Investment from the capital markets will be a critical component of successfully addressing the problem of ocean plastic. If scalable and replicable solutions can be funded and developed, the problem of ocean plastic can be turned on its head to become a “massive opportunity,” but only if investors can be convinced there’s money to be made, writes Forbes contributor Rob Kaplan. Corporate investors may be in the best position to make funnel funding into developing solutions.
Kaplan, who is founder and CEO of Circulate Capital, says short-term solutions have focused more on the symptoms rather than the cause, and ultimately do little to address the vastness of the problem. “Ocean plastic is a systems problem that demands a comprehensive, systems solution,” he writes.
Studies show that a 45% global reduction in ocean plastic can be achieved by improving waste management in India, Indonesia, Vietnam, Thailand, and The Philippines – but there’s a lack of funding and scale in those countries. Potential investors have little evidence of positive outcomes and there seems to be a lack of investable opportunities, according to Kaplan.
More “risk-tolerant” capital needs to be injected in companies and infrastructure projects; corporate investors may be able to help push longer-term solutions because they don’t need the same financial returns as large investors, Kaplan points out.
Circulate Capital is collaborating with the newly launched Alliance to End Plastic Waste on the Incubator Network, a project to develop and promote technologies, business models and entrepreneurs that prevent ocean plastic waste and improve waste management and recycling. The goal of the Incubator Network is to create a pipeline of projects for investment, with an initial focus on Southeast Asia. Companies including PepsiCo, The Coca-Cola Company, Danone, Dow, Procter & Gamble, and Unilever, expect to commit more than $100 in the incubator.
The Alliance to End Plastic Waste is a group of global companies from the plastics and consumer goods value chain that hope to advance solutions to eliminate plastic waste in the environment, especially in the ocean. The thirty founding member companies have committed over $1.0 billion with the goal of investing $1.5 billion over the next five years to help end plastic waste in the environment. The Alliance says it will develop and bring to scale solutions that will minimize and manage plastic waste and promote solutions for used plastics by helping to enable a circular economy.