Sustainable Investing
Waste to wealth: A circular economy approach to e-waste
3 min read 1 Feb 24
From mobile phones to medical equipment, electronic products in their millions are being produced and discarded in excess each year. The growing e-waste problem is driving unparalleled levels of resource depletion and pollution, presenting a clear social and environmental risk. As a result, countries are increasingly looking to establish more sustainable consumption and production patterns through a circular economy approach.
According to the World Health Organization (WHO), electronic waste – or ‘e-waste’ – “is the fastest-growing waste stream in the world, increasing three times faster than the world’s population”1. In 2020, 4.7 million tonnes of e-waste was generated in the European Union (EU) alone2, of which less than 40% was recycled3.
Projected e-waste generation worldwide from 2023 to 2030 (in million metric tons)
As global waste generation reaches new heights, the circular economic model has emerged as the leading approach in waste management and reduction. When applied to e-waste, circularity prioritises the efficient use of resources; aiming to extend the lifespan of electronic products and consequently minimising waste generated through consumption and production.
Most recently in December 2023, the Austrian government launched its Repair Bonus voucher scheme which will reimburse people up to €200 for their electronic repairs. The scheme is among mounting commitments by governments to introduce circularity into our value chains; South Korea introduced its Extended Producer Responsibility system in 2000 and the Netherlands has had its Circular Economy Programme in place since 2013.
To meet the demand for circular solutions in Europe alone, the development of physical assets and infrastructure will require €230 billion in investments by 20404. With a projected financial value creation of €1.5 trillion for the region, the transition towards a circular economy presents a significant opportunity for investors5.
At this juncture, what exactly does a circular economy entail and what is the opportunity for long-term investors?
Population growth vs resource scarcity
With the global population expected to reach 9.7 billion by 20506, demand for food, water, energy, and materials is rapidly rising. We are facing increasingly limited access to natural resources as the world grapples with the interrelated challenges of climate change, extreme weather events, and biodiversity loss.
Given the pressing need for responsible consumption and production, transforming our economies to adapt to these challenges remains a key priority. As outlined by UN Sustainable Development Goal (SDG) 12, the shift from a linear to a circular economy entails the efficient use of resources, reduction of waste, and repurposing of materials. In this way, circularity reconceptualises the entire product cycle from inception to end-of-life, as opposed to instilling recycling practices alone.
Reconceptualising an electronic product’s life cycle in a circular economy
This transition creates potential opportunities for investors in private markets, as businesses looking to advance more circular supply chains will need the supporting infrastructure to do so. From food systems to textiles, circular practices and opportunities can be found across a broad range of sectors and themes.
Investing in circular solutions
In response to the demand for circular solutions, companies are progressively looking to refurbish and resell electronic equipment; effectively reducing the requirement for raw materials, as well as energy and water consumption in the manufacturing process.
In slowing the flow of resources, scaling reprocessing technologies and reimagining business models, companies may reduce costs, build more agile supply chains, and potentially capture financial value7. A recent study estimated that circular business models have the potential to generate €265 billion in revenue and result in 15% of the physical consumer goods market by 20308.
Considering the uptick in legislation and innovation, we believe the transition to a circular economy represents a structural shift that has the potential to offer attractive returns for long-term investors.
A version of this article was first published in Investment Perspectives Q4 2023, our quarterly investment outlook.
1 World Health Organization (WHO), 'Electronic waste (e-waste)', (who.int), October 2023.
2 Destatis, 'European Union produces 4.7 million tons of electronic waste', (destatis.de), April 2023.
3 European Parliament, 'E-waste in the EU: facts and figures (infographic)', (europearl.europa.eu), April 2023.
4 Summa Equity, 'Investing in a circular and waste-free Europe', (summaequity.com), April 2023
5 Summa Equity, 'Investing in a circular and waste-free Europe', (summaequity.com), April 2023
6 European Commission, 'Global population is growing' (knowledge4policy.ec.europa.eu), December 2022
7 See Bocconi University, Ellen MacArthur Foundation and Intesa Sanpaolo, 'The circular economy as a de-risking strategy and driver of superior risk-adjusted returns', (ellenmacarthurfoundation.org), July 2021
8 Summa Equity, 'Investing in a circular and waste-free Europe', (summaequity.com), April 2023
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