TOKYO -- Japanese companies have committed to move away from the practice of burning plastic waste and embrace a cycle of reusing materials as they risk losing environmentally conscious investors to U.S. and European peers making better progress on recycling.
Household goods producer Kao is encouraging consumers to use shampoo, soap and detergent in refillable bottles. The company says it has reduced plastic use by 93,000 tons compared with when all its products came in single-use containers.
Kao has vowed to have 300 million containers with low environmental impacts -- including those made of bioplastics -- in the market annually by 2030, as well as to recycle 100% of plastic waste at all of its factories and other locations.
Kao is a founding member of a consortium fighting plastic pollution. The group, established in January, includes 265 companies and associations such as Mitsubishi Chemical Holdings.
"We're going to develop plastic recycling technologies, including collecting plastic waste, rather than burning it," said Michitaka Sawada, president and CEO of Kao, who also heads the consortium.
Chemical and materials makers are joining the effort. Kuraray is investing $15 million in a U.S. plant to produce biodegradable plastics for food packaging starting early next year. Mitsubishi Chemical is set to license bioplastics-related patents to others.
The question is whether businesses will adopt new materials, which tend to cost at least twice as much as conventional products. Suntory Holdings is among the companies making a commitment to do so. The beverage giant says it will stop buying fossil fuel-based materials by 2030, replacing them with items made from used plastic bottles and bioplastics.
These efforts to eliminate waste are intended to create a circular economy, where products are made from recycled materials and, in turn, are recycled themselves. Such a system would pump at least 20 trillion yen ($187 billion) into Japan's economy, or nearly 4% of gross domestic product, according to one estimate.
The trend of switching to alternative materials and recycling waste into new raw materials is accelerating overseas. Chemical companies BASF of Germany and Braskem of Brazil have taken the lead in mass production of bioplastics, and today 2 million tons of such plastics are used each year internationally -- 50 times the volume in Japan.
U.S. consumer product behemoth Procter & Gamble has committed to use 100% recyclable or reusable packaging by 2030. British-Dutch peer Unilever is also among a group of companies pledged to switch to reusable, recyclable or compostable packaging by 2025.
These companies are responding to growing calls from ESG investors -- focused on environmental, social and governance issues -- to bolster sustainability efforts. Japanese businesses fear losing such investors if they do not play catch-up.
The Japanese government has vowed to slash one-quarter of single-use plastic litter by 2030 and reuse or recycle 100% of plastic waste by 2035 under a plan released in late May. Tokyo touts that the country is responsible for less than 1% of global marine plastic pollution and that its plastics recycling rate was 86% in 2017 -- one of the highest in the world.
But the international community disagrees with the assessment. A 2018 report by the Organization for Economic Cooperation and Development set Japan's recycling rate at 20% -- below the roughly 30% average in the European Union. The OECD assessment did not recognize thermal recycling, which uses energy generated during burning and accounts for 60% of Japan's recycling efforts.
The problem for Japan is the sheer volume of plastic waste, which totaled 9.03 million tons in 2017, up 0.4% on the year. The average person in the country wasted slightly more than 30 kg of plastic packaging a year in 2014, more than those in China and the EU.