Scarcity of Discarded Plastic Bottles Leaves Coca-Cola and Nike Fighting Over Trash

Ambitious Goals

As sustainability efforts expand, some large companies like Coca-Cola (KO) and Nestlé (NSRGY) have pledged to reduce their carbon footprint by using recycled plastic. Coca-Cola has announced goals to make 100% of their packaging recyclable by 2025 and to use recycled material in a minimum of half their packaging by 2030.

The prices of recycled materials are reflecting the shift in demand. Data from Independent Commodity Intelligence Services show that in Europe the price of recycled polyethylene terephthalate, or PET, has increased by about 35% since January.

Green Legislation

Government initiatives in the US and Europe increasingly mandate the use of recycled materials in bottles. This will likely drive prices of recycled PET higher as more companies compete for access to the plastics. California has legislation in place requiring companies to use 50% recycled material in their plastic bottles by 2030. The European Union has issued directives limiting the manufacture of plastics and setting minimum percentage recycled materials for plastic bottles.

The problem is the small percentage of PET bottles that are collected for recycling – only 27% of discarded bottles are recovered in the US according to the National Association for PET Container Resources.

Hot Garbage

The market for old bottles is hot. A diverse range of companies focused on environmental impact are vying for recycled plastics. As a result, only about 30% of recycled bottle materials are reclaimed by the original manufacturers. Clothing companies such as H&M (HNNMY) repurpose plastic bottles into polyester. Sportswear giant Nike (NKE) uses materials from more than a billion plastic bottles in its products. Carpet and auto manufacturers are also in the market for recyclable plastics and could see their bottom lines pressured by new competition for these inputs.

It seems global efforts toward environmental responsibility has had the unexpected consequence of making trash a valuable commodity.

Things are changing daily within the financial world. Sign up for the SoFi Daily Newsletter to get the latest news updates in your inbox every weekday.

Sign up

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

All your finances.
All in one app.

SoFi QR code, Download now, scan this with your phone’s camera

All your finances.
All in one app.

App Store rating

SoFi iOS App, Download on the App Store SoFi Android App, Get it on Google Play

James Flippin ABOUT James Flippin James Flippin is the son of a financial advisor who grew up hearing and learning about bond yields, interest rates, the stock market, and the ins and outs of Wall Street. After stints as a licensing and business broker for Marcus and Millichap in New York City, James moved into broadcasting and became a reporter and anchor. He covered crime, politics, finance, and tech at NBC News Radio while working part-time as a producer for SiriusXM. James graduated from the University of Delaware with a bachelor’s degree in political science and economics. He's also an accomplished podcaster with over 10-years of experience.

TLS 1.2 Encrypted
Equal Housing Lender