The Closed Loop Fund Helps Cities Increase Recycling

Closed-LoopThe biggest barrier facing most cities when it comes to providing the level of innovation and infrastructure needed to reduce waste and increase recycling rates often boils down to one factor: Money—or specifically, the absence of it. As budgets dwindle, missed opportunities to leverage problems in waste diversion cost cities millions of dollars in potential revenue each year.

In 2013, low recycling rates caused cities to collectively spend billions of dollars on landfills and lose over $11 billion in commodity revenue from the sale of recyclable material sent to landfills.

Enter Ron Gonen — co-founder of RecycleBank and former deputy commissioner of sanitation, recycling and sustainability for New York City under Mayor Michael Bloomberg’s administration.

Last week, the recycling maverick took the stage at the Municipal Waste Management Association (MWMA) Fall Summit (the environmental affiliate of the United States Conference of Mayors) to announce his latest project, the Closed Loop Fund — a consortium of large corporate companies that plan to invest $100 million over the next five years to support the development of recycling infrastructure and services.

The fund provides zero-interest loans to municipalities and below-market interest loans to private companies to develop local recycling infrastructure. Loans are repaid via landfill diversion savings and/or commodity revenue from the increase in recycling.

To qualify for a loan from the fund, applicants must adhere to the following criteria:

  1. Demonstrate long term financial viability of the project
  2. Demonstrate that the project can scale and be replicated by
  3. Demonstrate the ability to provide detailed reports
  4. Demonstrate that the project will generate a significant increase of tonnage returned to the supply chain

As co-founder and managing partner, Gonen is confident in the move to blend his experiences as entrepreneur to government official into a unique platform that will provide a framework to help governments innovate. The fund got its start last year when Wal-Mart convened 30 recycling, consumer product and supply chain experts to discuss how to increase recycling in the United States and approached Gonen with a plan.

“We can see some national systemic change with innovative business solutions to address municipal waste. We first saw the opportunity in RecycleBank,” he says. “We also found that some cities had the budget and capital to make the investment, but there are lots of other municipalities that know there is a need but don’t have money. With the Closed Loop Fund we know that if we’re going to fix the recycling issue across the country we need to make sure that access to capital is available.”

Gonen went on to mention during our conversation that many American cities are lacking even basic recycling initiatives like curbside recycling.

The estimated impact from the Closed Loop Fund, if additional investment outside of the already committed $100 million is acquired, could result in 27,000 incremental local jobs, 78 million metric tons of GHG reduction, $2 billion in avoided landfill tipping fees, and revenue generated from selling diverted commodities.

The founding members of the Closed Loop Fund include Coca-Cola, Colgate-Palmolive, Johnson & Johnson Family of Consumer Companies, Keurig Green Mountain, Inc., PepsiCo, Procter & Gamble, Unilever and Wal-Mart, as well as Goldman Sachs.

Though armed with CSR plans and high-level sustainability portfolio goals, the motley crew of corporations behind the initiative are not exempt from the scrutiny of consumers who identify many of these brands as big polluters.

So, why have they decided to come to the table and put their money where their (very public) sustainability plans are?

After speaking with two of the partner corporations, the general consensus is that these companies are claiming to be committed for the long haul, meaning their participation is not a righteous attempt at a publicity stunt, but rather a business investment that they calculate has the potential to pay huge dividends—both for cities burdened with the problem of waste, and their bottom lines.

Practically speaking, by diverting more plastic from the waste stream for re-use, large companies that rely on plastic products can source more recycled content for use in the production of their products.

With a circuitous loop of materials and resources being diverted from landfills and sold back to manufactures in need of material, The Closed Loop Fund aims to solve the challenges for both private and public sector entities.

Monique Oxender, Senior Director of Sustainability at Keurig Green Mountain, Inc. shared the business benefits and technology innovation opportunities that could potentially push their brand’s business trategy forward in the long-term

During a phone interview, Oxender explained:

“We’ve had a recycling issue with K Cups that has quite frankly stumped us. Our motivation for joining the fund is to learn and reduce barriers. This is a high level investment for us and we want to be directly involved and at the table.”

According to Jeff Meyers, Sustainability Packaging Manager for Coca Cola, the idea of getting together with other companies to expand curbside recycling offer lots of opportunity for growth.

“It’s not something that any one company can solve on its own,” he says. “We like the collaboration and packaging formats and products. We can all work together and design more sustainable packaging.”

If the Closed Loop Fund proves to be successful, new discoveries and metrics will provide the pathway for replication.

For additional information on the Closed Loop Fund or to obtain an application for your city, visit www.closedloopfund.com or send an email to admin@closedloopfund.com.

Applications will be reviewed by The Closed Loop Fund leadership and partners on a quarterly basis beginning October 29. Grants are set to be funded in 2015.

Image via Wikimedia Commons

Sherrell Dorsey is a writer, social entrepreneur and advocate for environmental, social and economic equity in underserved communities. When she’s not obsessively learning how to decrease her carbon footprint, Sherrell contributes frequently on green design, sustainable architecture and environmental policy at Inhabitat.com. Follow her on twitter and visit her website. 

Sherrell Dorsey

Sherrell Dorsey is a social impact storyteller, social entrepreneur and advocate for environmental, social and economic equity in underserved communities. Sherrell speaks and writes frequently on the topics of sustainability, technology, and digital inclusion.

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