Case Study

Strengthening Recycling in Emerging Economies

Plastic pollution is most visible in Asian and African nations, where waste management systems are often inefficient or non-existent.

Indonesia, the Philippines, Thailand and Vietnam are some of the world’s top plastic polluters. Together with China, they account for up to 60% of the plastic waste leaking into oceans. Coupled with the fact that plastic consumption is continuing to grow as emerging economies develop, ensuring that all countries have the necessary waste management infrastructure in place will be central to ensuring that plastic waste does not end up in the environment. The main challenges have been cited as a lack of infrastructure and financing, poor public awareness and poor execution of recycling policies.

“We have recognized that financing is a key barrier, as people always want to know “who is going to pay for it?” By removing capital for infrastructure and operators as a barrier, we believe we can accelerate solutions to policy, education, supply chains and more.”

In an effort to remove financing as a barrier to improved infrastructure, Circulate Capital launched a $106 million fund dedicated to preventing plastic from entering Asian oceans. The Circulate Capital Ocean Fund will provide both debt and equity financing to waste management, recycling and circular economy start-ups and SMEs in South and Southeast Asia focused on preventing plastic pollution. The company has identified more than 200 potential investment opportunities across a range of industries in the region.

Companies are also stepping in to help fill the infrastructure gap. Danone has conducted a mapping exercise to determine which of the markets into which it sells have the lowest recycling rates. In Argentina, Brazil, Mexico, Indonesia and Ghana the Danone Ecosystem Fund is assisting in the creation and development of worker co-operatives that can oversee the process of collecting, sorting and selling plastics directly to recycling plants. With recycling in many developing economies often carried out by millions of waste pickers (often women, children, the elderly and the unemployed) the World Bank stresses that when properly supported and organized, informal recycling can create employment, improve local industrial competitiveness, reduce poverty and decrease municipal spending.

The success of collecting waste material will require a collaboration between the private and public sector to invest in the right technology, develop technical expertise to maintain a proper waste management system and create a secondary market for waste materials.

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