SINGAPORE: Singapore-based venture capital firm Circulate Capital launched a US$106 million (S$144 million) fund dedicated to preventing plastic pollution in Southeast and South Asian oceans on Wednesday (Dec 4).
The fund addresses the "financing gap” between private capital and the resources Asia’s waste sector needs, said Circulate Capital.
An Ocean Conservancy report showed that there is a net financing gap of US$28 to US$40 per tonne of plastic collection in China, Indonesia, the Philippines, Thailand and Vietnam.
Asia is also home to the biggest contributors to the estimated 8 million metric tonnes of plastic trash that winds up in the ocean each year, according to research published in the journal Science.
The study showed that the top five marine plastic trash offenders are all in Asia: China, Indonesia, the Philippines, Vietnam and Sri Lanka. Such litter inflicts US$1.3 billion in damage annually to fishing, shipping and tourism industries in the Asia-Pacific.
The fund’s eight investors include The Coca-Cola Company, PepsiCo, Procter and Gamble, Unilever, Dow, Danone and Chevron Phillips Chemical.
This comes after Coca-Cola, which invested US$15 million in the fund, was named the world’s largest polluter of plastics for the second year in a row in November, ahead of PepsiCo and Nestle, in an audit conducted by Break Free From Plastic.
Vice president of communications, public affairs and sustainability of Coca-Cola Asia-Pacific Matt Echols denied that there was a conflict of interest for the investors, who are among the largest producers of plastic in the world, instead adding that it was “the opposite”.
“What’s exciting about that is the companies are now looking at these issues as business opportunities. Coca-Cola, for example, we no longer see this as a problem, we see it as an opportunity,” he said.
He also stressed that Coca-Cola has committed to making 50 per cent of its packaging from recycled materials by 2030.
Circulate Capital has identified more than 200 investment opportunities across the region, with more details to be announced early next year, said Mr Rob Kaplan, CEO of Circulate Capital.
“Our first few, most of them look like your basic fundamental waste and recycling companies. We’re helping bring in new technology and capacity from other markets and bringing proven technology here to recycle plastic that currently gets into the environment and instead put it into the value chains of large corporations,” he said.
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The fund is looking to invest in 20 to 30 companies across the region in the next three to four years, he added. It also aims to reach businesses at all stages of the plastic life cycle, from manufacturing to recycling.
Mr Kaplan said: “At each stage of this value chain, because it is a value chain, we see profitable businesses that need capital to grow.
“And that’s how we make money. That’s how institutional investors will make money, to bring in the amount of capital we need to really drive change.”