Venture capitalist urges massive plastics recycling investment
© Huguette Roe -

Venture capitalist urges massive plastics recycling investment

World Economic Forum participant makes link to reducing plastics in the ocean.

January 21, 2020

A Singapore-based circular economy-focused fund manager says $5 billion of investments annually in waste and recycling infrastructure can help stem the tide of discarded plastic flowing into oceans.

Rob Kaplan, CEO of Circulate Capital, outlined the reasoning behind and purpose of his recommendation in an article and presentation offered at the 2020 World Economic Forum in Davos, Switzerland.

Kaplan identified five nations in Asia—China, Indonesia, the Philippines, Thailand and Vietnam—that he says could most benefit from major investments in systems to collect discarded plastics and process them for recycling. He writes that “targeted investment” in those five nations “could reduce plastic ocean flows by 45 percent.”

Pointing to a study that indicates “more than half of the plastic that flows into the ocean comes from South and Southeast Asia,” Kaplan adds, “The meteoric rise in consumption, and the single-use, disposable mindset that comes along with it, have far outpaced the modernization of recycling and waste management systems needed to cope with the consequences.”

In these newly prosperous regions of Asia, “This economic growth means that there is capital available” for such investments, adds Kaplan, pointing in particular to international development agencies.

He breaks down the numbers this way: “19 Asian countries account for 82 percent of global plastic waste flowing into the ocean. Meanwhile, the public sector in Asia funds about 90 percent of infrastructure development. According to the World Bank, waste management is often the largest single budget item for many local governments in low-income countries, and yet it receives next to zero support from international development agencies.”

These developing nations have not yet created “a formal ecosystem that supports collection, sorting, recycling and the circular economy,” writes Kaplan. The result, he says: “Over 90 percent of waste in countries across the Southeast Asia region is still openly dumped or burned, which is why it often easily makes its way into the ocean.”

Regarding how this $5 billion per year might be used, Kaplan writes, “The only way capital markets will act at scale is if investors believe this is a money-making opportunity. Patient and risk-tolerant capital is needed to incubate and invest in businesses and projects that will become the future of waste management and recycling across the region.”

Kaplan points to two companies in India—Banyan Nation and Kabadiwalla Connect—and one in Indonesia called Tridi Oasis that he says are offering business models that incentivize the responsible collection and diversion (away from dumping grounds) of discarded plastics.