In November 2023, a delegation from CDP travelled to Nairobi, Kenya, for the third negotiating session (INC-3) for a Global Plastics Treaty. The mood was positive on arrival, with delegates keen to progress the zero draft text published in September and reach an agreement on a formal first draft.
However, with the hangover of delays from INC-2 and stalling tactics from a handful of low-ambition countries, INC-3 negotiations closed with no agreement to develop a first draft (only an updated or “revised” version of the zero draft with all options captured within), and no commitment to undertake formal intersessional work. This leaves negotiators with a lot of work at INC-4 in April – both agreeing on the first draft and progressing negotiations toward the final text, which member states committed to sign by the end of 2024.
CDP calls on member states and private sector to advocate for mandatory corporate plastics disclosure
CDP attended INC-3 to advocate for the inclusion of mandatory corporate disclosure on plastics within the Global Plastics Treaty, in particular to encourage governments to support Option 1 of Part IV.3 ‘Reporting on progress’ of the zero draft. This stipulates that “Each Party shall take measures to ensure mandatory disclosures from businesses, including the financial sector on their activities and financial flows from all sources related to plastic pollution and related sustainable finance practices”.
Supporting this option (with some amendments) would demonstrate the highest level of ambition on corporate transparency within the Treaty. Disclosure will be vital for progress against global goals to be tracked, for investors to have the data they need to direct finance toward treaty-aligned activities, and for corporations to not only understand the action required from them but also accurately account for plastic-related risks and opportunities.
We commenced our INC-3 activities with a breakfast event prior to negotiations, “Corporate Disclosure and Unlocking Private Capital for the ILBI”, co-hosted with the Norwegian Ministry of Climate and Environment, and the Department of Forestry, Fisheries, and the Environment of the Republic of South Africa. Speakers from CDP, the Norwegian and Japanese governments, and the UNEP FI Financial Leadership Group, explored how mandatory corporate disclosure is crucial for achieving treaty goals, and facilitates the alignment of private capital towards plastic pollution-ending companies and activities. The session closed with active conversation and a collective acknowledgement of the value of mandatory corporate disclosure provisions within the Treaty.
Throughout the week, our engagement with governments and private sector actors showed encouraging and strong support for corporate transparency to be a core tenet of the Global Plastics Treaty. There remained some debate in formal negotiations as to how this should be achieved – many governments supported mandatory disclosure as the most reliable mechanism to provide comprehensive, comparable data, whereas others preferred voluntary measures or the self-determined incorporation of monitoring and reporting within national action plans. However, we continued to hear from private sector representatives that mandatory corporate disclosure would remain high on their agenda, in the hopes that its inclusion with the treaty will create a level playing field for businesses and investors.
The plastics data gap must be addressed to mobilize Treaty-supporting finance
During negotiations, as is the case with any international instrument, financing was also a strong topic of contention. Many governments (particularly from the Global South) emphasized the need for financing and robust equity measures to ensure effective global implementation. Private finance was not a major part of formal discussion but was highlighted by some negotiators as an important source of capital to fund treaty aims. Financial institutions from around the world have expressed their concern around the plastic pollution crisis, and their willingness to support efforts to tackle it by redirecting funds. Ahead of INC-3, 49 financial institutions with over USD $3.5 trillion in assets under management signed an open letter to governments calling for mandatory corporate disclosure within the treaty in order to provide the data they urgently need to facilitate these shifts in financial flows.
At present, significant data gaps exist across the plastics industry, which hamstring investors’ efforts to identify pollution-mitigating activities whilst also hindering effective, evidence-based policymaking and decision-making by the private sector. Harmonized and comparable plastic-related corporate data, obtained through disclosure, will be crucial to unlocking the trillions in private capital required to help solve financing issues, and will remain in sharp focus among negotiators and private sector actors.
As negotiations neared their conclusion, additional option in Part II.13 was proposed, “Transparency, tracking, monitoring and labelling”, of the zero draft, which suggested strong wording covering mandatory disclosures from large and transnational businesses. The wording proposed aligned closely with CDP’s recommendations. This proposal has been incorporated into the revised zero draft text, which means that we left INC-3 with Option 1 of Part IV.3 still on the table, along with the option for mandatory disclosure in Part II.13. We are positive that this will leave us in a stronger position to ensure corporate transparency remains high on the agenda at INC-4.
With revised zero draft released, governments must accelerate work to maintain ambition on disclosure
On 28th December, the International Negotiating Committee (INC) secretariat released the revised zero draft text for a Global Plastics Treaty. Ahead of INC-4, CDP’s Scaling Plastics Disclosure team is analyzing the revised version of the zero draft text and refining our recommendations for the next round of negotiations at INC-4 in April. For many, a revised zero draft – simply a more detailed version of a document intended to be the starting point for negotiations – was not the outcome expected from November’s INC-3.
It is vital that governments undertake strong informal work over the next three months to ensure they are in a good place to meet for negotiations on a cohesive and ambitious first draft in April. Approaching INC-4, negotiators must ensure mandatory corporate disclosure remains an option within the future first draft text, with strengthened provisions covering the full lifecycle of plastics, and activities along supply and value chains. We will continue to engage governments, financial institutions and corporations as they prepare for the next round of negotiations.
With much more ground yet to cover, now is the time for negotiators to accelerate in both pace and ambition if we are to have a strong and ambitious Global Plastics Treaty ready to sign by the close of 2024.