Getting the circular economy straight

As corporations start to realize that the move towards sustainability also makes good business sense, the investment opportunities are endless.

My late mother Renate Medved liked nothing more than garage sales. She found particular delight in discovering value in other people’s cast-offs. She would be surprised to know that she was, unconsciously, an early proponent of the circular economy.

Buying vintage clothes or second-hand sneakers, recycling bottles and paper, or cutting down on single-use plastics are now commonplace as environmentally responsible habits.

The common sense that motivated my mother – thrift, efficiency, reducing waste – is likely to become the basis of a major shift affecting countless industries.

“The challenge is to redesign the supply chain, develop innovative technologies and generate sufficient renewable energy to use and reuse those molecules, so that we have closed loops that we need as our population grows,” said Britain’s Prince Charles, an early proponent of the circular economy, in 2014.

Once dismissed as a plant-talking oddball, as the Washington Post noted, some of Charles’ ideas about the need for sustainable industrial growth, first expressed 50 years ago, now seem ahead of their time.

Corporations are beginning to take note, realizing that the move towards sustainability also makes good business sense.

In 2013, H&M launched a garment collecting program that recycles old clothes into new apparel. In 2019, the company collected more than 29,000 tons of unwanted textiles – equal to 145 million T-shirts.

With fast fashion creating millions of discarded clothes every year, there is an urgent need for such initiatives.?

While many clothes are recycled from wealthier countries through to the developing world, Chile’s Atacama desert has become the dumping ground for some 59,000 tons of second-hand clothing each year, from sweaters to ski boots, creating vast mountains of unwanted clothes that threaten to poison one of the world’s driest regions.

Although some sectors have practiced recycling for many years, like the paper industry which has been using linen and cotton rags to make paper for centuries, the modern concept of collecting paper and plastics in kerbside bins has been around since soon after the first Earth Day in April 1970, which marked the birth of the modern environmental movement.

But in the half century since then, we have made very little progress. The EPA estimates that less than a third of household and industrial waste is recycled.

The need is urgent and the potential investment opportunities are enormous.

New businesses are springing up across the world with a mission to turn waste into something useful. At the Bowenpally Market in Hyderabad, India, unsold vegetables are converted into enough biogas to power buildings, streetlights, and a kitchen that serves 800 meals a day. If recycling waste into clean energy sounds like a quaint idea, the Sysav plant in Malmo, Sweden produces 1.5 TWh of district heating and 270 GWh of electricity each year. Israel’s UBQ transforms landfill waste into thermoplastic material and 3D printing filaments for manufacturing. The company just raised $170 million of new funding in a round led by TPG Rise. Each ton of UBQ’s material produced can prevent the equivalent of as much as 12 tons of C02 from entering the atmosphere.

ChopValue in Canada recycles used chopsticks into wooden shelves and furniture. DGrade in the UAE produces Greenspun, a high-quality yarn made from recycled plastic water bottles. It also manages the full supply chain from bottle collection to clothing production.

Supplies of lithium, the essential element that powers most of the batteries on which our clean electric future depends, currently depend on mining operations. Canadian company Li-Cycle is planning its sixth and largest battery recycling plant in Lordstown, Ohio. When completed in 2023, it will be able bring the company’s total recycling capacity to 55,000 tons per year. It is one of about 100 companies worldwide aiming to increase recycling of the 180,000 tons of lithium-ion batteries discarded worldwide.

We are now providing seed funding on the OurCrowd platform to Maolac, which is creating a nutrient-rich superfood from the discarded colostrum, or premilk, of cows that have just given birth. Some 5 billion liters of bovine colostrum are discarded each year, and the company will now recyle this powerful waste product, turning it into nutrient-rich food ingredients and supplements that contain 10-20 unique proteins with anti-inflammatory properties and beneficial health effects, including boosting the immune system.

There are countless business opportunities in the hundreds of companies around the world transforming waste into useful products, but the investment and innovation opportunities go much deeper.

Within existing industries, thinking circular can create new openings, efficiencies and technologies. The cell-based meat and protein industry is booming, but large quantities of the nutrient rich media used to grow the cells are discarded, wasting large amounts of water and creating new waste problems. Foresea, an Israeli startup now funding on the OurCrowd platform, has found a way to grow seafood from cells while recycling the cell-growth media and nutrient waste, saving water and cutting costs. Their ability to convert the biological materials and waster products into a circular feed source has the potential to dramatically reduce production costs. If successful, the method could be widely adopted across this fast-growing sector with significant impact.

What once was more of a movement than an economic trend, something we did because we were driven by feelings of conscience, is now becoming a powerful economic imperative. Green investment will lead to green results.