Impact investing could provide opportunities for the recycling industry

Written by: Olivia Sibony | Published:
Olivia Sibony is head of crowdfunding at SeedTribe

When people put plastic into their recycling bins at home they probably assume that all items will be recycled.

Wrong.

It was reported earlier this year that recycling rates of local councils serving 14 million households in England have fallen over five years.

Half of local authorities recycled a lower proportion of household waste in 2016-17 than in 2011-122 and only nine per cent of our plastic is recycled in the UK, due in part to a lack of recycling facilities – it being too expensive to sustain plants.

Low recycling rates are challenging the industry, but they also opens up opportunities for investors, recycling innovators and entrepreneurs.

Impact Investing

Look at recycling plastic. Investment in this area must happen if we are to increase overall recycling rates and impact investing is helping recycling and waste businesses to innovate and reimagine the traditional recycling business model.

With impact investing, businesses can pitch to motivated investors who are already interested in supporting a business that will have an impact on social or environmental problems, whilst making the all-important profit.

Impact investing refers to investments made into companies, organisations, and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return.

At SeedTribe, an impact-led crowdfunding platform, we handpick all businesses, ensuring they are legitimately striving for impact, tackling a social or environmental challenge. We use the UN’s Sustainable Development Goals as a framework to vet each business and just as importantly, it must be a worthwhile investment opportunity.

Recycling is an area with huge potential for investors where the business model is evolving, offering up opportunities for profit. There is an undeniable rise in global interest in recycling and with that, China is no longer accepting the UK’s waste.

These factors mean the UK’s recycling industry must evolve and grow. Investing in something that is only showing an increase in demand and where numbers will continue to increasingly point in favour of recycling, is indeed a wise choice.

Recycling PET Plastic is an example of this and SeedTribe is currently raising funds for Advanced Sustainable Developments (ASD) which is leading the way in recycling of PET plastics and reinventing the recycling business model.

ASD was founded by Ahmed Detta who predicted the increase in demand for onsite recycling once the Beijing government implemented the ban on accepting UK waste.

PET is one of the most used plastic materials but unfortunately, it is not being recycled in the way it used to before the financial crash of 2008, after which oil prices made it unprofitable to sustain. This has led to local council recycling rates dropping because PET recycling firms ceased trading. Today PET Plastic currently cannot be processed locally.

Because recycling PET is today not commercially viable and there is a lack of Government investment in the industry, Ahmed Dettahas had to reinvent the business model by not relying solely on the revenue from recycled plastic.

Using the circular economy and brand partnerships, recycling PET plastic can be profitable. Detta’s business is building relationships with big corporations such as Danone and Coca-Cola which will provide advertising revenue on the recycling banks that people put their bottles into. These companies are seeing that they need to play a critical role in reducing plastic waste, so we are seeing an increase in funding from these sources, which Detta is tapping into.

This innovation and reimagination of the recycling industry is made possible because of socially interested investors such as those on SeedTribe. Impact investing can and is revolutionising the recycling industry.

As government investment remains low and the public become more aware of the importance of recycling, we will surely see more businesses in the recycling industry turn to interested impact aware’ investors.

These investors are given a unique opportunity to invest in an ever-growing market with huge potentials whilst knowing they are helping to find solutions to the global problem of plastic.

By Olivia Sibony is head of crowdfunding at SeedTribe


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