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Closed Loop Fund Reveals First Three Investments That Aim to Transform U.S. Recycling

Today, the Closed Loop Fund, an impact investment fund that makes below-market loans to recycling companies and municipalities for recycling infrastructure, announced its first three investments to bolster said infrastructure and reduce the over $5 billion dollars spent by cities annually on landfills.

The initial capital includes $7.8 million from Closed Loop Fund, which helped to unlock an additional investment of $17 million from other public and private co-investors, totaling $24.8 million. All three investments demonstrate replicable economic and environmental returns that recycling can bring to communities across the United States. This is the first of over $500 million the fund expects to unlock to invest in American recycling over the next five years.

In April 2014, Closed Loop Fund launched as a partnership between some of the world’s leading companies, including 3M, Coca-Cola, Colgate-Palmolive, Goldman Sachs, Johnson & Johnson, Keurig Green Mountain, PepsiCo and the PepsiCo Foundation, Procter & Gamble, Unilever, Walmart and the Walmart Foundation.



The Closed Loop Fund's
Bridget Croke
will discuss
New Strategies
for
Impact Investing

at
New Metrics '15.

Lack of infrastructure, including household recycling carts, facilities, and technologies, is one of the greatest barriers to more recycling in the country. The Fund plans to invest $100 million in the U.S. recycling infrastructure by 2020. The Fund invests in the form of zero-interest loans to cities and low-interest loans to recycling companies, to prove that recycling business models are financially sustainable now into the future.

In 2013, lack of recycling infrastructure caused US cities to collectively spend over $5 billion to send to landfill over $11 billion worth of commodities that could have been recycled. Closed Loop Fund was founded to ensure that everyone in the U.S. can recycle all of their packaging when and where they need to. As P&G’s Len Sauers and Unilever’s Jonathan Atwood pointed out in a post earlier this year, the companies involved expect the return on their investment to be multi-dimensional: First, shoppers will have access to programs to recycle our packaging. Second, we will increase the volume of recyclable packaging (as P&G committed to do in July) by having a more consistent pipeline of recycled content. And third, we will maximize efficiencies and reduce the environmental collective footprint of our companies and our shoppers.

Closed Loop Fund’s first investee is a joint venture between QRS and Canusa-Hershman (CHR) to create a one-of-a-kind Plastic Recovery Facility (PRF) in Baltimore, Maryland that will provide a game-changing solution for recycling. Currently, 70 percent of communities across the U.S. are not able to collect and recycle #3-#7 plastics, such as yogurt containers and take-out packaging or large rigid plastics such as crates, buckets, baskets and lawn furniture. For the first time ever, QRS and CHS will combine technology that can both separate these products and turn them back into raw materials for new products and packaging. The state-of-the-art facility is able to process 4,500 tons of materials every month – double the capacity of what’s presently possible in the U.S. This will help drive significant increase in recovery of hard-to-recycle plastics and ensure a stable market. 

Beginning in October, QRS-CHR will service the majority of the East Coast – from Maine to South Carolina – increasing recycling rates and finally providing a recycling solution for #3-#7 plastics. The opening of the facility is expected to help divert 440,000 tons from landfills and reduce 555,000 tons of greenhouse gas emissions. QRS-CHR is a business model that will replicate across the U.S. and beyond.

Closed Loop Fund’s two other investments are in Quad Cities, Iowa, and Portage County, Ohio, both important Midwest markets for recycling. These investments will allow the two communities to convert from dual stream recycling systems to single stream, making it easier for citizens to recycle and significantly increasing recycling rates. These communities are similar to hundreds across the south and Midwest with citizens who want to recycle, but without a convenient option. This funding will provide models that help expand single-stream recycling to similar communities across the country.

The potential impact of the two investments is substantial. Over the next 10 years, in Portage County alone, 37,000 tons will be diverted from landfills with a reduction of 110,000 tons of greenhouse gas emissions. Quad Cities is expected to see 86,000 tons diverted from landfills and 250,000 tons of greenhouse gas emissions reduced.

"QRS-Canusa's newest Plastic Recovery Facility in Baltimore provides all communities and recyclers throughout the Northeast and Mid-Atlantic regions with a reliable, domestic processing solution for mixed, post-consumer plastic containers,” said Greg Janson, CEO of QRS. “Working in conjunction with other QRS facilities, the Baltimore PRF targets virtually all polymers in the single stream mix for recovery, returning high volumes of quality material to the manufacturing base. This purpose nests perfectly with the mission of the Closed Loop Fund and we are excited for their support of the project.”

By 2025, Closed Loop Fund aims to do the following: 

  • Reduce greenhouse gas emissions by more than 50 million tons (over 10 years, this is equivalent to getting 10.5 million cars off the road)
  • Divert more than 20 million cumulative tons of waste from landfills
  • Create 20,000+ local jobs across the United States
  • Save nearly $1.2 billion for American cities
  • Prove replicable models that will help unlock additional investment in recycling

“We’ve spent months reviewing proposals from cities and recycling facilities that have the potential to transform recycling systems across the country,” said Rob Kaplan, co-founder and Managing Director of the Closed Loop Fund. “We know that when done right, recycling is a profitable business that can save city and taxpayer money. That’s why Closed Loop Fund invests in business models like QRS-Canusa, Quad Cities and Portage County that solve key bottlenecks in the recycling system, create economic value for cities, and make recycling more accessible for citizens.”


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