Nestlé today announced a USD 30 million investment in the Closed Loop Leadership Fund, the private equity fund of circular economy investment firm Closed Loop Partners to lead the shift from virgin plastics to the use of food-grade recycled plastics in the U.S. This investment is the first to use Nestlé’s packaging venture fund established earlier this year, which is part of the company’s overall investment of up to CHF 2 billion to accelerate the development of innovative sustainable packaging solutions.
“This investment is one of many solutions we are exploring to address the global plastic waste challenge,” said Véronique Cremades-Mathis, Global Head of Sustainable Packaging, Nestlé. “It will help create a more sustainable recycling system and, at the same time, assist us in achieving our commitment to reduce our use of virgin plastics by one third by 2025. This is particularly important as increasing the use of recycled plastics could substantially reduce the environmental impact of our packaging.”
Closed Loop Leadership Fund is a private equity fund that was created to acquire companies along the value chain to build circular supply chains. The fund invests in companies that aim to increase recycling rates in the U.S. and keep valuable materials in packaging supply chains by integrating and improving all aspects of supply chains, from access, collection, sortation to processing.
According to the United States Environmental Protection Agency, the U.S. recycling rate for all materials, including plastics, is around 25 percent. Recycling rates, however, can vary significantly by material type. This is due in part to the different ability of municipal recycling systems to accept and process materials. “It is important that we do our part to help keep recyclable materials out of landfills, and increase recycling rates in the U.S., and this investment is a significant move in that direction. It is also a critical step in our effort to secure access to high-quality, food-grade recycled plastics which can be converted into new packaging material for use across our product portfolio,” said Steve Presley, Chairman & CEO of Nestlé USA.
The investment will be used for the financing of Closed Loop Leadership Fund’s acquisition of well-established, best-in-class companies that are advancing the circular economy in the U.S.The Fund aims to increase recycling rates by an additional twenty-five percentage points in areas serviced by the portfolio companies. “Nestlé’s investment is a significant commitment to help modernize, optimize and capitalize circular economy infrastructure in the U.S. and harness innovative technologies to keep materials in manufacturing supply chains,” said Ron Gonen, CEO of Closed Loop Partners. “In addition to the investment, Nestlé has committed to create an end-market for the food-grade recycled plastics processed through the companies we acquire. This will enable us to fully close the loop on valuable materials.”