$500 million fund launched to guide investment towards plastic waste solutions

Today (12 May), the Alliance to End Plastic Waste and Lombard Odier Investment Managers (LOIM) have announced their intention to launch a new circular plastic fund.

The fund will aim to raise $500 million from institutional 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 become a cornerstone investor in the fund, assigning LOIM to build and manage the fund, in accordance with its goal of generating a positive environmental, social, and economic impact.

In an announcement, the pair highlighted an estimated $1 trillion global economic opportunity in transitioning to a circular value chain for plastic packaging, as well as driving economies of scale and economic returns.

The fund aims to target key themes which can directly contribute to a circular economy for plastic and accelerate opportunities in waste management, ‘both upstream and downstream’ – including the collection and sorting of infrastructure, technology-enabled recycling infrastructure, design solutions for improved plastic durability, reuse and recyclability.

It also aims to drive innovation in plastic chemistry and production which, as stated by the partnering businesses, can simplify or make end of life treatment easier or more effective.

Only nine per cent of the world’s plastic is recycled – the remainder often ends up in incineration, open dump sites, landfill or enters the environment as plastic waste. The Alliance highlights that although solutions to countering these issues exist, such as infrastructure and collection systems, all require ‘significant capital investment’ and there is ‘vastly more to do to end plastic waste.’

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.”

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 added: “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.”