The global issue of plastic pollution — and its significant consequences for our planet — is a widely recognised challenge. 

Every year we produce the weight of the world’s population in new plastics, effectively the weight of 2.5 million blue whales. That’s a big problem when you consider that 90% of plastics are created using fossil fuels, generating large quantities of greenhouse gas emissions. 

The plastic value chain’s emissions, from production and end of life, currently represent 4% of all emissions which is comparable to that of the aviation sector. And based on the current trajectory, in 20 years those emissions could represent 20% of the annual carbon budget allowed under a 1.5 °C global warming scenario.

Furthermore, usage tends to be short lived, with nearly half of all plastic produced consisting of single-use plastics. This produces vast amounts of waste, which is often poorly managed. Only 10% is recycled, 26% is incinerated or even burned in open air and emitting carbon and toxic fumes, while some 15% is released into the natural environment, harming nature and biodiversity.

A solvable problem

That said, plastic pollution is a solvable problem. It just requires more innovations, scale-ups and investments.

Lombard Odier Investment Managers (LOIM) — the institutional asset management arm of Lombard Odier Group headquartered in Switzerland — is uniquely positioned with a new strategy to catalyse investment into solutions that tackle this challenge head on. 

The objective of LOIM’s Plastic Circularity Strategy is to reduce plastic waste and greenhouse gas emissions in the plastic value chain while delivering market returns. In LOIM’s view, the solution to reducing plastic waste is the transition to a more circular model. Creating a closed loop system can minimise the harm to nature and biodiversity that arises from producing and disposing of plastic. 

Private equity’s role

The investments required in transforming the plastic value chain into a circular model represents a market opportunity estimated to exceed US$1 trillion. 

LOIM highlights that private equity has a role to play in accelerating the scaling of solutions and closing the funding gap between venture and strategic investments.

Its Plastic Circularity Strategy involves investing in companies specialising in innovative materials, new usage models offering reuse, repair and refill options and improved collection, sorting and recycling. It will predominantly invest at the growth equity stage where the funding gap is the most severe, across a wide scope of solutions, leading to optimal diversification and impact. 

By tapping into private companies, investors gain access to a significant majority of the economy not covered by listed markets. 

The Plastic Circularity Strategy features: 

  • Access to a global private-equity mandate in private equity focusing on growth-stage investments in Europe and the US.
  • Strong deal flow from its networks, the Plastic Circularity team and through relationships in the private equity market with highly experienced Private Equity investors.
  • The unique combination of LOIM’s private-equity track record and access to expert research and network cross petrochemical, packaging and consumer goods industries.
  • High-conviction investment: aims to deploy capital in 20-30 select opportunities. 

LOIM’s belief in the potential of sustainability is integrated into its investment process, from thematic research to deal selection and ongoing portfolio management.

By creating value for the companies it invests in, LOIM’s private-equity team can unlock positive sourcing opportunities. Its networks and capabilities create value across multiple areas including:

  • Supporting investee companies to define their strategies, including their financial strategies.
  • Identifying growth opportunities into new technologies, geographies, segments, or specific clients.
  • Aiding investee companies to deliver on these opportunities, especially by making introductions in the sector and providing access to talent and sector expertise.
  • Facilitating the exit of LOIM’s investments by providing investee companies with privileged access to strategic players and other sustainability investors.

Impact Investment Summit to feature Victoire Carous 

Victoire Carous, co-lead of the Plastic Circularity Strategy at LOIM, will be speaking at next week’s Impact Investment Summit Asia Pacific in the breakout session: Eliminating Waste, Maximizing Impact – Resource Reuse for Environmental Gain.

Alongside Victoire, the session will feature Claudia Kwan – Senior Investment Analyst at Northstar Impact, Pete Ceglinski – CEO & Co Founder at Seabin, Adam Tucker – CEO at Dragonfly Enviro Capital, Carlos Castillo – Portfolio Manager at Melior Investment Management, and Kurt Hegvold – Managing Director at Electrolux Australia.

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