Capital markets are critical for scaling sustainable solutions to end plastic waste

The Alliance to End Plastic Waste (“Alliance”) and Lombard Odier Investment Managers (“LOIM”) today announce their intention to launch a new circular plastic fund. The fund will aim to raise US$500 million from institutional and other accredited investors for scalable solutions to remove plastic waste from the environment, increase recycling, and drive the global transition towards a circular economy for the plastic value chain. The Alliance will serve as a cornerstone investor in the fund.

Following an extensive and competitive tender, the Alliance has mandated LOIM to build and manage the fund with the objective of generating positive environmental, social, and economic impact together with attractive financial returns.

There is tremendous opportunity for turning plastic waste into a resource, as well as driving economies of scale and economic returns. According to industry estimates, the transition to a circular value chain for plastic packaging represents a potential US$1 trillion global economic opportunity by 2030.

The fund will aim to target key themes which can directly contribute to a circular economy for plastic and accelerate opportunities in overall waste management (both upstream and downstream) —including collection and sorting infrastructure, technology-enabled recycling infrastructure, design solutions for improved plastic durability, reuse and recyclability. It will also aim to drive innovation in plastic chemistry and production which can simplify or make end of life treatment easier or more effective.

The Alliance will act as technical adviser to the fund via a team of experienced professionals who will provide industry-led expert advice on the technical feasibility, commercial viability and scalability of plastic circularity solutions, as well as waste management technology and infrastructure.

Catalyzing capital for investible opportunities

The obstacles to recycling are well known. Only 9% of the world’s plastic is recycled; most of it ends up in incineration, open dump sites, landfill or enters the environment as plastic waste. While solutions to countering these issues exist—ranging from infrastructure and collection systems and scaling innovative technologies, to systemically addressing market inefficiencies and turning linear supply chains into a closed loop—there is vastly more to do to end plastic waste. All these solutions require significant capital investment.

Jacob Duer, President and CEO of the Alliance said: “Our goal in partnering with Lombard Odier in relation to a circular plastic strategy is to grow investments in solutions that can help end plastic waste and contribute to a circular economy. The strategy harnesses the collective intelligence of the plastic value chain and connects it with capital, bringing much needed solutions to scale. I am confident this will help focus financial market attention on the investment opportunity that plastic circularity represents, and help to catalyze multiple sources of financing for investments in circular solutions for plastic waste.”

Accelerating the drive to end plastic waste

Jim Fitterling, Chairman and CEO of Dow and Alliance Chair, commented: “The systemic transformation needed to enable a plastic circular economy requires societal, infrastructure and technology innovations. This strategy presents a meaningful opportunity to put the plastic waste management ecosystem firmly on the agendas of institutional investors to accelerate the transition to a global plastic circular economy.”

Jean-Pascal Porcherot, Co-Head of LOIM and Managing Partner of Lombard Odier Group said: “LOIM is proud to be partnering with the Alliance to build and manage a ground-breaking fund that addresses the plastic circularity issue with true solutions. This important mandate reflects the shared values between the Alliance and LOIM, and recognizes our deep expertise and highest credentials in sustainable investing.

“This strategy presents a compelling investment opportunity. It will target opportunities across all segments of the private equity spectrum - including direct and co-investments investments - with the objective to reduce plastic waste issues worldwide and deliver attractive financial returns and sustainability outcomes.”

At Lombard Odier Investment Managers, we are rethinkers with one goal in mind. To provide our clients with outstanding investment solutions that meet their needs for the long term and evolve to thrive in the challenging world in which we all live. 

We are focused investment specialists, seeking out investment opportunities that lie on less trodden paths, where our diverse and talented team can add genuine, persistent, value to our clients. We constantly rethink what we know and do, innovating to create new strategies and develop new ways of investing. 

We believe that the next economic revolution has already begun and that sustainability will be a major driver of returns for the foreseeable future and beyond. For those with the skills to adapt to this new reality, sustainability will create new sources of alpha, open up new investment opportunities and lead to enhanced return and reduced portfolio risk.

Our team of sustainability experts combine sophisticated data sources, academic rigour and technical innovation to create leading-edge, science-based tools that provide unique insights that are available to all our investment professionals. 

These unique insights are reflected directly in our growing range of dedicated sustainable investment strategies that are aligned to this core belief - That our economic model must move from being Wasteful, Idle, Lopsided and Dirty to become Circular, Lean, Inclusive and Clean. We call this The CLIC™ Economy.

With more than 180 investment professionals, we are a global business with a network of 13 offices across Europe, Asia and North America and have assets under management of 67 billion CHF (as at 31 March 2022).

The Alliance to End Plastic Waste (Alliance) is a global non-profit organisation with the mission to end plastic waste in the environment. Its focus is implementing projects and investing in innovative solutions to develop or enhance waste management systems. As of December 2021, its portfolio comprises over 35 projects across 29 countries worldwide.

Tackling plastic waste is a complex challenge that requires collective action. Since 2019, the Alliance has convened a global network of over 90 industry leaders across the plastics value chain, together with government, civil society, entrepreneurs, and communities to work towards advancing a circular economy for plastic waste. For more information, visit: www.endplasticwaste.org.

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