• While the transition to renewable energy is critical to meeting our global climate targets, it will only address about half of our emissions.
• The remaining half are tied to the products and services we consume everyday.
• The circular economy provides the only economically attractive and environmentally sustainable way to transform our production and consumption systems in line with global climate commitments.
• There are already a number of successful circular economy business models that reduce extraction and landfilling costs and cut carbon emissions, paving a pathway forward.    

Leaders from almost every nation on earth––197 countries––have signed the Paris Agreement to limit temperature rise to 2 degrees, with an agreement to aim for a 1.5 degree celsius limit. Nearly one-fifth of the world’s 2,000 largest public companies (representing $14 trillion in sales) have committed to net zero emissions. 

So why are scientists, activists and leaders across sectors still worried about the climate crisis? Two important reasons come to mind:

1. Our current policies push us close to 3 degrees rise in global temperature. Even our pledges only get us to 2.4 degrees. 
2. It’s not enough to transition to renewable energy. We also need to tackle carbon emissions in the stuff we create, buy, use and dispose of. 

Our reliance on “dirty” and non-renewable energy is a significant contributor to our climate crisis, and a rapid and just transition to renewable sources of energy is critical to reducing global emissions. However, that’s only about half of the answer. Research from the Ellen MacArthur Foundation finds that our transition to renewable energy “can only address 55% of emissions. The remaining 45% comes from producing the cars, clothes, food, and other products we use every day.” 

What does our linear economy have to do with the climate crisis?

What’s wrong with our current methods of production and consumption? Today’s linear economy is based on a ‘take-make-waste’ model: we take natural resources (extraction) to make products (production/manufacturing) and when we’re done using them (consumption), we dispose of them (waste/landfilling). 

         LINEAR ECONOMY

At the take/extraction phase, this is an issue because we don’t have access to unlimited natural resources. Today, we are using about 1.6 earths; meaning we’re using about 50% more of the earth’s resources than it can regenerate every year. By 2050, with an increased global population and resulting rise in consumption, that “overshoot” could get to 3-4 earths, which is clearly unsustainable. From a climate crisis perspective, extraction––a key part of our linear economy––is responsible for “53% of the world’s carbon emissions” and “more than 80% of biodiversity loss,” according to a study done by UN Environment. 

At the other end of the linear value chain, waste/landfilling is also directly contributing to greenhouse gas (GHG) emissions and our climate crisis. Why are landfills especially insidious? In addition to taking up otherwise productive land, this explanation from Waste Dive is especially helpful: “when trash is packed into a pile, the oxygen-free environment supports bacteria that thrive in those conditions. As the microbes degrade the waste, they release carbon dioxide and methane. The latter is…84 times more potent of a global warming agent than carbon dioxide in the first 20 years of its release.”

And while we know that methane released in landfills is particularly harmful to the environment, we are still learning about the extent of their impact. In the United States, a recent multi-year aerial study of “super-emitter landfills accounted for 43% of the measured emissions of the potent greenhouse gas methane––outpacing the fossil-fuel and agricultural sectors” while “the ten biggest methane-emitting landfills pumped out the gas at rates averaging 2.27 times the federal estimates.”

How does a circular economy help address the climate crisis?

Transitioning from a linear to a circular economy is critical to addressing the 45% of emissions associated with our current models of production and consumption. Unlike the linear “take-make-waste” model described above, a circular economy eliminates the concept of waste altogether, moving us into a more closed loop system where materials and products are kept in use as long as possible. In doing so, the circular economy tackles some of our greatest social and environmental challenges while unlocking $4.5 trillion in economic value by 2030.

         CIRCULAR ECONOMY

As you’ll notice in the diagram above, the two emissions-heavy ends of the linear value chain––extraction and landfilling––are eliminated, as they are not valuable in a circular economy. How do you eliminate such prevalent parts of today’s value chain? 

Let’s start with extraction of natural resources. Since the beginning of the first industrial revolution, we’ve had a nearly 1:1 relationship between economic growth and the use of natural resources. According to UNEP, global extraction of natural resources has more than tripled since the 1970’s and by 2060, “global material use could double to 190 billion tonnes (from 92 billion), while [GHG] emissions could increase by 43%.” While improving resource efficiency is helpful, our current and projected extraction rates (and associated GHG emissions) are largely influenced by increased consumption and our reliance on single-use products and packaging made from finite natural resources, like fossil fuels. 

In a circular economy, the use of toxic, single-use or non-renewable inputs are reduced, and ideally eliminated. Circular design and sourcing instead favor inputs that do not rely on extraction of natural resources, valuing materials that are renewable, regenerative, reusable and recyclable. 

But we can’t just focus on better and more sustainable inputs to our products. Valuable materials, including those that are naturally sustainable like food, can still end up as “waste” in the environment and in landfills, resulting in carbon dioxide and methane emissions. Today, the world produces over 2 billion tons of solid waste, and that’s expected to grow to 3.4 billion tons by 2050. By volume, global waste includes 44% food and organics, 17% paper and 12% plastic––all materials that could be valuable in a circular economy. 

By keeping products and materials in play as long as possible––by extending the life of products and reprocessing materials at end of use––the circular economy eliminates the need for both extraction of natural resources and landfilling or incineration of goods. Circular systems prioritize local, “short” material loops in which communities benefit from valuable materials re-entering local manufacturing supply chains, creating new jobs, spurring innovative end markets and fostering a healthier environment. By advancing local solutions, the circular economy provides more communities with the tools needed for resilience against a globally changing climate, and, of course, reduces or eliminates the significant GHG emissions and economic costs associated with the linear economy. 

How can we accelerate our climate commitments through the circular economy?

Investments, innovations and regulations that encourage a circular economy see materials as valuable commodities rather than products of a single-use, extractive-intensive and wasteful society. Let’s explore a few examples across the linear to circular value chain.

Keeping materials in play. Over 500 companies have signed the Global Commitment for a New Plastics Economy, including the world’s largest consumer goods companies. At the same time, less than 9% of plastics are recycled globally. Investments in the collection, sortation and reprocessing of materials – including plastics, glass, paper, aluminum, etc. – are critical to keeping materials in play and reducing what is sent to landfills. For example, Eureka Recycling, a locally operated nonprofit Material Recovery Facility (MRF) in Minneapolis, was able to increase its recovery of recyclables  by 13% by upgrading equipment to improve sortation capacity. This resulted in 1 million pounds more of PET plastic recovered annually, which is the same as almost 20 million plastic water bottles. If lined up, this would be enough water bottles to connect New York to San Francisco. By keeping these valuable commodities out of landfills, we reduce the need for extraction to produce virgin plastics.

Some materials can be more difficult to recycle or reprocess at the end of use. Cotton, a highly resource-intensive crop, is an example of a popular material that is not often reprocessed or recycled, especially post-consumer use. Circular startup Evrnu has developed a novel technology to transform challenging textiles like 100% post-consumer cotton into new, like-virgin materials. Similar to the example above, this kind of solution eliminates the need, costs and emissions impact of extraction (production of virgin cotton) and landfilling (used cotton to waste). 

Finally, some materials like organics––food scraps, yard and agricultural waste, human waste, etc.––are not a great candidate for reuse or reprocessing. In a circular economy, we can turn organics into valuable sources of energy and fertilizer. Israel-based HomeBiogas uses anaerobic digestion to convert organic materials into fuel for cooking or hot water. In addition to reducing the costs and emissions associated with sending food waste to landfills, this circular solution creates valuable products that reduce the need for extraction (e.g. cooking fuel) and improves soil health (e.g. natural fertilizer).

Switching to more sustainable materials. Rather than focusing on the end-of-life of products and keeping materials in play via models like recycling, some circular solutions are focused on alternative materials that are less extractive and more sustainable from the outset, while still maintaining the same performance as traditional materials. Algaeing, for example, is using biodegradable and energy-efficient algae as an alternative material for fashion and textiles. In addition to reducing the use of water and eliminating the need for toxic chemicals and pesticides commonly used in textiles, their algae alternative reduces the costs and emissions associated with both extraction/production and landfilling of materials like cotton and polyester.

Reducing the need for materials. Half of all packaging is designed to be used only once––also known as “single-use packaging”––and then thrown away. Most often, that packaging is not the primary source of value of a product, as we’re usually buying what’s inside. Think of a bottle of shampoo or detergent – a big part of the item cost is for the packaging, which doesn’t really offer value to the consumer. Started in Chile to address economic and environmental issues associated with the packaging of household staples like cleaning supplies, Algramo’s smart vending machines dispense products “by the gram” (hence the name!) into reusable containers. This reduces both the environmental impact and cost associated with single-use packaging, and provides a much more convenient way for people to buy common goods.

Extending the life of our stuff. Outside of single-use packaging, more and more “durable” items are prematurely thrown away, despite having multiple uses or “lives” left in them. This is exacerbated by the rise in on-demand purchasing via eCommerce and “fast consumption” lifestyles. Several startups are looking to reverse this trend, by finding both economic and environmental value in circular business models that extend product use to multiple consumers. For Days, for example, has developed a circular business model for typically fast fashion items like t-shirts and sweatshirts. They incentivize customers to return clothing at end of use through discount pricing and reverse logistics, keeping apparel out of landfills. 

We can even extend the life of organic products like food. As mentioned above, food waste is a significant part of landfills and a dangerous contributor to both methane production and food insecurity. Start-up Mori has developed a tasteless and sustainable coating, inspired by the Mori silkworm, to extend the life of perishables like fruit, vegetables and seafood. In addition to reducing the amount of food waste that ends up in landfills (contributing to climate change via methane emissions), Mori’s solution also reduces the need for food packaging, further reducing emissions and costs associated with the extraction and landfilling of single-use packaging.  

So, what’s next? 

Circular economy business models offer a clear pathway toward achieving our collective climate goals, tackling the greenhouse gas emissions tied to the extraction, processing, manufacturing, and landfilling of goods. Already, there is a burgeoning ecosystem of innovators that are breaking away from the take-make-waste linear business model in favor of a circular economy, in doing so benefitting people, the planet, and business.

Next in Closed Loop Partners’ climate series, we’re going to explore how we can enact change more quickly to accelerate the transition to circularity.  What are the levers we need to collectively pull? Who are the key stakeholders involved? What are we asking of governments and corporations? 

First, the basics: What do reuse models look like?  

Think back to the milkman model and then add a few more bells and whistles; you’ll land at today’s optimized refill and reuse models. From personal care products to beverages, refilling reusable containers is becoming more popular. There is no one size fits all when it comes to reuse. Some models are tech-enabled, which helps companies track, discount and incentivize reusable and refillable packaging, while gaining customer insights. Other models have completely closed loop systems, with collection, washing and disinfecting stations embedded in the dispensing machines to sanitize and return packaging onsite. And finally, the simpler models of previous decades hinge on “bringing your own” packaging to collect your products. 

Why are reuse models growing so quickly in 2021? What are the effects of the COVID-19 pandemic on reuse?

Heightened visibility of single-use plastic waste during the pandemic has further galvanized consumers and brands

As lockdowns were implemented across the U.S., many of us turned to food delivery. Amid a global health crisis, these services were a lifeline. But after relying on them day in and day out, the resulting pile of single-use plastic containers, cutlery or sachets mounting in the trash has become too much to ignore. Headlines across the globe extol these concerns, noting that COVID-19 has “supercharged” the world’s takeout habit and left a big mess, or that plastic waste has surged as restaurants use more disposable packaging. The same trend was seen with single-use masks, which now litter streets across the globe. With this heightened visibility of waste, more consumers are now clamoring for alternatives to single-use. 

Meanwhile, brands are doubling down on their sustainability efforts, including the implementation of reuse models. To name just a few examples of businesses prioritizing circularity amid the pandemic, in 2020 Closed Loop Partners convened 13 leading retailers representing more than 50,000 stores in the U.S. to reinvent the retail bag as part of our Beyond the Bag Initiative. This year, the initiative announced multiple winning reusable bag solutions that will be piloted over the coming months. Our portfolio company, Algramo, expanded to the U.S. in 2020, working with brand partners like Clorox and Colgate-Palmolive to offer refill services for household cleaning products in reusable packaging. Similarly, early in 2021, Burger King in the U.S. and Japan and Tim Hortons in Canada piloted reusable, container programs through Loop, a circular packaging platform. Just Salad also announced its plans to expand its popular reusable bowl program for digital orders.  

Increased digital literacy amidst the pandemic has helped better prepare us for the reuse revolution 

At the beginning of 2020, the concept of scanning a QR code to see the menu at a restaurant was likely alien, and laborious, at best. Yet today, ordering food at any restaurant often now involves scanning a QR code to see the menu. COVID-19 has fundamentally accelerated the digitization of our daily lives, as businesses and stakeholders across the globe experiment with increasingly “contact-less” or “automated” processes. The resulting uptick in e-commerce, and subsequent familiarity with a host of digital applications, including mobile wallets and tap-and-go payment systems, have helped to change habits and increase our collective digital literacy. 

This progress has laid the groundwork and opened many possibilities for the future of reuse models. Reusable packaging today often harnesses state-of-the-art technology to build smart systems that provide transparency to the user and useful analytics to the producer––bringing value to both retailers and customers. QR codes or radio-frequency identification (RFID) tags enable stakeholders to check a reusable product, for example a cup or bag, in and out along its lifespan, increasing visibility and in doing so creating opportunities for incentives for customers to return their packaging. The more familiar we become with QR codes or RFID, the smoother and easier the transition to reuse models will be.

Growing regulatory pressures in the U.S., including single-use plastic bans, are accelerating momentum for reuse  

The landscape of U.S. policies around materials management is changing rapidly in response to the urgency of the plastic waste challenge. The recent Break Free from Plastics Act 2021 not only lays the foundation for extended producer responsibility in the U.S., but also incentivizes businesses to create reusable products that can remain in circulation for multiple uses, moving away from single-use. These shifts in federal legislation are further bolstered by single-use plastic bans across multiple U.S. states, including California, Connecticut, Delaware, Hawaii, Maine, New York, Oregon and Vermont. Most recently, Washington state fast-tracked its plastics phase-out, with goals to ban single-use bowls, cups, plates, cutlery, straws, polystyrene food containers, thick plastic bags and helium balloon releases by the end of 2021, four years earlier than its initial 2025 target. As these regulatory shifts continue to gain traction, it will be critical to move toward a more collaborative and holistic approach across states to create a consistent regulatory environment, as businesses adapt their operations to integrate reuse models and other circular solutions. Right now regulations vary per place, and businesses must adapt accordingly. A more holistic approach could help align interests and accelerate consistent educational messaging to advance circularity. 

The odds seem in the favor of reuse right now, but what’s the catch? What do we need to watch out for? 

Reuse models must prioritize accessibility and convenience, or swathes of the population will be left behind 

As the “hippies” of the 1970s championed the protection of the earth and the promotion of sustainable practices like “reuse,” so have today’s affluent “yuppies” taken up the cause. As a result, sustainable products are now most often associated with a hefty price tag. But to move from serving a niche sliver of the population to the mainstream, reuse models need to work for everyone. They can’t be limited to high earners, nor can the ushering in of “smart,” tech-enabled reuse systems forget that not everyone has a smartphone or credit card.  Reuse models will be most successful when the needs of multiple stakeholders are integrated, to build widespread acceptance and accelerate uptake. We will need a multitude of innovations to fit different contexts—geographic, economic & social. 

Algramo is one company that is making reuse more affordable. The company’s system not only reduces single-use packaging waste through the use of reusable containers, but it also allows families to buy what they can afford. Through Algramo’s vending machines, customers can choose to purchase the exact quantity of cleaning product they need in bulk pricing, no matter how small the amount. 

Thorough analysis of the environmental impact of reuse models is necessary to evaluate any potential tradeoffs 

To be the most appropriate fit for a product or packaging, reuse models must have a net positive environmental impact. Last year, our NextGen Consortium––a convening of leading foodservice brands, including Starbucks and McDonald’s––piloted several reusable cup systems designed to reimagine a more sustainable beverage experience. These pilots demonstrated the need for stakeholders to consider two core principles for product design: 1) build to last and 2) build to be recovered. And yet, all materials used for packaging, even within reuse models, have an environmental footprint. To choose the least impactful material, its entire lifecycle must be taken into account. There are the upstream environmental costs to consider––for example, how energy intensive it is to extract the material––as well as the downstream costs of recovering materials after use. The number of times reusable packaging is used also ties directly to its environmental impact, as does its end-of-life pathway. For example, glass might be aesthetically appealing for customers, but it is heavy––making it more costly and emissions-intensive to transport––and is more difficult to recover.  Faced with this choice, reusable plastic options could be the more lightweight and recyclable option. 

While there are no simple answers, there are many possibilities. The pandemic has urged us to rebuild the status quo, and the runway for reuse models is being cleared. As we move forward, evaluating each reusable product or packaging application in its full context––with its entire life cycle and its operating market in mind––can help ensure that the reuse models of the future are economically sound, environmentally responsible, and accessible to and inclusive of all communities. As the conditions grow more optimal for the rise of reuse, we look forward to continuing the work needed to scale these models to their full potential, including building partnerships with brands to accelerate uptake.   

Closed Loop Partners invests in cutting-edge reuse and refill models through its investment funds, while also testing, piloting and scaling new reusable packaging solutions through its Center for the Circular Economy. In partnership with Upstream, Closed Loop Partners has also helped to launch the first national reuse awards in the U.S. — The Reusies. This inaugural event celebrates the pioneers, the trailblazers, the innovators and game-changing heroes who are working and advancing systemic change and solutions to create a world where we can get what we want and need without all the waste. Nominate companies and individuals here. 

The plastics waste challenge makes clear the urgent need for us to identify a path toward a waste-free future. To achieve this ideal in the midst of today’s take-make-waste reality, a range of solutions need to be in play at the same time. To address plastic waste at every stage of the material’s life cycle––from source, to use, to end-of-life and back again––every stakeholder across the value chain must be involved. No one institution or solution can build the circular economy alone, and even if they could, change would not happen fast enough to address the urgent climate challenge. With any system-wide transformation, the path forward is complex, nuanced and involves experimentation. A collaborative, multifaceted approach can accelerate the process in a more thoughtful, holistic way. 

At Closed Loop Partners, we envision a circular future for plastics. This requires building a system that reduces the need to extract virgin resources––fossil fuels––to make plastics, harnesses design innovation and material science, and champions reuse models and new product delivery models. In parallel, we must strengthen the recycling infrastructure needed to capture existing plastics after use. With over 50 investments across our funds and three pre-competitive industry consortia to solve shared material challenges, led by our Center for the Circular Economy, we act across four key pillars to advance circular plastics supply chains.

1. Scale Reusable Products and Packaging and Explore New Materials to Reduce the Need for Single-Use Plastics
Our work to build the circular economy begins at the source, by rethinking the kinds and quantities of raw materials we use, and the supply chains they flow through. Reuse, refill and resale business models keep valuable materials in play, and therefore reduce the need to extract virgin resources. At the same time, material science innovations help diversify the resources we rely on to create packaging and products. For example, organic materials, including algae, mushrooms, eucalyptus, coconut fibers and corn that are rapidly replenishable and could be composted at end-of-life, represent viable alternatives to plastics for packaging and textiles. 

How do we do this?

Our Closed Loop Ventures Group invests in leading reuse and refill models, exemplified by our portfolio company, Algramo. The Chilean-based company entered the North American market in 2020, piloting their tech-enabled refill system and smart reusable packaging in New York City. Their vending machines allow customers to dispense household cleaning products by the gram, getting exactly the amount of product they need into a smart, reusable container, eliminating single-use plastic packaging. Algramo not only makes the sustainable option the most affordable alternative, but also the more accessible and convenient one.

At an even earlier stage, our innovation arm, the Center for the Circular Economy, tests emerging reusable packaging models through the NextGen Consortium and the Consortium to Reinvent the Retail Bag. In 2020, our NextGen Consortium, in partnership with Starbucks, McDonald’s and other leading foodservice brands, conducted in-market tests for new reusable hot and cold cup models at local cafes in the San Francisco Bay Area. The Consortium examined every step of the reusable cup journey: from customer sign-up, to the payment process, to cup returns. Building on our learnings, we released a report on Bringing Reusable Packaging Systems to Life, an open-source resource that highlights steps for implementing reuse models. 

Our Center also researches climate-friendly material innovations like compostable packaging, as one viable solution to plastic waste when the necessary recovery systems are in place. The Center’s Compostable Packaging Consortium aims to create a decision-making framework on when to deploy compostable packaging, while building an investment roadmap to scale the composting infrastructure needed to handle these formats at their end-of-life.

2. Collaborate with Diverse Stakeholders to Accelerate Change at Scale
To move from a linear system to a circular one, every stakeholder that will be affected––including consumers, entrepreneurs, corporations, NGOs, cities, policymakers and governments––must be at the table. Creating systemic change requires collaboration across the value chain, inviting numerous perspectives and areas of expertise, and aligning on shared goals. 

How do we do this?

Last year, our Center formed the Consortium to Reinvent the Retail Bag, an unprecedented multi-sector effort by leading retailers, including CVS Health, Target and Walmart, to address a common material challenge: the single-use plastic bag. Brands across the grocery, sports & outdoor goods, value, apparel & home goods sectors aligned to address shared environmental and operational challenges to move beyond short-term fixes to long-lasting, systemic solutions for how customers get their goods home. In February 2021, nine winners of the Beyond the Bag innovation challenge were selected from a pool of more than 450 innovations, and are now testing and refining solutions to improve their potential to scale.

3. Invest in Recovery Infrastructure to Recapture and Recycle Plastics, and Reduce the Need to Extract Virgin Resources
The value of plastic is not lost after a single use; keeping the material within supply chains is a matter of our economic self-interest. As corporate commitments to use post-consumer recycled materials increase, the demand for recycled plastics continues to grow, enabling a viable market. Yet, without the necessary recovery infrastructure, current supplies of recycled plastics only meet 6% of demand for the most common plastics in the U.S. and Canada. Optimizing recycling facilities and new advanced recycling technologies, among others, can increase the supply of high-quality, clean recycled material feedstocks, maximize their value over multiple lifecycles and reduce our reliance on virgin inputs dependent on the extraction of fossil fuels.

How do we do this?

Our Closed Loop Infrastructure Fund, established when the firm was founded in 2014, has helped municipalities and private companies across North America upgrade and expand their recycling infrastructure for materials––from glass, to paper and plastic. For example, the fund provided a $3 million below-market rate loan to the City of Phoenix, to upgrade its recycling facility and enable greater diversion of plastics from landfill and improve the quality of baled paper produced. This helped the city’s materials recovery facility reach its highest revenue to date in May 2020, at over $400,000, with an 18% increase in tons of residential recycled materials collected during the COVID-19 pandemic. 

Our recently launched Closed Loop Circular Plastics Fund provides catalytic debt and equity financing, spurring additional mainstream investments into recycling infrastructure that can help address bottlenecks in the system for rigid and flexible polyethylene and polypropylene––plastics that need more targeted interventions to help meet their high demand in the U.S. and Canada. The commitment of stakeholders at every point of the plastics value chain is critical to evolving the plastics industry toward a more sustainable future. The founding companies invested in the fund are plastics producers and chemical companies, who have been key players in unlocking the value of resin resources through material and chemical innovations; now there is opportunity to adapt their processes to maximize the value of plastics already in circulation, championing the recovery and remanufacturing of resins to extend their useful life. 

We also look to solutions that help address some of today’s most difficult-to-recycle plastics, those that cannot be processed by traditional mechanical recycling facilities. The Center’s research on advanced recycling technologies uncovers how these technologies––purification, decomposition and conversion––can help recycle many more types of plastics, expanding the scope of recoverable materials far beyond just packaging. In 2019, we conducted a landscape mapping of the technologies and opportunities, and are now conducting deeper research into the environmental impacts, policy incentives and financial case for these technologies. 

4. Sustain Markets for Recycled & Climate-Friendly Materials
With the market rewarding sustainability, circularity does not mean sacrificing profits. Today, there is a market incentive to keep valuable materials within the system, instead of sending them to landfill, which costs taxpayers money and wastes $10 billion worth of materials in landfills across the United States*. Investing in companies and product innovations that incentivize the use of recycled materials or climate-friendly materials capitalizes on opportunities created by a strong, vibrant circular economy. 

How do we do this?

Many of Closed Loop Partners’ portfolio companies manufacture products and packaging using recycled or new sustainable materials, proving viable, circular business models. For example, our portfolio company, AeroAggregates, produces ultra-lightweight fill material for infrastructure construction projects from 100% post-consumer recycled glass. Our Venture Group’s portfolio company, Algaeing, manufactures algae-based dyes and fibers within a zero-waste system––enabling water and energy efficiency while creating a viable alternative to petroleum-based textiles. 

Our portfolio company, For Days, offers direct-to-consumer apparel made from 100% organic cotton and designed for recovery with a mail-back program. They recently launched its Closet and Credit system, which gives customers credit for returning their used clothing items. They can then use this credit toward new items sold by the company, enabling a circular zero-waste system for their clothes by turning their “closet into currency.” 

To effectively build a circular economy, all of these solutions need to be in play. A successful circular economy is one where every material’s value is recognized, shared, re-used and continuously cycled. Addressing the global plastics crisis requires seeing and solving it from multiple angles; there is no panacea. We need to address today’s reality, in which billions of tons of plastics already circulate in our economy––while building for a waste-free tomorrow. 

*Closed Loop Partners. Research Brief: Materials Landfilled in the United States and Opportunities to Increase Materials Recovery, 2018 Update. Closed Loop Partners Internal Research, 2019, adapted from Powell and Chertow, 2018, Powell et al., 2016, and Powell et al., 2016.

On a more personal level, as global supply chains began to crack during the COVID-19 pandemic, our domestic recycling infrastructure saved us from major shortages of critical consumer products — like toilet paper. But that is only a fraction of the value the circular economy can provide on both a local and national level.

A policy known as Extended Producer Responsibility (EPR), now being introduced at the state and federal level, would create a massive investment in local recycling and circular economy infrastructure. Through a fee paid by consumer goods companies, thoughtfully-constructed EPR will save billions of dollars spent annually in landfill disposal fees. It would create hundreds of thousands of local jobs and provide consumer goods companies a reliable and cost-effective alternative to their current dependence on limited raw materials, which generate enormous amounts of greenhouse gas (GHG) emissions during extraction.

In the past, advocating that companies take responsibility for the sustainable management of their products was the sole domain of environmentalists. But we are now seeing multiple stakeholders, including CEOs, politicians, customers and shareholders align on the view that when brands invest in local recycling and circular economy infrastructure to protect the environment, it creates value for businesses too. In New York this January, State Sen. Toddy Kaminsky (D) introduced an EPR bill that has gained broad support, and similar legislation has been introduced or is being considered in California, Colorado, Hawaii, Maryland, New Hampshire, New York, Oregon, Vermont and Washington state.

A select group of CEOs of major consumer goods companies have recognized that what happens to a product after its initial use poses a risk — but when managed properly, can be an opportunity to secure long term value. Mark Schneider, the CEO of Nestlé, wrote recently, “[B]old and meaningful action in this space can become a competitive advantage, contributing to improved market share and growth.” Former Unilever CEO, Paul Polman, saw the opportunity to meet consumer demand years ago and trailblazed with sustainable business practices and products. During his decade-long tenure as CEO from 2009-2018, Unilever’s stock price increased by 290 percent. Investors took notice. Alan Jope, Unilever’s current CEO, has continued to expand Unilever’s commitment to sustainable business practices.

Three considerations are key to make EPR successful. First, stakeholders should gain consensus on the goal for EPR and incentivize brands to achieve it. Second, we should update the definition of “recyclable” to ensure that only products that are profitable for municipal recycling programs are designated as recyclable. Third, we must allocate funds from an EPR program directly to municipal recycling programs and empower local leaders to invest the funds in the infrastructure required to achieve their waste reduction goals. Styrofoam is an example of a packaging material that is challenging to recycle and has a limited market, while aluminum is infinitely recyclable and has a strong market.

For true accountability, all parties should set a goal for the policy and decide how to measure progress. Experience shows us that the best objective would be a recycling rate percentage well above today’s average recycling rate of around 30 percent, and a percentage of post-consumer recycled content used in the manufacturing of a product or packaging. EPR fees charged to consumer goods companies should not be viewed as the goal, but as a means to achieve the goal of a fully circular production system, where reliance on natural resource extraction and landfills is limited. Therefore, incentives for brands — fee waivers, designation to consumers and public recognition — are key for products to achieve a high recycling rate and use of recycled content. Where it’s not possible for producers to currently meet such goals for a particular product due to technical or economic limitations, this system and waiver could help incentivize producers to switch to recyclable or compostable materials or adopt reusable packaging models.

Which brings us to the next: a clear definition of what “recyclable” means. Recyclable has traditionally been defined as the ability of a product or material to be collected and sorted by a recycling facility in the United States. This does not take into account the economics of the recycling industry and the municipal recycling programs that are expected to remain solvent and grow. The result: consumer goods companies claiming that a product is recyclable, while municipal recycling programs struggle to find profitable end markets for it.

“Recyclability” should be defined as “a product whose primary material is sold by a municipal recycling facility for a profit.” Therefore, in order to receive a designation of “recyclable,” a product should have a market value of above the processing cost of materials (paper, metal, glass, plastic) at municipal recycling facilities across the United States. This stipulation would encourage producers to be more rigorous from the outset regarding their packaging design, connecting the diverse pieces of the system, from designer to producer to recycler, so that all stakeholders are in agreement that a product has value in a circular system. The EPR fee structure should be designed to motivate brands to ensure that their product is recyclable (per the definition above), is recycled and uses all or mostly recycled content in manufacturing.

Third, we should allocate funds from an EPR program directly to municipal recycling programs, empowering local leaders to invest the funds in infrastructure and innovation. It is critical that legacy policies, such as bottle bills that conflict with municipal recycling collection programs, be phased out as EPR policy is adopted. There are a number of leaders that have accomplished amazing things with limited funding, showing that investments made directly in local municipal recycling programs and at the direction of local leaders will yield the best results.

While EPR won’t solve all of our waste issues, thoughtfully-constructed EPR will provide the foundation for the development of comprehensive recycling and circular economy infrastructure in the United States. And with thoughtful incentives, companies that strive to be leaders in reducing waste, will be recognized and rewarded.

We are a country that has demonstrated that when the interest of business aligns with the interest of policy makers and local communities, we can develop infrastructure that creates massive long-term value. Thoughtfully-constructed EPR has the potential to do just that.

Ron Gonen is the CEO of Closed Loop Partners, a circular economy-focused investment firm and innovation center and author of “The Waste Free World: How the Circular Economy will Take Less, Make More, and Save the Planet.”

Originally published in The Hill.

12 minutes. That’s how long it typically takes from the moment we receive a single-use plastic bag to the moment we discard it. And those 12 short minutes barely register within the much longer life cycle of the plastic bag. The story of the plastic bag starts with extracting finite fossil fuels––like natural gas ––and usually ends in landfills, or worse, in our oceans, where they take decades to break down. It’s time that we identify a better, more resilient way forward for retail––one that maximizes valuable resources and benefits the customer, the retailer and the planet.

Every year, 100 billion single-use plastic bags are used annually in the U.S., and fewer than 10% of those are recycled. Plastic bags continue to be one of the top ten most littered items on our beaches, contributing to a mounting global waste crisis. And now, the urgency of these environmental challenges are coming head-to-head with a rapidly changing retail landscape, as a result of the COVID-19 pandemic. Stay-at-home mandates from many governments and work-from-home policies from many companies are driving the growth of e-commerce and digitization as consumer habits shifted almost overnight. This shake-up in retail norms presents the ideal moment for reinventing the single-use plastic bag through new business models and design innovation. If there was ever a time to rethink the status quo of our retail system, it is now. 

The plastic bag plays a pivotal role in the retail experience; whether you’re buying groceries, ordering a shirt for delivery or picking up a prescription. It’s an extension of the store beyond its premises, and a convenience to the consumer, as we carry our goods home, pick them up from the curb or receive them at our doorsteps. To address the challenges of this shared experience around the plastic bag, we need a whole suite of  solutions that can fit the varied retail contexts and customer needs across different geographic, social and economic environments.  

This week, our Consortium to Reinvent the Retail Bag’s global innovation challenge, the Beyond the Bag Challenge, identified nine winning solutions that show the breadth and real-world promise of solutions that already exist to help reinvent retail and the plastic bag . Each brings a unique contribution to creating a new way to get our goods home, and together they can help pave the way forward, capitalizing on current market trends and shifting consumer habits in order to advance larger, industry-wide sustainable change. 

Tracking the bag throughout its life

New digital technologies make it possible for customers and retailers to see well past the 12 minutes that elapse between the current checkout counter to disposal of today’s single-use plastic bag. They provide a clearer, more holistic picture of the lifespan of the bag, and with it, elevate the transparency of entire supply chains.

EON uses the Internet of Things (IoT) to help retailers track inventory, manage reverse logistics and understand how bags are used by monitoring impact data throughout the bag’s value chain, and extending lines of sight into their full lifecycle.

SmartC, a solution co-created by 99Bridges and Envision Charlotte, leverages IoT technologies to connect reusable bags, enabled by smart tags, at participating retail stores, allowing retailers to reward customers with points, coupons or discounts every time they reuse their shopping bags. 

And what about all the existing reusable bags sitting in our closets? Fill it Forward created a tag that connects our bags to a mobile app where users track their environmental impact, help give back to charitable projects, and offer rewards that encourage reuse—significantly extending a bag’s lifetime.

Meeting customer needs

Amidst a changing retail environment, these innovations recognize that habits are difficult to break, and to address this challenge, they have innovated around our lifestyles. Their Reuse models offer durable alternatives to the current retail bag, improving on the user experience not only from a performance standpoint, but from an environmental perspective too.  

GOATOTE offers a kiosk system that provides us easy access to clean reusable bags, solving for those moments you do not have a reusable bag, but don’t want the trade-off of a single-use alternative offered at the store.

ChicoBag aims to have lightweight, compact, reusable bags readily available for a variety of customer interaction points––delivery, curb-side pick-up or in-store.

For those who shop online or use pick-up services, Returnity designs and manufactures reusable shipping bags and boxes for products already on the market, and provides the e-commerce and delivery packaging system that powers how these bags and boxes are used. 

Aligning with existing retail operations 

Some emerging innovators are focusing on material science innovations that result in bags that are indistinguishable from today’s plastic bag to a customer or retailer at checkout, but are sourced from renewable materials and follow different paths at end of use.  

To replace traditional thin film plastics, Sway offers a seaweed-derived material that is bio-based and has the potential to be carbon-negative at scale. Their replacement matches the strength and performance of traditional plastic bags.

PlasticFri, on the other hand, sources starch from agricultural waste, creating a bio-based, compostable bag.

As an  upgrade to traditional paper bags, Domtar is developing a new bio-based, recyclable material of 100% cellulose fiber that  is stretchable and stronger, able to stand up to multiple uses. When considering which type of materials to introduce to a location, it is equally important to assess the availability of local curbside organics collection and anaerobic digestion and composting facilities, to ensure that these bags can be processed at end-of-life. 

Today, the outsized impact of plastic bag waste demands innovative solutions. However, as companies work toward zero-waste goals, the packaging of items that go inside the bag is also an important consideration. In recognition of this, we are giving special recognition to two Beyond the Bag Challenge submissions as Circular Trailblazers. These companies are advancing refillable and reusable packaging systems for products across retail, from food to cleaning supplies, broadening the horizon for the waste-free future of retail. Algramo, a start-up based in Chile and now piloting in New York, has created a mobile dispensing system for personal care and cleaning products that allows shoppers to skip packaging all together. Loop, developed by TerraCycle, creates reusable and recyclable packaging alternatives for some well-known household products, eliminating the need for single-use packaging when customers visit a store, or deliver these items to their homes.  

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There is no one replacement for the current single-use bag––the solution lies in a combination of approaches that can fit into diverse retail markets.  And it’s critical to test these solutions. The nine winners of the Beyond the Bag Challenge––Chicobag, Domtar, EON, Fill it Forward, GOATOTE, PlasticFri, Returnity, SmartC and Sway––need further investment, refining and piloting to help set them up for success, with support from the retail partners who came together to create the Consortium to Reinvent the Retail Bag. We look forward to the exciting work ahead to assess how these solutions can align with customer needs, the growing demand for circular solutions, and the changing face  of retail. 

Over the last decade, e-commerce changed the world. Over the last year, COVID-19 has changed e-commerce.

The biggest change? Ordering groceries online is now normal for many Americans. Food had been the last frontier for e-commerce, due to the challenges of maintaining refrigerated or frozen temperatures for a 1 to 2-day shipment. But a Mercatus study predicts 20% of all food shopping will happen online by 2025, to the tune of a $250bn annual spend.

How did we get here, and where are we going? At TemperPack, we make it our job to understand the science and business of perishable shipments.

As a first step, let’s go back in time.

MEAL KITS ARE BORN

HelloFresh and Blue Apron were founded in 2010 and 2011, each with a vision for changing the way we eat.

That new way involved shipping fresh produce and meat to people’s homes via the mail.  Though early pioneers in the mail order food game had shipped frozen food (Omaha Steaks and Jenny Craig), meal kit companies were the first to really take on the challenge of shipping fresh food (i.e., keeping lettuce crisp for a 2-day UPS shipment). Thanks to their logistical prowess, they made it work.

Meal kit companies attracted significant investment around the vision of reinventing a food system compatible with an e-commerce world. That vision got an additional boost when Amazon acquired Whole Foods in 2017, prompting traditional grocers to offer “click and collect” services and helping accelerate the adoption of perishable e-commerce.

Today, you can get meat, produce, ice cream, frozen dinners, fresh prepared meals, meal kits, diet-specific meals, restaurant take-out, and pantry items delivered to your home. If you want, you don’t ever have to step foot into a grocery store again or leave your house for that matter.

MEAL KITS: A SURPRISING BOOST FOR THE ENVIRONMENT

While people might worry about the environmental impact of packaging up and shipping meals to people’s houses via FedEx and UPS, meal kits offer significant environmental benefits compared to shopping at grocery stores: reducing food waste and reducing CO2 emissions.

According to Feeding America, 120 billion pounds of food is wasted each year, at farms, businesses (such as grocery stores and restaurants), and at homes. 21% of landfill space is occupied by food.

The biggest sources of food waste are consumers in their homes, accounting for 54 billion pounds of all wasted food. Meal kits reduce food waste at home by portioning meals and providing only what is needed for each recipe.

Businesses that sell food are another significant source of waste. 52 billion pounds of food from manufacturers, grocery stores, and restaurants end up in landfills. From a food waste perspective, meal kits and other direct-to-consumer food companies use a more efficient business model than retail. While a meal kit packing facility is designed for efficiency, a grocery store is designed to showcase abundance, whether that means mountains of alluring produce or soft drinks as far as the eye can see. Even with admirable efforts from companies like Kroger, this model is designed to generate more waste when it comes to perishable items.

With built-in features that reduce food waste both at home and in upstream distribution, meal kit companies can make a big impact. HelloFresh estimates that it reduced food waste by 66% compared to grocery stores in 2019. Other direct-to-consumer food companies like Misfits Market and Imperfect Foods can go even further by offering their customers “rescued” off-spec food that was likely headed for a landfill.

Food waste contributes to carbon emissions, and the reduced food waste of meal kits helps reduce their carbon footprint. A study by the University of Michigan estimates that meal kits reduce carbon emissions by 33% compared to grocery store meals.

While the negative aspects of meal kits (delivery trucks and packaging) are on stage for all to see, behind the scenes, meal kits operations have a net positive benefit compared to shopping at grocery stores.

PACKAGING: THE 2:1 DILEMMA FOR MEAL KITS

But what about that packaging?  Let’s take a closer look. We work with many meal kit and direct-to-consumer food companies and are familiar with their overall model and operations.

While specific companies and specific meal orders vary significantly, a typical meal kit order weighs about 20 pounds (averaging across 10 of the largest meal-kit companies in the United States). Of that weight, approximately 35% represents the actual food in the box, 45% makes up the coolant in the form of gel packs or ice, and the 20% is physical packaging:

That’s almost twice as much packaging material as food. And the numbers add up. Based on our own data and external sources, we estimated that 120 million meal kit shipments would be delivered in the US in 2020. This means over 1.5 billion pounds of packaging and coolant will be used to protect 840 million pounds of food.

A reasonable question to ask is: how is it possibly sustainable to use 1.5 billion pounds of packaging to protect 840 million pounds of food? Sustainability aside, are meal kit companies adding risk to their business by asking their own customers to manage 1.5 billion pounds of inbound packaging waste?

By our estimates, meal kit deliveries will increase 30-50% next year (and all the packaging that comes with it), so these are increasingly pressing questions.

MEAL KIT PACKAGING – A CLOSER LOOK

With the industry generating [nearly a billion] pounds of packaging waste, it’s important to understand what’s in there. Packaging and coolant represent approximately 2/3s of the overall weight of the shipment.

Here’s a breakdown:

Outer shipping box – Most companies use familiar corrugated boxes – aka the cardboard boxes Amazon uses. The EPA states that these corrugated boxes are recycled correctly 88% of the time, more often than any other material.  Most companies we work with use boxes from Sustainable Forestry Initiative certified sources.

Insulation – In short, insulation makes it difficult for ambient heat to enter the box.  So even when it’s hot outside, the contents inside stay cold. If meal kit companies were driven purely by performance and cost, they would all use Expanded Polystyrene Foam (EPS), better known as Styrofoam®. EPS is inexpensive and effective, but its environmental hazards are well known. To their credit, very few meal kit companies use EPS. Most of them have moved on to more environmentally friendly materials, including repurposed natural textile fibers (like denim and cotton), paper, or bio-foams. However, often these insulation liners contain plastic binders and still need to go to a landfill, but some, including our ClimaCell® liners, are curbside recyclable.

Ice Packs – Ah, ice packs. As noted above, the ice packs (often referred to as gel-packs or “coolant”) are the heaviest item in a container.  Most coolants include a mixture of water and ethylene glycol (which is what gives it a “jelly” feel) and are wrapped in low density polyethylene (LDPE), the same material used in plastic shopping bags.

In short, the coolant is what absorbs the heat that does make it past the insulation. In theory, if you had a perfect insulator, you wouldn’t need coolant. Conversely, if you were to use enough coolant, you wouldn’t need the insulation. Combining the two is the best way to minimize overall packaging while protecting the shipment.

Individual Wraps and Containers – To protect individual items from moisture, and keep the box organized, meal kits used pouches, wraps, or light containers to protect specific items. Often these use LDPE or PET.

Flyers, promotions, menu cards – There are many pieces of paper, but most of these are recyclable from home, though some are not due to the plastic lamination needed for that high gloss, premium look and feel.

MAKING MEAL KITS BETTER FOR THE PEOPLE, BUSINESS, and the PLANET

The most sustainable packaging is no packaging. Being that this is incompatible with the challenges of delivering perishables through the mail, what would smarter packaging look like? For starters, we would suggest a strategy that minimizes non-recyclable plastics like low density polyethylene (LDPE) film. LDPE film widely used in meal kit packaging, especially for individual wraps, insulation lining, and coolant bags. Removing this would not only have an environmental benefit, but a brand benefit as well, since 77% of consumers consider plastic to be the least sustainable packaging material.

LDPE is not recyclable at home, and a GreenPeace study suggests that, even when people take it to collection sites (often grocery stores), it usually ends up in a landfill. There are few paths to reduce LDPE.

• Short-term: Add Rigidity. Switching out flexible LDPE for more rigid High-Density Polyethylene (HDPE) or Polyethylene terephthalate (PET) would replace an unrecyclable material for one that is recyclable from home. HDPE is used in milk jugs and detergent bottles while PET is commonly used for single use water bottles and produce containers. Both are highly recyclable when they are rigid. We can envision replacing individual ingredients wrapped in LDPE with fewer, rigid containers protecting groups of ingredients.
• Long-term: Compostable Innovations. There are many companies working to develop paper-based, compostable and/or dissolvable (and even edible) films for food protection. The Ellen MacArthur Foundation’s “Upstream Innovation Guide” featured several, including Apeel, Monosol, and Mori. While still not as commercially available as their traditional film counterparts, these solutions would be far more environmentally friendly – a big improvement for meal kit solutions and fresh food everywhere.

Coolants are a big part of the equation as well. While the most commonly used gel packs today must be thrown away, innovation continues around drain-safe coolants (in which most of the gel pack material can be safely poured down the drain), dry ice solutions, and more. Again, coupling a rigid, highly recyclable plastic container with a drain-safe coolant (like water, which has a very high energy density) would be a step in the right direction.

Stepping Back

Meal kit companies have narrow margins and fluctuating subscription bases, so expecting these companies to spend more money on more sustainable solutions may be a stretch. But we can envision a future where materials and operations are optimized so that only the right amount of packaging, insulation, and coolant are used for each specific shipment, based on the weather, duration, and payload, saving companies money and reducing the amount of trash customers must manage.

The management teams running these companies have already proven that they can find solutions to complex supply chain issues. To solve their packaging challenge, we would recommend that these teams consider the five following strategies:

1. Standardize acceptable food safety criteria (time and temp) across all grocery delivery modes and products.
2. Design packaging scenarios with sufficient safety factors to account for contact-free, unattended delivery scenarios.
3. Implement real-time weather data to inform geographical and seasonal packaging decisions, reducing refunds while mitigating risk of food-borne illness.
4. Using 2 & 3, transition to dynamic pack-outs so that each box goes out with the minimum viable amount of packaging to safely get the job done – driving out cost.
5. Where packaging is necessary, commit to packaging formats that utilize renewable materials that are first, and ideally, compatible with curbside paper and plastic recycling streams, or second, BPI-certified for compost.

Achieving this “right materials at the right time” approach would boost these companies’ bottom lines and further improve their carbon footprints. Getting there is within reach and would allow food delivery companies to trumpet a persuasive argument that their model is truly best for the environment. Sign us up.

We are overlooking the equally visible plastics that are just as challenging to recover and reuse: the plastics that make up half the volume of every car; the plastics that make up 20 percent of the 55 million tons of electronic waste sent to landfill annually; the polyester (plastic) that represents 60 percent of all apparel fibers; and 42 percent of all non-fiber plastics which go to packaging. While we’ve developed recovery systems for some plastic packaging, we’ve failed to see the challenge holistically, in ways that address diverse forms of plastics in our system. Meanwhile, they have been steadily mounting in landfills, with limited to no end-of-life solutions.

The reality is that we need to solve for and build systems to prevent, reduce, reuse or recycle all plastic waste, not just packaging. Across industries and sectors, we must deploy all tools available to build a circular system for plastics. These include: harnessing design innovation to eliminate unnecessary plastic and reduce extraction of fossil fuels; scaling reuse systems and rental and resale platforms; investing in mechanical recycling and designing products that align with that system; and investing in advanced recycling technologies that can safely transform hard-to-recycle plastic waste into valuable new products or into building blocks to make new plastic or packaging.

Focusing on a single strategy to the plastic waste challenge compounds risks.

While solutions such as reuse and rental systems are critical to extending the life of a product, they are not necessarily plastic-free systems. Companies such as Rent the Runway allow users to subscribe to a library of clothing, allowing thousands of garments to be shared by 8 million customers. Even so, after dozens or even hundreds of uses, a clothing item likely will need to be retired, but currently no widely available, commercial recycling solutions exist to capture that textile waste. Even the most innovative companies leveraging reuse models for cups, food delivery or personal care packaging include some plastics or other valuable materials in their packaging or services that after many uses will need recycling. These solutions are a small part of supply chains today, but we believe they have a strong opportunity for growth. And as they continue to grow, it is important to think ahead about solutions for the ends-of-life of materials in these systems, to keep them in circulation.

If we consider mechanical recycling, plastics that undergo this process can run through it only about seven times before becoming too degraded, and mechanical technologies cannot process most of the 16.9 million tons of textile waste Americans send to landfill every year.

The current strategies to address plastic waste are complementary, but taken alone they will be ineffective at producing a circular system for plastics. Without a multi-pronged approach, we will continue to see growing stockpiles of plastic waste in all forms, from various industries. We are at a critical moment of consensus. Across industries and sectors, stakeholders agree that we want and need reduction in plastic and better management of the plastics being produced. Enabling these outcomes will require policy shifts, incentives, investment, education and long-term partnerships. And we will need to experiment with and invest in emerging and nascent solutions that can safely solve for difficult material types.

Advanced recycling technologies can contribute one piece to the puzzle, solving for our hardest-to-recycle plastic-based products, such as healthcare-related plastics, multi-layer packaging, apparel and building materials.

Like the plastic waste problem, there is a tendency to oversimplify advanced recycling. It is not a monolith; rather, it is a sector marked by distinct and diverse technology processes that purify or break down plastic to create virgin-quality outputs through a number of biological, thermal and/or catalytic processes including dissolution, glycolysis, pyrolysis and gasification. Closed Loop Partners has categorized these processes into three buckets: purification; decomposition; and conversion. Some technologies, such as pyrolysis, have been around for decades. Others are new and developing; all are improving and not all will be winners. Like anything, it is a growing and competitive landscape and those that are the most cost-effective with the most positive environmental impact likely will advance quickly.

Two very different stories emerged this week around advanced recycling technologies. Purecycle, a purification company, just closed a $250 million bond for its Ohio facility, after successfully proving its technology at scale by processing discarded carpet into clear, high-quality polypropylene. Meanwhile, another advanced recycling technology company, LOOP Industries, was put under the spotlight by a research firm for failing to meet expectations. The stories around Purecycle and LOOP Industries show the importance of deep due diligence and the need for continuous testing and honing of solutions to de-risk them before scaling. We’re continuing to evaluate purification, decomposition and conversion technology processes, their environmental and human health impacts, supply chain economics and policy landscape. The technology processes themselves do not determine whether a company or a process is “circular.” The stakeholders invested in creating circular systems do.

While we’ve developed recovery systems for some plastic packaging, we’ve failed to see the challenge holistically, in ways that address diverse forms of plastics in our system.

Historically, market incentives and policies have not favored circular outcomes from advanced recycling processes. In the United States, manufacturers are not rewarded for using recycled plastic, nor are they penalized for using virgin sources. This has meant that manufacturers have favored the lowest priced commodity on the market, often virgin plastics, and the economics for advanced recycling have bent towards supplying industry with fuel produced from plastics. However, mandates that require recycled content, brand commitments to use post-consumer recycled content for their products and packaging, and landfill bans are becoming more prevalent across diverse markets, increasing the demand for high-quality recycled plastic.

The biggest economic and environmental opportunity in advanced recycling is to build circular supply chains for plastics, meaning plastic-to-plastic loops, which ensure that we keep materials at their highest value within our economy for as long as possible. We can align the advanced recycling market towards circular principles by creating market incentives and supportive policies that recognize these technology processes as recycling when their outputs are directly looped back into plastic supply chains.

Are there unknowns related to these new technologies or processes? Yes. It’s critical that we gain a better collective understanding of the environmental and human health impacts of these recycling processes. We must understand what conditions need to be true to steer the industry towards a circular economy, or risk perpetuating a linear system. Closed Loop Partners is leading a research project with this type of impact assessment as one central objective of our study, alongside an assessment of collections and feedstock processing, and investment guidelines to align this sector to circular principles.

It took the solar industry 40 years to reach 1 million solar systems in the United States, but three years after hitting the 1 million mark in 2016, the U.S. surpassed 2 million systems. In 2010, only 4 percent of new electric capacity was solar, but by 2016, it was 40 percent. Technology development and building an industry around a novel technology takes time, incentives and long-term partnerships to drive investment and scale. Advanced recycling will be no different, and because the sector is newly developing, all stakeholders — brands, retailers, investors, plastic producers and recyclers, NGOs and citizens — have the opportunity and a role to play to ensure a safe and circular system and future.

In 2020, we are continuing our research in the sector to understand the environmental and human health impacts of advanced recycling processes, the policy measures and investable opportunities along the supply chain that can enable a circular future for plastics and a safe and sustainable future. We invite you to learn more about our work on advanced recycling here.

Originally published on GreenBiz. 

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. Kroger joined as Grocery Sector Lead Partner, DICK’S Sporting Goods as Sports & Outdoors Sector Lead Partner, and Hy-Vee and Walgreens as Supporting Partners, alongside Conservation International and Ocean Conservancy as Environmental Advisory Partners. OpenIDEO is the Consortium’s Innovation Partner.

What does it take to reinvent the retail bag? And what solutions exist today? These are the questions we asked as we launched the Consortium to Reinvent the Retail Bag in July of this year, bringing some of the nation’s most influential retailers together to solve for the 100 billion single-use plastic bags used annually in the U.S. These bags too often end up polluting our oceans, stuck in our trees or being wasted in landfills, and it’s time that we create a better path forward. 

In August, the Consortium opened the Beyond the Bag Challenge, inviting entrepreneurs, designers, suppliers and problem-solvers to submit solutions that replace the current single-use plastic bag. Through the Challenge, the Consortium brings to light future-forward, tech-enabled solutions that can help build a new system that serves the function of the retail bag in a sustainable, affordable and inclusive way––helping transport goods from store to destination in a way that aligns with diverse retail systems and delivers ease and convenience for all. Three months and more than 450 submissions later, it’s clear that an impressive range of innovative solutions exist. Challenge submissions span the globe across 60 different countries, and represent a range of company stages, from early concept startups to established, commercial businesses. 

We’re seeing three broad categories of innovation emerge––reusable designs, innovative materials and enabling technology––that highlight key opportunity areas, showing the range of solutions and potentially groundbreaking ways we can change retail.

How might these solutions play out in the world? What might a sustainable retail bag system look like? After evaluating hundreds of potential solutions through the lenses of sustainability, business and technical viability, accessibility, customer behavior and alignment with reuse and recovery infrastructure, the Consortium announced today a shortlist of promising solutions for further exploration [SEE SHORTLIST HERE]. 

Across the Shortlist, we’re seeing three broad categories of innovation emerge––reusable designs, innovative materials and enabling technology––that highlight key opportunity areas, showing the range of solutions and potentially groundbreaking ways we can change retail. These provide a window into the future, a teaser as to what might be to come. Identifying innovation is the first step, and with the right kind of testing, honing and piloting, we can start implementing new solutions and systems at scale. 

As we collectively become smarter about what the market needs, what consumers want in a retail experience and what new technologies might enable futures we can’t yet fully envision, we will seek to better understand how these and other solutions might work together to create an interconnected and informed system that will fundamentally shift the way we are currently shopping and getting goods home.

Reusable Designs Keep Materials in Play for Multiple Uses 

Systems-Driven Reusable Packaging Integration by Returnity

There is a growing innovation category for retail packaging centered on reuse. These solutions use durable materials that can serve the purpose of today’s single-use bag, but remain in circulation for multiple uses within a user-friendly system. Many of these solutions also involve transferring ownership back to the producers and manufacturers––shifting away from typical purchasing models and toward renting, leasing and subscription models for packaging. These include bags-as-a-service and shared-bag systems that incentivize companies to see their products or packaging as valuable assets worth investing in. Through the Challenge, we’re seeing how this broad category comes to life in a multitude of formats, especially at the initial customer interaction point––the point of sale. Solutions range from gurney-style carts that fit in the trunk of a car, to compact reusable bag withdrawal and return stations that sit at the checkout counter and continually cleaned, reusable containers that transport products directly to customers’ homes.

The innovations coming to the fore in this category have the potential to address real challenges in the retail experience. Reuse models address short-lived disposable options, extending the use time of the retail bag from today’s 12-minute average to multiple life cycles, keeping valuable materials in play at their best and highest use. However, for their full impact to be realized, it is important to dig deeper into the structures and systems that enable their long-term environmental and economic sustainability, examining reverse logistics and conducting life cycle assessments, among other areas for evaluation.

Innovative Climate-Friendly Materials Can Reduce Impacts on the Planet

#INVISIBLEBAG by Distinctive Action Ltd

Designers today are recognizing that the materials they choose for a product determine how its entire life cycle will play out, from start to end. As a result, there is a growing focus on material science innovation, and a reevaluation of what goes into products for a carbon-free future. The Challenge has brought to light a whole host of new materials that broaden the way we think about the retail bag––aiming for superior performance that better meets the needs of a diverse range of customers, without creating an outsized impact on the environment. These solutions include stretchy fibers derived from nature, water-soluble films, biopolymers processed from agricultural waste, natural materials like algae, seaweed and chitin, and upcycled materials like cotton. 

Many of these pioneering solutions draw from rapidly replenishable resources and seek to add material value at end-of-life, whether through composting or recycling systems. They diversify the resources we use to begin with, relieving pressure from just one primary source––especially fossil fuels. At the same time, we need to ensure that these new solutions don’t outpace our existing recovery infrastructure, and are actually recaptured as intended after use. 

Enabling Technologies Accelerate the Uptake of Smart, Sustainable Solutions 

IoT-enabled Food Delivery & Pickup System by Minnow Technologies

Beyond these innovations are the underlying technological processes and systems that create a scaffolding for other solutions or systems, opening up new exchanges with customers and working towards a bagless future. These might harness Quick Response (QR) codes and/or radio frequency identification (RFID) systems that enable companies and consumers, in effect, to check products or packaging in and out along their lifespan. This increases visibility and digital connectivity, which can drive better logistics and inventory management, informing strategic decision-making and incentivizing customers through “nudges” or reward programs. Innovative and “smart” delivery models, like in store kiosks or mobile applications, can also integrate with other categories––reusable designs or innovative materials––to deliver products.

It is critical that these solutions are able to scale commercially, align with market needs and integrate within existing systems of leading retailers, laying the groundwork for long-term change that cuts across industries.

Now, how do all of these solutions come together? From a birds eye view, the range of solutions is wide, with many of them complementary and potentially overlapping. If we take into account all of the ways we use the retail bag, and all of the different people around the world using retail bags, this diversity of thinking works to our advantage. And we know there are yet more avenues to explore. As we collectively become smarter about what the market needs, what consumers want in a retail experience and what new technologies might enable futures we can’t yet fully envision, we will seek to better understand how these and other solutions might work together to create an interconnected and informed system that will fundamentally shift the way we are currently shopping and getting goods home.

Ultimately, it may not be a single solution, or even a few that solve the problem. With ever increasing ways to purchase goods come ever increasing needs for a myriad of interventions that solve for niche sets of needs within specific customer or delivery segments. In reality, there is no panacea to this complex problem––different geographic, economic and social contexts demand varied approaches that cater to diverse sets of needs. If we are to change the future of retail, these solutions, from reuse models to innovative materials to the enabling technologies, need to communicate with and interrelate within a holistic ecosystem, explore new pathways of collaboration to fill in gaps or amplify one another’s strengths, and work to advance the market together, rather than separately.  

This is just the beginning of the journey, both for solutions in the Challenge and for the Consortium collectively. In the lead up to the announcement of Challenge winners in early 2021, we’ll begin working more closely with the Shortlisted innovators, helping refine their solutions, digging deeper to understand their full economic, environmental and social impact, and exploring emerging trends. And as we begin to learn where and how these solutions might apply to today’s challenges as well as tomorrow’s, we will work to advance and implement those which can bridge this innovation gap and have an eye on adaptability and agility, or on those that might enable the successful implementation of another concept or emerging technology––all to ensure we are rolling out new ventures that not only work within the operational parameters of our Partners, but serve both customers and the market at large. Overall, it is critical that these solutions are able to scale commercially, align with market needs and integrate within existing systems of leading retailers, laying the groundwork for long-term change that cuts across industries [SEE SHORTLIST HERE].

As we enter the next phase of this initiative, we are excited to work across the Consortium’s ecosystem of emerging innovators and established retail institutions to drive toward a more inclusive, affordable and sustainable future. Join us on this journey, and stay tuned for our upcoming announcement of the final Beyond the Bag Challenge winners in early 2021.