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Cornell SC Johnson College of Business

Keeping a Better World in Mind

A Dean's Blog by Andrew Karolyi

Globalization of businesses, markets, and the paradox of the plastic pollution crisis

December 22, 2024

Here at the end of 2024, I am deeply grateful for the year’s successes and the health of my family, for the people in my life, and the purpose of my work. The topic inspiring me for this month’s blog is one that will motivate me in the coming year as part of my ongoing resolution to promote collaboration.

The Plastics Paradox

Every day more data emerges confirming that the plastic pollution crisis is growing. In response, the UN Environmental Programme’s International Negotiating Committee (INC) on Plastic Pollution has met five times since 2022, most recently this past November. Earlier meetings led to this year’s stated goal to develop a legally-binding global plastics treaty, setting core obligations for all countries to reduce plastic production and regulate or phase out the many harmful chemicals they use. Business is ready for this. How do I know? The Business Coalition for a Global Plastics Treaty, a vocal group of 275 major global brands, is asking for it, and has offered this roadmap for an effective treaty. The group sees a binding UN treaty as “the key policy mechanism to accelerate progress in three critical areas: the reduction of plastic production and use through a circular economy approach, increased circulation of all necessary plastics, and the prevention and remediation of hard-to-abate micro- and macro-plastic leakage into the environment.”

I find these dynamics fascinating. Those present at the meeting held November 25-December 1 in Busan, South Korea reported that commitment and goodwill was overflowing from over 100 nations…but not from the world’s largest petrochemical producers. Russia, Saudi Arabia, Kuwait, and others, represented by the International Council of Chemical Associations, blamed plastic pollution on mismanagement rather than overproduction or chemical toxicity. They opposed any measure restricting plastic production or setting policies to phase out or regulate chemicals. The treaty plan was thus scuttled.

On December 1, the UN Environment Programme announced the outcome and provided a Chair’s Text, which is well worth reading. What leaps at me from it is the assertion that “Economic development is the prerequisite for adopting measures to address plastic pollution. Developing countries have a right to grow sustainable consumption to meet social and economic development needs.” Having spent decades studying, writing about, and engaging with emerging markets as regions of untapped value and deserving of external investment, I could not agree more.

Plastics pollution is projected to double by 2050. The INC talks will resume sometime in 2025. The 275+ members of the Business Coalition stand ready to work together with policymakers across the world to secure the treaty that business needs, and that the majority of nations want.

And closer to home…

A few weeks before the UN Treaty talks, Fisk Johnson, our College’s generous benefactor and supporter, joined our Trustee-Council Annual Meeting, and described his own “constant conflict of nature versus human nature.” Fisk is a scientist and a true environmentalist who stewards a generational family firm that uses plastics, and not surprisingly, is an active member of the aforementioned Coalition. He so eloquently described in equal measure his current optimism and his worries over the health of the planet. Plastic can be both “a lifesaving product” and a threat to humankind. Sterile plastics prevent disease and keep food fresh and transportable. Synthetic plastic textile fibers use much less land and water than cotton. Mountains of plastic waste amass in underdeveloped nations, scavenged by people and animals. Eight metric tons of plastic enter the ocean every year. Fish consume plastic and people eat the fish. To quote Fisk: “It is everywhere and it is in all of us.”

Long before the UN Global Compact and Business Round Table, the SC Johnson family were making bold changes to their packaging and processes, and the company has paid a competitive price for this. They introduced the first 100% recycled plastic Windex bottle in 1990, and continue to improve their use of recycled plastic, amping up the life-cycle production process and removing unnecessary material from its packaging. Yet consumers have not embraced re-fillable concentrates and simpler packaging. When we spoke at TCAM, Fisk was emphatic about the good that a treaty and regulation could do for the planet, and for business, in terms of leveling the competitive playing field and driving behavior change.

A treaty could establish a framework for extended producer responsibility: anyone who makes a plastic product is 100% responsible for collection and reuse, and for the cost of it. (This is in place in my home province of British Columbia.) If producers pay more for making wasteful products, they’ll be incentivized to make cleaner products. In this country, we have minimal plastic regulation and recycling rates are low; most of what we put in the recycling bins ends up in landfill. California, Oregon, and Maine have all passed extended producer regulations, but each state crafts them differently, which will hamper producers (and none of these address microplastics). Political parties are not immune to industry pressure. Companies know that solid regulation has its uses for business.

All stakeholders on deck

Plastics use is increasing, and will drive oil demand growth, according to the Financial Times. Every stakeholder in the plastic ecosystem needs to adjust. Companies and scientists must inform the public. Consumers must learn and change their behaviors in small ways. Producers must adapt their processes and materials. Governments need to regulate. Citizens can write to their elected representatives.

Fisk urges everyone to bring attention to this issue, and so I am. I am grateful for his leadership. I asked Fisk to invoke his father, Sam Johnson, who voluntarily abandoned CFCs at SC Johnson & Company in the 1970s, and who incited the founding of our Cornell Center for Sustainable Global Enterprise. Fisk took a second and offered that his father would measure our actions by their effect on our children. “He was a very, very successful CEO but more importantly, he spent his lifetime caring for people.”

And I couldn’t leave without mentioning:

  • Kalamkari is a traditional regional Indian art form, created by hand on cotton with natural dyes. This month’s Grand Challenges Impact Competition winners were Team Kalamkari, a team of our Dyson students working with a UN-backed NGO in India to build online retail support for artisans whose work has been copied by synthetic fast fashion manufacturers. Well done, Team Kalamkari!
  • Undergraduate and MBA students have been working with accounting professor Mary MacAusland to prepare a team entry for the Accounting for Sustainability A4S International Case Competition, focused on corporate decarbonization. Win or lose, they will have received great experience creating the business case for nature.
  • Just some of the awards our faculty received this year:
    • Internal faculty awards in 2024
      • Dean’s Distinguished Award for Societal Impact in Research – Christopher Barrett. Chris’s research has advanced our understanding of the causes of extreme, persistent poverty and food insecurity and of how policy, institutional, and technological innovations can sustainably relieve unnecessary human suffering. His sustained engagement with operational agencies and policymakers allows his work to impact scholars as well as government, nonprofit, and private firm behaviors.
      • Dean’s Distinguished Award for Societal Impact in Teaching – Angela Noble-Grange & Trent Preszler. Angela’s course Courageous Communication and Trent’s writing courses Forest Bioeconomy and Climate-Smart Agribusiness classes all challenge students to master clear communication about new and important topics.
      • Dean’s Distinguished Award for Early Career Impact – Emily Garbinsky & Todd Gerarden. Emily has made significant strides in understanding the relationship between money and consumer well-being, publishing 13 articles in top marketing and psychology journals and maintaining a strong research pipeline advancing scholarly knowledge and addressing critical societal issues related to saving behavior. Todd has excelled in all dimensions of his research on the economics of electricity, renewable electricity, innovation in energy technologies, and energy efficiency, using a variety of frontier economic and econometric methods, including structural models, natural experiments, and experiments.
      • Dean’s Distinguished Award for Impact Through Service – Mukti Khaire, Sarah Wolfolds, Vince Slaugh, and Cheryl Stanley – all are exemplars of creativity, energy, dedication, and selflessness — well-deserving of recognition and appreciation.
    • External honors received by our faculty in 2024:
      • Risa Mish, Poets & Quants Favorite MBA Professor, and The Consortium’s Earl Hill Jr. Faculty Achievement and Diversity Leadership Award
      • Will Cong, Circle Insight Award, Crypto & Blockchain Economic Research
      • Kevin Kniffin, Poets & Quants 50 Best Undergrad Professors
      • Ariel Ortiz-Bobea, author of the Economics chapter of the Sixth National Climate Assessment (NCA6)
      • Vrinda Kadiyali, new Senior Editor, Marketing Science
      • Andrew Davis, 2024 Best Operations Management Paper in Management Science.