Why Waste Management ETF Is a Hidden Champion in Environmental Investing

The environmental investing conversation often overlooks a critical player: the waste management sector. Yet EVX, the VanEck Vectors Environmental Services ETF, tells a compelling story that shouldn’t be ignored. Over its nearly 15 years of existence, this waste management etf has quadrupled in value, proving that there’s far more than just trash beneath the surface. The exchange-traded fund’s track record challenges the assumption that environmental responsibility must come at the expense of investment returns.

The Resilience of Garbage Collection as a Business Model

What makes waste management etf investments particularly attractive is the counterintuitive nature of the business itself. Unlike cyclical industries that suffer during economic downturns, garbage collection operates on a fundamentally different principle: people always need their waste hauled away, recession or not. This defensive characteristic creates a revenue stream more predictable than most.

The financial mechanics of the industry reveal why. Landfills operate on what might be called a toll-booth model. When waste trucks arrive at disposal sites, operators charge tipping fees—essentially the price per ton of garbage delivered. In 2020, the average tipping fee stood at $53.72 per ton, translating into approximately $1.4 million annually in revenue for small landfills and $43.5 million for large operations from gate fees alone. The remarkable part: these fees have nearly tripled since 1982, demonstrating consistent pricing power even as the industry matures.

Dominance by Two Giants in Waste Management

The waste management sector exhibits significant concentration, with two private companies commanding a disproportionate share. Waste Management (WM) and Republic Services (RSG) together control approximately 480 of the nation’s 2,627 landfills—roughly 18% of total capacity. Within the EVX portfolio, these two companies comprise nearly 20% of the fund’s total weight, according to fund documentation.

Their market performance has been nothing short of remarkable. Over the past five years, both companies’ stock prices have doubled, outpacing many broader market indices. This dual dominance reflects not just size but operational excellence in managing what many perceive as unglamorous infrastructure. EVX, which tracks the NYSE Arca Environmental Services Index with 24 holdings, captures this concentration while providing exposure to the broader waste management etf ecosystem.

ESG Opportunities Hidden Within Landfills

Beyond basic waste disposal, the waste management sector has evolved to capture additional value through multiple channels. Landfill mining—the practice of excavating aging disposal sites to recover recyclable materials—creates incremental revenue and reduces environmental impact simultaneously. Some operators now extract materials from decades-old landfills and reprocess them into usable products.

More innovatively, methane capture technology has transformed landfills into energy producers. Methane gas naturally emitted at disposal sites can now be harnessed and converted into electricity. According to the U.S. Energy Information Administration, landfill gas generates approximately 10.5 billion kilowatt-hours of electricity annually—enough to power roughly 810,000 homes and heat nearly 547,000 homes each year. For waste management etf holders, this means companies are monetizing what was once considered mere byproduct, creating additional profit margins while reducing greenhouse gas emissions.

A Case for Long-Term Commitment

The waste management etf category deserves reconsideration by investors seeking both stability and growth. Environmental services companies operate in an arena where demand is predictable, pricing power is demonstrable, and ESG credentials run deep. EVX’s quadrupling performance over 15 years wasn’t accidental—it reflects an industry that’s simultaneously defensive, profitable, and increasingly sophisticated in capturing environmental value. For those willing to look past the unglamorous sector name, waste management investments may offer exactly what many environmental portfolios lack: genuine resilience combined with meaningful returns.