We have reached an expiration date on the current linear economic system that throws valuable resources away.

When did we stray so far from the common sense value of not wasting? Until the 1950s, people designed products to be proud of their quality and durability. Repair services were a given; a tailor would risk reputational ruin if their clothes had to be tossed after one wear.  During the first and second World Wars, recycling was viewed as a patriotic duty. Recycling and reuse were championed. Rubber, metals, textiles, and cooking fats, among other things, were essential to the war effort. And so Americans rallied.

Today, rather than continue to evolve towards conservation and resource efficiency, we seem to devolve into a world of waste and pollution. Approximately 50% of all food produced in the U.S. is thrown out, and food waste is the biggest occupant in American landfills, costing taxpayers billions in landfill disposal fees. Americans throw out 80 pounds of clothing each year. And about 90% of plastic waste ultimately ends up in a landfill or incinerated. The statistics go on, but the loss of these resources has a double sting: there’s a hefty price tag attached to all this waste and dire implications for our health.

A throw “away” culture, while financially beneficial to companies that extract natural resources like oil and mining companies and landfill operators, causes a massive financial hardship to municipal budgets. Landfill tipping fees per metric ton can exceed $100 in the United States and landfills are the third largest source of methane emissions in the world. Ultimately, these costs are paid by taxpayers and municipalities.

The materials we pay to landfill are often valued commodities. Plastics, paper, textiles, and metals can be reused, repurposed, and can re-enter manufacturing supply chains. The recycling industry is a powerful engine in the economy; in 2018, the industry created over $110 billion in economic activity, 534,000 jobs, and $13.2 billion in tax revenues for governments across the country. Only 30% of what can be recycled in the United States is recycled due to a lack of recycling and circular economy infrastructure in many parts of the United States. That means that there is an opportunity to 3x the already substantive jobs and economic value created by the recycling industry.

Given all of this, why are we still following a linear economic model that culminates in wasted resources? Over time, a number of different forces have contributed to the current state of play. In the 1950s, there was a marked shift away from the “waste not, want not” approach to life, replaced instead by a feverish post-war consumption boom where status came to be defined by the quantity of products consumed as opposed to the quality of products produced.

By 1960, the prevailing indicator of the health and success of a country was its gross domestic product – the total value of goods and services provided – rather than attributes like quality of education, air, water, and green spaces, among other things. In the 1970s, economist Milton Friedman declared that the only responsibility of business is to increase profits, establishing the precedent of shareholder primacy which ignores and discounts other stakeholders like local communities and the environment.

While consumers, taxpayers, and the environment lose out in this current take-make-waste economy, extractive industries, like oil & gas and landfill owners win. But we can reimagine this system and an alternative does exist: it is the circular economy, and it’s gaining traction.

The circular economy represents the most significant restructuring of global commerce since the industrial revolution. It is an overhaul of how products are designed, manufactured, sold, consumed, refurbished and recycled, eliminating the concept of waste and keeping materials in circulation at their best and highest use. This new economic model reduces the need for the extraction of finite raw materials and the costly disposal of waste at landfills.

Today is the perfect opportunity to reflect on this shift, since recycling is a key enabler of the circular economy. On America Recycles Day, Closed Loop Partners is celebrating the potential of the circular economy to reimagine capitalism in order to reduce costs, increase efficiency, and protect the environment we share.

The circular economy is estimated to be worth $4.5 trillion globally by 2030. Large consumer goods companies are increasingly recognizing that the development of circular supply chains will reduce manufacturing costs and provide consumers with more sustainable products. Similarly, governments are seeing how local recycling and circular economy infrastructure reduce municipal disposal budgets, generate revenue and drive local job creation.  The transition to circularity will rely on collaboration across the entire value chain, including product designers, recyclers, manufacturers and brands. In doing so, we will align the interests of citizens, municipalities, industry and the environment we all share.

Allison joined the Closed Loop Partners team this year and is responsible for strategic partnerships, capital formation, and fund structuring at the firm. We sat down with her to hear more about her journey into the circular economy world where profitability and sustainability meet.

I was ready to transition to a role where I could enable systemic change in a work environment where risk-taking was encouraged. I had already decided the circular economy was the right next sector — it was a matter of finding an exciting role that would blend investing, industry influence, and a triple-bottom-line ‘systems thinking’ manner of evaluating problems.

Tell us a little bit about your previous life and what brought you to Closed Loop Partners?

As a college student, I became excited by the possibility of capital markets enabling social and environmental change across national borders. I was a student at Georgetown University’s Foreign Service School studying Science & Technology Policy. I loved everything involved with social and environmental finance: from measuring impacts, to pricing them, to setting up schemes to finance and trade them, all with the goal of finding the most most efficient ways to protect and enable them.

After graduating, I became a carbon markets analyst at a D.C.-based non-profit, studying and reporting on voluntary carbon market trading regimes around the world.  At the time, the economy was booming; there were several cap and trade bills in the U.S. Congress; and a carbon price seemed imminent — we could finally decouple greenhouse gas intensity from economic growth! Alas, the financial crisis happened the following year — and with it, so did the near term prospects for a national carbon price.

So, I returned to school in 2009 to study finance and the business of sustainability at the University of Michigan’s Erb Institute, receiving an MBA and an MS in sustainable systems science.  After graduating in 2012, I joined JPMorgan in a rotational management training program. Following the program, I became a structured finance banker to alternative investment funds, creating custom financing solutions for alternative investment funds. I enjoyed the product development and also the sophistication of my clients. Most interesting of all, I was seconded to JPM’s Sustainable Finance team for part of my last year at JPM to set up two social impact funds.

After these secondments, it became clear that I was ready to transition to a role where I could enable systemic change in a work environment where risk-taking was encouraged. I had already decided the circular economy was the right next sector — it was a matter of finding an exciting role that would blend investing, industry influence, and a triple-bottom-line ‘systems thinking’ manner of evaluating problems.  Having become aware of Closed Loop Partners (CLP) through friends in impact investing two years earlier, the decision to join was an easy one. We’re at a tremendously exciting phase in our platform growth, and I am thrilled to be a part of it.

What excites you most about the circular economy?

Two things: the urgency of the waste / conservation problem, and the fact that circular economy solutions make so much sense!  Also, I’ve been obsessed with recycling since college. I even went ‘dumpster diving’ for a month on Georgetown’s campus to try to figure out the right combination of bin siting and labeling that would encourage people to recycle. Yeah, I was cool.

What are you most looking forward to in your role at Closed Loop Partners?

Being able to apply my finance and systems analysis experience to helping Closed Loop Partners grow.  The impact, network, and respect that CLP has built in the recycling, sustainability, and impact investing industries is impressive.

We caught up with Chelsea Briganti, founder and CEO of LOLIWARE, while onboard the National Geographic’s ship, SeaBird, for the first week of the Sustainable Ocean Alliance’s (SOA) Accelerator at Sea this September. LOLIWARE was part of the inaugural cohort of SOA’s ocean-tech focused accelerator in 2018.

Chelsea Briganti, Founder & CEO of Loliware

LOLIWARE is a Closed Loop Ventures’ portfolio company that is pioneering biomaterials derived from seaweed to replace plastics; healing the planet by making single-use plastics obsolete.

Born in Hawaii, Chelsea grew up feeling a strong connection to the ocean, where she was baptized, nourished, and calmed by the waves throughout her childhood. This, along with her industrial design background and desire to use her skills to create a better planet, have helped propel LOLIWARE forward. The company is now working with several Fortune 500 companies and partnering with Marriott and Pernod Ricard to disseminate millions of plastic-free straws.

We sat down with Chelsea to catch up on the latest news. This interview has been condensed and edited for clarity.

With the help of a team of material scientists, food technologists, seaweed biologists, and biopolymerists, LOLIWARE wants to replace the 360 billion plastic straws used globally every year. How far along on this journey are you?

We’re currently underway with a massive scaling effort. This is where most startups completely drop the ball. They have a great idea, it could be world-changing, but they struggle to take it from the lab to mass scale.

Fortunately, I learned a lot from our initial work at LOLIWARE on the cup. We were creating a cup that you could eat rather than throw away. It was an interesting idea and helped put us on the map, but we dropped the ball on the manufacturing side. I learned that LOLIWARE’s strength and core competency, our real sizzle as a company, is our material technology and innovation pipeline, it’s not that we’re manufacturing geniuses.

What we are is a leading materials innovation technology company. This means that we continue to pioneer biomaterials derived from seaweed to replace plastics at scale. We’re doing this by inventing new materials and inventing the process to scale these new materials. We can then take these two blueprints to a plastic manufacturer, for example, and license them. Plastic manufacturers will be dinosaurs unless they evolve with current regulatory and market forces. There are tons of bans on plastics and millennials don’t want plastic anymore. We’re pitching a new technology to help manufacturers evolve with the times.

LOLIWARE’s straw feels just like a traditional plastic straw, but it’s 100% plant-based, hyper-compostable, and marine degradable. What’s the significance of seaweed in your mission to heal the ocean?

The reason seaweed is so special is because it sequesters carbon as it grows and has a fast, renewable lifecycle of four to six weeks. What comprises the seaweed is cellulose, naturally occurring polymers, and proteins. All of these represent opportunity. They can be used for other packaging innovations, for example, you can create a SeaPulp™ by extracting cellulose from seaweed. This can be formed into any shape, with the added benefit of avoiding any health issues associated to PFAs.

When you look at our competition, the only consequential one is paper. You’ve got tons of fiber companies on the scene and China has said that their solution to plastic is paper. But, you’re going to start seeing backlash against paper. In some cases, paper has a worse carbon footprint than plastic because of its inputs: Trees have a long lifecycle and often you have to transport them thousands of miles for processing.  We are tree-free and rainforest-free, believing that these precious carbon sinks should remain intact versus be used for packaging.

Seaweed is definitely part of the future of replacing plastic.  All of our seaweed is sustainably sourced. Our supplier in Europe harvests it in accordance with strict regulations. Right now, less than 1% of it is harvested and, in turn, LOLIWARE only uses a fraction of that.

LOLIWARE has already built a strong and recognizable brand, appealing to consumers who want to avoid plastics, toxins, and GMO products, among other things. How important has branding been for growth?

You have to have a killer technology, but you also have to have a killer brand, especially given the current climate. I got a lot of push back from early-on investors in LOLIWARE. They felt like we were wasting time, asking “Why do you even have a social media presence?” But I always knew they were wrong. We’re B2B2C and we’re a movement to go plastic-free. We’re also a technology to replace plastic. Both of these things come together. That’s the secret sauce. There is no brand of paper straws or corn-based plastics that people identify with, yet people connect with LOLIWARE. It’s important to be clever, to be fun, and to have beauty in sustainability when it comes to branding.

We also really focus on being a women-empowered brand. For the longest time, women’s inventions have been sitting on the sideline – underfunded and underdeveloped. Yet, women have a lot of buying power and care about sustainability. Now is the time to rally them. We need more women in leadership to solve the problems of the ocean and the planet.

And lastly, we can’t ignore the incredible natural environment we’re in right now as we head toward Sitca, Alaska. How do natural backdrops like this help to inspire your work?

When you’re an entrepreneur you can easily sequester yourself in the office and become hermetic. For me, I’m inspired by nature’s vast expanse. I love how Charles Eisenstein expresses the importance of being in places where the dream of the planet still lives. You definitely feel that here. It’s the dream of the planet, a pristine natural environment. You get the visceral sense that you are on the planet versus in a manmade landscape like New York City. Too often we’re in landscapes where everything is made by us and we can quickly become disconnected from the natural world. It’s important to be able to take the mental image of the dream of the planet back to your work. It’s what we’re trying to protect or even recreate in places where the dream of the planet is dead or dying.

The revision of China’s Solid Waste Management and Pollution Prevention Law could have far reaching impact on brands and recyclers.

A proposed revision to the Solid Waste Management and Pollution Prevention Law in China could affect the operations of brands and recyclers. The revised law entered the review phase at the 13th National Congress on June 25, 2019 and is now seeking public opinion. Below are some key implications of the clauses:

Impact on the packaging industry

Clause 2.13: Companies that produce, use, and store solid waste (SW) should publish their waste management information. Publicly listed companies must also publish their preventive measures against SW pollution.

This represents a significant departure from current protocol. Increased transparency and mandatory reporting requirements for public companies will incentivize companies to invest in SW prevention, potentially providing reputational rewards to those best-in-class. This kind of impact oriented investment fits nicely with the growing interest in ESG investing in China.

Clause 3.20: Producers of SW must pay Environmental Protection Tax.

This would add a new expense for manufacturers that could be passed onto consumers too. The commercial real estate sector in China recently had to adjust to the introduction of this, where previously they did not have to worry about their waste management expenses.

Clause 3.21: The design and production of packaging must follow green production standards that will be set up by the State Market Regulation to reduce waste generation. Producers of materials that fall under mandatory recycling categories must be responsible for the recycling of their materials. The list of mandatory recycling materials will be produced by NDRC (National Development and Reform Committee).

Clause 3.22: The government will encourage R&D institutes and producers to develop and use materials that can be easily recycled, safely stored, and that can decompose in a natural environment. Packaging materials that can’t be easily composted will be banned.

Clause 3.21 and 3.22: It’s encouraging to see that the government is not only promoting recycling, but also the reduction of waste through circular design and materials innovation. This will force brands to adopt circular packaging principles, so there will be a lot of room for innovation in eco-friendly packaging.

Clause 3.42: There will be EPR for electric appliances and other products.

Since 2018, this kind of EPR has been in effect for electric vehicle manufacturers, requiring better lifecycle management across the value chain – from product design and consumption to the recycling and waste management related to electronic vehicles at end-of-use.

Impact on the recycling industry:

Clause 3.28: Permits must be required for the transportation of SW across cities.

Demand for distributed, modular recycling units will grow so that waste can be processed more locally. The need for smart logistics will grow in tandem to optimize for more efficient transportation routes, among other things.

Clause 3.29: There should be a complete solid waste import ban by 2020.

While there has been a lot of speculation in the U.S. regarding whether or not China will implement a total waste import ban by late 2020, as declared in 2017, it is clear that the Chinese government plans to move ahead with this.

Clause 3.57: There will be differential charging schemes for residential waste.

The mandatory sorting of residential waste was introduced in certain pilot cities in China on July 1, 2019. In a district in Shanghai, it now costs $17 USD to dispose of 120 liters of food waste. You can read more about this on our blog on Recycling Rises to Power in China.

Although we do not know how likely it is that all of the proposed revisions will pass or when, the fact that there are so many proposed changes to the current law, which came into force in 1995, and that they’ve gone all the way to the desk of the National Congress, is a signal that waste management is a high priority for the central government. By reviewing the proposed changes, companies in China and abroad can better prepare for what’s coming down the line.

Unlike Europe, where the circular economy is championed by investors, the government, and consumers, in China it’s the government taking the driver’s seat. The proposed revisions to the law illustrate the steps the government is willing to take to develop the circular economy in China. In turn, industries are taking note and are seizing the subsequent business opportunities.

I would encourage brands that consider China as one of their key markets to give serious thought on how they can create a circular advantage to meet the growing demand for sustainable products in China before their competitors do. This will be critical in a context where a country is implementing increasingly strict solid waste management laws.

The reform on plastic pollution in China, the next big thing after National Sword?

At the 10th meeting of the Central Committee for Deepening Overall Reform on September 9th, chaired by the Chinese President, plastic waste reform was listed as a key issue. The following was cited:

“Actively responding to plastic pollution by restricting the production, sale, and use of some plastic products, actively promoting recyclable and biodegradable substitute products, and regulating plastic waste.”

We are still waiting for a detailed reform plan, but this is another huge boost for the development of a circular economy in China, supported by the government. Brands and recyclers in China and overseas should start to prepare for the changes brought by a reform like this.

The Key Takeaways from Fortune’s First Global Sustainability Forum:

This September, in Yunnan, China, I attended Fortune’s first Global Sustainability Forum, speaking on a panel on Waste Not. The Forum dived deep into the business opportunities and challenges that arise from the transition from a linear to circular economy, highlighting the following key points:

• There are three key driving forces behind circularity: increasing shareholder activism and interest in public companies’ ESG commitments; public awareness among consumers on the environmental footprint of products and services; and growing regulation in Europe and Asia to tackle waste issues, especially plastic pollution.
• Finance is slowly but surely reckoning with the economic risks posed by climate change and other environmental threats. ICBC, the world’s largest bank by assets, ran a stress test in 2015 and, we learned, issues higher interest loans to firms that are over-exposed to environmental hazards. The stress tests began in 2015, and have changed the way Chinese banks look at the businesses they fund, now reducing their exposure to coal projects and increasing their exposure to renewable energy.
• Building sustainable supply chains is challenging due to limited transparency around data, a lack of focused financing, and water and waste management typically being too cheap to account for negative externalities. Labor specific issues also often take precedence.

Chris Cui, Director of China Programs, builds bridges between the U.S. and Asia in order to advance the circular economy. She brings 13 years of cross-sector experience in financial service and philanthropy sectors in Asia, Europe and the U.S., advising Fortune 500’s emerging market strategies to capture growth potential from Asia.

The U.S. as well as other developed countries were taken by surprise when the Chinese government implemented a ban on the importation of recyclables on January 1, 2018. However, the Chinese government had been sending signals for the past decade of their future plans around both the importation of recyclables and the development of domestic recycling infrastructure.

Eight cities in China were selected as pilot cities for pilot recycling programs as far back as 2000 in order to study the most effective programs. Recycling gained significant attention in June 2019 when Chinese President Xi stressed the importance of cultivating the good habit to improve the living environment and to contribute to green and sustainable development.

“Trash classification is related to the people’s living environment and the economical use of resources. It is also an important embodiment of the level of civic-mindedness. Extensive education and guidance should be carried out to make the people realize the importance and necessity of garbage sorting.”

Chinese President Xi

It’s very rare that the top leader, rather than the Ministries in charge of the industry, make such strong statements about recycling.

Importantly, it demonstrates the priority that China has placed on the development of its own domestic recycling programs and infrastructure, as part of its effort to combat environmental issues that threaten the health of its 1.4 billion citizens. It also explains why China carried out the ban in the first place; they are continuing to shift their focus to developing domestic recycling infrastructure to feed their massive manufacturing base. Xi has made clear that the public sector will support the private sector to develop infrastructure to turn “waste” into opportunity.

So, what does this look like?

The Chinese government aims to increase recycling rates to 35% for residences by 2020, they’re building basic trash sortation systems and starting to charge waste management fees for both residential and commercial waste for 46 major cities by the end of 2020. They’re also expanding their trash classification system to all cities by 2025.

The four new trash sortation categories in China.

Image source here.

Case Study: Shanghai

Shanghai is one of the first cities to start responding to the policies from Central Government. Twenty-three million people must learn to sort their trash according to four labels – recyclables, dangerous goods, kitchen waste and other waste – under a mandatory sorting scheme starting on July 1. Misclassification will result in a fine of up to USD 30 for individuals, USD 7,200 for commercial entities and USD 70,000 for recyclers (and the potential revoking of their licenses). How to sort trash correctly is not just in the news, it’s the talk of the town and it’s even included in exam questions for schools.

For individuals who fail to sort their trash, their social credit rating, which not only determines their mortgage rate and insurance premium, but also their eligibility to purchase flight tickets and even send their kids to public schools, will be lowered.

Unsurprisingly, these new developments in recycling bring challenges, particularly around education and infrastructure. The Shanghai government has hired 1,700 instructors, conducted 13,000 training sessions, and created an app to handle enquiries to help citizens meet the requirements.

Meanwhile, the policy highlights the current lack of infrastructure for this kind of scheme. There needs to be significant investment from both the public sector and private sector to sufficiently grow the collection and sortation capabilities of the country. This especially applies to rural regions, which constitute a large proportion of China and lack the necessary infrastructure to deal with trash, especially tricky waste such as fertilizers and pesticides.

Yet all of these shifts have culminated in, and created, a significant business opportunity. Recycling needs investment now. China’s planned economy means that every five years, the central government will create an economic development plan for the country for the next five years. Key sectors that are targeted in the five-year plan will receive support, from specific policies to financial subsidies, that attract significant interest from the private sector. The recent emphasis on the recycling sector is a good example of this and, importantly, sends a positive signal to the market.

Residents in Shanghai search the internet for guidance on how to sort trash correctly.

Image source here.

The Business Opportunity Is Vast and Growing

At Closed Loop Partners, we know that keeping valuable commodities circulating in supply chains is good business. The current developments in China are spurring interest, excitement and investment in the space, which will continue to grow. There is room for both startups and bigger companies, domestic as well as foreign players, traditional players in the recycling industry and new players from other sectors like tech, marketing or consumer goods companies; all of whom are ready to innovate and embrace the change.  We’re seeing a new structure of supply and demand around recyclables worldwide. Shanghai is just the beginning; more cities and business opportunities will arise in the coming years as a result of the combination of favorable factors:

The public markets are all in
With preferential policies and hundreds of billions of dollars to support the campaign, stocks have been rising for companies that supply equipment, chemicals and other services related to recycling.

The private sector is paying attention
More and more startups are emerging to solve the waste management problem in China, with some managing to raise money from mainstream VCs such as Alibaba, Baidu and Tencent. Robots for sortation, like AMP Robotics, or mobile apps for smart recycling stations or second hand mobile phones are just some examples of the innovations applicable in the field.

Demand for recycling related equipment and services is growing
As more cities follow the example of Shanghai and start mandatory urban trash recycling, related sales will jump significantly; sales of the smart trash bin on JD.COM soared by 613% between June 1-13 and it’s estimated that Shanghai residents bought 12% of the smart trash bins sold nationwide.

Sustainable packaging will be encouraged
Innovations in sustainable packaging will be welcomed by brands. Policies have been drafted on EPR in China for the packaging industry.

Opportunities for completely new business models are emerging
Challenges in the enforcement of trash classification means there are opportunities for entirely new business models to solve for the new pain points. For example, startups are offering online booking services for on-demand trash pickers and sorters that will come to your home.

If you’re interested in learning more on this topic, get in touch with Chris Cui and join us at these upcoming events:

• 14th China International Plastic Recycling Conference & Exhibition 2019, Sep 25-27, Shanghai, China. Closed Loop Partners is a co-organizer and will give the keynote.
• The Fortune Global Sustainability Forum 2019, Sep 4-6, Yunnan, China. Closed Loop Partners will be speaking on a panel.

It was a momentous moment in Minneapolis last week as more than 800 people convened for Circularity 19, the largest conference in North America devoted to advancing the circular economy. In acknowledging the world’s finite resources and increasingly volatile supply chains, transitioning to a system that keeps valuable materials in circulation at their best and highest use has become a no brainer. In fact, it’s what many companies have been doing for a long time; Caterpillar has been remanufacturing products since the nineties.

Although not an entirely new concept, supporters of the circular economy are now reaching a critical mass. Consumers and companies alike want a more sustainable economic model. Now we have the appropriate framework: the circular economy. This doesn’t predicate itself on infinite resources; it reduces costs, creates jobs and protects our environment. From large brands like Google and 3M to students, NGOs, financiers and community activists, there was significant momentum behind Circularity 19.

Together, conference attendees watched startups pitch circular solutions such as reusable cup systems, explored the potential of materials marketplaces, and learned about transformational technologies that turn waste plastics back into the building blocks for new materials. All of these examples demonstrated the benefits of keeping valuable materials in circulation.

What was clear was that the circular economy isn’t a nice to have, it’s a need to have. Companies and individuals can’t afford to throw away the valuable rare earth elements in their phones or to ignore the intrinsic value of waste plastics that can reduce our dependence on oil extraction.

An overarching theme of Circularity 19 was around the power and responsibility that inevitably comes with advancing any new system; the importance of making sure the circular economy doesn’t suffer from the same ailments of the past linear “take-make-waste” system. Three areas in particular continued to come up in conversation:

The need for a just and equitable circular economy from the start
There needs to be a greater focus on the social elements of the circular economy; historically underrepresented groups, particularly lower income communities of color, are often disproportionately affected by environmental injustices. In a panel on Power, Privilege and Bias in a Circular Economy, speakers highlighted the importance of including everyone at the table from the very beginning, flagging the need for awareness and intentionality around what signals are being sent when developing a new system.  There is also a need for thinking about how the success of circularity is measured from both a business and social standpoint; defining shared metrics for a truly regenerative, healthy, circular society is critical.

The importance of healthy materials and safe chemistry in the circular economy
It’s simple. In a circular economy valuable materials are kept in play, cycling in perpetuity, so the materials of choice must be safe and high quality. What does this really mean? Materials must be evaluated, tested and designed with their next life in mind – what happens when these materials come into contact with your skin? What about with the soil? If something is comprised of mixed materials, for example treated for flammability to serve a particular purpose in their first life, can these materials ever be food grade quality in their second life? These are the kinds of questions that were facilitated and fostered at Circularity 19, helping attendees to think through unintended consequences.

The urgent need for industries to collaborate outside of their comfort zones
A common thread throughout Circularity 19 was the need for unlikely bedfellows in order to achieve systemic, circular change. It takes more than just one industry. For example, the fashion industry can and must learn from the chemicals industry. The technologies emerging from the latter have important applications for the former, including chemical recycling technologies to process polyester garments at the end of their first life. Similarly, the tech industry has spent years investing in the development of RFID technologies and other tracking systems for the digital economy. But not enough organizations are applying these learnings to fashion. There is huge potential for weaving RFID technologies into garments so that stakeholders can keep track of their products’ lifecycles.  Scanning tags and seeing that a garment is made of 100% linen and from a certain brand is valuable information that can influence the next life of a product – is it best for resale? Or is it best to recycle the product into fibers to create a new garment?

Throughout Circularity 19, it was encouraging to see how much progress has been made on circularity, as well as important to see how far we still have to go on this journey. By sharing knowledge and continuing to have productive conversations with diverse stakeholders, the conversation can be pushed forward. It was heartwarming to be a part of Circularity 19 this year and we look forward to Circularity 2020 in Georgia.

With only 9% of the world’s plastics getting recycled and global plastics demand forecasted to triple by 2050, we’re in desperate need for tangible, investable solutions to avert a crisis. Where ten years ago, the urgent need to broach this subject was met with resistance, today the conditions are altogether different.

Across the globe, movements such as Break Free From Plastic and legislation like the EU’s Circular Economy Action Plan have galvanised the public. Shocking images of sea turtles maimed by straws or statistics about there being more plastic than fish in the sea by 2050 have struck a chord.

It’s clear we must rethink our current leaky, linear system and shift to something more circular. We need a system that’s consciously designed to use less materials in the production and delivery of products and that keeps materials in circulation at their highest value for as many generations as possible, if not infinitely. This way we can reduce our waste and our extraction of raw materials.

Sometimes plastic is the most appropriate material to serve a purpose, given its particular properties, other times it’s not. There is no silver bullet approach.   We need to invest in both near term solutions and long term solutions with clear paths to scaling to tackle the problem of ocean plastic pollution and reduce overall environmental impacts.

The good news: we’re already seeing clear, investable solutions that can shift us in the right direction.

There are at least 60 technology providers developing transformational technologies that purify, decompose, or convert waste plastics into renewed raw materials in North America, representing a $47 billion opportunity in North America alone. Many of these technologies mean there is no limit to the number of times plastics can be recycled, thereby helping us to shape a more circular economy for plastics.

Other companies are exploring innovative new delivery models or alternative materials science. Their outputs could supersede the need for plastic packaging altogether, whether through vending machines that dispense exact amounts of product into reusable containers like Algramo, new feedstocks replacing styrofoam packaging like TemperPack or through hyper-compostable, edible straws made of sustainably harvested seaweed like Loliware.

Large banks and brands are getting on board too, recognizing the need for change. Institutions like Goldman Sachs, Citi, Comerica Bank and Engie have co-invested in our funds in order to catalyze the development of the circular economy.

If we’re to stem the tide of plastic pollution in our oceans, it’s critical that we invest across the value chain and in companies that are rethinking the system for a more sustainable future. With the current enabling conditions, from policy to consumer engagement, now is the time to do it.

This blog was inspired by the discussion in Confluence Philanthropy‘s webinar on Exploring Investor Solutions to Restore the Ocean, which I participated in with Mark Spalding, President of The Ocean Foundation, Conrad MacKerron, Senior Vice President of As You Sow, and Angela Howe, Legal Director of Surfrider Foundation.