The environmental group Ocean Conservancy and the plastics and consumer products industries unveiled plans Oct. 4 for a $150 million investment fund to target plastic marine litter in Southeast Asia, one of the world's hotspots for such pollution.
The Asian fund aims to replicate what the social investment group Closed Loop Partners has done in North America, where it raised $100 million from retailers and brand owners to help finance recycling operations.
Under this new initiative, announced at the Our Ocean 2017 conference in Malta, CLP will set up a similar fund for Southeast Asia.
The effort is targeting Southeast Asia because they say half of the estimated 8 million metric tons of plastics waste that flows into the oceans each year comes from Asia, particularly from Indonesia, the Philippines, Vietnam and Thailand, countries with long coastlines and less-developed waste collection.
"Our research has found that by improving waste management in Southeast Asian countries, we can cut the flow of plastic going in the ocean by half by 2025," said Susan Ruffo, managing director of international initiatives at the Washington-based Ocean Conservancy.
Ruffo said it's a long-term project, with the groups hoping to have the investment fund fully operational in three to five years. She said she could not make announcements now about where the $150 million would come from.
Steve Russell, vice president of plastics at the American Chemistry Council, said plastics materials companies are evaluating contributing to that $150 million.
ACC and the World Plastics Council have already contributed money, along with other groups, to fully fund the initial start-up phase for the Closed Loop Partners work in Southeast Asia, he said. PepsiCo, 3M and Procter & Gamble also are part of the Asia project.
Russell said the plastics industry sees potential in applying that Closed Loop model in Southeast Asia to build collection, sortation and reprocessing capabilities for handling plastic waste.
"The reason we are so excited about this is that it takes a model that is working, a catalytic investment fund, and adds it to the menu of solutions in the region," he said.
Both he and Ruffo said the fund would seek to leverage its $150 million to attract other sources of investment.
"That $150 million will be leveraged four to one, five to one, six to one," Ruffo said. "That is traditionally how they work."
Ruffo said the new fund wants to demonstrate the financial viability of recycling projects in the region.
"If we can show these are bankable projects, we can attract other capital," she said. "It's a pretty new area in terms of creating viable investment projects, as opposed to grant projects."
Russell said $150 million in financing is not a lot of money in comparison to the scope of the problem in Southeast Asia, but participants want to show recycling as a solid investment.
He said the plastics industry has carefully studied what the fund wants to do, and likes what it has seen.
"There won't be a single silver bullet but this proposal met all their criteria," he said, including transparency, participation by multiple sectors and a CLP model that has worked in North America.
There are waste and recycling initiatives ongoing in Southeast Asia that warrant more support, he said.
"There are all sorts of really creative things happening," he said. "The challenge is scale."
The fund hopes to share initial results of its work in the next year and begin to attract investors.
"Through this initiative, we will invest in and support the municipalities, entrepreneurs, investors and NGOs working to reduce ocean plastics and improve waste management in Southeast Asia," said Rob Kaplan, managing director of Closed Loop Partners.
Several large plastics companies and groups, including DowDuPont, Amcor Ltd., Dart Container and ACC, are part of the Ocean Conservancy's Trash Free Seas Alliance.