Closed Loop Fund:
From Aspiration
to Impact
Reflections on a year of founding a cross-sector, public-private partnership for sustainability
By Rob Kaplan and Ron Gonen, co-founders of Closed Loop Fund
In April of 2013, a group representing the United States recycling system convened in New York to discuss how to collaborate in an effort to increase recycling rates. In their own way, everyone in attendance, including the world’s largest retailer, leading consumer goods companies, largest recycling companies and major cities, recognized the significant economic and environmental value of recycling to their organization and society. American cities spend billions of dollars to throw away billions of dollars worth of valuable, recyclable commodities every year. This system problem requires a system solution.
The collaboration began to take shape around a concept. Could we pool our resources to create an investment fund that would invest in building recycling infrastructure across the country?
Just over a year later, 10 industry leading consumer good companies committed to the Closed Loop Fund to make capital available to municipalities and private companies building recycling infrastructure. Our goal is to ensure that everyone in the U.S. can recycle all of their packaging when and where they need to. The loans made by the Fund would range from a 0% rate to municipalities to low single digit rates for privates companies and would be repaid via a combination of landfill diversion savings and the sale of recyclables.
That commitment has now turned into tangible projects. This week, the Closed Loop Fund announced its first three investments:
Residents of Portage County, Ohio and Quad Cities, Iowa will now have access to convenient recycling programs that can accept and process much more volume and many more types of materials.
And, the creation of a Plastic Recovery Facility will enable recycling programs across the east coast to access a stronger market for hard-to-recycle packages — from yogurt cups to lawn furniture. As a result, we expect more eastern recycling programs will begin accepting more types of plastic packaging, making it easier for folks to recycle at home.
These examples total $24.8 million, including $7.8 million from Closed Loop Fund plus an additional investment of $17 million from other public and private co-investors, marking the first of over $500 million the fund expects to unlock to invest in American recycling over the next five years.
At a time when many are contemplating the realities of climate change and making broad commitments to tackle it, Closed Loop Fund and its investors expect these projects to divert more than 750,000 tons of waste from landfill and reduce more than a million tons of greenhouse gas.
As we reflect over the past year, a lot has changed in recycling. We’ve received more than 65 solid proposals, requesting more than $170M in capital. Clearly the demand is there for recycling infrastructure.
The pressure to make recycling work is greater than ever. And, it’s an exciting time for those of us committed to making it easier and more accessible for people to recycle when and where they need it.
Recycling is the number one environmentally-friendly action people report taking and, as a result, it is one of the most effective ways to engage people in combating challenges like climate change and strengthening their local economy.
