Why the world’s biggest companies are investing in recycling

Over the past few months, nine companies have invested between $5 million and $10 million each into the fund: 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. More investors are expected to be announced in the next two months.

From the launch of the Closed Loop Fund, a budding $100 million effort by a group of large companies to invest in recycling infrastructure and, in the process, put more recycled materials into manufacturing supply chains. Along the way, it aims to give a boost to recycling in the United States at a time when rates are leveling off but the demand for recycled feedstocks is picking up.

This is no philanthropic venture. Despite impressive gains in collecting recycled materials in the U.S. — recycling rates of municipal solid waste have more than doubled since 1990, from 16 percent to 34.5 percent in 2012, according to the most recent U.S. Environmental Protection Agency figures — a lot of valuable materials continue to be wasted. After steep increases in the early 1990’s, recycling rates have slowed or leveled off in recent years. Moreover, those EPA rates are skewed by a handful of materials — notably, automotive batteries and tires, of which 96 percent and 44 percent are recycled, respectively, largely due to state regulations. That means the 34.5 percent overall figure overstates the recycling rates for aluminum, glass and plastic.

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