Repair it, don’t
throw it away
In early 2021, the UK joined a growing number of European Union nations and at least 20 American states with a ‘right to repair’ law in progress. Why is this important for investors?
It is part of a longer-term trend to find solutions to the problem of annual consumer waste, where over 50% of items consumers discard are thrown away due to defects rather than the goods being unusable.
This is most obvious with electronic consumer goods, such as washing machines, small kitchen appliance or personal electronic products. It is estimated that 23% of electronic waste is still functional or requires minimal repair, according to the Waste and Resources Action Programme (2011).
The right to reparability is the first line of defense when it comes to minimising waste. By extending the lifespan of the products, consumers contribute to reduction in the use of natural resources, and reduce the amount of unnecessary waste. Such share and repair business models form part of the outcome-orientated economy, which is one of the four major themes that make up the Lombard Odier Natural Capital investment strategy. Our research has identified around 190 global companies that fit into this theme.
of electronic waste is still usable
of CO emissions can be saved by 2030 by adopting right to repair
tons of e-waste is generated each year
of discarded items are defective but still usable
How big is the problem of avoidable waste?
It is estimated that 54 million tonnes of e-waste is generated per year, but only 17% is recycled, resulting in $57 billion in lost goods and materials.
of that e-waste is actually recycled
Source: LOIM analysis, Oko-Institut/ The Economist (estimated data for 2012-2013)
Source: LOIM analysis, Global e-Waste Monitor 2020
There are now companies offering consumers 10-15 year guarantees of the right to repair for an item, if it is possible, rather than throwing it away. Trying to avoid this waste and cutting the extraction of natural materials through recovery and re-use creates a circular model, which would avoid 7.5 Gt CO2e by 2030 and boost resource productivity by 3% per year, according to the Ellen MacArthur Foundation and Ecofys.
Why is this theme investable?
Companies which are supporting the right to repair will capture market share and retain customers. Some leading global companies are already ensuring the availability of parts for 10-15 years post-discontinuation of an item.
Shared economy and repair belong to the outcome-oriented economy theme, which comprises of nearly 200 companies identified for possible investment. The other three themes are Circular Bio-economy, Resource efficiency and Zero waste.