pairing the top 10 export recipients and using data from our Recycling Index, shows that otherplastic waste export flows are going to countries where large amounts of waste are inadequately dealt with,increasingly the potential for mismanaged waste to become a reputational issue. UK will likely divert plastic
Germany’s export flows for its top 10 partners look strikingly similar to the UK’s profile, but higher proportionsof plastic waste exports to eastern Europe and Russia. Corporations in Germany whose plastic waste isexported are less exposed to that waste being mismanaged than those in the UK.

© Verisk Maplecroft 2019 | maplecroft.com

13 of 17June 2019
Waste Generation and Recycling IndicesFigure 7: German waste exports

Switzerland
USA

Proportion of waste
inadequately disposed of
100%

EUTurkeyChina andHong Kong
India
Malaysia
Vietnam
Australia

0%
Exports of plastic waste
10,000 tonnes
50,000 tonnes

New Zealand© Verisk Maplecroft 2019

Source: UN, 2019; Verisk Maplecroft

Figure 8: US waste exports

CanadaChina andHong Kong
EU
TurkeyMexicoProportion of waste
inadequately disposed of100%

Pakistan
India
Vietnam
Malaysia
Indonesia

0%
Exports of plastic waste
10,000 tonnes
50,000 tonnes© Verisk Maplecroft 2019

Source: UN, 2019; Verisk Maplecroft

US plastic waste exports to China vastly outweigh those of the UK or Germany, which elevates the riskof waste being mismanaged when it is diverted from China and other countries with import bans. While
Colombia, Ecuador and El Salvador manage waste better than many of their South East Asian counterparts,
they do not have the infrastructure to cope with an exponential increase in plastic waste. Other mooted
destinations have even poorer records: Ethiopia mismanages 94% of its waste, Senegal 84%, and Bangladesh
89%.

© Verisk Maplecroft 2019 | maplecroft.com

14 of 17June 2019
Waste Generation and Recycling IndicesFigure 9: Latin America and Eastern Europe offer new frontiers for plastic waste exports% of inadequately disposed waste

100%
90%

India

80%

China
Slovakia

70%
Hong Kong (China)

60%

Romania50%

United States

40%

Czech Republic

Kazakhstan
Peru

30%
20%

Costa Rica

10%0%

ExtremeHigh
medium
low

0

1

2

3

Jamaica
Colombia
Dominica
MexicoVenezuela

4
5
6
Waste Generation Index

7

8

9

10
© Verisk Maplecroft 2019

Source: Eurostat, 2019; OECD, 2015; Verisk Maplecroft

Where now for waste?
With the new global pact, China and other countries refusing to take waste, and many governments reluctant
or unable to invest in waste management upgrades, corporates will need to find their own solutions.
One option is new destinations for waste exports. Figure 9 highlights that many countries that manage waste
well, also produce a lot of it. Nations that not only produce little waste, but are also adept at dealing with what
they do generate, may be better bets for companies looking to dispose of waste responsibly.
Countries with at least a medium risk score in the WGI and below 30% waste inadequately disposed of include
a host of Latin American and Eastern European nations.
However, Figure 9 also shows the potential risk investors would face in financing new waste infrastructure inthese nations. Using the Fiscal Environment Index as a proxy for sovereign credit risk it is clear that low risk
countries are also big waste generators. Investors could consider medium risk nations such as Mexico, Peru,
Colombia, Slovakia or the Czech Republic.
Any change in waste management process will be difficult without forcing up operational costs and productprices. We can expect companies using large amounts of packaging, such as logistics or retail, as well as ICT
firms using plastic in their products to be most affected.

© Verisk Maplecroft 2019 | maplecroft.com

15 of 17June 2019
Waste Generation and Recycling IndicesFigure 10: New frontiers for waste management
Pillar 1: National requirement for
implementing new plastic policies

Presence of existing
single-use plastic bans, 26%

Pillar 2: Government capacity and intent
to effectively implement plastic policies

Proportion of municipal
solid waste recycled, 17%

Plastic waste generation
per capita, 17%
Environmental Regulatory
Framework Index, 13%

Government
Effectiveness Index, 13%

Corruption Index, 13%© Verisk Maplecroft, 2019
Source: Eurostat, 2019; OECD, 2015; Verisk Maplecroft

However, investing in circular economy solutions to should insulate companies against growing customer andregulatory pressure (see Figure 10), while aligning with benchmarks like the Sustainable Development Goals(SDGs). All of which will please investors concerned about a companies’ impact on the environment.
Some companies are already transitioning ahead of the curve. Starbucks, Unilever, Evian and McDonald’s
are among those that have made high profile switches away from plastic to alternative materials. This trend
will drive innovation and investment opportunities in materials design, processing and disposal and could
eventually result in lower cost alternatives such as bioplastic.
The scale of investment needed to realise a circular economy will require partnerships with rivals and acrosssectors. But companies failing to act in the face of rising political, consumer, and shareholder concern will beconsigned to the scrapheap.

© Verisk Maplecroft 2019 | maplecroft.com

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Waste Generation and Recycling Indices

Analysis 3: The proliferation of plastic policies
Solid waste is everyone’s businessCompanies and investors are increasingly aware of the need to address the issues of resource efficiency,
waste management and the transition from a linear to a circular economy. In addition to maintaining a positive
reputation in the eyes of consumers, however, there is also a strong business case for addressing these
aspects of sustainability. Failure to properly assess and manage resource consumption and waste can lead toadverse impacts on companies.
By maintaining a business strategy centred on the linear industrial model, expenditure on energy, water andmaterial inputs will remain unnecessarily high. In addition to operational costs, regulatory requirements
around solid waste will become more common and more stringent. We are already seeing this pattern emerge
in developed markets in the form of single-use plastic bans.
Reputational risks and brand damage are inevitable if companies continue to operate in line with a linear
model. Already we are seeing a wave of multinational companies moving to eliminate single use plastics andmaking lofty commitments for integration of recycled material.

The advent of plastic policies – countries to watch
Plastic is a revolutionary material. It is lightweight, durable, chemically inert and relatively cheap to produce.
However, these characteristics which have led to it becoming embedded in our economy as a staple material,
are also the reasons why it is touted as a key driver of the current ecological crisis. Plastic has become
ubiquitous in consumer goods and packaging but is now also being found in far flung corners of the naturalenvironment. Plastic particles have been found at the bottom of the Mariana Trench, where less humans have
explored than in outer space.
Public awareness of plastic pollution has steadily increased in recent years and is now reaching a tipping
point. We are now witnessing companies committing to phasing out plastics, and investors honing in on thisamongst other key ESG focus areas. Recent shareholder resolutions have driven global companies including
Coca Cola and Starbucks to phase out single-use plastics, setting the bar for their peers. Private sector
initiatives like the Ellen MacArthur Foundation’s New Plastics Economy Global Commitment, which include
companies responsible for over 20% of plastic packaging, and the more recent Alliance to End Plastic Waste,further demonstrate this trend.
Companies must seek to understand their exposure to business risks stemming from plastics. Using datafrom Verisk Maplecroft’s new waste indices, it is possible to determine the countries most at risk for new andmore stringent regulations on plastic materials. In this bespoke index, the probability of new or more stringent
plastics policies is measured using factors grouped into two pillars capturing the national requirement forsuch policies, and the capacity and intent of the national government on implementing them.

© Verisk Maplecroft 2019 | maplecroft.com

17 of 17June 2019
Waste Generation and Recycling IndicesFigure 11: Where will we see more stringent plastics legislation in the future?
Pillar 1: National requirement

Pillar 2: Capacity and intent

Medium risk
High risk

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Extreme risk

Plastics policy index

Low risk

Index score

Top 30 countries by 2018 GDP (current US$)© Verisk Maplecroft, 2019

Source: Verisk Maplecroft

In Figure 11, the risk of new plastic regulations emerging is assessed for the 30 largest economies by 2018
GDP. The Netherlands, the United States and the United Kingdom are the three countries singled out in thisanalysis as being the ripest for new regulations on plastics.
For all three countries, Pillar 2 is driving this score. Each of these countries possess a national government
which is proven effective with a low level of corruption, a strong record of environmental legislation, and ademonstrated ability to emplace plastic-specific legislation.
South American countries Brazil and Argentina are also recognised as being high risk, though for different
reasons. Here, the national urgency for such policies is greater since the populations generate large quantitiesof plastic waste and recycling rates are poor. However, the ability and willingness of the government to roll out
such policies is more questionable in these cases.

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