Investing in waste management tech key to reducing pollution

As the world's population continues to grow, so does the amount of waste generated each year. According to estimates, global waste generation will reach 2.2-billion tonnes by 2025.

Shockingly, high-income countries, which only account for 16% of the global population, produce 34% of the world's waste. And, despite efforts to increase recycling rates, only 15%-20% of waste generated globally is recycled. 

One of the leading causes of waste pollution is inefficient production processes, product design and improper waste disposal practices — such as illegal dumping — and ineffective waste collection services.

Manufacturers of products should embrace the principles of circular economy in their product design to ensure their product maintains a level of value after it's been used. Due to products not having post-use value, and due to unreliable or non-existent refuse collection services in certain areas, consumers resort to disposing these products in inappropriate ways.

It is estimated that SA generates about 122-million tonnes of waste a year, 90% of which still goes to landfills. Waste products that end up in landfills become an environmental and social cost to society, with little accountability from manufactures. We should move towards the principle of cradle to cradle, where there is accountability for product manufacturers in the waste value chain. 

Considering the impact of waste pollution on the environment, society and governance practices, what actions can investors take to mitigate these challenges?

At Sanlam Investments, our approach has recognised investing in waste management as a core part of our sustainability strategy. Investing in innovative waste management technologies can play a crucial role in improving waste management.

This could include investing in companies that are developing new materials, technologies or business models that support a circular economy and reduce waste. 

To demonstrate our commitment towards sustainable investments, SkipWaste recently became Sanlam Investment’s private equity division’s fourth acquisition in the fund, after that of Cavalier Group, Absolute Pets and Q Link.

SkipWaste has an integrated business model, spanning onsite waste management, primary storage, waste logistics, recycling and recovery, and alternative disposal and conversion.

With more than 1,000 clients and 3,000 sites primarily in Gauteng, SkipWaste is well-positioned to sustain its access to waste-at-source and to redirect more waste towards alternative forms of disposal.

In addition to investing for impact, asset owners can encourage investee companies to adopt sustainable practices, such as reducing waste, improving recycling, and increasing their use of renewable energy.

One practical measure is for companies to set specific, science-based and well-thought-out targets so investors can track the company's performance and hold management accountable. This can have a positive impact on the environment and the long-term financial performance of companies.

Waste management can also contribute to achieving several UN sustainable development goals (SDGs), including SDG 8, which focuses on promoting sustained, inclusive and sustainable economic growth, full and productive employment, and decent work for all.

Effective waste management can help create employment opportunities, particularly in low-income communities. For instance, waste management and recycling already provide job opportunities for people involved in collecting, sorting, processing and marketing waste.

According to Plastics SA, the industry provides informal jobs to 60,000 people, many of whom are waste-pickers and collectors. This helps to reduce poverty and increase economic growth.

Furthermore, sustainable waste management practices such as recycling, composting and waste reduction can also contribute to achieving SDG 12, which aims to ensure sustainable consumption and production patterns. By reducing the amount of waste that ends up in landfills, waste management can help decrease greenhouse gas emissions and environmental pollution.

Waste management also contributes to the development of resilient infrastructure, which is critical for sustainable economic growth. Proper waste management helps to prevent environmental degradation and health hazards, thereby supporting the development of resilient communities.

Innovation is crucial in the fight for sustainability amid increasing environmental challenges worldwide. Entrepreneurs, innovators and researchers are developing new technologies, processes and products that can help people reduce their impact on the planet and create a more sustainable future.

By investing in companies that promote circular economies and sustainable practices, asset managers can encourage the development of innovative solutions. And, as showcased, effective waste management can also contribute to achieving UN SDGs, including sustainable economic growth, reduced poverty, and sustainable consumption and production patterns.

By supporting innovation and investment in sustainable waste management, asset managers can drive progress towards a brighter and more sustainable future.

The Sanlam ESG Barometer, in partnership with Business Day, was launched on March 2023. It is the first barometer in SA that assesses how JSE-listed companies are actively improving environmental and social outcomes in society through their activities.

Click here to view the results.  

About the author: Johan Griesel, ESG and impact analyst at Sanlam Investments. 

This article was sponsored by Sanlam.