The Circulate Initiative has called for greater investment to tackle plastic pollution, as new data revealed only $32bn a year of private investment went to plastics circularity between 2018 and 2023 – far below the $1trn needed.
In the third edition of the Plastics Circularity Investment Tracker, figures show that in 2019, 22 million tonnes of plastic waste was produced, an amount which could double by 2060 if immediate action isn’t taken to address the funding shortfall.
The Circulate Initiative – a non-profit organisation that works on resolving plastic pollution in emerging markets – analysed over 5,500 transactions across 3,000 companies in 100 countries over the six year period. It found that emerging markets received only 6% of investments, despite the greater impact of plastic pollution in these economies. Asia and Africa received 10% and 0.2% of total investments respectively over the six year period, even though the two continents account for 90% of plastic waste emitted to the ocean.
Further, while investments are lacking across the plastic lifecycle, 82% of investments are channelled to downstream solutions such as recovery and recycling, while solutions such as refill and reuse, which are designed to reduce plastics consumption, received only $8bn.
Michael Sadowski, executive director of The Circulate Initiative, said: “The Circulate Initiative is thrilled to launch the third edition of the Plastics Circularity Investment Tracker in cooperation with International Finance Corporation (IFC).
“While the investment gap to tackle plastic pollution is significant, in showcasing examples of successful, innovative investment models, we hope to inspire more financial decision-makers to see the opportunity to join the global fight against plastic pollution.”
Elsewhere, the report found that, while early-stage investment is needed to foster innovation and new business models, only 2% of investments went to firms in this space in their early stages of development.
However, on a more positive note, the report also demonstrates a growing acceptance of innovative investment approaches, such as thematic loans and bonds, blended finance and outcomes-based financing, deemed “critical” to mobilising private capital.
The data has been released ahead of the final round of negotiations for an international legally binding instrument on plastic pollution, including in the marine environment, set to take place in November and December 2024 – something which the Circulate Initiative emphasised the importance of to not only mobilise additional capital, but to redirect it to regions where it is most needed.
Jamie Fergusson, global director of climate business at IFC, added: “As we build on the momentum of the negotiations for a global plastics treaty, it is imperative that the public and private sector work together to translate the potential commitments from this treaty into tangible actions. IFC is ready to support companies investing in emerging markets, which currently only receive 6% of investments, to foster a circular economy that benefits all.”
