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Closed Loop Fund: Recycled Materials Enter the Manufacturing Supply Chain

Posted by Ruthie on 9/8/2014 to Public Education


Change is never easy and often slow in coming. Nowhere is this more evident than in the long road being paved by those integral in greening our world. We can all imagine fanciful inventions that use very little energy, create no pollution and are inexpensive to obtain. As a culture we even pride ourselves on our record of innovation and achievement. That said, the vision of our future undoubtedly has a lofty price tag; change can also be expensive. It is only when our economic engines believe that spending money will ultimately earn itself even more, that these great transitions can be expected to occur.

We seem to be transitioning.

Closed Loop Fund

Recycled materials are entering the manufacturing supply chain at a robust rate and demand is growing. Everywhere from packaging to clothing, paper to rubber, you are likely to turn around and find products that are using some form of recycled materials. And, while recycling rates are leveling off, use of recycled materials continues to grow.

Some of the world’s largest companies have recognized this trend, realizing an investment in recycling efforts in the community translates into increased material supply. Business 101 tells us that this translates to lower costs of material and, in turn, greater potential profit. Or in other words “how things get done”. The Closed Loop Fund includes investment capital from Colgate-palmolive, Coca-Cola, Goldman Sachs, Johnson & Johnson, Keurig Green Mountain, Pepsico, Proctor & Gamble, Unilever and Walmart. Available funds are nearing $100 million earmarked for an investment into recycling infrastructure. Yes, these are the big boys, and when they start to put their money behind projects, well, that’s when things get done.

We are at a point of critical mass. It is less expensive to purpose recycled plastic than to extrude virgin oil from the ground. Still only a relatively small percentage of potentially recyclable materials are finding their way to the recycle bins (most overall figures are skewed by the state mandates of recycled auto batteries and tires, for example). And more jobs have already been created in the burgeoning Recycling industry vs its waste disposal counterpart.

While there continues to be technical challenges facing the increase of efficiency in the recycling process, companies like Walmart are pledging a significant reduction in greenhouse gases, committing to more use of recyclable material. Motivation again, is not necessarily altruistic. Consumer demand has expressed in no uncertain terms that they care about how their products are manufactured. It is simply smart marketing to make environmentally friendly marketing decisions.

While most money from The Closed Loop Fund is expected to be invested in community infrastructure in an effort to simply catch more material, Money will also be invested in technologies that help improve the aforementioned inefficiencies still present in areas like single stream sorting.

Loans heading out to municipalities are interest-free, These companies do not see their role here as a community bank. They have simply recognized that investing in cost controls of their materials will have a payoff down the road. They can be seen as heroes; adding jobs helping the environment and keeping prices down. Philanthropy this is not, but it is nice to know that things are happening that are both economically beneficial and good for the earth.