This article has been written by an expert contributor, Munro Partners
Every year >1 ton of waste is generated for every person on the planet.1
We all recycle. Despite this, 99% of the stuff we harvest, mine, process and transport are trashed within six months2. There is obvious room for improvement.
What do we mean by the circular economy? The circular economy looks at companies most likely to benefit from efforts to improve recycling, alternative packaging materials and wastewater management.
That is, looking at how to enable the decarbonisation of the planet.
Currently, only 14% of plastic is recycled around the world, relative to 60% of paper and up to 90% of steel. We expect a significant lift in the percentage of plastic and paper that gets recycled as governments, corporations and investors place a higher value on the true cost of these materials to the planet.
Circular economy leader: Ball Corp.
Ball Corp. is a US-listed, global provider of metal packaging for beverages, foods, household products and aerospace.
Underpinning the global aluminium can industry’s growth has been the significant consumer focus on sustainability, and in particular the “war on single-use of plastic”. These consumer trends are still in the nascent stages.
Aside from plastic’s sustainability problem, demand for cans has also come at the expense of glass, particularly in the beer industry, as it is lighter and less fragile to transport (thus more suited to an eCommerce).
In addition to replacing the glass and plastic bottles, Ball Corp has also launched a new aluminium cup business to replace single-use plastic cups. They’re in some exclusive gyms in Sydney. Just ask Bryce!
Circular economy leader: TOMRA
Decarbonisation is at the core of Norwegian-based and listed company, TOMRA, as their closed-loop recycling system aims to address the exponential increases in global landfills.
Using state-of-the-art technology solutions, they have developed a world-leading deposit refund scheme (DRS) that aims to capitalize on this megatrend. These automated DRS systems process refillable and non-refillable containers while also addressing global concerns around food safety and quality standards.
As governments across the European Union and U.S. begin to adopt this technology, TOMRA stands to benefit from an under-penetrated addressable opportunity, which they estimate to be between US$50 billion and US$80 billion.
To learn more, watch this video on The Circular Economy
1 23 February 2022 BofA Global Research, The world is not enough – Scarcity Primer
2 23 February 2022 BofA Global Research, The world is not enough – Scarcity Primer
Munro Partners is a global investment manager with a core focus on growth equities. Established in 2016 by an award-winning investment team with a 16 year proven track record of strong returns, the business has over $5 billion in AUM and is owned and controlled by key staff. Via their proprietary investment process, they invest alongside their clients to benefit from some of the key structural changes that occur in our world today. The business is Australian domiciled, with its head office based in Melbourne.
Disclaimer: The material contained in this publication has been furnished for general information purposes only as is not investment advice of any nature. The companies mentioned are for illustrative purposes only, is not a recommendation and may or may not be held by a Munro fund. There can be no guarantee that any projection, forecast or opinion in these materials will be realised. As an actively managed fund, Munro continually assesses each portfolio holding and the views expressed in this document may change at any time subsequent to the date of issue. This information has been prepared without taking account of the objectives, financial situation or needs of individuals. No representation or warranty is made concerning the accuracy of any data contained in this document. Prior to making an investment decision, retail investors should seek advice from their financial adviser. This document is intended as general information only.