Alliance to End Plastic Waste hits $400M investment target, outlines future targets

The industry-funded Alliance to End Plastic Waste and its members have invested at least $400 million of their $1.5 billion commitment in environmental projects since forming early last year, according to a Sept. 2 progress report from the group.

AEPW, which is funded by large global consumer goods, plastics and waste management firms, said the coronavirus pandemic has slowed the pace of some of its projects to help clean up and build infrastructure to manage plastic waste in the environment, mostly in developing nations.

But the alliance said it's started 14 projects in six countries in Asia and Africa, and its companies and organizations are working on 55 separate member-led projects that include $400 million of investment. The report is the most detailed description of the alliance's work since it formed in 2019.

The Singapore-based group also unveiled several new goals for 2025: Unlocking at least $7.5 billion from other investors in waste management and recycling projects, demonstrating what it calls "zero plastic waste" in multiple cities and creating better economic opportunities for more than 100 million people by supporting local ownership of waste management.

"Our ambition, over five years, is to divert millions of tons of plastic waste in more than 100 at-risk cities across the globe, improve livelihoods for millions and contribute to a circular economy," said Jacob Duer, president and CEO.

A key part of the group's focus is to bring seed investments to programs and act as a sort of incubator to get projects to a larger scale, where they can then be seen as financially viable to other investors like development banks, governments and private firms.

"Looking ahead, we will upscale projects and get them 'investment-ready' so that our initial seed money can spur bigger capital investment," said David Taylor, chairman, president and CEO of Procter & Gamble Co. and chair of the AEPW. "This is how long-lasting, systemic change can take hold, and this is where the private sector must play a leading role with initiatives like ours."

It's a task that some experts caution will go well beyond the $1.5 billion AEPW has pledged, a point that AEPW officials agree with.

Ocean Conservancy, for example, estimated in a November 2019 report that it would cost up to $3 billion a year just in the five countries research shows are the biggest sources of ocean plastic: China, Indonesia, the Philippines, Thailand and Vietnam. And the head of the Ellen MacArthur Foundation told a National Geographic conference earlier this year that the cost is likely in the range of $150 billion.

Duer said the alliance knows it will take a lot more than its $1.5 billion, but he contended that the strategy of funding initial programs and making them attractive to other investors can, in the long term, have an impact.

He pointed to an alliance-funded effort to build a waste management and recycling system in the community of Jembrana, on the Indonesian island of Bali. The alliance wants to scale up that model to 30 places in that country.

"This is really what we are all about, developing solutions around integrated waste management, preventing leakage of plastic waste into the environment, derisking those solutions and, thirdly, scaling those solutions," Duer said.

He said development financing organizations like the Asian Development Bank in the Philippines or the Asian Infrastructure Investment Bank in China regularly receive applications for large projects of more than $100 million in waste management, but it can be challenging to evaluate whether those projects would be viable investments.

"What they are looking at doing is investing in solutions that have a limited risk," he said. "We see our added value and our contribution ... because of the unique contribution of who we are, as an alliance, we can develop new solutions, we can invest our resources in those solutions and we can direct them."

The alliance works also with other specific investment funds that have been created to look at plastics in the environment or waste management in general.

"We are being contacted by many of those investment funds because they are looking to us for solutions which they can invest in and that's why we are working very closely with them in both the development and the derisking of solutions," Duer said. "We believe that our initial investments can contribute to catalyzing what we believe are significantly higher resources and allocations from these investment funds."

Duer said AEPW's target of leveraging five times its investment over five years is "very ambitious target" but argues that it's not necessarily money that's scarce, but evidence of projects with good track records for other investors.

"Resources, we believe, may not be the limitations; it's the ability to have the right solutions that can be scaled," Duer said. "Looking at what all the investors out there are investing, and if we are looking at that as a package, then I honestly believe we can make a significant dent into this problem."

He said the alliance is focused on waste management because it's the weakest link right now in controlling plastic waste getting into the environment. Other areas, like recycled content to create demand and product design, are part of the alliance's work but the focus is on waste management.

"Three billion people do not have access to waste collection," he said. "That waste will automatically end up unfortunately in the environment. So we need to have a focus on that."

Duer said the project has met its targets to this point, even with the impact of the coronavirus pandemic. The group's Sept. 2 report details several programs that have been slowed by the pandemic, but he said AEPW sees that its work is more important than ever in the health crisis, as waste volumes grow.

Some places in Thailand, for example, have seen a sixfold increase in waste generated during COVID-19, whether from single-use packaging, personal protective equipment or other factors, he said.

"There's an even bigger urgency in COVID," he said. "In countries where you don't have proper waste management systems in place, either because they're nonexistent or because they're broken, simply more waste accumulates in the environment, including plastic waste."

For the next year, the group wants to double the number of projects it is working on from 14 to 28, he said.

"We will be expanding our geographic scope, while our focus will continue to be on Asia, where the majority of the leakage is happening, we will also be increasing investments in Europe, in North America, in Latin America and Africa," he said.

The group's 36-page report gave details on several projects, including:

• Project STOP in Jembrana, Indonesia, to create that city's first solid waste management and recycling system that aims to collect 20,000 metric tons of waste a year from its 150,000 people. It started a test this year and hopes to have full deployment next year.

• In Africa, it started providing direct support to the Asese Foundation in Accra, Ghana, earlier this year, as that group builds plastic recycling plants that will take waste collected by residents. AEPW said Asese started operating its first plant last year, and the effort in particular is designed to help women start businesses.

• In India and Vietnam, AEPW is working with the Grameen Creative Labs, co-founded by Nobel Peace laureate Mohammed Yunus, to develop what it calls "zero plastic waste cities" in Puducherry, India, and Tan An, Vietnam. The effort also aims to develop sustainable local businesses and turn the waste into things like flowerpots and plastic boards, AEPW said.

• Elsewhere in India, it is working with the German development bank GIZ to fund Ganges River waste management projects and with the group Renew Oceans on a pilot pyrolysis plant to turn waste into fuel.

Beyond specific projects, AEPW is also helping to fund several projects to help startup companies and organizations launch technology or programs.

For example, it developed a program, with the startup platform Plug and Play, for incubation centers in Silicon Valley, Paris and Singapore. More than 1,000 groups applied for funding for the first slots in a 12-week program designed to help them attract other funding and get mentored by panels organized by the Alliance.

It plans additional innovation hubs with Plug and Play in Asia, Africa and Latin America in 2021.

As well, AEPW said its members Berry Global Group, LyondellBasell Industries and Milliken & Co. are working on secondary sorting systems for collecting recyclables, and others in the group, including CP Chemical, Dow Inc., PepsiCo Inc. and P&G, are investors in funds with Circulate Capital to finance waste collection throughout Asia.