This year’s Earth Day on 22 April is focused on the global drive to end plastic pollution. There is an estimated 150 million tonnes of plastic in oceans today and, at current rates, we are on track to have one tonne for every three tonnes of fish by 2025 and more plastic than fish in our waters by weight by 2050 (according to World Economic Forum figures).

We need a global effort to eliminate single-use plastics and significantly reduce use, and improve recovery, of the rest. The damage caused by our current use and disposal of plastics makes the system unsustainable and we support the global drive for solutions.

As investors, we see the financial value, the environmental and social impacts and, therefore, the benefit to our clients in supporting those companies that can deliver this transition.

No single action is likely to provide a complete solution in our view so we are focused on the full range of meaningful changes that need to be made, which include:

• Changes to food production and packaging to deliver safe food with reduced wastage without reliance on plastic packaging
• Readily biodegradable packaging
• Plastics derived from natural sources
• Improved recycling rates.

Ultimately, however, it is the development of closed-loop ‘circular economy’ models that we believe will be critical.

One of our key investment themes is Increasing Waste Treatment and Recycling. Only 14% of plastic packaging is currently collected for recycling and just 5% is retained for subsequent use, highlighting the opportunity for companies working to improve this. Across our portfolios, we own Suez, Pennon and China Everbright, which continue to revolutionise the waste recycling space.

Recent measures announced by the UK government are positive steps in this sphere: the proposed deposit return scheme for drink containers mirrors similar enterprises in Norway, Germany and some US states, which boosted recycling rates to above 90%.

Another key theme across our portfolios is Making Food Production Sustainable, where we look for companies offering sustainable alternatives to current food production and packaging.

Dutch company Corbion is a new holding for our funds. The company uses natural ingredients to produce lactic acid, which is used as a food preservative. This is already a great theme for us and Corbion is now moving a step further in converting its lactic acid into polylactic acid, a bioplastic.

Bioplastics have a role to play in making our system more sustainable but it is critical to understand they are not a solution on their own to marine littering. Even those that are biodegradable typically require industrial conditions, which are very different to those found at the bottom of the ocean.

Smurfit Kappa, Europe’s largest paper packaging producer, is another core name for the funds. Paper and packaging companies are caught at the centre of the waste debate and we see strong financial and environmental opportunities in those that can do it sustainably.

Three-quarters of the fibres that Smurfit Kappa uses are from recycled sources and the remaining 25% come directly from its own plantations and third-party suppliers. We see value in Smurfit’s responsible resource management, operational efficiency and products that help to reduce waste and resource use as well as increasing recyclability, reusability and degradability.

While we continue to invest in solutions providers, very few of us can say we are not part of the plastics problem. Plastic is a priority engagement issue for us in 2018 and we are working with our investee companies to drive change.

Progress is under way but too slow. Unilever, for example, has already cut packaging waste per consumer by 28% since 2010 and has targeted at least 25% recycled plastic content in its packaging by 2025.

Sachets are a particular issue for the company and it is investing heavily in technology called CreaSolv, a chemical process that breaks down the polymers in sachets so the plastic can be reused. This, and other aspects of the company’s Sustainable Living Plan, puts Unilever at the forefront of global companies in our view but even this progress is unlikely to drive the fundamental change our oceans need.

Earth Day’s focus on this important issue is critical. The Ellen MacArthur Foundation recently announced at the World Economic Forum Event in Davos that several leading consumer brands are working towards 100% reusable, recyclable or compostable packaging by 2025 and we also note various supportive government statements and initiatives in 2018.

As investors, we welcome this focus but stress that we remain a long way from a global resolution that protects our natural environment. As long as our business activities remain unsustainable, their future earnings are in doubt and so is their value.  We will continue to invest in those companies that stand to gain from the move to sustainable business models and engage with those who have more to do.

Our clients want to invest in companies that can earn sustainable financial returns by delivering positive environmental impacts. After all, there is little point in saving for a retirement by the beach, if we have no beaches worth going to.