RobecoSAM Launches New Circular Economy Investment Strategy
Benefit from transition from “take-make-dispose” economic model
Sustainable investment specialist RobecoSAM today announced the launch of a new Circular Economy Equities strategy. The goal of the new investment strategy is to take advantage of the long-term transition from the unsustainable “take-make-dispose” economic model, to a ‘circular economy,’ based on broad-based recycling and re-use of resources.
$4.5 Trillion opportunity
The strategy aims to invest in companies that create value in loops through the redesign of production inputs (also to be reused or recycled), circular supply chains, logistics and waste management systems, and the promotion of socially-balanced and eco-friendly lifestyles. RobecoSAM views the circular economy as a major trend, with a market potential reaching $4.5 trillion by 2030.
Drivers of the Circular Economy
The Circular Economy investment team will be led by Senior Portfolio Manager Holger Frey. Explaining the forces driving the new strategy, Frey said:
“Since Sustainable Investing is embedded in our DNA, we’ve been looking at the trends leading to the Circular Economy for quite some time. Consumer awareness is changing rapidly as younger generations – Millennials and Generation Z – are more informed on production and processes. They have a mindset of not needing to own everything and are much more interested in sharing models and streaming on electronic devices, for example. There is also a rising interest in the secondhand and renting market for premium apparel, as it is well aligned with their ideas about sustainability and sharing.
“Additionally, as the backlash against plastic pollution has shown, social media facilitates information flow to consumers and the growing product segmentation offline and online, provides them with switching alternatives.
“At the same time, regulation is tightening.”
According to Frey, ““Retrospectively, the tailwinds driving this shift to the Circular Economy will seem incredibly obvious. However, investors need to consider the investment opportunity today to benefit from the resulting value creation.”
RobecoSAM has identified approximately 340 stocks that fit the Circular Economy universe, and expects the portfolio to contain between 40-80.