Recycling in America: How Can Investors Help Fix a Broken System?
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Recycling in America: How Can Investors Help Fix a Broken System?



The following content is sponsored by The Recycling Partnership.

ROI of Recycling in America

Recycling in America: Can Investors Help Fix a Broken System?

Reduce, reuse, recycle. Many are familiar with this mantra, but it’s not always easy to practice what we preach.

Even though most Americans want to recycle, not enough of them actually can. In fact, nearly 40 million households in the U.S. have little to no access to recycling.

This infographic from the Recycling Partnership highlights why this gap persists, and provides solutions to help bridge it. It also explains why bold investments in recycling now could have potential payoffs down the line.

The Reality of Recycling Issues in America

Of 47 million tons of total generated recyclables in a year, only one-third is actually recovered. This disparity is attributed to a combination of factors: lack of recycling access, education, and infrastructure.

As a result, the curbside recycling rate in the U.S. is only 32%. If progress continues at this glacial pace, the country will only achieve equitable access to recycling for all households in 150 years.

Recycling in America is broken—so why is now the opportune time to fix it?

Consumer Demands Are Fueling Global Targets

First and foremost, consumers are demanding change: 84% of consumers expect packages to be recyclable. The corporate sector is responding positively to these demands. Over 450 of the world’s largest companies have come together to sign a commitment to:

  • Eliminate single-use, unnecessary plastic packaging
  • Make all plastic packaging 100% reusable, recyclable, or compostable

This move will not only boost recyclability rates, but also raise recyclable content up 5x by the year 2025.

Because of these shifting winds, investors are wanting to incorporate more environmental, social, and governance (ESG) factors in their financial decisions. As a result, the number of S&P 500 companies publishing sustainability reports has leapt from just 20% in 2011 up to 90% in 2019.

Finally, at the highest level of action, America is also committing to bold climate-related goals, which are to:

  • Reduce greenhouse gas (GHG) emissions by 50-52%
  • Raise the national recycling rate to 50%

Policymakers also stress the importance of a circular economy for packaging (which aims to eliminate waste and repurpose resources) which would mean rethinking America’s current recycling system.

How can the public and private sectors work together on these goals? The Recycling Partnership has a collective solution: a $17 billion investment for a better future.

A Breakdown of the Benefits

Spread over five years, this $17 billion investment could improve recycling infrastructure, and bolster the need for recycling-related education in the process.

Here’s what goes into this calculation:

  • $4 billion
    Equitable recycling for every U.S. household
  • $4 billion
    Create a residential recycling solution for film/flexible plastics
  • $3 billion
    New/upgraded material recovery facilities to support domestic manufacturing
  • $6 billion
    Education and public engagement (breaks down to just $1.2 billion annually)

The last factor is worth looking into a bit deeper, seeing as it makes up the biggest portion of the required investment for a reason.

Education’s Role in Helping Fix Recycling in America

Consumers express high levels of confusion over what they can and can’t recycle, leading to more recyclables ending up in landfills. For example, did you know that most plastic container lids can’t be recycled? By some estimates, barely ¼ of plastic waste is actually recycled, while the rest is incinerated or ends up in landfills.

Unless this confusion is cleared, millions of tons of recyclables will continue to go to waste. Improved education and public engagement is the solution.

This table highlights the significant knock-on effect that public education can have on recycling rates and the recovery of all types of materials:

 Recyclables captured
Current rate32%
With equitable recycling access alone48%
With both equitable recycling access and education68%

That’s why consistent annual investments are needed to maintain momentum in education and outreach strategies, to build long-lasting trust in the recycling system.

How Recycling Investments Can Pay Dividends

In the long run, the potential return on investment (ROI) in recycling in America could be nearly double the amount of the initial amount put in. Over 10 years, $30.8 billion could be made back or saved, in the form of:

  • $11 billion in wages
  • $9.4 billion in landfill savings
  • $8.8 billion from the value of recyclables
  • $1.6 billion from other avenues (including tax revenues)

Other more intangible benefits include avoiding emissions comparable to 129 million cars, the creation of 200,000 jobs, and capturing 169 million new tons of recyclables.

It’s clear that consumer and corporate attitudes towards recycling are seeing a seismic shift. Public-private partnerships are thus vital for these efforts to reach their full potential.

The Recycling Partnership is bringing together various stakeholders at the same table, to rebuild the recycling system in America and achieve just that.

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Fixed Income ETFs: Investors’ Ticket to Flexibility

Fixed income ETFs are a go-to tool for institutional investors. Find out why professionals use them in this graphic.



Fixed Income ETFs

Download the ETF Snapshot for free.

Fixed Income ETFs: Investors’ Ticket to Flexibility

When market volatility surges, fixed income investors encounter multiple pressure points. For example, they may face difficulties with liquidity, price discovery, and transaction costs.

In this infographic from iShares, we show how fixed income ETFs help address these challenges. It’s the second in a five-part series covering key insights from the ETF Snapshot, a comprehensive report on how institutional investors manage volatility.

The Methodology

To assess the role that ETFs play, Institutional Investor published a report in 2021 based on a survey of 766 decision makers. Respondents were from various types of organizations, firm sizes, and regions.

For instance, here is how responses broke down by location:

  • 21% Asia Pacific
  • 36% North America
  • 29% Europe, Middle East and Africa
  • 14% Latin America

Here’s what the survey found.

Encountering Roadblocks

During 2020 market volatility, the vast majority of institutional investors said they had difficulty sourcing (95%) and/or transacting (92%) in individual bonds.

Smaller firms faced these roadblock more often than larger institutions.

Assets Under Management% Who Faced Great Difficulty Sourcing Bonds
$5B or less61%

How did institutional investors overcome these liquidity challenges?

Turning to Fixed income ETFs

More than half of institutions increased their use of ETFs as they looked to source, price, and transact bonds. In fact, in the first three months of 2020, fixed income ETF trading volume reached $1.3 trillion—half of 2019’s total.

ETFs also became more popular relative to their underlying basket of securities. During extreme volatility in April 2020, ETF trading volume relative to the underlying securities was three times higher than the 2019-2020 average.

With their higher liquidity, ETFs also helped institutional investors with price discovery.

“When there was no trading activity in certain corporate bonds, you can use the ETFs as a pretty good proxy for what people are willing to pay and what the appetite is.”
—Senior Analyst, Asset Management firm

However, the usefulness of fixed income ETFs goes far beyond liquidity.

Want more institutional insights into ETFs?

ETF Snapshot

Download The ETF Snapshot for free.

A Versatile Tool

Institutional investors said fixed income ETFs were a good replacement for individual bonds for a number of reasons.

Reason % of Respondents
Quick Market Exposure/Access55%
Avoidance of Individual Security Analysis51%
Transparency of Holdings46%
Transaction Costs40%

The difference in transaction costs is particularly evident in the fixed income landscape. During extreme market volatility in March 2020, the bid-ask spread* for the iShares High Yield Corporate Bond ETF was 48 times smaller than the underlying securities.

* A bid-ask spread measures the difference between what an investor is willing to buy a fund for (the bid price) and the price an investor is willing to sell for (the ask price). A smaller bid-ask spread indicates greater cost efficiency.

In light of these attributes, fixed income ETFs are a go-to tool for institutional investors. In fact, they were top-rated for a number of use cases.

Purpose% of Respondents
Portfolio Rebalancing62%
Tactical Adjustments66%
Derivative Complement/Replacement66%
Transition Management74%
Liquidity Management83%

One senior analyst at an asset management firm noted that it was easy to get granular with asset allocation because there are so many ETFs with plenty of liquidity.

The Future of Fixed Income ETFs

As of May 2021, fixed income ETFs made up 18% of all ETF assets under management. It’s likely that their role could become more prominent in the future.

For instance, 34% of institutional investors are likely to increase their use of fixed income ETFs going forward. One thing is evident: fixed income ETFs have proven to be flexible tools, especially during heightened market volatility.

​​Download the ETF snapshot for free.

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Visualizing Carbon Storage in Earth’s Ecosystems

Forests are vital carbon sinks, soaking up about 40% of all emissions annually. Here is the carbon storage of ecosystems around the world.



Carbon Storage

Visualizing Carbon Storage in Earth’s Ecosystems

Each year, the world’s forests absorb roughly 15.6 billion tonnes of carbon dioxide (CO2).

To put it in perspective, that’s around three times the annual CO2 emissions of the U.S. or about 40% of global CO2 emissions. For this reason, forests serve as a vital tool in regulating the global temperature and achieving net-zero emissions by 2050.

In this graphic sponsored by Carbon Streaming Corporation, we look at the Earth’s natural carbon sinks, and break down their carbon storage.

Carbon Storage by Ecosystem

Forests contain several carbon sinks, from living biomass such as roots and leaves to soil. In fact, soil contains nearly twice as much carbon than the atmosphere, plant, and animal life combined.

  • Soil: 2,500 gigatonnes (Gt)
  • Atmosphere: 800 Gt
  • Plant & animal life: 560 Gt

The soil type, vegetation, and climate all affect how carbon is stored. For example, colder and wetter climates promote the most effective carbon storage in soil.

Global Carbon Storage* (Tonnes of carbon per hectare)Vegetation Soil
Boreal forests64344
Temperate grasslands7236
Tropical forests120123
Tropical savannas29117
Temperate forests5796
Deserts and semideserts

*Average stored carbon in tonnes per hectare at a ground depth of one meter
Source: IPCC

Wetlands are substantial reservoirs of carbon. Despite occupying only 5-8% of the Earth’s land surface, they hold between 20 to 30% of all estimated organic soil carbon.

Risks to Natural Carbon Sinks

Around 8.1 billion tonnes of CO2 leaks back into the atmosphere each year.

Over the last 20 years, the world has lost about 10% of its tree cover, or 411 million hectares (Mha). The main causes behind this are forestry (119 Mha), commodity-driven deforestation (103 Mha), and wildfires (89 Mha). What’s more, research suggests that Amazon rainforests emit more carbon than they absorb due to record levels of fires, many of which are deliberately set to clear for commodity production.

With the increasing frequency of wildfires and deforestation, the world’s forests are at risk of releasing carbon. Protecting and preserving these biomes is critical to the Earth’s carbon balance and mitigating climate change.

Carbon Credits Provide a Solution

Given the risk of losing critical carbon sinks, carbon credits play an important role in preserving these ecosystems.

Carbon credits can help finance projects that reduce or remove GHG emissions from the atmosphere. From improved forest management to reforestation, there are a number of different types of carbon projects across wetlands, grasslands, and various forests:

  • Reforestation and Afforestation
  • Avoided Deforestation
  • Natural forest management
  • Wetland restoration

For instance, a carbon credit project may preserve endangered tropical lowland peat swamp forests spanning thousands of hectares, such as the Rimba Raya Biodiversity Reserve Project in Indonesia, one of the projects that Carbon Streaming has a carbon credit stream.

Through this project, forests are prevented from being converted into palm oil plantations to reduce and avoid 130 million tonnes of GHG emissions during the 30 years of the project.

Another example would be the Cerrado Biome Project in Brazil, another carbon offset project where Carbon Streaming has a stream agreement. This project is protecting and preserving native forests and grasslands from being converted to commercial agriculture.

Importantly, these projects would not be economically viable without the sale of carbon credits.

Protecting Stored Carbon

To prevent further loss of stored carbon, government policies, NGO-led initiatives, and the financing of carbon offset projects are gaining momentum. Taken together, they offer the critical intervention needed to preserve the earth’s carbon vaults.

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