BGL report finds solid foundations for sustainability investments

Cleveland-based investment bank Brown Gibbons Lang & Co. (BGL) has published a 27-page report based on conversations with waste industry executives that concludes “strong tailwinds” continue to drive sustainability-related investments.

The report, co-authored by Effram Kaplan and Jim Cocita of BGL, reached its conclusions in part based on conversations with executives from waste and recycling service providers including Houston-based WM, Ontario-based GFL Environmental, Houston-based VLS Environmental Solutions and The Amlon Group, based in New York.

Kaplan and Cocita define sustainability in part as “an essential component in the transition from a linear (take-make-dispose) economy toward a circular in-nature economy [that] requires a fundamental change in the management of finite resources.”

BGL says regulations play a role in spurring corporate action and demand for sustainability reporting.

However, according to Kaplan and Cocita, “Corporations and consumers alike are elevating sustainability concerns into strategies and decision-making [and] investors are also including sustainability factors in their investment approach. For many, sustainability has become as much about opportunity as it has about risk.”

“Our sustainability goals serve to keep us focused on what we can do for the planet that also helps propel our business forward," GFL Vice President Jennifer Ahluwalia says in the report.

Brian Brantley, general counsel of VLS, tells BGL, “It was essential for our new private equity partner to make sustainability a core emphasis for the organization.” VLS agreed to be acquired by Miami-based I Squared Capital in 2022.

The report also includes a description by Mark Wayne, CEO of The Amlon Group, about the core role of sustainability in that firm’s activities.

“Sustainability is core to everything that we do,” Wayne says. “Waste-to-value for us would include waste-to-energy or recovering a waste byproduct and returning that recovered material back to the respective manufacturing process as an alternative to virgin materials.”

P.J. Foote of WM, one of the largest waste and recycling firms in North America, tells BGL, “We provide on-site support for large-scale customers to advance integrated sustainability strategies related to waste reduction, greenhouse gas emissions (GHG) management, and more. In these cases, WM has dedicated teams working at customer facilities to provide oversight and help with materials management.”

The report’s authors point to WM’s ongoing investments in material recovery facilities (MRFs) when observing that technology is “revolutionizing the recycling market” and such investments—including in data analytics—have a long way yet to go.

BGL and its industry sources also expect an active merger and acquisition (M&A) to retain its vibrancy, with Foote of WM saying, “M&A can play an important role in executing on our strategy to expand the sustainable solutions we provide to our customers.”

The full 27-page BGL report on sustainability in the waste sector can be accessed here.