The circular economy has captured the imagination of brands, cities and innovators. Will 2017 be the year when the concept evolves from aspiration to profitable action? Here are four reasons why, from our view as circular economy investors, we believe this year will mark a shift from idea to action:
1. Focus on local government
If there is one safe bet with the new administration, it is that leadership on circular economy will not be coming out of Washington. Instead, we expect an increasing reliance on the leadership of state and local governments as the feds take a back seat.
This shift means an increasing focus on the day-to-day realities of costs associated with waste management and profits possible by shifting to a circular economy. This won’t just come from the usual suspects. Communities such as Memphis, Tennessee; Waterbury, Connecticut; and Portage County, Ohio; have chosen to invest millions of dollars in their recycling infrastructure in order to reduce costs. Phoenix and New York City have stated circular economy language in their goals and are implementing on a range of programs to get them there.
Further, according to President-elect Trump, “Infrastructure investment strengthens our economic platform, makes America more competitive, creates millions of jobs, increases wages for American workers and reduces the costs of goods and services for American consumers.” This could be an important opportunity to build the infrastructure required to advance circular economy principles at scale, enabling real, shovel-ready projects across the country to get built.
We have received over 300 proposals for such projects and are seeing models such as Lakeshore Recycling in Chicago (PDF) and Eureka Recycling in Minnesota’s Twin Cities creating high-value local jobs and robust business models that make these infrastructure projects profitable.
2. Recycling is the feedstock of U.S. manufacturing growth
Local manufacturing creates stable, well-paying jobs 鈥� jobs that are disappearing in North America. The manufacturing employment opportunities of the future will look different from those of the past. One of the most exciting trends we see across our investment portfolio and pipeline are the scaling of new technologies and manufacturing facilities that turn recycled materials into new, higher-value products. Recycling creates the figurative and literal feedstock of future manufacturing.
A few companies to keep an eye on: Integrico, a railroad tie manufacturer in Louisiana, is recycling mixed plastics into its ties; and Ultracell, a premium cellulose insulation company near Buffalo, New York, is making high-quality insulation from a low-cost mix of recycled corrugated cardboard and old newspaper.
3. Entrepreneurs lead the way
The path to growth in our economy will be driven by both Main Street and Wall Street. The entrepreneurs, innovators and investors will commercialize the technologies and businesses build the circular economy. We are beginning to see these innovative businesses take shape.
Through Closed Loop Ventures, we have invested in new innovations that we believe will accelerate this breakthrough, including:
AMP Robotics, a robotics company that will transform the sorting of recyclable packaging at MRFs.
Evrnu, a fiber technology company that converts garment waste into new, high-quality fiber for the creation of new clothing, in partnership with brands and retailers.
The Renewal Workshop, an apparel refurbishment service building a “certified pre-owned” business model, saving companies money and diverting thousands of tons of waste from landfills.
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