RobecoSAM today announced the launch of the RobecoSAM Circular Economy Equities strategy (the “strategy”). The strategy’s investment objective is to achieve long-term capital growth by investing in listed companies that address the opportunities created by the paradigm shift in traditional production and consumption patterns toward a circular economy. The strategy is managed by Holger Frey, a senior portfolio manager in the RobecoSAM Trends & Thematic Investment team.
Revolutionizing the Global Economy
A revolution of the global economy is underway. The traditional linear economy which follows the “take-make-dispose” consumption model and in which value is created by selling as many products as possible is becoming unsustainable. A steadily growing global middle class with greater purchasing power is putting tremendous pressure on the finite resources of our planet and endangering our environment.
Currently, the linear economy consumes finite resources at 1.75 times the planet’s annual regenerative capacity. And yet, each year in the US, about 5bn lbs of goods returned after purchase, equivalent to about 5,600 fully loaded 747 jets, goes to landfill. In response, the circular economy in which resources are kept in use for as long as possible, the maximum value is extracted from them whilst in use, and products and materials are then recovered and regenerated at the end of each service, is rapidly gaining momentum.
The paradigm shift to a circular economy is disrupting traditional production and consumption patterns. An increasing number of countries and companies are addressing the inefficiencies of linear production and waste, and establishing recycling policies. Industry self-regulation towards a circular economy is gaining momentum amid looming regulatory pressure and consumers are increasingly demanding sustainable products.
The circular economy creates value in loops
With such monumental changes come exciting investment opportunities. The shift toward a circular economy has been valued at USD 4.5 trillion by 2030. The RobecoSAM Circular Economy Equities strategy gives investors a unique opportunity to be part of this largely untapped growth story.
Holger Frey, Senior Portfolio Manager, RobecoSAM Circular Economy Equities strategy, RobecoSAM: “We are reaching a tipping point for traditional production and consumption patterns. Tightening environmental regulation coupled with rising consumer awareness favor higher circularity and the shift away from finite resource extraction. The RobecoSAM Circular Economy Equities strategy gives investors a unique opportunity to capitalize on the still nascent and disruptive investment opportunity.”