Investing in projects which support the transition to a more circular economy is just one of the ways that we are improving financial returns for our clients, while also helping to create a cleaner, greener and more sustainable future for everyone.
As with all of our investment targets, we select them based off of not only their potential environmental credentials, but also their potential to create market beating sustainable returns over the long term. This is why we believe in the thematic potential of the circular economy, and that helping lead the efforts to transition to a linear economy represents a great investment opportunity.
A linear economy is one in which natural resources are used to make products which will eventually become waste, for example many single-use plastics, such as straws, are linear economy products.
There are three key principles that have been identified as underpinning the transition to a more circular economy: the elimination of waste and pollution, circulating products and materials, and the regeneration of nature.[1] In brief a circular economy is one which prolongs the lifecycle of existing materials and products, thereby reducing the amount of waste created, along with cutting greenhouse gas emissions from having to manufacture new products. This is achieved by “sharing, leasing, reusing, repairing, refurbishing and recycling existing materials and products as long as possible”.[2]
Accordingly, the circular economy projects we have invested in so far support the fulfilment of these principles. Some of these projects include: water treatment and purification facilities, which improve water quality through the reduction of pollutants and encourage biodiversity; pollution and carbon emissions control; and waste management projects, such as recycling plants.
[1] https://ellenmacarthurfoundation.org/topics/circular-economy-introduction/overview
[2] https://www.europarl.europa.eu/news/en/headlines/economy/20151201STO05603/circular-economy-definition-importance-and-benefits