FMCG companies with weak plastic targets risk billions in litigation, compliance costs – Planet Tracker

GLOBAL – Fast-moving consumer goods (FMCG) companies with poor plastic management practices face billions in potential litigation, compliance costs, and reputational damage, according to a new report by Planet Tracker and the MSCI Institute.

The report, titled “Microplastics – Macro Risks & Financial Cost of Inaction,” analyzed over 450 global FMCG companies, finding that more than 55% of packaged food firms lack packaging-related targets, while 88% have no clear strategy to address microplastic pollution.

“Companies must move proactively,” says Thalia Bofiliou, senior investment analyst at Planet Tracker.

“They need robust, company-wide packaging targets, deep cuts to virgin plastic use, and transparent reporting. Failing to do so exposes them to rising regulatory, legal, and financial risks.”

Governments are tightening extended producer responsibility (EPR) laws, single-use plastic bans, and packaging taxes, increasing the financial burden on firms lagging behind sustainability standards. The report estimates potential legal costs could reach US$20–100 billion by 2030.

“Litigation and compliance costs are growing as regulators and consumers hold brands accountable,” Bofiliou notes.

“Even indirect costs like higher insurance premiums, credit downgrades, and investor divestment can significantly affect profitability.”

A high-profile example includes the ongoing lawsuit filed by Los Angeles County against PepsiCo, alleging misleading claims about the recyclability of its plastic packaging. Analysts warn that such cases could set precedents for global accountability.

Some FMCG giants have recently scaled back their sustainability goals, undermining investor confidence.

Unilever lowered its virgin plastic reduction target from 50% by 2025 to 33% by 2026, while Coca-Cola pushed its recycled content goal of 50% from 2030 to 2035, reducing the target to 35–40%.

“Frequent target changes or selective reporting are red flags,” says Bofiliou. “They signal weak governance and elevate financial exposure.”

Investor action and accountability

The study urges investors to scrutinize company disclosures and avoid funding firms engaged in greenwashing.

It recommends aligning packaging targets with credible global frameworks, such as the Ellen MacArthur Foundation’s Global Commitment and WWF’s ReSource program.

“Investors should push for measurable, science-based packaging goals and transparent progress tracking,” Bofiliou concludes.

“Companies that act decisively today will avoid costly litigation tomorrow — and gain the trust of increasingly sustainability-driven consumers.”

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