Waste Management

Investment opportunities in recycling


Investing in recycling means investing in communities and economies across the country. That’s the powerful, simple truth that keeps green bankers passionate about their work. They believe that everyone should have access to curbside recycling, and that investment in closed loop funds will help make this a reality in communities across the country.

The waste and recycling industry offers several opportunities for someone looking to start a small business with a modest investment. You just need to find one or more waste materials that are being discarded that can be reused, resold, or recycled.

Recycling comes naturally to America’s beverage companies. They are designing our plastic bottles to be 100% recyclable, including the caps. They are making them this way for a simple reason: so our bottles can be remade into new bottles. But there is always more to be done, such as in recycling of aluminium cans. You can choose to invest in the recycling of aluminium cans. Even if you don’t have the needed capital to go into it full scale, you can still make money by collecting the cans for big recycling firms.

Because recycling programs are often thought of as a “nice to do” rather than a financial investment, they are often not given priority for budget allocation. In reality, however, effective recycling programs can generate revenue for an organization and payback the initial investment in as little as 2 years.

Interest in recycling is looping back around. That’s evident from the launch of the Closed Loop Fund, a budding $100 million effort by a group of large companies to invest in recycling infrastructure and, in the process, put more recycled materials into manufacturing supply chains. A company specialized in dumpster rentals in Waco has recently invested in the fund as recycling and waste management go hand in hand.

Recycling provisions in private equity funds is part of this initiative. Recently while Professor David Wessels presented his excellent venture capital and the finance of innovation research, we were reminded of one of the fund terms that often ended up being carefully scrutinized and negotiated by limited partners: the recycling provision. Due to underdeveloped recycling and waste management sectors in the region, it is worth a closer examination of the effect these important bans might have on investment opportunities in the United States.

What do companies do when recycling rates are hitting a plateau, but a demand for recycled manufacturing goods is on the up? It’s called the Closed Loop Fund. In just the past few months alone, nine major companies have put $5 to $10 million into the fund, an effort to accelerate the growth of recycling infrastructure by getting more recycled materials into the manufacturing supply chain process.

State agencies can commit to recycling 50% or more of construction debris in all state-sponsored building projects. This will help reduce waste in the construction industry as well as stimulate investments in construction recycling facilities for aggregates (concrete, asphalt, brick) as well as clean lumber, metal, and cardboard.

Such investments in plastics recycling may become increasingly common as the hundreds of thousands of tons of plastic scrap that formerly headed to China no longer make that ocean voyage. The political, economic and cultural climate in the U.S. makes it an appealing place to make investments in the waste and recycling industry. These reasons help explain why the sector is estimated to be worth $21 billion and employs over 450,000 people, while continuing to grow quicker than the rest of the economy. Politically, the USA is committed to hitting both domestic and international targets.

Houston, Texas based Waste Management, Inc. (WM) has formed a strategic investment with Recycle Rewards, Inc, a subsidiary of Recyclebank, which rewards people for taking everyday green actions with discounts and deals from businesses. According to WM, the investment brings together all players in the economy, from low-income households to huge corporations.…