Hi Kate. Thank you for your time.
Please introduce Closed Loop Partners to our readers.
Closed Loop Partners is a New York-based investment firm that invests across a range of asset classes that accelerate the growth of companies at the forefront of the development of the circular economy in tandem with an innovation center that catalyzes circular solutions. Since our launch in 2014, we have built an ecosystem that connects entrepreneurs, industry experts, global consumer goods companies, retailers, financial institutions, and municipalities. Our investments align capitalism with positive social and environmental impact by reducing waste and greenhouse gas emissions via materials innovation, recycling technologies, supply chain optimization, and landfill diversion.
With that in mind, we spend our time looking at innovations across plastics and packaging, food and agriculture, apparel, and supply chain technologies. Companies we’ve invested in include:
- Mori, which is commercializing a silk-based edible coating that extends the shelf life of fresh food and reduces food spoilage and waste
- Homebiogas, which creates modular household anaerobic digester units that convert household food and yard waste into cooking gas and liquid fertilizer, and
- Algramo, whose “smart dispensing system” for the reuse of consumer products eliminates the need for single-use packaging.
That’s amazing. You lead the Center of the Circular Economy at Closed Loop Partners. Would you please explain the center’s role and how you work there?
We launched the Center for the Circular Economy in 2018 as an innovation hub for research, analysis, and collaboration to accelerate the transition to a circular economy in which materials are shared, re-used, and continuously recycled. We take a holistic, end-to-end approach to innovating, testing, and scaling the circular solutions of the future by connecting upstream innovation to downstream recovery infrastructure and end markets. At the Center, we bring competitors together to tackle sticky, complex material challenges and bottlenecks in the circular economy, testing and iterating circular solutions and bringing the right people to the table to effectively fill gaps and catalyze systems-level change through industry action and investment.
Collective action to reduce plastic waste
What is the role of the Center in the single-use plastic crisis?
The Beyond the Bag Initiative was launched by the Consortium to Reinvent the Retail Bag in 2020 as a multi-year collaboration across retail sectors to identify, test and implement innovative new design solutions that serve the function of today’s single-use plastic retail bag. We are partnering with CVS Health, Target, Walmart, and a dozen other U.S. retailers to provide customers with affordable and environmentally-sound solutions to getting their goods home. Reusable bags that we can borrow rather than own are one part of the solution, alongside bag reduction and building the habit of using the bags we already own.
Last month, we published Beyond the Plastic Bag, a report that shares key insights from collaborative reusable bag pilots conducted in select CVS Health, Target and Walmart stores in Northern California in 2021. The learnings from our reusable bag pilots extend far beyond this one application and help bring additional data to the conversation on reuse, but we still have a long way to go. Additional collaborative tests of reuse systems over more prolonged periods will be necessary to gauge the shift from the initial adoption of a reusable product to the active return and repeat engagement in a truly circular reuse system. Through collaborations like the Beyond the Bag partnership, we hope to accelerate toward a future in which reusing valuable materials and products in our economy become commonplace.
What distinguishes Closed Loop Partners from others working to solve this problem?
At Closed Loop Partners we’re action-oriented, take a data-driven approach, tap a broad network of brands and industry experts, and break down silos to establish collaborative relationships across supply chains and among competitors to solve pressing market needs through innovative, investable, and systems-based circular solutions.
Sharing learnings helps accelerate progress.Kate Daly
At the Center, we tap our colleagues’ decades of experience in investment and connections to a pipeline of emerging innovations and bring our own qualitative and quantitative research and data analytics to bear through iterative in-market pilots that test messaging, customer acceptance, and operational alignment, identifying circular trends, challenges, and opportunities across sectors. Within this experimentation, we are always mindful of the need to avoid the unintended consequences that can come when shifting to new systems.
Partnerships on common ground
How was the consortium able to bring together 15 retail partners that are seemingly competitors?
Some of our retailer partners are direct competitors in terms of the products they sell but see sustainability challenges as an opportunity for collaboration rather than competition. Because retailers and brands have little control over their products or packaging after point of sale, we’ve clearly recognized that collective action to reduce plastic waste and improve downstream recovery of materials, including plastics, is much more impactful and can drive momentum across the retail industry.
What is the relationship between the Beyond the Bag and NextGen consortiums? How does this strengthen CLP’s impact on reducing single-use plastic?
Both the NextGen Consortium, which brings together Starbucks, McDonald’s, and other brands to reinvent the cup, and the Consortium to Reinvent the Retail Bag are doing groundbreaking in-market experimentation on reuse models and whether it’s a reusable cup or a borrowed retail bag there is much overlap in key insights regarding consumer behavior, operational alignment, and messaging. We bring together the brand partners across both initiatives to share those insights and allow shared learnings and questions. Those are some of my favorite moments in this work—bringing together the sustainability and operations teams at global brands who have committed to digging into this work together and are willing to share insights and learn from their peers. Sharing learnings helps accelerate progress.
Eager to work on complex systems
What types of partners do you need to help you accomplish such goals?
Circularity, by definition, is inclusive.Kate Daly
Circularity, by definition, is inclusive. To participate in a circular system each stakeholder on the value chain must be connected to others in a mutually beneficial exchange. To accomplish a transition to circularity we need partners who are invested in collective action and are eager to work on complex challenges and drive toward long-term solutions, learning and adapting along the way. In addition to brands and retailers, NGOs, designers, trade associations, and material recovery experts all need to be at the table.
Since 2016 plastic bags have been at the shopper’s expense in Germany. And since July 2021, disposable plastic products can no longer be sold in the EU. This applies to plastic plates, cutlery, drinking cups, bags, etc. There has been a stock depletion in various locations, and our colleagues frown on using disposable tableware when ordering food. How do you explain the persistence in the American market?
As Americans are exposed to more options […], we’ll see the cultural shift […] gain momentum.Kate Daly
It’s always useful for us in the United States to look at examples from abroad, even if there are significant cultural differences between our populations. In the United States, regulations relating to recycling are at the state and local level—there is no national recycling policy and no national ban on disposable plastic products. While there are bans on plastic single-use products in many municipalities and states, regulations are inconsistent across the country. Some U.S. states have even passed “pre-emption” laws that ban their municipalities from banning these items.
Some of the plastic bans have led to unintended consequences: for example, food service retailers switched to compostable packaging, although they don’t have access to any composting facilities, or retailers switched to paper bags, which can have a high carbon footprint or reusable bags end up being used as a one-for-one replacement for single-use bags. There is a growing awareness that we have a lot of work ahead to keep plastic out of the environment, our water, and our food, and I think as Americans are exposed to more options that are affordable and environmentally sustainable, we’ll see the cultural shift that is already underway gain momentum.
Where do we go from here?
What are the biggest challenges you see for this project “Beyond the Bag” in the next 5 years? Or for single-use plastic in America – to view more holistically?
At the Center for the Circular Economy, our theory of change is that no one can act alone to solve a systems-level problem. Beyond the Bag is scaling innovation through collaboration. Our goal is for customers to have a similar experience and understanding of reuse regardless of which retail store they enter. The standardization of the process of reuse—adoption, use, return—whether for cups, bags, clothing, foodservice ware, tools, etc., is an important element in transitioning customer habits away from the convenience of disposable and toward a system that provides other kinds of benefits.
Designing a system that flows within the contours of people’s daily routines is critical to building new habits.Kate Daly
What role does design play in solving the single-use plastic crisis?
The promise of circularity begins at the moment of design. Circularity cannot be tacked on at the end of the production process—it must be built in from the moment of conception. We continue to look to Amsterdam and Copenhagen, and other cities for inspiration in architectural design, for example, with buildings incorporating material passports and designed for disassembly. In the case of packaging, just as important as product design is the design of the storytelling and messaging that direct people to the next stage in the process, for example, a return bin or a reward at sign-up. Designing a system that flows within the contours of people’s daily routines is critical to building new habits.
What do you think a future without single-use plastic looks like for retail in America?
Retailers can’t act alone when they are only one part of the value chain. The future will require collective action from retailers, brands, designers, customers, NGOs and policymakers to figure out what a world with fewer single-use plastics can look like. We need to design and implement every aspect of the new systems thoughtfully to meet the needs of customers and retailers and ensure a measurable environmental benefit. Iterative testing and data-driven decision-making can help avoid unintended consequences, like the one-to-one replacement of single-use plastics with reusables that aren’t reused sufficient times or aren’t recaptured at all. This is hard work and requires a nuanced approach and allowance for complexity. Experimentation, iteration, and collaboration are the keys to unlock a future where reuse is the norm.
Thank you, Kate, for your insightful answers and the allowance to sneak peek a little behind the curtains of the Center of the Circular Economy at Closed Loop Partners. We wish you all the best and well-deserved success in eliminating single-use plastic in America.