Goldman Sachs GS SUSTAIN Key hurdles and initiatives to achieving a Circular Economy An estimated $634-995 billion To tackle the gap between recyclability and actual recycling, a wide range of actions can help address challenges to circularity USD of investment is needed today. In order to accomplish circular economy goals, strategies to tackle waste, overconsumption and ecodesign must have between 2020-2040 to close technical feasibility, policy support and infrastructure capacity, where supporting infrastructure has capacity for maximum the plastics circularity gap - AFARA material flow. Using analysis from AFARA and Google on Closing the Plastics Circularity Gap as an example, we highlight the top interventions that can be useful for improving the circularity of plastics and other materials such as paper and cardboard, aluminum, copper, and others (Exhibit 20). Exhibit 20: Top interventions reducing the Plastics Circularity Gap in 2025, 2030, and 2040 Timeline Interventions Key Outcomes Examples Increase accessibility and convenience of collection by providing consumers with new programs/services to Adding public bins/receptacles Collection Programs / Services increase collection rates Emptying bins in a timely manner Offering pickup of recycling in residential and commercial areas Consumer Incentives to reuse and recycle plastic Provide consumers with incentives, including monetary / loyalty / social rewards to shift towards reuse and Providing a discount when consumers bring their own cup/bag correct recycling Consumer Incentives to reduce plastic consumption Provide consumers with incentives/disincentives, including monetary/loyalty/social rewards, to encourage a shift Setting a fee on plastic bags toward reuse and correct recycling Provide consumers with knowledge to improve plastic management through reuse and recycling correctly Sharing positive sustainable impacts Education and Awareness on reusing and recycling Launching local education and awareness campaigns Top Empower consumers to promote proper plastic management among others Interventions Provide consumers with knowledge to change plastic consumption behaviour by eliminating virgin plastics or by 2025 Education and Awareness on reducing consumption reducing plastic use Increasing participation in consumer-led movements Empower consumers to promote a change in plastic consumption behaviour Inventory Management Eliminate pre-consumer plastic waste, like product destructions due to quality issues, product losses during Optimizing delivery cycles based on consumer shopping habits transportation, unsold products due to excess inventory, unsold products due to shelf life expiration, etc. Increase the capacity and quality of the collection network to manage a higher throughput of plastic volumes Retrofitting/building material recovery facilities (MRFs) and transfer stations Mechanical Recycling System Optimizing optical sensors Improve the sortation system to increase the quality and purity of raw materials for recycling (i.e. clean and Integrating artificial intelligence/machine learning to recognize waste streams homogenous bales) and patterns Top Redesign products and packaging to minimize use of plastics Minimize the number of polymers used in a package or product Interventions Design for Recyclability Reduce complexity and barriers to recycling Minimize the amount of inks used by 2030 Eliminate small/loose materials Design for fit with regional recycling infrastructure Leverage novel additives that improve recyclability Expand the collection system with a network of infrastructure to increase capacity for managing throughput of Developing new polyethylene to ethylene monomer technologies plastic volumes Top Chemical Recycling Increase purity of raw materials for recycling by improving the sortation system Standardizing the definition of recycled content to include plastics derived from Interventions Improve and develop polymer-to-polymer recycling technologies chemically recycled feedstocks by 2040 Reduce barrier to entry for chemical recycling through clear regs Plastics Tax Encourage industry to minimize the use of virgin plastics throughout pricing signals Setting a tax on all virgin plastic production Plastics Substitution Substitute plastics with a material that has better environmental impacts and improved end of life than virgin Substituting plastics with edible packaging plastics Reverse Supply Chain Provide consumers convenient collection program for end-of-life plastics directly back to the manufacturer to Offering pick up of recycling with product delivery Deprioritized encourage reuse Interventions Enforce industry to minimize the use of plastics through regulations and bans Setting a standard for minimum recycled content Plastics Reduction Policy Mandating mono-material products Provide industry with resources to adapt to changes Banning certain plastic types Providing directories for recycled content suppliers These are split by solutions that are targeted/feasible by 2025, 2030 and 2040 based on maturity and readiness to deploy. Grey shaded solutions overlap impact from other solutions Source: AFARA, Google, Data compiled by Goldman Sachs Global Investment Research 3 May 2022 <6