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.

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.

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 VC, Kim 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

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.

In the U.S., 35% of the food we produce goes unsold or uneaten. Whether this is because of too much food produced, too little harvested, food spoilage, or not recognizing the economic value of food byproducts, most of this surplus food ends up in the 1,000+ landfills operated around the country. If we look at U.S. landfills today, food makes up almost a quarter of the materials in them. A lot can be done to improve the resource efficiency of our food system today––and within this work lies a critical path to positive environmental impact and significant economic opportunity.

According to the leading food waste non-profit organization ReFED, uneaten food is a major driver of greenhouse gas emissions today, generating 4% of U.S. and up to 10% of global emissions annually. These emissions come from many sources, ranging from unnecessary forestland conversion to excess energy use in food over-production to methane emissions during food waste decomposition.

To address climate change holistically, we need to look across the supply chains that move food through our economy today and transition them from take-make-waste supply chains to circular ones. Ultimately, a circular food system reduces food waste – and its associated greenhouse gas emissions – fundamentally linking it to climate goals. In fact, it is one of the top solutions to avoiding a global two degree warming scenario today, as reported by climate education non-profit Project Drawdown.

Investments in solutions that prevent food from going to waste, such as predictive software that allows retailers to match supply with demand more precisely, as well as composting infrastructure or anaerobic digestion technologies, are critical. According to ReFED, an annual investment of $14 billion – including $3 billion in catalytic capital that is patient and flexible – is necessary to cut food waste in half in the U.S.

But why invest in food waste reduction now?

1) Investable Innovations Already Exist

For more than five years, Closed Loop Partners has been publishing research, investing in and advancing circular solutions that cycle nutrients and eliminate food, organic and agricultural waste. These solutions span upstream food reduction solutions to midstream consumption solutions to downstream processing infrastructure – knowing that interventions at every stage of the supply chain are required to build a circular food system. As an upstream example, one of our portfolio companies, Mori, has developed a silk-based and edible coating that extends the shelf life of fresh food, reducing food spoilage and waste.  Rebound Technologies, one of our midstream portfolio companies, designs and manufactures freeze-point cooling systems, reducing food spoilage by boosting the efficiency of cold storage. Further downstream, our portfolio company HomeBiogas creates household and commercial-sized anaerobic digester units that convert food and yard waste into renewable energy and liquid fertilizer that can both be used onsite. Closed Loop Partners also invested in Atlas Organics, a growing composting company. In 2021, we successfully exited our investment in Atlas Organics, following its sale to Generate Capital, a key investor aligned with impact outcomes and growth of the company.

2) Demand for Investment Is Increasing

We are now at an inflection point, with several clear tailwinds that have convinced us that the investment case for deploying capital into the sector has never been more attractive. What are the tailwinds? We bucket them into three categories:

• Environmental and market forces are directly driving revenue opportunities: Climate change has been headline news for years, but it’s never garnered the level of attention in the U.S. that it has today––and its link to food and agriculture has never been clearer. Climate change-induced droughts and severe weather are impacting agriculture cycles and food supplies, and organic waste in landfills is increasing greenhouse gas emissions. Additionally, amidst rising inflation, geopolitical instability and challenged supply chains, retailers are searching for more resilient ways to manage food supply chains: including sourcing more locally and reducing food waste to decrease costs while providing affordable products to consumers.

• Industry leaders are driving action toward shared goals: Many Fortune 500 companies have set public net zero commitments, and more than 20 of them have set food waste reduction commitments with target reduction levels by target dates. As of early 2022, more than 40 large global corporations have signed up to the EPA’s 2030 Food Loss & Waste Champions program to reduce their food waste by 50% by 2030. Furthermore, there are several large cross-sectoral corporate, government and NGO partnerships for food waste reduction now in place, from 10x20x30 to the Pacific Coast Food Waste Collaborative to promote knowledge sharing, innovation and pool sources of demand for solutions. Kroger also launched their Zero Hunger | Zero Waste social and environmental impact plan to help create a more efficient, equitable and charitable food system. We are closely watching and excited by all three sets of development: consumer demand, corporate demand and public-private partnerships for knowledge sharing and innovation.

• Policy is indirectly driving revenue opportunities: Many of us in impact investment have been watching regulatory and voluntary bodies work to standardize and create accountability for ESG disclosure for years. Those of us in the food waste space, particularly in the U.S., have also honed in on the uptick in legislation and updated mandates introduced at every level: federal, state and municipal, including the food waste bill passed this year and local organic waste bans. In 2021, the EPA updated its food waste data baselines to align with international goals outlined in Sustainable Development Goal 12.3, and it expanded the scope of the food scraps it considers waste that must be addressed. More than 10 states and D.C. have enacted food diversion mandates. In the nearly seven months that have passed since January 2022 alone, more than 70 bills were introduced in state legislatures to mitigate or repurpose food waste, calling for measures ranging from making it easier to donate excess food, to updating expiration date label approaches to funding compost collection.

• Signals that traditional investors are starting to pay attention are rising: Investors poured more than $10 billion in venture capital into agricultural technology (known as ‘ag tech’) solutions in 2021. They even invested $2 billion into food waste solutions last year as well. But $2 billion trails the capital needed to cut food waste in half in the U.S., which ReFED found to be a $14 billion annual need.

3) Opportunities to Invest Are Growing

Having invested in food waste solutions since 2016 through Closed Loop Ventures Group and ongoing strategies within growth equity and private equity, Closed Loop Partners and ReFED have recognized the need to bring additional catalytic capital into the space. The two organizations have joined forces in a long-term partnership to begin to close the funding gap and to connect innovators with large players in the food system for transformational, sustainable systems change. Our new Circular Food Solutions Platform aims to provide the necessary capital, connectivity, market insight and support for innovation, to accelerate a variety of emerging food waste reduction solutions and bolster infrastructure for recovery. Ultimately, the Platform aims to scale a more circular food system that reduces organic waste and its associated greenhouse gas emissions, minimizes the economic burden on municipalities of unnecessary landfilling and waste incineration, and contributes to hunger relief – all with the larger goal of a more sustainable, circular economy.

Our new Platform is an investment and innovation platform that aims to drive traditional capital into the sector through two catalytic vehicles: a catalytic investment strategy and catalytic grant strategy. The Platform will be jointly managed by Closed Loop Partners & ReFED, intending to: (a) provide patient, catalytic capital; (b) de-risk solutions through innovation support and research; and (c) bring critical stakeholders to the table to collaborate in a cross-supply chain, cross-sectoral manner toward shared sustainability goals. The proposed hybrid structure seeks to activate solutions across three categories: Prevention, Rescue and Recycling. The Platform’s proposed design includes philanthropic and catalytic, flexible investment capital – debt, equity and grants – with the intention of meeting organizations where they are in their development cycle and a purpose of accelerating the efforts of not just private start-ups, but also public sector entities, project operators and non-profit organizations.

Collaboration is Key to Solving the Problem

This initiative is unprecedented. Knowing that collaboration is key to solving this complex challenge, it brings together an industry-leading data provider on U.S. food waste and impact methodology to assess solutions, and an experienced circular economy-focused investment and innovation firm, with unparalleled collective industry knowledge, network, and investment experience. By working together, we can collectively have a much bigger impact on the system, in activating supply chains for sustainability.

Closed Loop Partners is already seeing many circular solutions in the food and organics space, seeking capital ranging from grants to early-stage equity funding to later-stage project finance debt. Since 2016, we’ve invested in 10 food waste mitigation or recycling companies ranging from solutions to sequester carbon in agricultural products, to cold chain storage, to industrial organic composting and anaerobic digestion.

With targeted funding of $100M – of which $80M would be allocated to an investment strategy, and the remaining $20M to grants for non-investment-grade (or non-profit) solutions – the new Circular Food Solutions Platform aims to contribute to the diversion of up to 10 million tons of food waste from landfill, which would result in 15M mtCO2e avoided, and save nearly 800 billion gallons of water. All while supporting innovators of all types to benefit from our nearly 10 years of work investing and partnering with large global retailers, consumer goods, technology companies and local municipalities to build more sustainable supply chains.

If you are interested in learning more about this important topic, please contact us here.

1. The IRA may provide an accelerant for new, circular markets domestically

To advance a much-needed renewable energy transition, the IRA directly encourages investments in solar and wind generating assets and energy efficiency upgrades in commercial and residential buildings. These new installations will not only require ample raw material – they will also accelerate the need for end-of-life solutions for energy infrastructure being replaced or systems being repowered. In solar, for example, annual capacity additions are expected to increase from 10 GW in 2020 to nearly 50 GW per year in 2025-6.[1]

As supply chain constraints continue, especially for products sourced from challenging geopolitical climates, recovering materials already in use will become increasingly desirable – and economically viable. This is a huge opportunity for companies focused on effective, at-scale reclamation and recycling – such as CLVG’s portfolio company, SOLARCYCLE. SOLARCYCLE is focused on recovering solar panel materials for resale, ultimately providing materials that can be sourced into new, domestic manufacturing.

Many of the tax credits introduced or expanded by the IRA have specific provisions related to domestic manufacturing – including for electric vehicle batteries. As domestic manufacturing scales to take advantage of these tailwinds, access to low-cost, locally sourced input materials, including those that are reclaimed from the value chain, will be paramount. This creates opportunities for companies focused on recovery of hard-to-recycle materials that can be incentivized with IRA rebates or credits – everything from battery materials to boilers and air conditioners, insulation, roofing and windows. Early-stage companies that are seeking scalable solutions for recovery and reuse across these markets may capitalize on opportunities from the legislation.

Not only does the IRA amplify the need for companies that can help reclaim products at end-of-life, but it also reinforces the opportunity for low-carbon, circular solutions for energy-intensive industries – such as steel, iron, concrete, glass and chemical production. Indeed, nearly $5B in capital is allocated to continue the push for low-carbon building materials, especially in public infrastructure projects. This is following on previous Executive Orders related to net-zero government procurement which aspire toward net-zero public procurement by 2050, including for carbon-intense materials like steel and concrete.[2]– To date, there are few – if any – commercial scale, low-carbon solutions for much of this procurement, meaning significant innovation will be needed in the coming years to make at-scale, carbon neutral production possible.

Beyond investment in renewables, the bill also has provisions that seek to enable investment into waste-to-energy and biogas operations, including expansions and modifications to existing tax credits. This creates opportunities for new, waste-generated, clean energy sources. Green hydrogen, which can be produced from waste biomass and other reclaimed sources, is well positioned with additional production tax credits. Through provisions for residential homeowners, home energy efficiency upgrades for electric heat pumps or window replacements can be much more accessible, even creating opportunities to bundle with circularity-enabling products like home anaerobic digesters, such as those developed by CLVG’s portfolio company, HomeBiogas. The biogas company creates modular household and commercial anaerobic digester units that convert food and organic waste into renewable energy and liquid fertilizer.

2. The IRA may facilitate environmental remediation on an unprecedented scale

The bill is heavily focused on the identification and remediation of pollution to air, water and soil systems, as well as the fortification of soil and water for the future – including a specific focus on ports. CLVG’s portfolio company, Accelerated Filtration, supports this mandate by offering fine particle filtration across a range of industries and applications, helping reduce the flow of wastewater into the environment. Nonetheless, there continue to be pollutants – PFAS and 1,4 dioxane among them – that do not yet have commercialized solutions for remediation. More innovations are needed to mitigate the future risk of all types of pollutants leaching into the environment upon disposal.

Additionally, more than $20B is provided in the IRA to support the uptake of sustainable agricultural practices, including regenerative farming solutions and financing for innovations that can improve conditions for livestock raising. The question of how best to engage farmers on these topics continues to be top-of-mind – after all, the intent is to create a win-win situation, where farmers can both increase profits and enhance the quality of the land that they are growing on for today and the future. Ucrop.it, a CLVG portfolio company, has developed a novel solution to this problem with a free platform that fully tracks crops throughout the development cycle, leveraging blockchain to prove the application of climate-positive agriculture practices, which flows through to customers, enabling full transparency and traceability. Companies innovating upstream in the food and agriculture value chains – from soil health and vertical farming to livestock management, have a strong dual mandate that is reinforced by the innovation capital in the bill.

3. The IRA may allow for other enablers of circularity – notably, financing

There continues to be more demand than supply of financing for circularity-enabling solutions to accelerate a climate-positive future. In particular, asset-heavy solutions that require commercialization of large-scale manufacturing or materials recovery facilities find it difficult to scale from pilot stage. This is yet another space in which the IRA is helping to close gaps and accelerate progress on circularity. By providing additional capital – in the form of grants, loans and concessionary capital – through national labs, the Department of Energy LPO, and even the formation of a Federal Green Bank, the IRA may enhance the dry powder available for early-stage climate tech and circularity-enabling solutions that accelerate our progress toward a climate-positive future. Closed Loop Partners continues to be energized about the crowding in of additional capital into the earliest stages of the space to facilitate the transition to a fully circular ecosystem––one that brings us closer to achieving our shared climate goals.

[1] https://repeatproject.org/docs/REPEAT_IRA_Prelminary_Report_2022-08-04.pdf

[2] https://www.sustainability.gov/federalsustainabilityplan/procurement.html

In 2021, Marquette County’s Solid Waste Management Authority (MCSWMA) decided to make a big change: upgrading its materials recovery facility (MRF) from a 1,500-ton-per-year dual-stream facility that could only serve Marquette County residents, to an 8,500-ton-per year – and growing – regional single-stream installation. The single-stream system meant that residents could put all materials in one recycling bin, since the facility could sort the recyclables instead. The larger capacity also meant that the program could serve not only Marquette County, but also other counties’ residential and commercial recycling. Partially funded through a $3 million interest-free loan from Closed Loop Partners’ Infrastructure Fund, the facility upgrade led to dramatic increases in recycling rates, improving the likelihood of materials being kept in the loop for longer, and locally. This kickstarted an improved recycling system for the County. But as Michigan’s recycling landscape rapidly changes, continued funding is needed if Marquette County’s recycling system is to evolve with it.   

What Michigan’s recycling looks like today  

Michigan is focused on developing its local economy through new manufacturing and industry – tied to its goal of building sustainable communities. Ensuring that there is robust access to recycling across the state, including processing capacity to manage the increased and changing materials flows, is a core part of this vision. Michigan Governor Gretchen Whitmer and the state Legislature are committed to raising Michigan’s recycling rate to 30% by 2025 and 45% by 2030, exceeding the national recycling rate of 32%. Achieving this goal requires investment across the recycling value chain – financing and supporting the scale of collection, ensuring that there is adequate capacity locally to process and sort these materials, and strengthening local end markets. Ensuring that materials are sorted and processed locally also lends itself to the state achieving greenhouse gas emissions goals, a key step to climate change mitigation.

Amidst the state’s constantly evolving materials landscape, even the most recently constructed or upgraded MRFs may be challenged to keep pace. High contamination rates continue to plague U.S. recycling systems. Materials that should not end up in the mix cause significant wear and tear on the equipment, in turn requiring regular investments from operators. Investments to fund capital equipment, technology and education are needed to ensure that a recycling system is operating optimally – keeping valuable resources in circulation and out of landfills and natural ecosystems. For Marquette County specifically, based on its facility’s design and the challenges and cost to hire manual sorters, investment in optical sorting technology is critical to moving forward. These could cost approximately $500,000 per unit, not including any potential retrofits needed. 

How Marquette County is making waves in the recycling system  

Operating with deep local roots, MCSWMA has actively sought ways to maximize the value of materials that are otherwise viewed as waste. In a state where landfill tip fees are relatively low, the County has been committed to identifying opportunities to reduce tons of material sent to landfill. This includes finding innovative ways to engage the public and raise awareness on contamination issues, especially those of biohazard waste that places their staff and team at risk.  

As a strong advocate for expanding residential recycling access, MCSWMA has also enabled discussions on recycling access at local and regional government levels. By delivering state and other recycling infrastructure grant opportunities to their municipalities and assisting in the grant process, MCSWMA was able to deploy over 10,000 recycling carts in Marquette County, improving access to their recycling program. They have also played a critical role in advancing recycling education, with their website becoming a regional resource for recycling participants. Building on these milestones, they are now working with the regional planning commission to determine ways to continuously improve recycling education, access and participation in the area. 

Collaboration between Marquette County and its neighboring counties has also been commendable. In fact, most of the tons processed at the County’s MRF is from out-of-county communities, and the team continues to strive to be a best-in-class hub for recycling in the region. The upgrade to a single-stream MRF was intended not only to serve the County’s 65,000 residents, but potentially the entire region’s population of approximately 200,000.  

In May of this year, Marquette County was given an Excellence in Recycling award from the Michigan Recycling Coalition for all their work. Additionally, they are a finalist for Resource Recycling’s Recycling Program of the Year, for counties with 150,000 or less residents. Today, they are continuing their work, strengthening infrastructure to push more materials to their MRF, and ensure valuable materials are pulled through the system. They are currently partnered with Michigan Tech University (MTU) on a proposed molecular recycling project, which could help process more challenging-to-recycle plastic materials on site in Marquette County, utilizing technology developed by MTU.  

“Previously, limited or no access to recycling and the lack of sufficient infrastructure resulted in recyclable materials being landfilled in Upper Michigan. We anticipate increased landfill diversion rates as more Upper Peninsula counties seek infrastructure funding to increase access to recycling services,” said Brad Austin, Director of Operations of the Marquette County Solid Waste Management Authority.  

Why invest in Marquette County 

Marquette County represents an important local solution to diverting valuable recyclable materials from Michigan landfills, and can serve as a blueprint for other similar programs across the U.S. The team that manages the County’s MRF, including Brad Austin, Director of Operations, is committed to building out a robust recycling system in the region.  

Today, the momentum of investments into Marquette County is strong. Closed Loop Partners’ Infrastructure Fund, following its initial loan to the County, continues to build upon their partnership, closing their second (follow-on) loan to the MCSWMA in May 2022. The Infrastructure Fund’s second loan to the MCSWMA supported the purchase of a new eddy current that will not only improve the county’s mixed plastics bales as commodity markets near historically high prices for such materials, but will also allow the County to separate out valuable non-ferrous metals such as aluminum that are also able to command high prices in today’s markets.  

Beyond the financing received from Closed Loop Partners, the MCSWMA has continued to identify grant funding sources to support smaller upgrades. However, the facility has grown much quicker than anticipated, and significant funding gaps still exist for the kinds of upgrades the facility now needs. This includes additional tipping floor and commodity storage space to enhance operational flexibility, and increase opportunities to recover and market additional commodities like aseptic cartons. Optical sorting technologies, and the construction associated with installing these, is also needed to maximize efficiency and complement their sorter staff. Ultimately, investments in these types of upgrades can bring the County closer to its goal of operating an efficient facility at capacity. 

To date, investment in the County’s recycling infrastructure has proven to be a critical driver to a more efficient and resilient local recycling system. If Marquette County is to stay at the forefront of recycling, and play a key role in Michigan’s recycling goals, more capital needs to be catalyzed into the County’s recycling infrastructure to drive continued impact.  

Interested in learning more about Marquette County? Contact Brad Austin at [email protected]. 

In 2021, Marquette County’s Solid Waste Management Authority (MCSWMA) decided to make a big change: upgrading its materials recovery facility (MRF) from a 1,500-ton-per-year dual-stream facility that could only serve Marquette County residents, to an 8,500-ton-per year – and growing – regional single-stream installation. The single-stream system meant that residents could put all materials in one recycling bin, since the facility could sort the recyclables instead. The larger capacity also meant that the program could serve not only Marquette County, but also other counties’ residential and commercial recycling. Partially funded through a $3 million interest-free loan from Closed Loop Partners’ Infrastructure Fund, the facility upgrade led to dramatic increases in recycling rates, improving the likelihood of materials being kept in the loop for longer, and locally. This kickstarted an improved recycling system for the County. But as Michigan’s recycling landscape rapidly changes, continued funding is needed if Marquette County’s recycling system is to evolve with it.   

What Michigan’s recycling looks like today  

Michigan is focused on developing its local economy through new manufacturing and industry – tied to its goal of building sustainable communities. Ensuring that there is robust access to recycling across the state, including processing capacity to manage the increased and changing materials flows, is a core part of this vision. Michigan Governor Gretchen Whitmer and the state Legislature are committed to raising Michigan’s recycling rate to 30% by 2025 and 45% by 2030, exceeding the national recycling rate of 32%. Achieving this goal requires investment across the recycling value chain – financing and supporting the scale of collection, ensuring that there is adequate capacity locally to process and sort these materials, and strengthening local end markets. Ensuring that materials are sorted and processed locally also lends itself to the state achieving greenhouse gas emissions goals, a key step to climate change mitigation.

Amidst the state’s constantly evolving materials landscape, even the most recently constructed or upgraded MRFs may be challenged to keep pace. High contamination rates continue to plague U.S. recycling systems. Materials that should not end up in the mix cause significant wear and tear on the equipment, in turn requiring regular investments from operators. Investments to fund capital equipment, technology and education are needed to ensure that a recycling system is operating optimally – keeping valuable resources in circulation and out of landfills and natural ecosystems. For Marquette County specifically, based on its facility’s design and the challenges and cost to hire manual sorters, investment in optical sorting technology is critical to moving forward. These could cost approximately $500,000 per unit, not including any potential retrofits needed. 

How Marquette County is making waves in the recycling system  

Operating with deep local roots, MCSWMA has actively sought ways to maximize the value of materials that are otherwise viewed as waste. In a state where landfill tip fees are relatively low, the County has been committed to identifying opportunities to reduce tons of material sent to landfill. This includes finding innovative ways to engage the public and raise awareness on contamination issues, especially those of biohazard waste that places their staff and team at risk.  

As a strong advocate for expanding residential recycling access, MCSWMA has also enabled discussions on recycling access at local and regional government levels. By delivering state and other recycling infrastructure grant opportunities to their municipalities and assisting in the grant process, MCSWMA was able to deploy over 10,000 recycling carts in Marquette County, improving access to their recycling program. They have also played a critical role in advancing recycling education, with their website becoming a regional resource for recycling participants. Building on these milestones, they are now working with the regional planning commission to determine ways to continuously improve recycling education, access and participation in the area. 

Collaboration between Marquette County and its neighboring counties has also been commendable. In fact, most of the tons processed at the County’s MRF is from out-of-county communities, and the team continues to strive to be a best-in-class hub for recycling in the region. The upgrade to a single-stream MRF was intended not only to serve the County’s 65,000 residents, but potentially the entire region’s population of approximately 200,000.  

In May of this year, Marquette County was given an Excellence in Recycling award from the Michigan Recycling Coalition for all their work. Additionally, they are a finalist for Resource Recycling’s Recycling Program of the Year, for counties with 150,000 or less residents. Today, they are continuing their work, strengthening infrastructure to push more materials to their MRF, and ensure valuable materials are pulled through the system. They are currently partnered with Michigan Tech University (MTU) on a proposed molecular recycling project, which could help process more challenging-to-recycle plastic materials on site in Marquette County, utilizing technology developed by MTU.  

“Previously, limited or no access to recycling and the lack of sufficient infrastructure resulted in recyclable materials being landfilled in Upper Michigan. We anticipate increased landfill diversion rates as more Upper Peninsula counties seek infrastructure funding to increase access to recycling services,” said Brad Austin, Director of Operations of the Marquette County Solid Waste Management Authority.  

Why invest in Marquette County 

Marquette County represents an important local solution to diverting valuable recyclable materials from Michigan landfills, and can serve as a blueprint for other similar programs across the U.S. The team that manages the County’s MRF, including Brad Austin, Director of Operations, is committed to building out a robust recycling system in the region.  

Today, the momentum of investments into Marquette County is strong. Closed Loop Partners’ Infrastructure Fund, following its initial loan to the County, continues to build upon their partnership, closing their second (follow-on) loan to the MCSWMA in May 2022. The Infrastructure Fund’s second loan to the MCSWMA supported the purchase of a new eddy current that will not only improve the county’s mixed plastics bales as commodity markets near historically high prices for such materials, but will also allow the County to separate out valuable non-ferrous metals such as aluminum that are also able to command high prices in today’s markets.  

Beyond the financing received from Closed Loop Partners, the MCSWMA has continued to identify grant funding sources to support smaller upgrades. However, the facility has grown much quicker than anticipated, and significant funding gaps still exist for the kinds of upgrades the facility now needs. This includes additional tipping floor and commodity storage space to enhance operational flexibility, and increase opportunities to recover and market additional commodities like aseptic cartons. Optical sorting technologies, and the construction associated with installing these, is also needed to maximize efficiency and complement their sorter staff. Ultimately, investments in these types of upgrades can bring the County closer to its goal of operating an efficient facility at capacity. 

To date, investment in the County’s recycling infrastructure has proven to be a critical driver to a more efficient and resilient local recycling system. If Marquette County is to stay at the forefront of recycling, and play a key role in Michigan’s recycling goals, more capital needs to be catalyzed into the County’s recycling infrastructure to drive continued impact.  

Interested in learning more about Marquette County? Contact Brad Austin at [email protected].