Closed Loop FundWhat do companies do when recycling rates are hitting a plateau, but a demand for recycled manufacturing goods is on the up? It’s called the Closed Loop Fund. In just the past few months alone, nine major companies have put $5 to $10 million into the fund, an effort to accelerate the growth of recycling infrastructure by getting more recycled materials into the manufacturing supply chain process.

Where it all began

Back in 2013, Walmart—the low-price, mammoth retailer—hosted a supply chain summit. There, they culled 30 experts in recycling and supply chain and asked them to focus on just one topic: how to increase recycling across the U.S.? There were themes that stood out among the numerous responses, such as system roadblocks, shrinking budgets and lack of resources.

Running a successful recycling program costs money. It takes infrastructure, recycling plants and human resources to do it the way it should be done. Walmart’s initial summit shed light on the common issues across the industry. The result: one joint fund, designed to provide cities with the capital to build or boost their recycling programs.

And in just the past few months alone, nine major companies have taken the initiative to invest: Colgate Palmolive, Coca-Cola, Goldman Sachs, Johnson & Johnson, Keurig Green Mountain. PepsiCo and the PepsiCo Foundation, Procter & Gamble, Unilever and Walmart and the Walmart Foundation. This is just the beginning; more companies are expected to hop on board in the coming months.

The goal: cut down on waste

Recycling, at a glance, seems like it’s humming along across the U.S. A lot of items are tossed to the recycling side of the equation, and recycling rates have more than doubled since 1990. Yet, overall waste continues to be an issue. There’s simply too much of it. Recently, recycling rates are beginning to slow or level off. Most recycling efforts focus just on aluminum, glass and plastic, wasting so many other valuable materials.

This begs the question: what can businesses do with the $11.5 billion of wasted packaging? This waste presents a unique advantage for companies. These wasted materials come cheap, allowing companies to manufacture at a dramatically reduced cost. The Closed Loop Fund helps to tackle this challenge, capitalizing on the business opportunity that wasted materials offers.

Massive potential

The Closed Loop Fund offers a never-before-seen, unified front from major brands. It’s a signal that companies are seeing the value and opportunity in recycling, and hopefully that perspective will carry over into the consumer side. We’ll be keeping a close eye on the Closed Loop Fund as it continues to develop.