Transforming Waste into Profits
In the face of mounting waste problems worldwide, investors are increasingly looking towards innovative recycling technologies as a means to capitalize on new opportunities while addressing critical environmental challenges.
According to recent estimates, approximately 12% of global waste is composed of plastics, a primary cause of environmental pollution, particularly in oceans. This waste contributes to the alarming prediction that, by 2050, there could be more plastic than fish in the seas. To combat this issue, various solutions are being developed, such as recycling and more efficient disposal methods like converting plastic into fuel.
One such innovation is the specially engineered adhesive layer developed by Michigan State University researchers, enabling effective recycling of multilayer plastics (MLPs), which are typically unrecyclable. This technology allows both mechanical recycling and water-based separation, improving recyclability of about 30% of packaging plastics.
Chemical recycling technology, like the one set to open in 2027 in Lyon, France, breaks down PET plastics to their molecular components, allowing infinite recycling without quality loss. This advancement in circular plastic economies will recycle 30,000 tonnes annually.
Mechanical recycling of engineering plastics is also being promoted by companies like Covestro, who sort, shred, and reprocess these materials into high-quality post-consumer recycled granules. They also apply rigorous quality management to ensure stable performance comparable to virgin materials.
Efficiency in plastics recycling is also being improved by advanced granulation technology, such as the EV Evolution Series granulators from CMG Granulators. These granulators reduce energy use up to 50%, enabling higher throughput and lower costs for recycling post-consumer plastics, thus supporting sustainability goals.
Similar principles apply to e-waste and food waste, where innovations in modular, energy-efficient recycling equipment or chemical/biological processes treat electronic components and organic food waste into reusable materials or energy. Circular economy business models that integrate these advanced recycling technologies into supply chains offer attractive investment opportunities with growing regulatory support and consumer demand for sustainable solutions.
Investors are advised to target pioneering technologies that overcome technical barriers to difficult waste streams, enhance material quality and traceability in recycled products, scale production capacity with energy-efficient operations, and collaborate in ecosystems that include waste sourcing, processing, and end-product manufacturing.
These approaches promise impactful environmental benefits and strong financial returns by addressing critical gaps in current waste management and supporting regulatory trends toward sustainability. An active investment strategy that considers environment, social, and governance (ESG) factors is one of the best ways to positively impact the environment.
It's worth noting that the total weight of all human-made objects, including concrete, glass, metal, etc., is estimated to be over 1.1 trillion tons. On average, each person produces about 270 kilograms of waste per year. Wealthier countries are responsible for about half of "dry waste," such as plastic, metal, glass, paper, and cardboard.
In low-income countries, 93% of waste ends up on open dumps, compared to just 2% in wealthy countries. Excessive consumer behavior generates millions of tons of textile waste, with around 80% of discarded clothing filling nearly 5% of landfill capacity in developed countries.
The world's annual waste production is expected to grow more than twice as fast as the population, reaching 3.4 billion tons by 2050. Wealthier countries produce 34% of the global total of household waste, despite making up only 16% of the world's population.
Investing in technologies that accelerate the transition to a circular economy can offer investors opportunities to capitalize on new and innovative solutions, while also contributing to a greener, more sustainable future. As Alexis Deladerrière, Head of International Developed Markets Equity at Goldman Sachs Asset Management, noted, "Investors can play a crucial role in driving the transition to a circular economy by supporting companies and projects that address the world's waste challenges in a sustainable and innovative manner."
One such innovative solution is the transformation of textile waste into a dissolvable pulp, which can be used as a substitute for materials like cotton, oil, wool, and petroleum-based materials. Compostable bioplastics can also be used to produce a wide range of products, potentially reducing the amount of "wasted" plastic.
In conclusion, the global waste problem presents a significant challenge, but it also offers opportunities for investors who are willing to support innovative recycling solutions. By backing these technologies, investors can contribute to a more sustainable future while also generating strong financial returns.
- Other innovative approaches in recycling extend to e-waste and food waste, where advanced technologies treat these waste streams into reusable materials or energy, thus creating attractive investment opportunities.
- Investors should focus on pioneering technologies that overcome technical barriers to difficult waste streams, such as textile waste, enhancing material quality and traceability in recycled products, and promoting energy-efficient operations.
- In the environmental-science field, real-estate investors can also leverage sustainable investing in buildings through green certifications, renewable energy, and water-saving technologies, contributing to the circular economy and securing financial returns.
