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    Eliminating plastic pollution: an investor perspective

    Eliminating plastic pollution: an investor perspective
    Michael Urban - Chief Sustainability Strategist

    Michael Urban

    Chief Sustainability Strategist

    Article published in Allnews, 12 October 2022

    On 5 October, at the Building Bridges sustainable finance conference in Geneva, Lombard Odier announced a landmark research partnership with Enterprise for Society (E4S). That same day, Jean-Pierre Danthine, E4S Managing Director, joined our Senior Managing Partner, Patrick Odier, for a dedicated panel to examine how sustainable finance has the power to scale-up new solutions that could put an end to plastic waste.

    Today, more than 400 million tonnes of plastic are produced each year, equivalent to the mass of the global population

    Hear from one of our experts on the role of investors in tackling plastic pollution

    Plastics are everywhere in our lives. Look around and you will find all manner of things made using plastic, from smartphones to food packaging. Versatile, lightweight and low-cost, the use of plastic has grown substantially. Today, more than 400 million tonnes of plastic are produced each year, equivalent to the mass of the global population. And this growth continues.

    Read also: Frédéric Rochat on sustainable investing

    However, the corresponding waste management infrastructure has not benefited from the same enormous growth. Of the 8.5 billion tonnes of plastic ever produced, 55% has been thrown away or gone to landfill, 8% has been incinerated and just 1.2% has found its way into a true circular loop. Plastic packaging is particularly problematic. More than 70% of plastic packaging goes unrecycled, ending in landfill, being mishandled in the waste management chain, or going uncollected altogether. Following a short first use, this waste translates to a loss of USD 120 billion for the economy.

    175 countries approved a historic resolution to develop the first legally binding United Nations agreement to end plastic pollution

    In order to reduce plastic pollution, a holistic approach to improving waste management and plastic circularity is required. At Lombard Odier, we believe we have reached a turning point. Technological innovation, consumer demand, brand commitments, and policy changes mean that circular plastic now represents an attractive opportunity for investors. Earlier this year, 175 countries approved a historic resolution to develop the first legally binding United Nations agreement to end plastic pollution. The agreement, which is to be completed in early 2024, will include measures to improve the production, design and disposal of plastic. Businesses active in the consumer goods, retail and fashion industries, together accounting for 20% of global supply and demand for plastic packaging, have committed to reducing plastic waste.

    Read also: 10 ways to rethink plastic through technology

    Investors play a key role

    A total of USD 1.2 trillion will need to be invested between now and 2040 to support the necessary systemic changes in the plastics industry. Investors will play a crucial role in mobilising the funds required for innovation and large-scale deployment. Investment in Europe and North America has already increased, as industry prepares to meet higher demand for recycled plastic, adapt to new policies, and bolster opportunities for growth and value creation. Strategic investors are actively furthering vertical integration in the recycling industry by working with waste management companies, polymer producers, brand owners, processing companies and retailers.

    Investors will play a crucial role in mobilising the funds required for innovation and large-scale deployment

    Lombard Odier has partnered with the Alliance to End Plastic Waste (AEPW) to help catalyse the investment of private assets in circular plastic and support circular economy research. The Lombard Odier Plastic Circularity fund will target investments in the plastics value chain, particularly in innovative materials, new patterns of use, and the improvement of collection, sorting and recycling. In this way, we aim to bring together the plastic value chain and the wider investor community to help reverse the tide of plastic pollution.

    Important information

    This document is issued by Bank Lombard Odier & Co Ltd or an entity of the Group (hereinafter “Lombard Odier”). It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a document. This document was not prepared by the Financial Research Department of Lombard Odier.

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