Unwrapping the potential of sustainable packaging

Child holding a plastic bottle against the sunlight - Unwrapping the potential of sustainable packaging


Plastics – and especially plastic packaging – play an essential role in the global economy, as they prevent products from being spoiled, and significantly extend the shelf-life of food. Additionally, the comparatively low weight of plastic packaging contributes to energy and fuel savings, and to reducing greenhouse gas emissions from freight transport. However, the advantages of plastics have to be set against a number of drawbacks, particularly for the environment. The absence of a circular plastic economy, and the leakage of millions of tonnes of plastic material, not only contribute in large part to marine pollution, but also trigger immense economic costs, and billions of USD in negative externalities. Fostering the further development of sustainable packaging therefore not only helps to limit the volume of plastic waste, but also offers attractive opportunities to participate in a market that is predicted to show a double-digit percentage growth rate within the next five years.

Key takeaways

  • According to analysis, 95% of plastic packaging material value, equivalent to between USD 80–120 billion per year, leaves the economy (in the form of waste).1
  • The recycling rate of plastics is only around 14%. Due to additional value losses during sorting and reprocessing, only about 5% of plastic packaging is reused for packaging, while most of the remaining 9% is used for lower-value applications.2
  • Nearly a third of all plastic packaging is not available for recycling.3
  • Plastic packaging contributes almost USD 40 billion-worth of greenhouse gas emissions and other environmental damage every year.4
  • Expenditures arising from these post-use effects, as well as from greenhouse gas emissions caused by plastic production, amount to at least USD 40 billion annually.5
  • The sustainable-packaging market is expected to grow from an estimated USD 305 billion in 2020 to almost USD 470 billion in 2027.6

The price tag of “plastubiquity”

"Around the world, one million plastic drinking bottles are purchased every minute, while 5 trillion single-use plastic bags are used worldwide every year.7"

In the modern economy plastic has become indispensable, ubiquitous and maybe the most versatile material in terms of applications. Its success is primarily based on its exceptional functional characteristics – in numerous potential application areas such as construction, transportation, healthcare and electronics – as well as on its comparatively low production costs.

However low the manufacturing “price tag” might be, the lifetime costs of plastics are very high. A WWF report suggests that in 2019 the plastic pollution, emissions and clean-up costs amounted to at least USD 3.7 trillion, which is more than India’s GDP, and many times greater than the market cost.8

The lifetime cost of plastic produced in 2019

Ten times greater than the market cost

Infographic 1: Ten times greater than the market cost

Note: Numbers are rounded to the nearest billion.
Source: https://wwfint.awsassets.panda.org/downloads/ wwf_pctsee_report_english.pdf

Equally pressing are the challenges posed by the short average lifespan of plastic wrappings/plastic packaging material (only six months), which is in sharp contrast to the decades or even centuries-long decomposition process that single-use plastics impose on the environment.

Infographic 3: The Lifecycle of Plastics

Source: https://www.wwf.org.au/news/blogs/the-lifecycle-of-plastics

More than four decades after the introduction of the first universal recycling symbol, the plastic recycling rate still has significant room for improvement. Compared to paper (58%) and iron and steel (70–90%), the recycling of plastics in general, and even more so of plastic packaging, is still in its infancy, with only 14% of plastic packaging being collected for recycling.9

Consequently, turning the recycling of plastic into a “circular economy” will help to build a more restorative and regenerative system, where plastic is reused as well as recycled. Adhering to the “triad of eliminate, innovate and circulate” would also lead to a reduction in plastic waste by 80%, and to a cut of 20% in greenhouse gas emissions over the next two decades, while at the same time generating 700,000 additional jobs, and USD 200 billion in annual savings.10

Infographic 4: Build an ecacious after-use plastics economy, Dramatically diminish the leak-out of plastics into natural systems & other negative externalities, Decouple plastics from fossil feedstocks

Source: Project Mainstream analysis.

This would also speed up the decoupling of plastic production from non-regenerative energy sources. 98% of annually produced single-use plastics are actually fabricated from fossil fuels.11

Over the coming decades, the demand for oil for plastics production is expected to increase even more, growing at 3.8% until 2030, and then at 3.5% to 2050, and thus at a faster pace than the overall demand for oil, which is projected to step up by only 0.5% per year.12

Between pollution, bans and waste prevention

"By 2050, single-use plastic production could account for 5-10% of global greenhouse gas emissions.12"

No matter how versatile plastic may be, and however vast the cost savings and efficiencies delivered by its application in various areas, the impact of (unmanaged) plastic waste on the environment is devastating.

Projected share of global mismanaged plastic waste in 2025

Infographic 5: Projected share of global mismanaged plastic waste in 2025

Source: https://ourworldindata.org/plastic-pollution

Estimates state that plastic currently makes up 85% of marine litter,14 and that by 2050 there will be more plastic in the ocean, by weight, than fish.15

Other studies indicate that since the outbreak of Covid-19 approximately 8.4m tonnes of protective masks, gloves and other inadequately managed plastic waste from the pandemic entered the ocean, originating from 193 countries.16

The pathway by which plastic enters the world’s oceans

Estimates of global plastics entering the oceans from land-based sources in 2010 based on the pathway from primary production through to marine plastic inputs.

Infographic 6: The pathway by which plastic enters the world’s oceans

Source: https://ourworldindata.org/plastic-pollution

In the face of these alarming scenarios, reducing plastic waste and recycling plastic mark important steps towards a stricter protection of our planet from single-use plastic waste – even more so when considering that a quarter of global plastics waste goes into incineration, and that 40% ends up in waste dumps and landfills17, literally “evaporating” valuable resources.

Yet not every well-meant approach to recycling plastic waste is beneficial for the environment. This is particularly true for “wishcycling”, defined by the Collins English Dictionary18 as “the practice of putting something in a recycling bin without being certain that it is actually recyclable”.

In this context, a Pew Research Center survey found that more than half of Americans believe that “most types of items” can be recycled.19

Sustainable packaging can be a solution – and an investment opportunity

Even though it is highly desirable to establish a plastic circular economy, where plastic products are designed to be easily reused or recycled (“design for recyclability”20), while in parallel reducing the necessity for and the use of single-use plastic products, plastic recycling alone can’t be a long-term solution for building a sustainable circular system. Nor would it be possible to reduce consumption enough (and thereby reduce packaging) without drastically slowing the global economy.

In this context, moving from plastic to sustainable packaging would mark a great leap forward – and many corporations are already doing their part. This gives investors a way to support the drive for less wasteful consumption, and a cleaner planet. Additionally, it opens interesting angles to participate in the ever-growing market segment of compostable and biodegradable bioplastics and biopolymers made from renewable sources like corn starch, tapioca roots, chips, starch or sugarcane.

Projections suggest that the global bioplastics and biopolymers market size will nearly triple, from USD 10.7 billion in 2021 to USD 29.7 billion by 2026, at a CAGR of 22.7%.21

From a regional perspective, the Asia-Pacific bioplastics industry is projected to manifest the highest CAGR of 12.35% in the period from 2021 to 2030.22

On a segment basis, in 2020 packaging accounted for the largest share in the bioplastics and biopolymers market in terms of value, followed by textiles and consumer goods.23

The drivers for a surging bioplastics demand

The dynamic of the expansion of the global bioplastics and biopolymers market has industry-internal as well as external drivers, like stricter regulations, and taxes on or bans of single-use plastic.

Infographic 7: Ban on single-use plastics in several countries

However, shifting consumer preference also plays its part in driving the development, production and distribution of more environmentally-friendly alternatives to conventional plastic.

In a recent consumer survey by the Boston Consulting Group, almost three-quarters of 15,000 respondents (and 83% among younger generations) said they would pay more for products with environmentally-friendly packaging, and over a fifth would pay an additional 10%. 64% of respondents also said that sustainable packaging was an important factor in their purchasing decisions.24

Putting a price on sustainability

Infographic 8a: Putting a price on sustainability

Infographic 8b: Putting a price on sustainability

Source: https://triviumpackaging.com/sustainability/2021BuyingGreenReport.pdf

Driven by consumers as well as by regulations, industries are gradually favouring the production and deployment of bioplastics and biopolymers to address environmental and economic issues, and also to mitigate the continuing price pressure exercised by the rising cost of fossil fuels.

In addition, advances in R&D (i.e., lower production costs and faster production processes) are also accelerating the rise of bioplastics and biopolymers as a viable alternative to conventional polymers like Polyethylene terephthalate (PET), Highdensity polyethylene (HDPE), Low-density polyethylene (LDPE) or Polypropylene (PP) and Polystyrene (PS).

Finally, a growing population and rapid urbanisation – and therefore the increasing demand for sustainable alternatives to conventional plastic from end-use industries – play their part in fostering the growth of sustainable packaging solutions.

Allianz Global Investors “unwraps” the potential of sustainable packaging innovators

Allianz Global Investors identifies companies that produce compostable and/or biodegradable bioplastics and biopolymers made from 100% renewable resources like mushrooms, corn starch, potato starch and used cooking oil. Their solutions can be decisive contributions to addressing the pressing challenges arising from the production and use of conventional polymers and single-use plastic packaging, and from the devastating impact that mismanaged and nonrecycled plastic waste has on the environment. At the very least, relying on bioplastics and biopolymers could help to save billions of USD in societal and economic costs.

Allianz Global Investors also continues to invest in innovators specialising in the manufacture, development and design of products made from post-consumer recycled plastic, helping to prevent billions of pounds (lbs) of plastic waste that would otherwise likely leak into inland waterways or into the ocean.

Download the pdf version

1 https://www.weforum.org/press/2016/01/more-plastic-than-fish-in-the-ocean-by-2050-report-offers-blueprint-for-change/
2 https://www3.weforum.org/docs/WEF_The_New_Plastics_Economy.pdf
3 https://ellenmacarthurfoundation.org/the-new-plastics-economy-rethinking-the-future-of-plastics-and-catalysing
4 https://www3.weforum.org/docs/WEF_The_New_Plastics_Economy.pdf
5 https://ellenmacarthurfoundation.org/the-new-plastics-economy-rethinking-the-future-of-plastics-and-catalysing
6 https://www.weforum.org/agenda/2021/10/how-mushrooms-and-microorganisms-could-transform-food-packaging
7 https://www.unep.org/interactive/beat-plastic-pollution/
8 https://wwfint.awsassets.panda.org/downloads/wwf_pctsee_report_english.pdf
9 World Economic Forum (2019): The New Plastics Economy: Rethinking the future of plastics
10 https://ellenmacarthurfoundation.org/topics/plastics/overview
11 https://www.minderoo.org/plastic-waste-makers-index/findings/executive-summary
12 https://www3.weforum.org/docs/WEF_The_New_Plastics_Economy.pdf
13 https://www.minderoo.org/plastic-waste-makers-index/findings/executive-summary/
14 https://www.unep.org/resources/pollution-solution-global-assessment-marine-litter-and-plastic-pollution
15 https://www3.weforum.org/docs/WEF_The_New_Plastics_Economy.pdf
16 https://www.pnas.org/content/118/47/e2111530118
17 https://www.bbc.com/future/article/20210510-how-to-recycle-any-plastic
18 https://www.collinsdictionary.com/submission/23916/wishcycling
19 https://www.pewresearch.org/fact-tank/2016/10/07/perceptions-and-realities-of-recycling-vary-widely-from-place-to-place/
20 https://cdn.minderoo.org/content/uploads/2021/05/27094234/20211105-Plastic-Waste-Makers-Index.pdf
21 https://www.researchandmarkets.com/reports/5406413/bioplastics-and-biopolymers-market-by-type-non
22 https://www.globenewswire.com/en/news-release/2021/09/06/2291947/0/en/Bioplastics-Market-is-Projected-to-Reach-16-8-Billion-by-2030-AMR.html
23 https://www.researchandmarkets.com/reports/5406413/bioplastics-and-biopolymers-market-by-type-non
24 https://triviumpackaging.com/sustainability/2021BuyingGreenReport.pdf

Investing involves risk. The value of an investment and the income from it will fluctuate and investors may not get back the principal invested. Investing in the water-related resource sector may be significantly affected by events relating to international political and economic developments, water conservation, the success of exploration projects, commodity prices and tax and other government regulations. Past performance is not indicative of future performance. This is a marketing communication. It is for informational purposes only. This document does not constitute investment advice or a recommendation to buy, sell or hold any security and shall not be deemed an offer to sell or a solicitation of an offer to buy any security.

The views and opinions expressed herein, which are subject to change without notice, are those of the issuer or its affiliated companies at the time of publication. Certain data used are derived from various sources believed to be reliable, but the accuracy or completeness of the data is not guaranteed and no liability is assumed for any direct or consequential losses arising from their use. The duplication, publication, extraction or transmission of the contents, irrespective of the form, is not permitted.

This material has not been reviewed by any regulatory authorities. In mainland China, it is used only as supporting material to the offshore investment products offered by commercial banks under the Qualified Domestic Institutional Investors scheme pursuant to applicable rules and regulations. This document does not constitute a public offer by virtue of Act Number 26.831 of the Argentine Republic and General Resolution No. 622/2013 of the NSC. This communication’s sole purpose is to inform and does not under any circumstance constitute promotion or publicity of Allianz Global Investors products and/or services in Colombia or to Colombian residents pursuant to part 4 of Decree 2555 of 2010. This communication does not in any way aim to directly or indirectly initiate the purchase of a product or the provision of a service offered by Allianz Global Investors. Via reception of his document, each resident in Colombia acknowledges and accepts to have contacted Allianz Global Investors via their own initiative and that the communication under no circumstances does not arise from any promotional or marketing activities carried out by Allianz Global Investors. Colombian residents accept that accessing any type of social network page of Allianz Global Investors is done under their own responsibility and initiative and are aware that they may access specific information on the products and services of Allianz Global Investors.

This communication is strictly private and confidential and may not be reproduced. This communication does not constitute a public offer of securities in Colombia pursuant to the public offer regulation set forth in Decree 2555 of 2010. This communication and the information provided herein should not be considered a solicitation or an offer by Allianz Global Investors or its affiliates to provide any financial products in Brazil, Panama, Peru, and Uruguay. In Australia, this material is presented by Allianz Global Investors Asia Pacific Limited (“AllianzGI AP”) and is intended for the use of investment consultants and other institutional/professional investors only and is not directed to the public or individual retail investors. AllianzGI AP is not licensed to provide financial services to retail clients in Australia. AllianzGI AP (Australian Registered Body Number 160 464 200) is exempt from the requirement to hold an Australian Foreign Financial Service License under the Corporations Act 2001 (Cth) pursuant to ASIC Class Order (CO 03/1103) with respect to the provision of financial services to wholesale clients only. AllianzGI AP is licensed and regulated by Hong Kong Securities and Futures Commission under Hong Kong laws, which differ from Australian laws.

This document is being distributed by the following Allianz Global Investors companies: Allianz Global Investors U.S. LLC, an investment adviser registered with the U.S. Securities and Exchange Commission; Allianz Global Investors Distributors LLC, distributor registered with FINRA, is affiliated with Allianz Global Investors U.S. LLC; Allianz Global Investors GmbH, an investment company in Germany, authorized by the German Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin); Allianz Global Investors (Schweiz) AG; Allianz Global Investors Asia Pacific Ltd., licensed by the Hong Kong Securities and Futures Commission; Allianz Global Investors Singapore Ltd., regulated by the Monetary Authority of Singapore [Company Registration No. 199907169Z]; Allianz Global Investors Japan Co., Ltd., registered in Japan as a Financial Instruments Business Operator [Registered No. The Director of Kanto Local Finance Bureau (Financial Instruments Business Operator), No. 424, Member of Japan Investment Advisers Association and Investment Trust Association, Japan]; and Allianz Global Investors Taiwan Ltd., licensed by Financial Supervisory Commission in Taiwan.


About the author

Active is: Seeing opportunity where others see challenge

With so much for markets to digest, investors need to be agile

With so much for markets to digest, investors need to be agile


Markets are off to a rocky start to 2022, as challenges ranging from a more hawkish Fed to sabre-rattling in Ukraine test investors’ resolve. Despite fading support from central banks, investors can find opportunities by staying agile and focusing on companies with resilient earnings.

Key takeaways

  • This year is unlikely to be plain sailing for the financial markets, and the first weeks have confirmed this diagnosis
  • Even though investors have a lot of issues to navigate, markets still offer potential – the key is to be agile
  • The overall long-term “excess liquidity” environment is morphing into a more hawkish, restrictive one – so earnings resilience should be a focus for investors
  • Given the backdrop, we prefer cyclical value to growth-oriented companies

Allianz Global Investors

You are leaving this website and being re-directed to the below website. This does not imply any approval or endorsement of the information by Allianz Global Investors Asia Pacific Limited contained in the redirected website nor does Allianz Global Investors Asia Pacific Limited accept any responsibility or liability in connection with this hyperlink and the information contained herein. Please keep in mind that the redirected website may contain funds and strategies not authorized for offering to the public in your jurisdiction. Besides, please also take note on the redirected website’s terms and conditions, privacy and security policies, or other legal information. By clicking “Continue”, you confirm you acknowledge the details mentioned above and would like to continue accessing the redirected website. Please click “Stay here” if you have any concerns.