This report draws on data from the Plastics Circularity Investment Tracker. The tracker captures private sector investments in plastics circularity solutions between 2018 and 2023, with insights aimed at improving transparency and closing the significant financing gap in addressing plastic waste.

Scope of the investment tracker

The scope covers private investments in plastics circularity, including technologies, business models, and solutions that aim to eliminate, reduce, reuse, or keep plastic materials in circulation. Data spans high-income and emerging markets, categorising investments into archetypes such as recycling, refill/reuse, and materials redesign. The report examines over 5,500 deals involving 3,000 companies in 100 countries, focusing on investments that are critical for transitioning to a circular economy for plastics.

Investment data in the tracker includes grants, equity/quasi-equity, debt, and blended finance, while excluding public funding and non-plastics-related investments. Investments are categorised based on plastics circularity as the core function of the business or a direct purpose of the investment. Deal values were disclosed for 57% of the transactions.

Key insights on private investments in plastics circularity

Global investments in plastics circularity totalled US$190 billion between 2018 and 2023, averaging US$32 billion annually. This is significantly lower than the US$1 trillion required per year to meet the 2040 targets. High-income economies attracted US$179 billion, while emerging markets received only US$11 billion. For example, Africa, responsible for 8% of ocean plastic leakage, received just 0.3% of total investments in 2023. This disparity reflects differing waste management priorities and investment readiness.

Investment is concentrated in downstream solutions, such as recovery and recycling, which received 82% of total investments (US$155 billion), while upstream solutions, like materials and redesign, received US$23 billion. Refill and reuse solutions accounted for only 4% of investments, underscoring the need for more balanced investment across the value chain. Moreover, private equity and banks contributed significantly to these investments, with banks responsible for 37% of deal value, driven by large-scale transactions, and private equity accounting for 23%.

However, early-stage investments comprised 55% of the total number of deals but received only 2% of the total deal value, highlighting a significant funding gap. Companies at this stage, despite their potential for innovation, require more substantial financial support to develop new business models and scalable solutions.

Leveraging the plastics treaty to mobilise capital and increase transparency

The report emphasises the role of the forthcoming international legally binding instrument on plastic pollution (ILBI) in mobilising private capital. The ILBI could enhance transparency by introducing mandatory reporting, tax incentives, and standards to track financial flows. The treaty is expected to catalyse private investment, with mechanisms such as extended producer responsibility (EPR) and recycled content mandates spurring capital mobilisation.

Recommendations and actions

The report calls for more investment in upstream solutions, especially in refill/reuse models and early-stage companies. Early-stage investment accounted for only 2% of the cumulative deal value, despite representing 55% of the number of deals. To close the financing gap, innovative financial instruments such as blue and green bonds, blended finance, and catalytic capital are recommended to attract institutional capital and support emerging businesses, particularly in underfunded regions like Africa and Asia. These efforts are critical to scaling solutions that address plastic pollution globally.

Sustainability-linked bonds, green bonds, and blue bonds are becoming more common, with US$2.6 billion in annual investments in plastics circularity being driven by these instruments from 2018 to 2023. This reflects the growing interest in financing projects that contribute to both environmental and financial goals. The top 10 investment deals, which were primarily in recycling and recovery, accounted for 25% of the total deal value.

In summary, while downstream solutions dominate, upstream innovations and early-stage investments need greater attention. Both upstream and downstream investments are necessary to achieve the circular economy for plastics and meet global 2040 targets.