• Manufacturing

Investment is the necessary driver for circularity

The business case for circularity is clear, says Kate Daly, Managing Director at Closed Loop Partners. It’s all about maximizing the value of materials.

As far as Kate Daly is concerned, the business case for circularity is clear.

Building a circular economy requires investment, and the markets are increasingly rewarding sustainability, both in revenues and share prices.

As the Managing Director of the Center for the Circular Economy at Closed Loop Partners, a hybrid investment firm and innovation center focused on the development of the circular economy, Daly knows markets.

"The markets are increasingly rewarding sustainability, both in revenues and in share prices."

When materials enter landfills, their value is wasted. Within circular supply chains their value is maximized.

Closed Loop Partners is working on multiple fronts to advance circular solutions for the markets. 

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Goal: reimagine the single-use fiber cup system

Founded in 2014, Closed Loop Partners provides an arc of capital from venture capital to private equity in order to eliminate waste, improve efficiency in supply chains and create circular systems.

Their Center for the Circular Economy also works to solve material challenges through research, collaboration and innovation, pioneering pre-competitive collaborations among the world’s leading retailers and consumer goods companies to implement circular solutions at scale.

In the field of packaging, the Center has convened the NextGen Consortium, a global group of leading food and beverage companies, with Starbucks and McDonald’s as Founding Partners.

In 2018, the consortium launched a global design competition to identify and commercialize a suite of sustainable solutions to replace the current single-use, hot and cold fiber-cup system.

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The 12 winning ideas were announced in 2019: eight companies offering innovative fiber cups and cup liners, one offering a new material innovation, and three offering reusable cup service models.

"The winning solutions effectively reimagine difficult-to-recycle materials, bring material value across the recovery system, and harness the technology and design necessary to keep materials in circulation for longer," Daly says.

Other circular solutions in Closed Loop Partners’ portfolio address packaging waste, food waste and economic barriers.

Boston-based Mori commercializes edible coatings and films made with silk proteins that help prevent food spoilage and reduce the need for plastic packaging.

Chilean startup Algramo creates vending machines and smart packaging to dispense and contain household staple products "by the gram," providing a complete refill and reuse system that addresses social and economic barriers to more sustainable options while eliminating the need for single-use packaging. The startup is now expanding to North America.

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Packaging design and recovery systems must be aligned

To put it simply, the two main challenges in achieving circularity for food packaging are: How the package is made and how it's recovered. These aspects should be addressed simultaneously.

“We need to align product design with the recovery systems available. It is critical both to rethink packaging design and to invest in the infrastructure to recover packaging, whether that’s via composting, recycling or other recovery systems,” Daly says.

“Manufacturers play a key role in closing the loop on our supply chains today. How we make the products we consume today determines their entire lifecycle.”

Possible new solutions must be tested and developed tirelessly before they enter the markets.

“We must hone, test and iterate solutions to de-risk any potential unintended consequences of new materials introduced to the market,” Daly says.

“Since different markets have varying needs and capabilities, a suite of well-tested solutions that fit different contexts will be necessary.

 

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