The non-profit organisation has said that the current investment trajectory is too slow to meet targets to reduce plastic leakage into the environment by 90% by 2040.
The above figures come from the third edition of the Plastics Circularity Investment Tracker, produced by The Circulate Initiative.
The report analysed over 5,500 transactions across 3,000 companies in 100 countries between 2018 and 2023. It is supported by the International Finance Corporation (IFC).
Other conclusions in the Plastics Circularity Investment Tracker
On top of the widening investment gap, the report found that emerging markets received only 6% of investments despite the greater impact of plastic pollution in these economies. The report revealed that 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. The Circulate Initiative focuses its work in South and Southeast Asia.
There was also a heavy focus from investors on downstream solutions like recovery and recycling – at 82% of investments analysed. Solutions to reduce plastic consumption such as refill and reuse received only 4% of investments at $8 billion.
Banks and corporate investment were the top two sources of funding, contributing to 37% and 31% of deal value respectively over the six-year period.
The non-profit is calling for an increase in early-stage financing to foster innovation and new business models as 2% of investments went to firms in early stages of development.
The report highlights a series of innovative investment approaches such as thematic loans and bonds, blended finance and outcomes-based financing. It says that these approaches will be ‘critical to the mobilisation of private capital for tackling plastics pollution’.
Building on the global plastics treaty
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 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.”
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.”
The Circulate Initiative is calling on the negotiations to increase and redirect capital to regions where it is most needed.
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