Goldman Sachs GS SUSTAIN The linear world as we know it Despite the world already consuming 1.75x more resources than the Earth produces annually in 2021, global waste generation is set to increase 70% by 2050 (from a 2016 base), according to the Global Footprint Network and World Bank, highlighting the need to transition our linear economy to become more circular. Current consumption and waste systems are not often designed and built with end-of-life in mind, and, as a result, a significant portion of materials face sub-optimal utilization and disposal. This traditional ‘take-make-waste’ economy contributes to negative impacts including excess emissions contributing to climate change, unwanted pollution, societal health issues, access to clean water, and more. The transition to a circular economy is pivotal in the fight to mitigate climate change, as excess emissions are released from inefficient use of resources and waste, with an estimated 1.6 billion tonnes of CO2e emissions generated from solid waste management alone in 2016 (1-3% of total GHG), the equivalent of ~350 million cars on the road. Current waste generation per capita is disproportionately generated by developed economies, while waste growth is set to come from developing countries. As low-income countries further develop, their waste footprint is expected to grow, making it critical to have proper means for recovery or safe disposal. While high-income countries are expected to grow their waste footprint at a smaller rate, this starts from a higher base, as the top quartile income level generates 34% of waste per year (World Bank). Municipal waste generation in the US increased 232% from 1960 to 2018 (40% since 1990), while generation in China increased 218% between 1990 and 2017 and in Europe (OECD) increased 28% between 1990 and 2020. Moving forward, North American waste is expected to increase 37% between 2016 and 2050 compared to 197% in Sub-Saharan Africa, 98% in South Asia and 53% in East Asia & Pacific (World Bank, Exhibit 3 ). Exhibit 3: Sub-Saharan Africa and South Asia are expected to see the highest waste growth Exhibit 4: ... however, this growth among developing economies is not expected to lead to rate through 2050... per capita waste generation even half that of North American levels Total waste generation and projected waste generation, million tonnes per year Total waste (and projected) generation per capita, in kg per capita per day 800 2016 2030 projected 2050 projected 3 2016 2030 projected 2050 projected 1.3% 700 2.0% day 0.4% ear /2.5 per y600 3.2% 500 0.7% capita 2 / onnes 400 1.4% 0.9% kg 1.5 0.8% 0.6% t CAGR: 2% mn 300 apita, CAGR: 0.8% 1.1% in 1 1.2% 200 per c 0.9% ste, 0.5 a100 ste W a 0 W 0 Middle East & Sub-Saharan Latin America North America South Asia Europe & East Asia & Middle East & Sub-Saharan Latin America North America South Asia Europe & East Asia & North Africa Africa & Caribbean Central Asia Pacific North Africa Africa & Caribbean Central Asia Pacific Source: World Bank, Goldman Sachs Global Investment Research Source: World Bank, Goldman Sachs Global Investment Research 3 May 2022 5