It is estimated that there are 5.25 trillion pieces of plastic debris, at a minimum, in our oceans. Even worse, by 2050, the plastic in the ocean will outweigh the fish it shares the water with.

The waste is both corporate and consumer driven. According to the EPA, 268 million tons of landfill and recycling waste are generated in the United States each year. Much of that is paper and paperboard waste— including paper towels and paperboard boxes. That’s right, Amazon boxes. 

The massive amount of waste that is produced daily, monthly, yearly is a problem that requires big and creative solutions. In other words, waste presents us with new trends, some of which we may already recognize: bans on plastic bags, the popularity of LED lighting, increasingly electrified cars.

From reducing single-use plastics to an increase in advanced recycling of electronics parts, the world is trying to work for the better. Here’s how investing in waste can both portfolio stability and exposure to the next big thing. 

What is waste management? 

Waste management is, simply put, what we do with our waste. 

More specifically, solid waste management can be broken into five components: (1) generation, (2) storage, (3) collection, (4) transportation, and (5) disposal. The four-primary means of disposal include (a) land application (burial or landfilling), (b) composting, (c) burning or incineration, and (d) recycling.

Waste management is a global issue that is incorporated in the UN Sustainable Development Goals, which “provide targets and indicators for broad global sustainability achievements.”  These include (1) clean water and sanitation, which waste disposal can have significant impact on and (2) responsible consumption and production, to name a few. Companies can use these as measures in their sustainability reports.

The global waste market recently experienced some big changes. The waste management infrastructure in the U.S. and around the world was tasked with a lot more trash when in July 2017, after decades as the world’s largest buyer of scrap materials, China announced that it would “no longer permit its domestic buyers to import plastic or paper scrap above a stringent 0.5% contamination threshold.” This “National Sword” policy, as it is called, went into effect in January 2018, creating major disruptions for exporters of recyclables around the world. 

China’s ban left more plastics in landfills around the world than in previous years and left countries looking for solutions regarding what to do with the sheer volume of trash. In the U.S., it also resulted in a nearly 50% drop in revenue generated by the sale of curbside recycling items. 

Because the policy highlighted the need for less contaminated recyclables, one solution is to better target less contaminated materials for export. In response, materials recovery facilities (MRFs) began using advanced technology to better sort materials picked up in recycling bins. These include high-speed optical sorters, ballistic separators and non-wrapping screens, and even artificial intelligence (AI) robots. 

But, what if products are more sustainable before they ever reach the consumer? The need for reducing waste isn’t lost on investors, who have an increasing interest in ESG (Environmental, Social and Governance) investing. Case in point, more than $30 trillion in global investments are driving companies to implement sustainability initiatives, with the biodegradable plastics industry expected to reach nearly $7 billion by 2025, according to one estimate.

Waste management is a fact of life with a myriad of component solutions — from reducing consumption to producing more sustainable products to more effective recycling — that all consumers, producers, investors, and global citizens have a stake in.

Why invest in waste management?

Reducing waste and improving sustainability are also important in the world of waste management — and offer great investment opportunities. 

For one, recycling is a growing and profitable industry because it’s both less expensive and more stable than resource extraction. And, it can be done smoothly and successfully.  Eureka Recycling in Minneapolis, Minnesota, for example, “recovers nearly 100,000 tons of primarily residential recycling per year.” A remarkable “eighty percent of the facility’s material stays in Minnesota and 90% in the Midwest.”

Recycling better doesn’t just pertain to plastics. Advanced plastics recycling, also called chemical recycling, “refers to several different technologies that convert post-use plastics into their original building blocks, specialty polymers, feedstocks for new plastics, fuels, waxes, and other valuable products.”  Advanced recycling helps to both preserve the plastics’ original value and conserve use of fossil-based resources.

Beyond recycling programs, there is a lot of big brand buy in for more sustainable ecosystems. Consider Apple, which has robust recycling programs. In 2018 alone, Apple refurbished more than 7.8 million devices, diverting more than 48,000 metric tons of electronic waste from landfills.

Reducing waste is a major component of what’s referred to as the closed loop economy. The circular economy “is an overhaul of how products are designed, manufactured, sold, refurbished and recycled. It is a framework for global corporations and startups alike to reimagine capitalism and reduce costs, increase efficiency and protect the environment we share. It is a platform to amplify opportunities for growth in a natural-resource constrained world.”

This is particularly important considering that it’s been estimated that a demand for recycled plastics could see exponential growth through 2030, possibly reaching levels of 5 to 7.5 million metric tons.

Big brands are investing in improving recycling and rethinking end markets via the Closed Loop Infrastructure Fund. These include 3M, Coca-Cola, Colgate Palmolive, Johnson & Johnson Consumer Health, Keurig Dr. Pepper, PepsiCo, Procter & Gamble, Unilever, the Walmart Foundation, Amazon, Danone North America, Danone Waters of America, Nestlé Waters North America, and Starbucks.

 Whether investors put their money in existing waste management companies, new recycling initiatives, the latest sustainability-driven trend, or the development of more sustainable products, there are lots of options for investing in waste management.

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