Pierre Schang, Fund Manager, and Jisia Ranaivosoa, Fund Manager/Analyst, La Financière de l’Echiquier
Population growth, climate disruption, raw material costs and increasingly stringent health regulations are creating structural needs to collect, sort, recover and treat increasingly dense and complex waste streams. Without significant action, global household waste generation could reach 3.4 billion tonnes by 2050*, equivalent to burying the city of Brussels under 25 metres of rubbish. Waste treatment has become a central pillar of the environmental transition. Pioneering investors have embraced these challenges by supporting companies committed to addressing them, turning them into genuine strategic and competitive levers.
Circularity at the core of the ecosystem
The devastating impact of plastic on our environment provides a tangible illustration of these challenges. Emissions generated across the plastics lifecycle are expected to triple by 2060**. The challenge is therefore not simply to collect more waste, but to produce recycled material of sufficiently high quality to be reintegrated into packaging supply chains. Beyond the environmental dimension, this need also reflects growing demand from manufacturers and local authorities for better-traced waste streams that are less vulnerable to contamination and can be reused in circular supply chains. For example, Republic Services, one of the leading US waste treatment companies, has developed a Polymer Center in Las Vegas dedicated to the secondary sorting of post-consumer plastics. The aim is to produce recycled materials that can be reused in new packaging. The site’s announced capacity exceeds 45,000 tonnes of recycled plastics per year, and the company is developing a second complex in Indianapolis. Equipment manufacturers also play a central role in this value chain. Norwegian firm Tomra is developing automated deposit-return systems and optical sorting technologies capable of identifying and separating materials – packaging, plastics, metals and food waste – with a high degree of precision. The resulting improvement in the quality of sorted waste streams is essential to the efficiency of circularity: the more effectively a material is isolated upstream, the greater the likelihood that it can be reintegrated into value-added applications rather than discarded.
Towards energy recovery
Energy recovery is a second driver of circularity and growth. The rationale is straightforward: landfill sites emit methane, a potent greenhouse gas that, once captured and processed, can be converted into renewable natural gas for use in energy networks or as fuel. North American group Waste Management plans to invest US$3 billion in its recycling and renewable natural gas infrastructure across nearly 40 modern recycling centres. In 2024, the company converted 58 million MMBtu*** of landfill gas into energy, a volume sufficient to cover the electricity needs of a city like Paris for a year. The group is targeting a significant increase in production thanks to additional facilities. For its part, Republic Services has set itself the target of increasing the reuse of its biogas by 50% by 2030 – an emblematic example of transforming a negative environmental externality into a source of recurring revenues while reducing emissions linked to landfill sites.
From an investor’s perspective, waste treatment operators display characteristics similar to those of utilities, while retaining their own unique dynamics. Collection and landfill activities are local markets and are most often governed by long-term contracts. Barriers to entry are significant: scarcity of permits, limited social acceptance of new landfill or incineration sites, logistical density and economies of scale in sorting and treatment. This structure creates situations of local monopoly or oligopoly, offering good visibility on volumes and the ability to pass cost increases through to prices. But unlike regulated utilities, these companies benefit from greater pricing and operational flexibility. Within a portfolio, we therefore view these businesses as complementary to companies more directly exposed to renewable energy or energy efficiency.
The environmental transition is not solely about producing cleaner energy; it also requires better management of the materials our economies extract, consume and discard. The waste treatment sector, whose growth is underpinned by long-term physical and regulatory needs, sits precisely at the intersection of resilience, circularity and industrial growth.
* World Bank, 2020
** Europa, 2025
*** Million British thermal units, a unit of energy measurement
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