Unilever, P&G Join Closed Loop Fund to Boost Municipal Recycling

Recycling has become a multi-billion dollar industry in the United States, with some estimates suggesting it could even be worth as much as $80 billion this year. Nevertheless, many communities in the U.S. still do not offer recycling with their municipal waste collection. Even though cities such as Los Angeles have seen a net financial benefit — gaining revenues from selling off recyclable materials instead of paying to send them to landfill — cities are losing money from not launching recycling programs.

Of course, as with the launch of any business or initiative, seed money is needed. And despite the improving economy, many municipalities cannot or will not invest in the launch of the program. Recently Unilever and Procter & Gamble joined a program that seeks to address the growing challenges of waste diversion.

Both consumer packaged goods companies are now aligned with the Closed Loop Fund, a multi-stakeholder program that seeks to invest up to $100 million in recycling programs.

Companies that have joined this initiative so far include Walmart, Coca-Cola, Kuerig, Johnson & Johnson, PepsiCo and Goldman Sachs — a list that will impress you, or cause your eyes to roll upward, depending on how sincere you believe this project is. Staffed and advised by a crew of executives and advisors from academia, nonprofits, governments and the private sector, the Close Loop Fund insists it “can drive transformational change through partnership” in order to boost recycling rates across the country.

In order to make this happen, the fund will offer zero-interest loans to cities so that they can develop new recycling programs. The organization will also provide below-market loans to private companies so they can develop new local recycling infrastructures.

Such a move is necessary as recycling is the lowest hanging fruit when it comes to the encouragement of more sustainable behaviors and habits. To that end, an op-ed co-written by Jonathan Atwood and Len Sauers, both vice presidents of sustainability at Unilever and P&G, respectively, outlines some of the reasons why improved recycling is needed. In 2013, cities spent about $7 billion on landfill fees while losing out on $11 billion that could have been gained from selling recyclables. With the Closed Loop Fund, Atwood and Sauers estimate that cities can improve on the already 87 million tons of waste recycled and composted in 2012. If this program succeeds, the two VPs say 27,000 new jobs could be created across the U.S. while cities gain $2 billion in savings.

This effort has a huge public relations side to it, too. Both companies claim they are doing this because CPG firms “have an efficient and inconsistent stream of recycled material for their packaging,” which can get in the way of meeting any future sustainability goals. Taking a stand on extended producer responsibility would help these companies achieve such targets — but these companies would rather pin the responsibility on consumers, retailers and municipalities. The offer of financing for recycling programs is a far more cost-effective strategy for these companies. $100 million may seem a lot, but it could evaporate quickly if many cities show interest. Time will tell if this will really make a difference or if it is just a well-orchestrated PR stunt full of “multifaceted” investments "in innovative programs.”

Image credit: Blahedo

Based in California, Leon Kaye has also been featured in The Guardian, Clean Technica, Sustainable Brands, Earth911, Inhabitat, Architect Magazine and Wired.com. He shares his thoughts on his own site, GreenGoPost.com. Follow him on Twitter and Instagram.