Planet Ark and Boston Global join forces on $1bn investment fund, targeting waste reduction

Australia is a global laggard in cutting product waste, but a new fund from Planet Ark and Boston Global will target investment opportunities aimed at reversing the trend.

From left: Boston Global’s funds management chairman Leigh Higgins, éthica Capital’s Chloe Argyle and Planet Ark co-founder Paul Klymenko. Picture: Lauren Michelle

Australia’s status as a global laggard in cutting product waste and maximising resource efficiency has created stark issues for the nation, but alongside that are a host of investment opportunities.

That’s the view of Planet Ark and Australian Ethical Investment co-founder Paul Klymenko, who is also a member of the government’s Circular Economy Ministerial Advisory Group.

Mr Klymenko labelled Australia “quite a wasteful society” compared to other developed markets, with the average person consuming about 31 tonnes of products and services.

“That’s about 15 African elephants, the weight that’s to maintain your lifestyle, my lifestyle, the typical Australian lifestyle,” he said, noting that improvements in sustainability, waste management, recycling and product repairability and longevity would help to alleviate cost of living pressures.

“It’s definitely a way of reducing the cost of living. It’s a way of making our society richer, in the sense that we will do more with less.”

The scale of the issues around waste and landfill capacity in Australia have prompted Planet Ark and its foundation, which is a charity, to partner with Bill Moss-chaired investment firm Boston Global to set up a fund. The BG Planet Ark Circular Future Fund will aim to raise up to $1bn by 2030, in tranches, to target investment opportunities.

The fund has a pipeline of 100 potential target commercial businesses that it believes will deliver “attractive financial returns”, while also driving outcomes around reducing carbon emissions and creating a more circular economy. The concept of circular economy aims at reusing and keeping materials in circulation, evolving product design to facilitate less waste and regenerating natural systems.

Mr Klymenko, who is also Planet Ark’s chief sustainability adviser, said the fund had already engaged with as many as 25 of the potential investee companies as it finalised its structure. The investment vehicle is targeting an initial raise of $100m.

The new venture comes after the federal government late last year released Australia’s Circular Economy Framework, which included a pledge to double the circularity through the economy by 2035. The document cited CSIRO modelling that estimated a doubling in the economy’s circularity could add $26bn in gross domestic product each year by 2035.

Greater Sydney and some regional areas in NSW are projected to run out of landfill capacity by 2030.

Among the government’s targets is the aim to reduce materials consumed in the making of products and services across the nation by 10 per cent. The framework cited Organisation for Economic Co-operation and Development data that showed Australia had the highest material footprint, per capita, of the G20.

The framework also comes amid landfill constraints in some parts of Australia. Greater Sydney and some regional areas in NSW are projected to run out of landfill capacity by 2030.

Despite those factors, the new investment fund will face challenges given the backdrop of the United States rolling back environmental, sustainability and renewable energy measures and as efforts globally on waste reduction have gone backwards.

The latest global Circularity Gap Report released last year raised concerns. It highlighted an increase in debate around the reuse and recycling of inputs, but noted the share of secondary materials consumed by the global economy fell to 7.2 per cent in 2023, from 9.1 per cent in 2018.

Asked about whether US President Donald Trump’s move away from sustainability measures could sway policy in this market or weigh on the new fund’s prospects, Mr Klymenko said: “You can’t time things perfectly. But if something is worthwhile and good it will be successful … I see things like Donald Trump as speed bumps and they can be quite big speed bumps.

“They’re not going to stop the problem we’ve got, that we’re living on a planet with finite resources, and there’s 8 billion people who are going to go to roughly 10 billion.”

Mr Klymenko said both sides of Australian politics recognised the challenges around waste management, leaving him relaxed about the outcome of the upcoming federal election.

“These are bipartisan issues,” he added.

On the landfill issue, the NSW government has outlined a move toward a weekly compost collection for large sections of the state by 2030, to promote food waste recycling and cut amounts heading to landfill.

Boston Global chair Bill Moss. Picture: Adam Yip

Areas such as regenerative farming and converting waste to energy have increasingly emerged as investment options over the past decade and are among themes being targeted by the new Planet Ark, Boston Global fund.

Other investors have also sought notable exposures in the space, with billionaire Mike Cannon Brookes’ investment arm backing insect farming firm Goterra to process and convert food waste.

Mr Klymenko noted the rate of how efficiently Australia was using materials in production was less than half the OECD’s average of US$2.50, providing an opportunity for the nation to “bridge that gap”.

He believes there are plenty of investment opportunities around the circular economy system including in infrastructure, and said areas with a greater risk profile held out the potential of higher returns.

“I like to invest when I see a field which is not necessarily fully grown, but you can see all the shoots and there are not too many bare patches,” he added.

“From a portfolio perspective, over the long term the Circular Future Fund is targeting an investment return of around 16 to 18 per cent per annum, net IRR (internal rate of return).”

Boston Global is an investment firm and family office founded by Macquarie Bank’s former head of real estate Bill Moss, with a strong focus on the property sector. The family office now includes the Moss and Cooney family’s investments.

Boston Global’s funds management chairman Leigh Higgins and investment banking managing director Heath Warman will have direct involvement in the new investment fund, as will Planet Ark’s chief executive Rebecca Gilling and head of partnerships Adam Culley. Chloé Argyle of éthica Capital is an adviser to the raising and an investment committee member.

Planet Ark’s foundation and Boston Global have split ownership of the new investment management entity equally, and share board and investment committee representation. The structure will also facilitate the operation of sub-funds to cater for different investment mandates among superannuation funds, high net worth and sophisticated and wholesale investors.

Any fund profits will be shared by the partners, while Planet Ark will receive a fee for naming rights. Boston Global is providing initial capital and funding.

There are also talks occurring about the potential for super funds and other large investors to make cornerstone commitments or partake in co-investing with the fund. They include government investment entities such as the Future Fund, National Reconstruction Fund and the Northern Australia Infrastructure Facility.

Planet Ark partnered with KPMG five years ago to set up the Australian Circular Economy hub, aided by government funding.

Originally published as Planet Ark and Boston Global join forces on $1bn investment fund, targeting waste reduction