Unilever North America has made a $15 million recycling infrastructure investment in the Closed Loop Partners’ Leadership Fund. This effort aims to recover an estimated 60,000 metric tons of U.S. plastic packaging waste annually by 2025.
The Closed Loop Partners’ Leadership Fund is a private equity fund focused on acquiring companies along the value chain to build circular supply systems. Unilever North America’s investment will ensure access to recycled plastics feedback processed by the companies that the fund invests in and enable many Unilever brands to incorporate post-consumer recycled (PCR) plastic in packaging beyond the bottle – including caps, lids and tubes. Half of the 118,000 metric tons of plastic packaging used by Unilever North America is PCR plastic. Many of its brands, including Dove, Hellmann’s, and Seventh Generation, already use 100% PCR bottles.
Get the details.
Waste360 spoke with Tom Langan, head of Unilever North America Communications and Bridget Croke, managing director of Closed Loop Partners to get their perspectives on this investment, their partnership, and how this work fuels the circular economy and the future of sustainable packaging.
Waste360: How did this particular investment come about?
Langan: For Unilever, one of our Waste-free World commitments is that we have a commitment to help collect and process more plastic packaging than we sell by 2025.
Our other commitments are interconnected and focus on the use of recycled content and we need more access to materials. We also have experience working with Closed Loop and we know the integrity of their work. We wanted to make sure it was going to have impact at scale, and that it was going to provide the materials we need back through the investments they make in different companies. This way, we have opportunities to access some materials and to bring it back into our brands for PCR use.
Croke: We built our Closed Loop Leadership Fund, which is our private equity arm, which Unilever just invested in, as I'd say an evolution of the types of investments we feel like are needed in order to solve some of those supply chain breakages, to be able to scale a circular economy and circular supply chains.
Certainly, we saw a lot of our corporate partners, like Unilever, that were part of our Closed Loop – and now we call it the Closed Loop Infrastructure Fund. Through that fund, we were really just building up supply pre-competitively and were actually taking acquisition stakes in companies across the recycling supply chain. This gives us more opportunity to be able to help the companies that are strategic investors in this fund.
We take these best-in-class operators that we're investing in and help scale and grow them into new markets while also being able to help the corporate investors access that recycled content coming out of these facilities. It's an evolution in how we're able to work across the whole supply chain, and not only build supply but also help get that into the hands of the brands that have those goals.
Waste360: Unilever has talked about a “Less Plastic. Better Plastic. No Plastic.” internal framework. Is there an equal emphasis on each one of those? Or do you think some are more key than others?
Langan: When you look at delivering our commitments overall, I think that improving the recycling infrastructure is going to really help us in some of the other areas around recycled content and other commitments. For the Less plastic. Better plastic. No Plastic. framework, I think they're really all equal and I think one thing that we have is a commitment to an absolute plastic reduction, so no plastics is going to have a role in that, finding alternative materials, and other types of innovations around that.
If you think about, we have Seventh Generation, which has their zero plastic line that's out now and we're moving into other reusables. We have a new Dove deodorant product that is refillable and uses a stainless-steel cylinder for the refill. There are ways that we can substitute plastics. There's a commitment to absolute reduction, but equally, we want to make sure we have better plastics where we do use plastic. Plastic has a lot of attributes and benefits, and we want to make sure we use recycled content where we can. I think we have to look at all of them together.
Waste360: Absolutely. Bridget, you probably see that with a lot of the companies that you're working with – the balance between using plastic, using better plastic, and then whether or not to use plastic at all.
Croke: Yes, definitely. I think the key is there's no silver bullet and I don't think one strategy is going to help us achieve the bigger outcome that we're all striving for. The Unilever approach makes a ton of sense to me, and I think that Unilever is a leader in putting out these ideas, and then moving toward executing and achieving those goals.
It is really setting the standard for a lot of companies out there, but we have also found a real ecosystem of collaboration because this is a system challenge. It requires a system solution, and nobody can solve this or write a check big enough on their own. Much like Unilever, we’re taking the approach of how do we invest in solutions across those three categories as well? While we don't use that language, it's definitely a concept that we use as a strategy too and I think a lot of our other investors do as well.
Waste360: Could you talk about Unilever's targets around producer responsibility?
Langan: Yes, we support and participate in EPR programs around the world where they exist. We advocate for well-designed programs in a sense that it can help really make sure that all brands are contributing towards having a more circular recycling system and the resources are there.
We have EPR programs in Canada, Europe, and other markets around the world, and we are advocating for EPR. There are different forms of EPR, but the traditional sense of EPR we don't really have in the U.S. right now. There are bottle deposit laws and other things that you could be seen as a type of EPR, but what we're talking about, the comprehensive EPR for all packaging, we don't have. We are working with a number of brands to advocate for this through the circular economy accelerators.
We've seen a number of states that are considering legislation on EPR. There's been some interest in Congress on how they could look at this in the longer range. We're trying to help shape that to have a well-designed system, but that will take time and it's not going to happen overnight. I think there's some real interest in states like California and New York, Washington, Connecticut, and others have been really looking at this for a while and I think they are probably closest to that.
I think if you look at the number of companies, not just Unilever, but across the consumer packaged goods industry that have made commitments under the Ellen MacArthur Foundation – there's going to need to be a larger scale commitment from these brands and companies to help improve the recycling infrastructure to really transform it to help meet these goals in the long run.
Waste360: How much did today's consumer play in this? Are they more vocal than they used to be?
Langan: Absolutely. I think there's a lot more awareness now more than ever around plastics, the environment and the consumption of plastics, and connecting issues around climate. I think the consumers are much more aware.
We hear it from consumers, retailers hear from consumers – it’s a different age than it was when I started my career. Consumers are looking for companies that have options that are recyclable for them, that have other options besides plastic, so there's a number of things to consider, but this is not all just an anti-plastics thing.
I think there is a role for plastic where it has a lot of benefits and functionality. For example, some of our products are used in the shower and certainly there are some safety aspects of the packaging that had to be considered. It's not anti-plastic, but I think they are looking for us to make sure that it's better plastic where we can, that we're using recycled material, that we're not over-packaging and using wasteful plastics. There are a number of considerations that I think consumers are more aware of today.
Waste360: How will you market this and share this good news?
Langan: We've certainly been talking about our commitments overall. We have just recently announced the Unilever Compass. This is the follow-up to the Unilever Sustainable Living Plan, which was a 10-year plan that ended in 2020. In fact, just last week we made an announcement around what we call the Unilever Compass. That is our business strategy with sustainability embedded in it.
We'll be talking more about the Compass and our commitments toward sustainability. This is an opportunity for our brands to tell the story of how we're taking responsibility for our packaging and plastics, and can share that through different avenues with our brands and their shoppers.
Croke: This is what I love about this commitment and some of the other announcements that Unilever has made. They're starting to really drive toward the execution of their goals. It’s important for companies to lead and show progress so that others see that they’re able to do the same and really move the narrative from what we want to do to what we are doing.
Waste360: Bridget, on your end, did you want to add anything else about what you hope that this investment can do for the supply chain overall and your work there?
Croke: Yes, our goal is no less than totally changing the packaging supply chains, and changing the economics of them. These are not small goals, but the investment will directly help us make acquisitions and start to consolidate companies across the recycling supply chain, and also create some vertical integration that will hopefully improve the cost structure of keeping materials in the packaging supply chain.
Having the strategic investors at the table is critical on the market side. It's critical to drive that signal to other investors and policymakers. Hopefully, for the whole recycling and waste management industry, this shows that everyone is moving forward in a really aggressive way, the stakes are higher, the actions are stronger, and everyone is going to need to be more innovative to keep up.
We also have our Venture Fund that's investing in earlier stage innovation and infrastructure companies that we own, and/or invest in can utilize like AMP Robotics and others that help reduce contamination on the front end, improve the process, and improve the economics of the system.
The intention is to have the ecosystem of investment types that all play together and hopefully, serve the end markets and corporate partners that we work with, but also that whole value chain and the recyclers as well.
Waste360: Tom, is there anything else you want to add?
Langan: As Bridget was saying, we're showing that we're acting to deliver on the commitment we made. We made a lot of these goals and commitments around our Waste-free World back in 2019 and some of the Ellen MacArthur ones in 2017. This is really our action behind the commitment to show that we're going to deliver on it.
If you take the estimated recovery benefits that we will get from this investment, and our use of PCR extensively across our brands like Hellmann's, Dove and others that are using 100% recycled plastic bottles, we're about 50% PCR use across our footprint. When you look at it like that, we're in a really good position to deliver on our commitment to collect and process more plastics than we sell. That really underpins the announcement and I am really excited about the partnership with Closed Loop to help deliver this.
Croke: The procurement team at Unilever has been really open and innovative, I've been super impressed with them. They're willing to get outside of the box to be able to solve this challenge.
Waste360: That is fantastic to hear. That is what it takes, right? It takes a lot of open minds and solution-oriented thinking.