How Climate, Carbon & Reuse Come Together

By Closed Loop Partners & Just Salad

November 17, 2022

Georgia Sherwin, Senior Director at Closed Loop Partners interviews Sandra Noonan, Chief Sustainability Officer at Just Salad, a direct investment of Closed Loop Partners. Just Salad is the home of the world’s largest restaurant reusable bowl program and is the first U.S. restaurant chain to carbon label its menu.

1. In 2020, Just Salad became one of the first US chain restaurants to show the estimated carbon footprint of every item on its menu, why was this so important to do and what have been the impacts on your business to date?

In 1994, the Nutrition Facts panel began appearing on food products. Today it is one of the most ubiquitous labels in the world and many of us depend on it to make purchasing choices. Nearly 30 years later, we know that food systems represent more than 34% of total greenhouse gas emissions (according to a 2021 paper published by Nature). Our food choices affect the temperature of the planet and its long-term habitability. So, food labels should help us evaluate ecosystem impacts, as well as nutritional content. That is the perspective that went into our carbon labels. They indicate the estimated quantity of greenhouse gas emissions associated with each item on our menu. Several research studies show that people will change their purchasing behavior in response to carbon labels. When we were developing our carbon labels, I wanted a term to describe eaters who consider taste, nutrition, and environmental sustainability when ordering from our menu. We chose the term Climatarian. Today, Just Salad’s digital menus feature a “Climatarian” dietary filter showing our lowest-footprint items. Carbon labels give us ingredient-level insight. We’ve worked with our third-party verifier, Planet FWD, to quantify the impacts of specific sourcing decisions. For example, we found that by switching from conventionally cultivated quinoa to Regenerative Organic Certified (ROC) quinoa, we’ve reduced the greenhouse gas emissions associated with two menu items by 3.29%, which will add up to approximately 1.83 tons of CO2e over the year 2022. With Planet FWD’s help, we’re generating similar calculations demonstrating the impact of other ingredients, like vegan feta cheese, and more resource-efficient packaging, like our reusable bowl program. We’ve also partnered with researchers at University of Pennsylvania and Harvard on a survey that assesses customers’ engagement with our carbon labels.

2. While we know reuse has an important role to play in reducing single-use plastic waste, how do you think about the carbon footprint attached to these reuse systems that typically require more energy and material during manufacturing, as well as complex reverse logistics?

It takes energy to produce a piece of packaging, whether reusable or disposable. Reusable packaging needs to be durable and long-lasting. Therefore, the carbon footprint from manufacturing it will be higher than for a flimsier, disposable container. What we’re optimizing for is the overall, lifecycle footprint of our reusable containers. We want it to be lower than disposables after the smallest possible number of uses. One factor affecting this is the type of material from which your reusable container is made, and how frequently your customers will reuse it. The less resource-intensive your material, and the more frequently your customers reuse it, the faster you’ll achieve the lifecycle emissions savings versus disposables. As for reverse logistics, we incentivize customers to keep bringing back their reusable containers by providing a free topping with every reuse. We offer additional rewards throughout the year to keep the reuse cycle going. For example, when we launched plant-based Beyond Chicken, customers who brought in reusable bowls received that item for free. At new store openings, we hold “$5 salad days” for reusable bowl customers. I’m proud of the fact that we tie rewards to circular, resource-conscious behaviors.

3. What kind of data have you uncovered to support the environmental case for reusable packaging? How do you verify this and what are some of the biggest challenges regarding impact measurement?

In 2022, we completed a third-party lifecycle assessment comparing the environmental impacts of our reusable and disposable packaging. We estimated the greenhouse gas emissions and water use associated with every stage: materials, manufacturing, the packaging they arrive in, distribution, first use and end of life. The LCA concluded that after two uses, the Just Salad reusable bowl has less global warming impacts than a disposable fiber bowl. These findings are substantiated through Monte Carlo uncertainty analyses with 95% confidence. If you were to eat at Just Salad every week for a year using our reusable bowl, your carbon footprint would be 89% lower than if you’d eaten out of a disposable container. The results also show that the reusable bowl results in less water consumption impacts after the second use (though uncertainty in the underlying water consumption data prevents these estimates from being substantiated at the 95% confidence level). To maximize the water-conservation and greenhouse gas emission benefits, we recommend that customers wash the Reusable Bowl in a full dishwasher at the most energy- and water-efficient setting possible.

Of course, lifecycle analyses are only as good as the assumptions upon which they’re based. We worked with our LCA partners over the course of a year to collect and verify our data. That was challenging, if only because of the time investment required. We were privileged to work with experts who cared deeply about data quality and rigor. They performed sensitivity analyses on our base assumptions (for example, our assumptions about the proportion of containers that are washed by hand versus dishwasher). The sensitivity analysis gave us even more confidence in the final results.

4. How have your reusable bowl programs evolved over time? What’s the customer experience look like?

Since 2006, when we opened our very first store, Just Salad has offered an in-store program that works as follows: Buy a reusable bowl for $1, and every time you bring it back, you get a free salad topping, like avocado. In 2022, we piloted a digital version of this program: In the Just Salad mobile app, you can opt in to our “BringBack” program. When ordering your meal, simple toggle BringBack Bowl Pickup. Your salad will be packaged in a reusable container that you can then bring back to Just Salad on your next visit. We will handle the washing and sanitation. BringBack is currently live at two stores and will roll out to a total of 10 stores in the coming months.

5. What would your advice be to a foodservice provider considering a shift to reuse? What are the different kinds of benefits they could anticipate, beyond simply environmental?

This year, we gave a comprehensive course on our reusable packaging program. (Companies and individuals can sign up for updates on future courses through the course site, www.thenewgreennormal.com). Summing up that course, I would advise anyone to take a systems-level perspective. Think about every stage of the packaging’s journey including Production, Consumption, Collection, and Processing. Then, consider how your customer interacts with the packaging at each of those stages. Finally, put a data collection system in place so you can measure and track environmental impact. Separately, seek out a support network that is as passionate about reuse as you are. That has helped me a lot.


Across Closed Loop Partners and our Center for the Circular Economy, we are testing, piloting and investing in reusable packaging models in order to accelerate their pathway to scale. We see reuse as a primary means to addressing the mounting single-use plastics waste challenge, reducing the need for virgin plastic extraction and keeping valuable materials in play.

Closed Loop Partners and Brookfield Partner to Launch Circular Services, the Leading Developer of Circular Economy Infrastructure in the United States

By Closed Loop Partners

November 15, 2022

With up to $700M investment from Brookfield, Circular Services will expand circular economy infrastructure and services to municipalities and businesses

NEW YORK, NY—November 15, 2022— Closed Loop Partners (CLP) and Brookfield Renewable (“Brookfield”) officially announce the establishment of Circular Services, a leading developer of circular economy and recycling infrastructure in the United States. Circular Services owns and operates municipal recycling facilities across the U.S. that enable municipalities and businesses to eliminate the billions of dollars spent annually on landfill disposal costs by ensuring that valuable commodities are recycled and reused in domestic supply chains.

Circular Services is majority owned and managed by Closed Loop Partners. Brookfield is committing up to $700M towards the growth of Circular Services via its Brookfield Global Transition Fund (“BGTF”), which is the largest fund in the world focused on accelerating the transition to a net zero economy. Brookfield has invested an initial $200M in Circular Services, with an additional $500M committed to pursue growth opportunities. Closed Loop Partners is also including the Partnership Fund for New York City as an investor in Circular Services.

Circular Services will be the largest privately held recycling company in North America, including major municipal and commercial contracts to recycle and reuse paper, metal, glass, plastic, organics, textiles and electronics in New York, New Jersey, Pennsylvania, Arkansas, Florida, Texas and Arizona. The company owns or operates twelve facilities, several long-term municipal and commercial contracts, a total annual recycling capacity of over one million tons and a large pipeline of actionable growth opportunities.

Circular Services uses advanced technology to improve sortation, processing and reuse of valuable commodities, including consumer packaging, organics, textiles, electronics and more, for continual reuse in domestic supply chains. Its facilities increase the number of sustainable jobs in the communities they serve, promote local re-commerce and remanufacturing, and enable resilient communities.

“The United States has operated with a very linear system for product manufacturing and waste management for the past 75 years, costing municipalities and business billions of dollars in landfill disposal and damaging our environment,” said Ron Gonen, Founder and CEO of Closed Loop Partners. “Circular Services is building circular economy infrastructure that will serve the financial and environmental interests of cities, consumers, businesses. We are excited to accelerate the transition to the circular economy, an economic system that invests in the continual use of commodities, reducing the reliance on natural resource extraction and landfills.”

“We cannot create a net zero economy without significantly scaling the infrastructure required for a circular economy,” said Natalie Adomait, Managing Partner and Chief Investment Officer of BGTF. “Brookfield has developed a blueprint for transition investing, combining a prudent and patient approach to long-term infrastructure development with the emerging business models that are critical to lowering carbon emissions while generating attractive risk adjusted returns for our investors. We look forward to working with Closed Loop Partners, clear leaders in the circular economy sector, to support Circular Services to scale up its impact across the United States.”

“Circular Services’ operations will expand the potential to bring innovative solutions to recycling infrastructure and bolster broader sustainability goals throughout the region. As Circular Services helps more cities across the U.S. adopt a more circular approach to waste management, its presence in New York City will be a welcomed boost to local efforts to position New York as a leader in the growing circular economy,” said Maria Gotsch, President and CEO of the Partnership Fund for New York City. “We are excited to be an investor in the largest privately held recycling company in the U.S. that will be headquartered in New York City.”

In cities across North America, zero-waste goals are becoming a top priority due to the combined urgency of climate risks and increasing landfill costs. According to the Circularity Gap Reporting Initiative, 70% of all global greenhouse gas (GHG) emissions are related to material handling and use, making circular economy infrastructure a critical part of the solution to our climate crisis. Expanding access to recycling and reuse services will enable cities and businesses to avoid the cost of landfilling products and packaging and achieve their sustainability goals.

 

About Closed Loop Partners

Closed Loop Partners is at the forefront of building the circular economy. The company is comprised of three key business segments: an investment firm, innovation center and operating group. The investment firm invests in venture, growth equity, buyout and catalytic private credit strategies on behalf of global institutions, corporations and family offices. The innovation center, the Center for the Circular Economy, unites competitors and partners to tackle complex material challenges and implement systemic change to advance circularity.

The operating group, Circular Services, has twelve recycling facilities in operation today, and provides holistic, circular materials management to close the loop on valuable materials for municipalities and businesses throughout the United States. Employing innovative technology within reuse, recycling, remanufacturing and re-commerce solutions, Circular Services improves regional economic and environmental outcomes by building resilient systems to keep food & organics, textiles, electronics, packaging and more, in circulation and out of landfill or the natural environment.

Closed Loop Partners is based in New York City and is a registered B Corp. For more information, please visit www.closedlooppartners.com.

About Brookfield Renewable

Brookfield Renewable operates one of the world’s largest publicly traded, pure-play renewable power platforms. Our portfolio consists of hydroelectric, wind, utility-scale solar and storage facilities in North America, South America, Europe and Asia, and totals approximately 24,000 MW of installed capacity and an over 100,000 MW and 8 million metric tons per annum (“MMTPA”) of carbon capture and storage development pipeline.

Brookfield Renewable is the flagship listed renewable power company of Brookfield Asset Management, a leading global alternative asset manager with over $750 billion of assets under management.

The Brookfield Global Transition Fund, co-led by Mark Carney, Brookfield Vice Chair and Head of Transition Investing, and Connor Teskey, CEO of Brookfield Renewable, is Brookfield’s inaugural impact fund focusing on investments that accelerate the global transition to a net-zero carbon economy, while delivering strong risk-adjusted returns to investors. The Fund targets investment opportunities relating to reducing greenhouse gas emissions and energy consumption, as well as increasing low-carbon energy capacity and supporting sustainable solutions. Consistent with its dual objectives of earning strong risk-adjusted returns and generating a measurable positive environmental change, the Fund will report to investors on both its financial and environmental impact performance.

Climate Series

Why Water Needs To Be Part of Circular Economy Investments

By Closed Loop Ventures Group

October 13, 2022

Amidst a climate crisis and high wastewater treatment costs, water reuse technologies are key to keeping one of the most valuable commodities in circulation

The circular economy is the most significant restructuring of global commerce and supply chains since the industrial revolution. The goal? To produce, consume and manage resources so that valuable materials do not go to waste, and damage communities and ecosystems. Since its founding, Closed Loop Partners has made progress to reach this goal across plastics & packaging, organics, textiles and electronics. However, driven by a range of compounding factors, we are at a point where we need to go deeper, and expand this list of materials to include one that is arguably one of the most valuable: water.

Water is fundamental not only in terms of consumption––human beings cannot survive more than three days without drinking water––but clean water is also essential to production. Most of the groundwater we pump is used by farmers to irrigate agricultural land and industries to manufacture the goods we consume. But with the rates of production and consumption fueling today’s linear economy, wastewater treatment is more important than ever. Groundwater is pumped out of aquifers faster than it can be naturally replenished. Increasing frequency and severity of extreme weather events also mean that long periods of drought are exacerbating already diminishing amounts of water, while periods of excessive rainfall are overwhelming the absorption capacity of soil and water treatment infrastructure, causing overflows in sewage and stormwater systems and massive amounts of consequent damage to ecosystems and infrastructure.

Insufficient supplies of water could reduce production capacity for businesses by 44%, disrupting the availability of essential resources like energy, clothing and food and resulting in millions of dollars’ worth of stranded assets. Earlier this year, droughts in Mexico drove a shortage of chili peppers, threatening the production of Sriracha around the world. Sriracha could just be the tip of the iceberg. Droughts are also exacerbating shortages of staple crops like cotton, wheat and corn, which could drive price increases. On the other hand, increasingly frequent deluges of water threaten the systems our societies run on. For example, the recent floods in Pakistan have already resulted in damages reportedly worth over US$10 billion, affecting millions of people and breaking and overwhelming key infrastructure. Overall, according to a CDP report, 69% of publicly listed companies around the world stated that they are exposed to water risks that could generate a substantive change in their business, with the potential value at risk topping out at US$225 billion.

Consumption patterns coupled with climate change are stressing our water sources and systems, threatening the continuity of those very consumption patterns. Amidst this, the diamond-water paradox is glaring––the availability of water directly affects the longevity and quality of our life yet has been one of the most mispriced assets. While water’s historical undervaluation has made investing in it notoriously difficult, we are now seeing market signals that water pricing and value are changing, and this is creating an opportunity for investors.

A sea change in water investing

Wastewater treatment has largely improved over the years, driving up water-associated costs in much of the U.S. and Europe. In New York, alone, the price of water and sewer have both increased nearly 5% YoY, and increased over 26% over the last 10 years (over 2x the rate of inflation).

Source: New York City Water Board Rate History Data

The cost to transport heavy wastewater to water treatment facilities, and then transport the leftover sludge to landfill, ensures that operational costs stay high. Sending wastewater sludge to landfills also opens up new environmental and social risks––unleashing a slew of hormones and chemicals from agricultural and industrial waste into the soil. More capacity is needed at treatment plants, but building new water infrastructure requires significant costs: land, new pipes and labor. As it stands, it is more expensive for customers to get rid of water than to buy it. In fact, for anyone hooked up to a municipal water treatment plant, that is often the case. Water disposal in New York City is 159% more expensive than supply (and has been for the last 30 years).

Despite rising costs to treat water, businesses are faced with numerous pressures to keep used water in circulation. Growing policy––including the EPA’s new regulation that holds polluters accountable for cleaning up PFAS contamination, as well as a new plan that reduces water releases from Lake Powell––is raising accountability standards. Industry collaborations––such as Ceres’ Valuing Water Finance Initiative (VWFI), which engages 72 companies with a high water footprint to value and act on water as a financial risk and drive the necessary large-scale change to better protect water systems, and the UN Water Resilience Coalition, a CEO-led initiative committed to reducing water stress by 2050––are driving broader market attention. Water-related public health crises around the U.S.––in Jackson, Las Vegas, Baltimore, Flint and New York––are pushing additional attention onto expanding potable water sources and addressing outdated water infrastructure. With all these forces at play for industries that output water, investing in water management can reduce waste management costs, and provide a consistent and reliable water input stream. If companies can recycle water back into the system and reuse it as an input, they can reduce costs and relieve municipalities of capacity challenges.

A groundswell of new innovations

Across the board, alternative water sources are increasingly interesting––and importantly, increasingly viable from an investment perspective. This includes on-site generation of water, such as SOURCE Water’s technology to produce potable water from sunlight and surrounding air. This also includes on-site filtration technologies that could create potable, grey or functional water, depending on the end user.

Most recently, Closed Loop Partners’ Ventures Group invested in Accelerated Filtration, a water filtration company based in Midland, Michigan that develops industrial water filtration technologies. The company’s technology helps address the pain point of industrial customers, delivering packaged turn-key filtration solutions for the consistent removal of fine suspended solids in variable water streams.

As investable opportunities in the water space continue to grow, Closed Loop Partners’ Ventures Group continues to watch investment opportunities in water filtration technologies that could provide a strong return on investment to commercial and industrial customers, and allow for water reuse. As water becomes increasingly scarce and increasingly valuable, we look forward to seeing the evolution of the space, and championing the integration of water as one of the most important materials to keep within a circular economy.

Interested in learning more about work to keep key materials in circulation? Visit Closed Loop Partners’ website here.

How Do We Spark a Seachange for Reuse?

By Kate Daly

October 06, 2022

It will take unprecedented collaboration to address the scale of our global plastic waste challenge. Bringing together the nation’s largest retailers to test and pilot sustainable packaging solutions that operate across each other’s stores is a critical step toward this collective goal. 

If you visualize the current journey of most products and packaging in our economy, it looks like a straight line that starts with extracting finite raw materials and ends at the landfill. After decades of relying on this seemingly convenient linear system, its long-hidden economic costs and environmental consequences have become clear, bringing us to a tipping point that necessitates a better way forward — one that considers these materials as resources, not waste.

Consider the iconic single-use plastic bag. In the United States, it’s estimated that we use 100 billion plastic bags per year – and fewer than 10 percent of these are recycled. Most bags wind up in the landfill, in the environment, or in the wrong recycling stream, tangling recycling equipment and leading to costly shutdowns. Today, depending on where we live, our local stores may charge a fee to use a plastic or paper bag or may have banned single-use bags. More and more, customers are demanding convenient options that reduce environmental impact while helping us get our 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. We’ve all had moments when we’ve forgotten our reusable bag or taken an unplanned shopping trip, which is where borrowing a reusable bag fits in.

Earlier this month, the Center for the Circular Economy released Beyond the Plastic Bag: Sparking a Seachange for Reuse – a report of our learnings from conducting first-of-a-kind reusable bag pilots at CVS Health, Target and Walmart stores in Northern California last summer.  The report is specific to the testing of reusable bag systems where customers who didn’t bring their own bag could “borrow” a bag and use it multiple times before returning it at the same or a different brand’s store to be washed, redistributed and reused by other customers.

The Beyond the Bag Pilots, launched by the Consortium to Reinvent the Retail Bag and conducted in partnership with global design firm IDEO, unearthed key insights across the customer journey and in behind the scenes operational logistics to determine what needs to be true for reuse models to be successful.

 What We Learned

  • For customers to pay attention to this new approach to carrying goods home, punchy, impact-oriented storytelling, with a clear description of the rewards and benefits of participating is essential
  • For customers to participate in reuse systems, signing up to borrow a bag must be just as convenient, inclusive and accessible as using a single-use bag
  • Accessible drop-off points and quick confirmation of the return of reusables are must-haves for customers to engage fully in a reuse system
  • Impact must be measured at every stage of the system, including percentage of reusable bags recovered, water and energy usage, and bag damage or loss rates. Return rates and repeat participation are critical measurements that require long-term testing and engagement to accurately gauge
  • As reuse grows, so do opportunities for increased efficiencies in shared infrastructure and other collaborations that increase the density and availability of drop-off points and help optimize and scale the system

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 insufficient recapture of “reusables” or the one-to-one replacement of single-use plastics with reusables.

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. Experimentation, iteration, and collaboration will continue to be key. Additional tests and measurements of reuse systems over longer periods will be necessary to gauge the shift from 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 becomes the commonsense norm. Explore the full learnings from our pilots here.

Climate Series

Reflections on New York Climate Week: What’s Next for the Circular Economy?

By Aly Bryan

September 27, 2022

In September 2022, New York City was home to the vibrance of Climate Week – a collection of robust professional programming, community gatherings and coffee catchups with friends new and old in the climate sphere. 

Closed Loop Partners was active throughout town as the link between the circular economy and climate change mitigation becomes increasingly clear. These discussions included one that I participated in alongside Amy Duffuor at Azolla Ventures and Allison Hinckley, PhD at Fine Structure Ventures on the Future of Climate Venture Capital Investing, facilitated by Co-Founder of Climate Tech VCKim Zou, at the HolonIQ Impact Summit.

The fundamental question for so many is how the current geopolitical and macroeconomic climate will impact climate VC in the coming months and years. As Kim and her colleagues have written, plenty of earmarked dry powder remains to be deployed. The question that remains is how climate VC’s evaluation criteria will shift in light of the relative uncertainty.

As investors in the circular economy, Closed Loop Partners has long been mindful about the underlying economic models that persist today and their link to climate change – namely those that link perpetual economic growth with extractive and emissions-intensive practices, reliance on long, brittle supply chains for energy and finite raw materials, and excessive waste within those existing supply chains. Given the macroenvironment of rising costs of capital, ongoing wars in the East, tariffs, and trade tensions with China, exacerbated climate conditions and an overhang from the worst pandemic in our lifetimes, the old way of production and economic “prosperity” is being called into question – and is now poised for disruption.

The sensibility across multiple conversations and events attended by Closed Loop Partners was that these forces have pushed climate-related innovations out of the silo of Corporate Social Responsibility (CSR) programming or parallel initiatives designed with a primary mandate to “give back.” Instead, we are seeing broader integration of circular economy and climate-related initiatives and investments entering the C-suite through supply chain, procurement, operations, and shareholder expectations. This means we are seeing corporations adopt transformations with an explicit economic mandate that can simultaneously facilitate a lower carbon, more circular future. Companies with this multidimensional mandate are those that Closed Loop Partners’ Ventures Group partners with and we are proud of the companies in our portfolio that are shepherding the economy into its next, more circular future.

As these transformations accelerate, so too does the need to drive mutual benefits for players further up and downstream from the products and services that we consume every day. In that spirit, value chain resilience continued to be top-of-mind across Climate Week events. Late last year, my team published a report outlining the catalytic power of mutually beneficial supply chain transparency in the next generation circular economic model. Whether from building up new, localized ecosystems through domestic or nearshored manufacturing or from actively creating value for legacy suppliers in an established ecosystem (e.g., parts manufacturers in automotive, mills or cut-and-sew players in the fashion value chain), companies can enable innovations that reduce waste, reduces full value chain liability, and – ultimately – facilitates a just transition for the ecosystem more broadly and builds future resilience.

This is no small task ahead of us; however, it is one that we – and much of the climate tech community – are embracing with open arms a transformation of how industry works. We are energized by novel solutions to tough problems and there is no shortage of both problems and solutions to take on in the coming months and years. Above all, the climate VC community is one of unfailing optimism. At the cusp of this transformation, we’re honored to be thought leaders on the circular economy and look forward to playing a small part in advancing the world toward the next generation of circular ecosystems.

Source

Food & Agriculture Series

To Reduce Food Waste, Investors and Community Organizations Need to Be at the Table

By Bea Miñana and Jessica Toth (Solana Center for Environmental Innovation)

September 26, 2022

Food waste is created at every point in our current food supply chain––on the farm, during manufacturing and transportation, on store shelves, at restaurants, and in our homes. Today, most of that uneaten food ends up in landfills, or is otherwise disposed of––an economic dead end, and a social and environmental risk. 

Amidst an increasingly urgent climate crisis, and growing inequity in food distribution, our inefficient food system is called into question. For investors and community organizations alike, finding circular solutions to reduce food waste across the supply chain is now a top priority.

What happens when food is wasted?

As much as 10% of global greenhouse gases comes from food wasted across the supply chain. Sending food to landfills misses the opportunity to convert that resource into any number of productive end uses––from compost and biogas to animal feed to packaging inputs and other products––that support the environmental, economic and social sustainability we seek in our economic system. Current practices that do not keep organic material in circulation are fundamentally unsustainable––locking in our society’s dependence on fossil fuel-based products and continually depleting soil’s regenerative capacity.

What does an ideal food system look like?

For effective strategies to manage food waste, we can look to nature. Natural agricultural cycles are some of the best examples of an efficient, closed loop system. When we harvest produce, we also take minerals and nutrients from the soil. That’s what makes our food nourishing. Importantly, food that is not eaten––surplus food and inedible remnants––contain nutrients too. Those remainders, when returned to the soil in the form of compost, enhance important microbial activity and replenish the soil for the next growing period. Food scraps are a resource that can also be transformed into clean energy and liquid fertilizer through anaerobic digestion. If managed optimally at each point of the supply chain, farming can have a reversing effect on climate change and soil depletion.

Landfilled food waste has negative value due to unpriced externalities. Diverted, it can be a valuable soil amendment, a source of energy, or input into other finished food and packaging products. This is an arbitrage to explore through financial capital and community initiatives.

What types of solutions are needed?

All manners of solutions are needed to move away from current linear processes that drive materials to landfill, as well as stop leaks in existing circular systems. Both holistic, far-influencing solutions––from public policy to childhood education––as well as technical innovations that address specific problems within the supply chains––such as developing end markets for unsold agricultural products––are critical. Until widespread public policy (with appropriate incentives) is in place, the first fundamental realignment requires risk-tolerant funding to capitalize solution providers and municipalities willing to be ‘first movers.’ The second set of solutions, which solve specific supply chain circularity challenges, will have more immediate impact and can be accelerated through a range of innovation services, including but not limited to the provision of flexible capital.

Today, investment and interest in food waste reduction are growing, and there has never been a better time to consider the range of impact solutions that need funding. In fact, in mid-May, Closed Loop Partners and ReFED announced a new Circular Food Solutions Platform that aims to catalyze an array of capital types that can support a wide range of solutions.

Let’s take a closer look at how investors and community organizations are addressing the challenge, and the impact that can be achieved when the entire value chain is engaged.

Seismic changes in regional food systems

In 2015, in the middle of San Diego County, a six-month pilot was run to take food scraps from a quick-service restaurant to a local farm with depleted soil less than one mile away, to compost and land-apply. The pilot aimed to prove the viability of closed loop regional food systems––that there is value in uneaten food, and it can be used to replenish surrounding agricultural soil. Findings from the pilot showed that the compost created from the fresh food scraps was five times more nutrient-rich than the finished compost the farm had been trucking in from 25 miles away. It not only saved the restaurant $250 per month on hauling fees, but also prevented 30 metric tons of greenhouse gases from being emitted.

This pilot was run by Solana Center for Environmental Innovation, a California-based nonprofit that has been advancing community initiatives to reduce food waste for many years. Among many other initiatives, this program planted the seed for what could be achieved through regional food systems. Today, San Diego County is now removing restrictions that previously prevented the replication of similar programs. Solana Center was awarded California’s highest environmental honor for this program, the Governor’s Environmental and Economic Leadership Award (GEELA), which recognized food waste as an environmental issue for the first time in the award’s history. More recently, Solana Center’s Executive Director, Jessica Toth, was recognized by the San Diego Business Journal as one of 50 Over 50 Influential Women, celebrating the impact of the programs run by the Center. With these developments, new technology, education and transport systems are needed to maximize and accelerate the economic and environmental benefits of these programs.

Catalytic funding funneled into circular food solutions

On the other side of the country, Closed Loop Partners, a New York-based investment firm and innovation center, has been focused on accelerating a circular economy across a range of sectors, including food and agriculture. Together with leading brands, industry groups, NGOs and investors, the firm funnels much-needed capital and network insights into industry-wide solutions and technical innovations that build a circular food system grounded in regenerative agriculture practices, recycling and transparent value chains. This includes upstream solutions that reduce food waste from the outset, and downstream solutions that can ensure uneaten food does not go to waste.

For example, Closed Loop Partners provided venture funding to ucrop.it, a company that operates as a blockchain farming and crops traceability platform that ensures certainty across crop cycles. It connects crop growers with corporate stakeholders from the agriculture value chain to agree on farming objectives for sustainable crop production, competitive financing and quality crops sourcing, to achieve greater profitability and incentivize sustainable agricultural practices. The firm also invested in ThriveLot, a company that installs and maintains edible, ecological landscaping and more for homeowners, creating a yard-to-table food system. More recently, Closed Loop Partners’ innovation center, the Center for the Circular Economy, launched a collaborative Composting Consortium to pilot industry-wide solutions and build a roadmap for investment in technologies and infrastructure that enable the recovery of compostable food packaging and food scraps.

Across the food system, financial investors, corporate strategic investors and philanthropists are deploying more capital into emerging companies creating solutions to reduce food waste and ensure that, at every stage of supply and consumption, food is used as a resource that brings value back to communities, the environment and the local economy.

Get involved

ReFED estimates that $14 billion in investment is needed annually to cut food waste in half by 2030, the goal set by the US EPA and driven by international targets. Over 20% of that $14 billion is needed for risk-tolerant funding for far-reaching initiatives, like those driven by community organizations such as Solana Center. The annual impact of $14 billion in investments per year is estimated to drive $73 billion in net financial benefit and reduce 75 million tons of GHG emission; over ten years, it could also create 51,000 jobs annually.

Investors and community organizations play distinct yet critical roles in advancing shared goals. Mitigating food waste will require consumer, producer and government engagement as well as financial investment. Effective deployment of capital and policy, with stakeholders from across the value chain collaborating on shared goals, can make a notable difference in driving economic, social and environmental benefits for communities and investors, addressing climate change, and building a more resilient, waste-free food system.

Interested in learning how Solana Center for Environmental Innovation is monetizing seismic change or to hear about the next big project? Visit here or contact Jessica Toth at [email protected].

Interested in a further discussion on this important topic? Please contact Closed Loop Partners here.

Closed Loop Partners Releases Key Insights from First-of-a-Kind Multi-Retailer Reusable Bag Pilots, with CVS Health, Target & Walmart

By

September 13, 2022

New report from Closed Loop Partners shares insights to guide retailers on effective reusable bag models, a key solution as regulations to reduce reliance on single-use plastic bags grow across the U.S.

Read the full report

September 13, New York, NY – Closed Loop Partners’ Center for the Circular Economy and the Consortium to Reinvent the Retail Bag released a new resource to help guide retailers looking to adopt reusable bag service models. The report, Beyond the Plastic Bag, shares key insights and analysis gathered from collaborative reusable bag pilots conducted in select CVS Health, Target and Walmart stores throughout Northern California in 2021, as part of the Consortium to Reinvent the Retail Bag’s Beyond the Bag Pilots.

Approximately 100 billion single-use plastic bags are used each year in the U.S., most of which end up as waste in landfills and the environment. Reuse models play an important role in addressing single-use plastic packaging waste, alongside other complementary waste mitigation strategies. As retailers work to respond to the urgent challenge and address increasing plastic bag regulations across the U.S., the report provides key findings on what drives an optimal shopper experience and uptake of reuse models:

Customer-facing journey for reusable bag services

  • Effective storytelling is foundational for building awareness
  • Convenience is imperative when it comes to adoption and sign-up
  • Customers are looking for a clear and easy reason to help them reuse
  • Accessible drop-off points and quick confirmation of return help build trust in the reuse system

 

Behind the scenes action enabling reusable bag services

  • Partnering with the right stakeholders matters
  • Impact must be measured at every stage
  • Further scaling reuse systems will help catalyze efficiencies

 

“Successfully implementing reuse models on the ground, and accelerating their growth, takes unprecedented collaboration. Since 2018, the Center for the Circular Economy has been convening competitors to address complex material challenges and advance circular solutions, including reuse,” said Kate Daly, Managing Director of the Center for the Circular Economy at Closed Loop Partners. “This collaboration with the nation’s largest retailers to test and pilot reusable bag solutions across multiple stores is a critical step toward reducing single-use plastic bag waste. Iterative testing and data-driven decision-making of reuse systems can help avoid unintended consequences, like insufficient recapture of reusable packaging or the one-to-one replacement of single-use plastics with ‘reusables.’ We hope that this report on the Beyond the Bag initiative serves as inspiration for forward-thinking organizations looking to bring reuse to the next level. The learnings from our pilots can help guide us toward a future in which reusing valuable materials and products in our economy becomes the commonsense norm.”

The Center for the Circular Economy launched the Consortium to Reinvent the Retail Bag in 2020, convening many of the world’s largest retailers to identify, test and implement innovative new design solutions that serve the function of today’s single-use plastic retail bag. The Consortium’s Innovation Partner, IDEO, worked closely with Closed Loop Partners and its retail partners in designing and running the reusable bag pilots in Northern California featured in the Beyond the Plastic Bag report. Findings from the Beyond the Bag Pilots build on and complement additional learnings from Closed Loop Partners’ NextGen Consortium that ran several reusable cup pilots in 2020, driving forward the Center’s work to rigorously test and hone reuse solutions to ensure that they achieve their intended impacts.

“Through partnerships with innovative startups, collaboration with other partners, and buy-in from our customers, the Beyond the Bag Pilots provided critical data-driven analysis on the role that reuse models could play in plastic waste mitigation when thoughtfully designed and their impact successfully measured,” said Sheryl Burke, Senior Vice President of Corporate Social Responsibility for CVS Health. “We still have a lot to learn collectively, but we’re thrilled to continue our journey towards a more circular future for retail.”

“Bringing Target, Walmart, and CVS Health to the same table demonstrates the partnership needed across our industry to address the challenge of plastic waste and achieve measurable environmental benefits for all,” said Amanda Nusz, Senior Vice President of Corporate Responsibility for Target and President of the Target Foundation. “We’re grateful for the insights these pilots have provided, and we’re applying what we learned to identify bag options that are best for our guests, propelling more circular systems throughout retail.”

“The Beyond the Bag Pilots fostered an unprecedented platform for connectivity between trailblazing reuse start-ups, customers, Walmart, and other retailers in the industry,” said Kathleen McLaughlin, Executive Vice President and Chief Sustainability Officer for Walmart. “The pilots created the space for collective experimentation, and provided data-driven insights on the ease, convenience, and perceived benefits of the models tested. This kind of on-the-ground diligence from pilots is critical to inform what could be next for reuse and where it could fit in a circular economy.”

Over the next year, the Consortium to Reinvent the Retail Bag will continue to conduct extensive research and in-market testing of designs and innovative bag solutions that can reduce single-use plastic bag waste. These aim to inform the viability of solutions in different contexts, as well as the full potential of solutions to more sustainably, accessibly and effectively get goods home.

About the Center for the Circular Economy at Closed Loop Partners

Closed Loop Partners is a New York-based investment firm comprised of venture capital, growth equity, private equity and catalytic capital, as well as an innovation center. In 2018, Closed Loop Partners launched its innovation center, the Center for the Circular Economy, which unites competitors to tackle complex material challenges and to implement systemic change that advances the circular economy. Closed Loop Partners brings together designers, manufacturers, recovery systems operators, trade organizations, municipalities, policymakers and NGOs to create, invest in and support scalable innovations that target big systems problems. In 2022, the Center launched a Reuse Insights Lab to advance the firm’s testing, piloting and investing in reusable packaging models. The Reuse Insights Lab conducts qualitative and quantitative research and data analytics through in-market testing, focus groups and customer interviews, to identify how to design and build the architecture for a reuse system that brings the circular economy to the forefront in our everyday life. Learn more about the Center’s work here.

About the Consortium to Reinvent the Retail Bag

The Beyond the Bag Initiative, launched by the Consortium to Reinvent the Retail Bag, aims to identify, pilot and implement viable design solutions and models that more sustainably serve the purpose of the current retail bag. Closed Loop Partners’ Center for the Circular Economy launched the initiative with Founding Partners CVS Health, Target and Walmart. The Kroger Co. joined as Grocery Sector Lead Partner, DICK’S Sporting Goods joined as Sports & Outdoors Sector Lead Partner, Dollar General as Value Sector Lead Partner, The TJX Companies, Inc. as Apparel & Home Goods Sector Lead Partner, and Ulta Beauty as Beauty Sector Lead Partner. Ahold Delhaize USA Brands, Albertsons Companies, H-E-B, Hy-Vee, Meijer, Wakefern Food Corp., and Walgreens are Supporting Partners, and Conservation International and Ocean Conservancy serve as Environmental Advisory Partners. IDEO is the Consortium’s Innovation Partner. Learn more about the Consortium here.