For a lot of us, 2020 was an event that was delayed because the world’s attention was changed to the crucial task of fighting the COVID-19 epidemic. However, other pressing global issues did not rest, and we slipped into the most pressing issues, like the impact of plastics on climate change and pollution.

During this period, the recycling and management of the waste value chains within South and Southeast Asia ground to a stop, and the use of virgin and single-use plastics skyrocketed. Research has shown that during the pandemic’s peak, more than 80 percent of the recycling value chain was not functioning across Vietnam, India, and the Philippines as demand for recycled plastics decreased by 50 percent. 

The situation is unsustainable in the long term, and the environmental impacts are disturbing.

Opportunities during times of crises

The issue of plastic pollution holds the potential to become an engine for economic recovery as well as growth. It can be tackled in parallel by moving away from the short-term approach and instead more of a focus on future-proofing. This requires coordinating approaches to the recycling of plastics as well as economic development. The circular economy could play a significant role in boosting global competitiveness and encouraging sustainable economic growth by creating jobs in the new norm.

To achieve this, we have to put more money into local systems, including local resilience, economies, and supply chains.

Impact investing to scale

Investments in climate-resilient infrastructures are crucial to tackle the issue of plastic pollution. They not only speed up the creation of sustainable infrastructure and result in substantial job creation but can also improve environmental and economic resilience. Recycling is the center of the circular economy and the future for investors in infrastructure looking for sustainable opportunities.

Additionally, the use of digital technologies that promote transparency, efficiency, and traceability will link all participants in the value chain, including informal sector workers, who make up 59 percent of the plastic recycled in the world 

The chance to invest

So far, we have invested in seven firms that are part of the recycling and waste management process in India and Indonesia that focus on these areas. We aim to showcase the investment market and clear the way for billions of dollars in institutional investment capital to build a sustainable solution to the ocean plastic problem.

The recycling and waste management industry might not be an exciting investment opportunity, but it’s not an economy that is a frontier where investors have to accept risky investments. To see the potential, it is possible to examine other leading companies in this field and see companies such as Veolia, which earned EUR10bn of revenues from waste management in 2019 alone.

In this way, investing in the industry will not just address the problem of ocean plastics. Still, it will also create positive socio-economic benefits, including jobs, women’s empowerment, and improved sanitation, while capturing the value of waste plastic.

With interest rates near zero, presenting an ideal investment environment shortly now is appropriate to start investing to invest in South and Southeast Asia’s circular economy and recycling industries. The increasing amount of plastic waste must be efficiently managed to create resilient supply chains and divert plastic waste from the earth. This kind of win-win solution deserves the consideration and priority of regional investors and governments.

Regula Schegg

Regula is the Managing Director for Asia Regula is Managing Director for Asia at Circulate Capital, based in Singapore. She oversees the development and execution of Circulate Capital’s investment strategy for South and Southeast Asia. Regula has over 20 years of experience in the international market, working in both the public and private sectors. Throughout her career, she held strategic development, financial control, commercial development M&A, and Private Equity posts. She was also involved in the Microfinance business, setting up the growth guarantee fund and establishing an impact business in the Philippines that was developing sustainable housing solutions working in partnership with communities of urban poverty and civil society organizations. Regula earned an MBA in Global Management from Thunderbird, School of Global Management, USA, and the option of pursuing undergraduate courses in Switzerland, Switzerland, the United Kingdom, and France. She is an Aspen Institute Business & Society First Movers Fellow. Regula is fluent in German, English, and French.