Plastic pollution is a global systemic risk. Only 9% of plastic waste globally is recycled[1] and 95% of plastic packaging is disposed of after one use.[2] The limits of plastic recycling coupled with estimates that plastic consumption will double by 2040[3] indicate that to sufficiently mitigate plastics-related risks, plastic reduction is key.

Walmart states that it aims to “break the link between consumption and waste.”[4] The company discloses extensively on its recycling initiatives and acknowledges that in addition to recycling, large scale reuse models and innovations are necessary to address plastic pollution. However, disclosure of Walmart’s plans to integrate reuse systems into its business model is minimal and virgin plastic use in Walmart’s private label packaging increased by 6% in 2022 against its goal of a 15% reduction by 2025.[5]

Insufficient action to address plastic-related risks exposes Walmart to financial risk:

· Legal risk: Plastic packaging distributed by companies including Walmart has low recycling rates,[6] especially flexible plastic packaging.[7] Consequently, Walmart’s use of the Store Drop Off label is misleading under the FTC Green Guides[8] and likely illegal in California once SB 343[9] takes effect, as the label’s use of the chasing arrows symbol misrepresents the recyclability of flexible plastic packaging to consumers. Additionally, the California State Attorney General is investigating the misuse of recyclable labels and recently filed a lawsuit against Exxon for making misleading claims about plastic recyclability.[10]

· Regulatory risk: Regulatory developments such as extended producer responsibility laws[11] could cost companies up to $100 billion annually should governments require them to cover the waste management costs of their packaging.[12] Six states are considering legislation similar to California’s SB 343.[13]

· Reputational risk: Recent research indicates that consumer demand for sustainability and trustworthiness is increasing.[14] Meanwhile, multiple investigations into claims of plastic recyclability reveal that most plastic packaging ends up in landfills.[15],[16] Misleading recyclable labeling and insufficient action to reduce its plastic footprint puts the trust of consumers in Walmart at risk.

To mitigate plastic-related risk, Walmart could prioritize plastic reduction, increase reusable packaging, and redesign remaining product packaging for consistent recycling or composting.