Investing for impact: private equity’s role in the plastics challenge

At LOIM, we recognise the important role that private markets can play in delivering sustainability outcomes alongside financial returns. LOIM’s Plastic Circularity strategy offers investors a way to capture opportunities arising from innovative solutions to the plastic-waste challenge. 

Launched in 2023, the strategy aims to reduce both plastic waste and greenhouse gas (GHG) emissions from the plastic value chain, while also delivering attractive financial returns.

Progress is measured through these key impact performance indicators (impact KPIs):

• avoided and reduced plastic waste
• avoided and reduced GHG emissions in the plastic value chain. 
   

FIG 1. Plastic Circularity consolidated impact KPIs¹
As of the end of 2024, the companies in the portfolio combined (excluding one that was invested in late 2024) achieved the following environmental impacts:

From plastic waste into opportunity  

Plastic pollution is a systemic challenge that drives biodiversity loss and contributes nearly 5% of global greenhouse gas emissions⁴. The Plastic Circularity strategy invests in companies that we believe offer high-performance, cost-competitive solutions that accelerate the transition to a circular value chain. The strategy focuses on three key areas of the plastic value chain: innovative materials, new usage models, and improved collection, sorting and recycling. 

In this way, the strategy spans the full lifecycle of plastics, reducing reliance on virgin fossil-based materials, extending product lifespans, and closing the loop with advanced recycling technologies. 

Read more: Investing in innovation to reduce plastic waste

Key features that we believe give us an edge in plastic circularity include: 

• Focus on the entire plastic value chain, from production, use and end-of-life, to maximise impact and portfolio diversification
• Strong deal flow from the Alliance to End Plastic Waste (AEPW), the Plastic Circularity team and LOIM’s relationships in the private-equity market 
• The unique combination of LOIM’s private-equity track record with the expertise of AEPW technical advisors, complemented by specialised research from holistiQ, the sustainable-investment platform of LOIM.

Capital meets innovation

The strategy’s focus puts us in a strong position to drive the transition from niche innovation to mass-market adoption across the plastic value chain. Our approach is designed to bridge the funding gap at the growth stage. We invest across the innovation curve, focusing on solutions that demonstrate both environmental impact and financial viability. 

We aim to create value by embedding sustainability throughout the investment process, guided by the key impact investing principles of intentionality, additionality and measurability. Every investment is designed with a clear intention to generate positive impact; adds value through financial support, strategic influence or operational improvements; and ensures accountability via the use of robust metrics.

These key sustainability performance metrics show how our plastics strategy is creating measurable impact in the transition to a circular economy. By investing in innovative solutions across the plastics value chain, the strategy is designed to turn the challenge of plastic waste into an opportunity for lasting environmental and financial impact.