By Kendall Harrow, Content Strategy Analyst
The investment opportunity for the waste management industry is growing as the population increases and companies utilize advanced technologies.
Green infrastructure is the range of systems and technologies that enable and provide for a more sustainable way of living. In this blog series, we will outline seven specific areas: green transportation, green energy, green fuel, waste management,green infrastructure & equipment, pollution control, and green constructions. We will define these themes, how they contribute to green infrastructure and how they are instrumental to the space as a whole moving forward.
Waste management is integral to green infrastructure in the U.S. and is becoming increasingly important as the population grows and produces more waste than before. From 1990 to 2018, U.S. waste production increased by 40 percent.1 Additionally, greening consumer preferences are contributing to the opportunity for waste management companies to operate more efficiently and sustainably. Companies are doing this by utilizing advanced technologies and processes, such as artificial intelligence and robotics. As the population increases and greening consumer preferences are expected to continue, the growing waste management industry is creating potential opportunities for investors.
Municipal Solid Waste Generation Rates, 1960 – 2018
Source: Environmental Protection Agency, as of December 2020.*MSW generation rose considerably from 2017 to 2018 mainly because EPA enhanced its food measurement methodology to more fully account for all the ways wasted food is managed throughout the food system.
What is Waste Management?
Waste management involves the activities used to treat waste, including collection, recycling, reuse, storage, transportation, and disposal. Green infrastructure is designed to handle waste effectively. For instance, instead of treating stormwater runoff as waste, green roofs and permeable pavement filter water and allow it to be absorbed back into the soil, rather than enter the sewage system.
Population growth and industrialization are driving waste management as they produce more materials. Without proper handling, materials can pollute waterways, overwhelm landfills, and lead to health problems. These environmental and social concerns are being addressed through legislation and regulations, which deter polluters by raising costs, and changes in consumer behavior that push for more sustainable practices.
How Technology is Helping the Waste Management Industry
Waste management companies are utilizing new technologies that are setting them up to become industry leaders. Republic Services Inc.,2 a solid waste collection company, tested a robotic sorter that uses artificial intelligence scanners at one of its recycling plants. The robot had a 99% success rate in identifying non-aluminum materials and removed those items 32% faster on average than a human.3 Republic Services has also used AI to recover recyclables from waste streams that were being sent to the landfill. These technologies increase efficiency, improve quality control, and lessen dependency on human labor.
Waste Management Inc.4 utilizes technology by developing green infrastructure systems that collect the greenhouse gases generated from its landfills, which can then be turned into renewable energy. In 2022, out of Waste Management’s captured landfill gas, 45% was used to generate renewable energy.5 This reduces dependence on fossil fuel energy sources and can generate revenue through the sale of converted renewable energy.
The investment case for waste management companies, like Republic Services and Waste Management Inc., is supported by their adoption of advanced technology, such as robotics, AI, and landfill-gas capture. Additionally, growing populations and economies are driving demand for waste management, while legislation, regulations, and consumers are pushing for this to be done using sustainable solutions. These factors are contributing to the growth of the waste management market globally, as illustrated below by Grand View Research.
Market Size of Waste Management Worldwide in 2022, with Forecasts Until 2030 (in Billion U.S. Dollars)
Source: Grand View Research, March 2022.*Estimated. For subsequent years, figures are forecasts.
Investors can access waste management companies through the VanEck Green Infrastructure ETF (RNEW). The ETF provides diversified exposure to companies across the seven green infrastructure sub-themes.
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Originally published 27 December 2023.
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Important Disclosures
1 Statista, Municipal Solid Waste in the U.S. – statistics & facts, as of December 2023.
2 Republic Services Inc is 4.64% of net assets of the VanEck Green Infrastructure ETF (RNEW) as of 12/15/2023.
3 Republic Services Sustainability Report 2022.
4 Waste Management Inc is 4.67% of net assets of the VanEck Green Infrastructure ETF (RNEW) as of 12/15/2023.
5 Waste Management Inc 2023 Sustainability Report.
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