The Sleeping Giant Stirs: Four Signs LATAM’s Circular Economy Investing Environment Is Heating Up

The Circular Economy in Latin America: A Report on Sustainable Development Goals

The circular economy in Latin America is buzzing with developments that investors need to know about. I’ve previously written about some of the opportunities to invest for growth in Latin America that can drive returns that PE and VC investors are longing to see, while also building out a circular economy in the region. After all, technology and infrastructure gaps usually imply white space for investors.

Reasons Why 2024 is Pivotal for Building the Region’s Waste Ecosystem

1. Asset Managers Have Lots of Dry Powder to Deploy

After sitting largely on the sidelines in 2023, large, brand-name private equity firms like GSAM and General Atlantic and smaller venture capital funds have lots of capital to deploy and are ready to put it to work. According to a recent LAVCA newsletter, some of the largest funds in the region say they are ready to make fresh investments in companies working on everything from climate technology to artificial intelligence (AI).

2. An Improved Public Policy Environment Is Supporting Efforts to Curb Plastic Waste

Latin America has moved to the forefront of public policy efforts, as evidenced by Columbia’s plans to host the next biodiversity COP in November 2024, followed by Brazil’s hosting of the well-known climate COP (COP 30) in 2025. Chile and Colombia are leading the way in the region, having introduced Extended Producer Responsibility (EPR) laws. While these groundbreaking initiatives are just getting off the ground with full implementation still in the pipeline, their inception marks a significant step forward, marking a strong commitment to making manufacturers accountable for the lifecycle of their products. Panama and Brazil have also made commitments to reduce plastic pollution, including eliminating the use of single-use plastic items in three years, reducing the import and consumption of plastic packaging by 30% in five years, and reducing the import of virgin plastic.

3. The Corporates are Moving In

Since corporates have a vested interest in finding solutions to the plastic waste crisis, they are often the first to come in and invest at scale. Drawing from our experiences across South and Southeast Asia, it’s encouraging to see a similar momentum gaining traction in Latin America. Recently, Delterra, in partnership with Amcor (AMCR), Mars, and P&G, launched a $6 million strategic alliance aimed at curbing plastic pollution throughout the Global South, with a primary focus on Argentina, Brazil, and Indonesia. This announcement came the same week my firm launched a $65 million initiative to combat plastic pollution in the region, in partnership with IDB Labs, the innovation laboratory of the Inter-American Development Bank Group, Builders Vision, Chevron Phillips Chemical, Danone, Dow, Mondelēz International, and Unilever.

4. There are Promising Opportunities in the Region

We’ve landscaped thirteen countries in LATAM and nine islands in the Caribbean, reviewing more than 300 companies in the circular plastics ecosystem. There are compelling market-based solutions that not only integrate activities of the entire value chain of waste plastics (including collection, sorting, and recycling) but also offer tremendous possibilities to scale volumes of prevented plastic pollution and contribute to improving working conditions and livelihoods of the people involved in this sector.

I’m excited by these developments and the prospect that we may have finally arrived at the moment where new investment dollars will flow to those enterprises that can help build the local, regional, and ultimately global recycling supply chains and unlock value in the region. LATAM is ready. Watch this space.

SDGs, Targets, and Indicators in the Article

1. SDGs Addressed or Connected to the Issues Highlighted in the Article

• SDG 9: Industry, Innovation, and Infrastructure
• SDG 12: Responsible Consumption and Production
• SDG 13: Climate Action
• SDG 14: Life Below Water
• SDG 15: Life on Land

The article discusses the circular economy, waste management, and efforts to curb plastic pollution, which are all connected to the above-mentioned SDGs. SDG 9 focuses on promoting sustainable industrialization and fostering innovation, while SDG 12 emphasizes responsible consumption and production. SDG 13 addresses climate action, which is relevant to tackling the plastic waste crisis and fighting climate change. SDG 14 and SDG 15 relate to marine and terrestrial ecosystems, respectively, which are impacted by plastic pollution.

2. Specific Targets Under Those SDGs Based on the Article’s Content

• SDG 9.4: Upgrade infrastructure and retrofit industries to make them sustainable and resource-efficient.
• SDG 12.5: Substantially reduce waste generation through prevention, reduction, recycling, and reuse.
• SDG 13.3: Improve education, awareness-raising, and human and institutional capacity on climate change mitigation, adaptation, impact reduction, and early warning.
• SDG 14.1: Prevent and significantly reduce marine pollution of all kinds.
• SDG 15.1: Ensure the conservation, restoration, and sustainable use of terrestrial and inland freshwater ecosystems and their services.

The targets listed above align with the issues discussed in the article. Upgrading infrastructure and industries to be sustainable and resource-efficient (SDG 9.4) is crucial for building a circular economy and improving waste management practices. Reducing waste generation through prevention, reduction, recycling, and reuse (SDG 12.5) is directly related to addressing the plastic waste crisis. Improving education and awareness on climate change (SDG 13.3) is essential for promoting sustainable practices and combating climate change. Preventing marine pollution (SDG 14.1) and ensuring the conservation and sustainable use of terrestrial ecosystems (SDG 15.1) are important for protecting the environment from the impacts of plastic pollution.

3. Indicators Mentioned or Implied in the Article

• Investment capital deployed by asset managers in climate technology, AI, biotechnology, health care, and financial services.
• Total dollar investment and number of disclosed deals in the waste management sector.
• Implementation of Extended Producer Responsibility (EPR) laws by Chile and Colombia.
• Commitments by Panama and Brazil to reduce plastic pollution, including the elimination of single-use plastic items and reduction of plastic packaging import and consumption.
• Launch of strategic alliances and initiatives aimed at curbing plastic pollution in specific regions.

The article mentions or implies several indicators that can be used to measure progress towards the identified targets. These indicators include the amount of investment capital deployed in specific sectors, the total investment and number of deals in the waste management sector, the implementation of EPR laws, commitments to reduce plastic pollution, and the launch of strategic alliances and initiatives. These indicators reflect the financial, policy, and collaborative efforts being made to address the issues related to the circular economy and plastic waste management.

Table: SDGs, Targets, and Indicators

Behold! This splendid article springs forth from the wellspring of knowledge, shaped by a wondrous proprietary AI technology that delved into a vast ocean of data, illuminating the path towards the Sustainable Development Goals. Remember that all rights are reserved by SDG Investors LLC, empowering us to champion progress together.

Source: forbes.com

Join us, as fellow seekers of change, on a transformative journey at https://sdgtalks.ai/welcome, where you can become a member and actively contribute to shaping a brighter future.