The investment management firm, Circulate Capital, recently announced the first close of the US$106 million Circulate Capital Ocean Fund (CCOF), world’s first investment fund dedicated to preventing ocean plastic in South and Southeast Asia and one of the ten largest ASEAN-based Venture Capital Funds in the market.
Circulate Capital is an investment management firm dedicated to incubating and financing companies and infrastructure that prevent ocean plastic, with a focus on preventing mismanaged plastic waste in countries located in South Asia and Southeast Asia, regions that contribute disproportionately to ocean plastic pollution, mainly due to the absence of investment in critical waste and recycling infrastructure to manage the problem.
In fact, in a statement, the company notes that Asia is the biggest source of plastic leakage into global oceans, with 60% of ocean plastic originating from the region. Whatsoever, Rob Kaplan, CEO, Circulate Capital appears to be optimistic that “we are able to reduce nearly 50% of the world’s plastic leakage by investing in the waste and recycling sector in Asia, and even more if we invest in innovative materials and technologies.”
The CEO adds that this is why Singapore, a strategic hub of Southeast Asia, was chosen for the launch; in order to prove that
Investing in this sector is scalable for the region and can generate competitive returns, while moving closer to solving the ocean plastic crisis.
Moreover, CCOF will provide both debt and equity financing to waste management, recycling and circular economy start-ups and SMEs in South and Southeast Asia focused on preventing plastic pollution and advancing the circular economy, aiming to address the financing gap between available private capital and the resources needed by Asia’s waste industry systems.
Namely, plastic garbage at sea is a key threat the planet has to face, as there are nearly 8 million metric tons of plastic making way in the ocean every year. This is equivalent to the weight of nearly 90 aircraft carriers. These plastics come in many different forms: Among the top 10 kinds of trash picked up during the 2017 International Coastal Cleanup were food wrappers, beverage bottles, grocery bags, straws, and take out containers, all made of plastic.
Adding that it is estimated that the maritime industry loses an estimated €235 million a year from marine plastic debris, while the fishing sector loses close to €138 million per year from plastic pollution, said WWF in a new report. The report reveals that maritime trade and fisheries are responsible for 20% of plastics at sea.
Circulate Capital’s investment model seeks to mobilize institutional investors by blending concessionary funds with investment capital. Its objective is to demonstrate that investments in turning waste into value can ultimately provide attractive financial returns. Notably, 200 potential investment opportunities have been identified across a range of industries in the region, with the first investments targeted in the weeks to come.
Some of CCOF’s founding investors are among the world’s leading companies, such as PepsiCo, Procter & Gamble, Dow, Danone, Unilever, The Coca-Cola Company and Chevron Phillips Chemical Company LLC.
Matt Echols, Vice President, Communications, Public Affairs and Sustainability at Coca-Cola Asia Pacific commented that “for the beverage sector, the more recycled content used in any type of packaging such as 100% recyclable plastics, the lower the carbon footprint,” adding that
Beverage packaging does not need to become waste. By investing in the waste collection and recycling sector in this critical region, it can become a valuable material used again and again; a step closer towards a circular economy.
What is more, earlier in the year, it was announced that an alliance of global companies from the plastics and consumer goods value chain launched an organization to advance solutions to eliminate plastic waste, mostly in the ocean environment. The cross-value chain Alliance to End Plastic Waste (AEPW), made up of nearly 30 member companies, has committed over $1 billion with the goal of investing $1.5 billion over the next five years to help end plastic waste in the environment.