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14 May 2018

How to invest in the war on plastic

As the UK government has declared war on plastic pollution over the next 25 years, what opportunities are there for the environmentally-conscious investor?  

Joel Dungate, Investment Analyst, discusses some of the potential beneficiaries from the battle for the environment.

“Earlier this year the Prime Minister pledged to eradicate all “avoidable plastic waste” by 2042. Plastic straws, cotton buds and wet wipes are items which could potentially be banned in England. This is likely to have an adverse effect on consumer goods companies who will need to reduce plastics use in their packaging. However, there are signs companies have already considered ways to adapt, with the likes of Unilever committing to 100% recyclable plastic packaging by 2025. Other companies to make a similar commitment include Marks & Spencer, The Coca-Cola Company, L’Oréal and Nestlé. So these companies, given their adaptability, may be long-term winners in the war on plastic.

“Packaging companies are the most likely to be affected by the moves to reduce plastic waste. Again, though, depending on their adaptability and innovation they could be winners or losers. Those packaging companies that are considering new, more environmentally-friendly technologies will benefit from the phase out of plastic, whilst those that are slow to change could be left behind. RPC is an example of a packaging company which is also committed to sustainability. The group seeks to create products that provide a sustainable solution while still being fit-for-purpose.

“Other investors may wish to benefit from the expertise of a professional fund manager by considering funds which focus on sustainability such as Impax Environmental Markets Trust. This company seeks growth via exposure to cleaner and more efficient energy, water and waste services.”

Please remember that investments and income arising from them can fall in value and you may lose some or all the amount you have invested. This article is for information only and does not constitute a recommendation to buy or sell the shares of the companies or investments mentioned.
 
How to invest in the war on plastic
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