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John: Welcome to another edition of the impact podcast. This is a very special edition of the impact podcast. We have got my longtime friend with us. He is the founder and CEO of the Closed Loop Partners. Welcome back to impact Ron Gonen.

Ron Gonen: Hey, John, great to be speaking with you again, and thank you for having me on.

John: Hey, you know, Ron you are a very special person in my life because when I started this podcast thirteen years ago when it was just really a radio show back then before podcast became a thing, I did not have a lot of people that wanted to come on and I actually called you and you agreed you were my first guest ever and so having you back on is always a special event for me and I am very grateful to you for all of you have done for me over, I do not know, fifteen years of friendship, maybe it is sixteen years of friendship now. You have both been inspirational but also aspirational and so it is just always a great great event to have you back on the Impact podcast.

Ron: John, thank you for saying that and I could describe you the same way.

John: Well, thanks. And you know today, we are going to be talking about the Waste-Free World, your brand new book that is coming out. It is already available on amazon.com, Barnes & Noble, and other great book stores, but before we get into that, I want you to share with our listeners, our viewers, and our readers who have not met you yet or have not listened to one of our past podcast a little bit about the Ron Gonen Journey.

Ron: Sure, so my journey is one that has always been centered on this intersection between maximizing sustainability and maximizing business success. I have always believed that those things are synonymous with each other and I came to that realization very early on in life through a fortunate opportunity where I grew up with a single mom and had to get a job when I was really coming out of middle school going into high school and my first job was working for a family kind of doing everything and anything around their house. I babysat their kids. I fix the fence. I mowed the lawn and the dad was one of the first green architects in America, someone named Paul Macht and he has an Architecture Firm called Macht Architects, and he started speaking to me in the late 80s and early 90s when I was a teenager about sustainable business practices, what we call today circular economy Green Building and it just made total sense to me. I was actually surprised listening to him that everyone did not build this way.

John: Right.

Ron: And that was my introduction to the world of sustainable business practices. Fast forward, coming out of college, I went to work in management consulting, first at Accenture and then at Deloitte and that was an important stepping stone in my career because it taught me about software. It taught me about technology development and business process, and then, although it was not specifically focused in the sustainability space, it gave me the necessary tools to be successful when I went off and focused on building my own businesses, and that is one thing that I would say to any of your listeners who are in high school or in college and have great aspirations to make a difference in the world, make sure that you also spend time just putting your head down and getting a good education and developing the tools and the skills that you need to match with your passion and aspiration to make a difference, but after about six or seven years at Andersen Consulting and Deloitte, I realized that I now had the skill set to go off and pursue my passion which was this intersection between maximizing sustainable business practices and profits and went back to business school at Columbia business school and developed my first company, which is a recycling company called Recycle Bank that I ran as the CEO until 2010 and then, after I exited recycle bank, I started a small Solar Company and then from there got a very unique opportunity which was to join the Bloomberg Administration in New York City as what was termed at the time the Deputy Commissioner for sanitation, Recycling, and sustainability but the core job description was to really reimagine and rebuild New York City Sanitation Department with a focus on sustainable business practices and eliminating landfill disposal costs. And after that experience, I went on to start Closed Loop Partners, which is what I am doing today and I have been doing since 2014.

John: I also do not want you to leave out that you have also become an educator along the way. Somewhere around 2010, you also started teaching at your alma mater, correct?

Ron: Yes, it was an interesting experience and opportunity for me, so when I got to Columbia business school in 2002 and people would ask me “what are you going to do when you graduate from Columbia business school, are you going to Investment Banking or you going into strategy Consulting?” I would say, “Well, actually, I am going to build a business that focuses on this intersection between maximizing profitability and sustainable business practices. That is what I view as the future of success in business” and people would literally say to me “that is commendable, but how do you plan to pay back your school loans with that as your career.” That is how bad attitude-

John: Wow

Ron: -you know, twenty years ago at some of the elite Business Schools. As it turns out Columbia business school invested in my first business, in my first year at Columbia-

John: Wow

Ron: -they gave me my first hundred thousand dollars, my first investor. I ended up returning about one and a half million to them from that investments though they were instrumental in helping me get my entrepreneurial career launched and hopefully, I was helpful to them and providing them a great return but then, fast forward to 2010 after I had my first exit, they invited me to come back to Columbia business school and build a course focused on entrepreneurship and social impact.

John: That is awesome and you still continue to teach there.

Ron: I took a leave from teaching two years ago.

John: Okay.

Ron: Because I started having children. I now have two young boys at home. And so my family first and then my firm gets a hundred and ten percent of my time currently, but the ten years I taught at Columbia were phenomenal and I plan to eventually go back.

John: What I love Ron is we have been friends so long now and we have been able to stay friends and work together and help each other along the way wherever we could, but one of my favorite memories of coming to visit you is when you started Closed Loop Partners, I went up probably two or three months into your original office and you want to talk about humble beginnings. I mean, you just had the most humble of beginnings in Closed Loop Partners, but had the biggest dreams, for our listeners and viewers out there, what you have become if not the most prolific but one of the most prolific investors in the ESG circular economy space and for our listeners who want to find your great website and your colleagues at Closed Loop Partners, you go to closedlooppartners.com, closedlooppartners.com, explain what the mission and the vision were at Closed Loop Partners and how you evolve that great brand over the years?

Ron: The focus of Closed Loop Partners is to build the circular economy and find the circular economy as manufacturing without reliance on natural resource extraction to manufacture products and without a reliance on landfills to dispose of products and if you can manufacture using sustainable material science, advanced product design, innovative manufacturing systems, you can eliminate a lot of the cost of extracting natural resources and waste in your system, preserve our natural resources and environment, and maximize margins, so that is the core focus of Closed Loop Partners and our investment thesis is to find companies that are building out these types of systems. The way we-

John: I [inaudible] to interrupt you, you have an amazing track record there though. Just share with our listeners some of the great brands that have invested in your fund there.

Ron: Sure. So our investors include the world’s largest retailers and consumer goods companies. On the retail side, our investors include Walmart, Amazon, and Starbucks.

John: Wow

Ron: On the consumer product side, we have Unilever, PNG, Nestle, Colgate, Palmolive, J and J, 3M. We have the five largest beverage companies including Coke and PepsiCo. One of the world’s largest technology companies including Microsoft is all investors in our company.

John: Wow. I mean that is as great a lineup as you can have because they believe in you and your vision which just goes again, your tremendous career, and what you have done and set out to do, but I interrupted, you were going to go on. So talk a little bit about how it has gone since you started?

Ron: Yes. So we started with that investment thesis and then built the firm out to be structured as an investment firm that has four asset classes.

John: Okay

Ron: Okay, a venture fund, a growth Equity Fund, a credit fund, and a PE fund and we also own an innovation center called the center for the circular economy and that structure enables us to look at the bottlenecks in the system, identify solutions, and then, apply the right form of capital to help that solution scale.

John: God it. We are going to come back to that later on, but again, for our listeners and viewers who want to find Ron and his colleagues at Closed Loop Partners go to www.closedlooppartners.com. Now, for the announcement of the day, your amazing new book the Waste-Free World: How the Circular Economy Will Take Less, Make More and Save the Planet. I mean, Ron, I have known you a long time and your Midas Touch is well known to me and to everybody else around you in your ecosystem, but I will tell you why and I shared this with you off the air. If there is ever a time to come out with a book title and such and on the subject matter that you are covering man you picked the perfect time. This is the time that all seems like when we started on this journey and circular economy and sustainability, we are a little bit early, frankly speaking, but I will tell you your book is right on time because it seems like all the stars have aligned.

Ron: You know, I think preparations and patience is an enormous part of success in any field and so I think that the time that you and I have spent over the past ten or fifteen years in this space-

John: Yes

Ron: -with preparation and patients sometimes I get feedback or comments now that the circular economy and sustainability and ESG are becoming more central to the way we do business. I will get feedback or comments like “that idea you just had or that thing you just said is so timely, so on point, how did you come up with that so quickly?” And I will say “I actually came up with that fifteen years ago, but nobody was listening at that time and I just stayed patient and I refined it” and I say-

John: Right

Ron: -patient and I refined it and now we are here and it is resonating and that has been a big part of this journey is just back to your comment about visiting our first office and how that [inaudible]

John: I will never forget that, never. I will forget it.

Ron: And you know, we tried to be as lean as possible and as focused as possible and as patient as possible and determined as possible and things are now starting to be responsive to our investment thesis and how we view the world moving forward.

John: When did you have the Epiphany or the real hankering to say I want to write this book and I need to get this out?

Ron: It is a funny story. The credit goes to a whole bunch of other people that do not include me. So Alec Baldwin, the actor, has a podcast.

John: Right.

Ron: I will give him a little plug because he has a lot of responsibility for this book. It is a podcast called Here is the thing.

John: I love the podcast.

Ron: Yes, okay

John: I am a big fan.

Ron: So I am a big fan of the podcast too, so I get a call one day and it is from the producer of the podcast and says, “I am the producer of Alec Baldwin’s podcast. Here is the thing.” I said, “Oh great. I am a big fan” and he said, “well, Alec wants to do a show on Waste and Recycling and you have been recommended as the person that he should have on the show,” and part of me is thinking is one of my friends playing a prank me. Pardon me [inaudible] “Hey, this is a great way to-

John: Right

Ron: -get the message out.” So I went on to Alec Baldwin’s podcast and you know, we had a great conversation for an hour about the world of waste and recycling, and a couple of days later, I get an email from a woman who says “I am an accomplished book agent, here is my track record and my bio, my husband and I just listened to you on this podcast, you have a book here. Would you be interested in writing a book?” And I said, “Well if I could get a book contract from an established publisher that I knew could market it and you could help me find a great researcher who could help me write the book, I would be interested.” And so I will give her a plug, her name is Emma Perry[?]. She went out and promoted the idea behind the book in Penguin Random House, offered me a contract and Emma found me a great researcher and then, I went off and wrote the book, but in order for me to get to that point of writing the book, there had to be this confluence of events and other people and so that is the story behind how the book came about.

John: And what year was this approximately?

Ron: 2017, I think I was on the podcast and it took a while to write the book, part of it is it takes a while to write a book.

John: Right

Ron: Part of it is I am the CEO of a growing firm. Part of it is I am a dad to two young boys, so you [inaudible] together.

John: And a husband, and a husband, and a husband

Ron: And a husband, and has a very supportive wife who says, “you can go ahead and write this book.” And so there is a confluence of people and events that had to come together to enable me to write this book and the timing is really good for when it is coming out.

John: And like everything else you do, you take it very seriously. I am just going to show our listeners and our viewers out there, this is the book. You were kind enough to send me a pre, you know advanced copy, so I printed it off and read it of course, but this is a big book. So you just did not take that responsibility lightly like you never do and it is really a great book Ron and it is going to be massively successful because you cover so many important topics that affect all of us. There is nobody that is listening or watching or reading this podcast today that is not affected by the topics that you go through in the book and I want to start with the whole issue of linear versus circular economy, and why is it paramount that we make the move and make the move posthaste to a circular economy behavioral DNA and culture and get away from this linear waste economy that we all grew up within, we know to be true here in America today.

Ron: There are a number of advantages to transitioning from a linear to a circular economy. I will touch on one key reason-

John: Go

Ron: -and that key reason is because the system as it exists today is gamed for the advantage of the extractive industry so oil mining timber and the landfill industries. The system is not set up to maximize transparency and be for the benefit of consumers and taxpayers and society. We have been cheated for the last seventy-five years by being marketed to that you need more stuff and once you finish with that stuff, you throw it out and you go buy more stuff and the problem with that system is every time you are buying something, you are paying a fee for the natural resource extraction for the material that is being used to make that product and then your tax dollars being used to pay for the disposal of that in landfill and that cost has been hidden and tucked away so that consumers and taxpayers would not recognize that the extractive industries and the landfill industries were getting rich on the back of the consumer and the taxpayer and that is one of the main reasons why we should transition away. Now, you will notice I have not said anything about climate change or environment or sustainability in that explanation.

John: Right.

Ron: There are many reasons that I can point to from a sustainability and climate change perspective as to why we should transition, but if that is not of interest to you, you should want to transition from a linear economy solely because you are going to significantly reduce cost in your life.

John: Got it, got it. You know you touch on many important topics in the book. Greengrocers, the sustainable closet, go into some of these and then I love the one I have got one word for you Benjamin, and of course, we know, you know, being at my age at least we all know the graduate and Mrs. Robinson, I mean the issue of plastics is massive. Share some of your thoughts on these critical topics of apparel recycling, plastic, and getting it out of our oceans and all of the wrong places that it is and how you attacked it in your great book.

Ron: So let us follow that train of thought that I had earlier in the conversation about this linear system-

John: Yes

Ron: -is gamed to be for the benefit of extractive Industries and landfill Industries.

John: Right

Ron: During the past decade, there has been this emergence in the fashion apparel industry of what is called Fast fashion-

John: Okay.

Ron: -which is I will make a bunch of cheap T-shirts, a bunch of cheap pants, people can buy a t-shirt or pair of pants for four dollars, five dollars, six dollars, and use it a few times. It is of low quality, so then they can get rid of it, and then, they buy the next product.

John: Right.

Ron: The result is that the amount of apparel in our waste stream has gone from one to two percent to now eight, nine, ten percent.

John: Wow

Ron: One reaction could be [inaudible], it is terrible that there is more waste. Another reaction could be “Well, who is paying for all of that apparel to go to landfill?” We the taxpayers are and what that means is that we have created a system that permits companies to push the cost of managing their product off to the public, so whether or not you are I or any of your listeners where those fast fashion products, our tax dollars are used to subsidize the disposal of them in a landfill.

John: Wow

Ron: That cost should be the responsibility of the producer. I am a big believer of you want to be in the fast fashion business. It is America. It is capitalism. It is a free market, go for it. I am just not willing to pay for the disposal of your product in a landfill. You will be responsible for that. The challenge for those companies is if they have to be responsible for the disposal of their product and landfill their business model does not work anymore.

John: Right

Ron: And that is what I mean by the system is being gamed were a lot of companies and industries have been able to externalize costs that they should be responsible for on to the public. We are a society that promotes ourselves as capitalists while behind the scenes you have got a couple of industries that are collecting our tax dollars and then bragging about how they are successful because they are the titans of capitalism, not so and that trickery and that game have to end.

John: Talk a little bit about how your day job, running Closed Loop Partners in the intersection of the circular economy. The opportunities that are coming across your desk now as opposed to when you started Closed Loop and the acceleration of those opportunities and how does that look right now and what do you foresee in the months and years ahead here?

Ron: Yes. So when we got started, we oftentimes found Innovative Technologies and solutions that nobody else was investing in and they are usually be one in the space.

John: Right, right.

Ron: Now, what we are seeing is a proliferation of entrepreneurs and Solutions in the space and we could talk about the electronic waste base which you know well, which is five, ten, fifteen years ago in the United States. There are only a handful of people working on electronic waste.

John: Right.

Ron: Now, at every step in the chain, there are people working on the collection, sortation, mail-back, some people are doing battery recycling, some people are just doing smartphones, some people are doing every kind of E-Waste, some people are saying I just do commercial, some people are doing saying I wipe your data and then I recycle it and so we are seeing this proliferation of entrepreneurs get into the space because fortunately, people are recognizing that hey there is money to be made here.

John: Right, right, right, right. You know you were so kind enough years ago to introduce me to one of what was then one of your portfolio companies still is in a massive success amp robotics, Matanya Horowitz, and thanks to you, we became the first company in our space to leverage his great technology and Matanya became a great friend of ours. Talk a little bit about some of your portfolio companies and I know it is like your children now, I mean because you have grown this amazing portfolio, you know, who are some of your favorites and you see as creating breakthrough technologies that can scale and really impact the whole world?

Ron: Well, we love all of our portfolio companies even like our children.

John: Like our children.

Ron: Because I am talking about one portfolio company, our CEO does not mean that I love anybody-

John: Right

Ron: And [inaudible].

John: Okay, [inaudible]

Ron: But a couple that I will touch on that we are super excited about is we have a portfolio company called home biogas, which is a company headquartered in Israel that has developed the first household size anaerobic digester, so anaerobic digesters convert organic matters that could be your food waste, could be your biological waste into gas. They have small enzymes in anaerobic digesters that eat the organic matter and release gas and you are capturing that gas.

John: Right

Ron: Large-scale anaerobic digesters have been around for years, most large municipalities of anaerobic digesters at their wastewater treatment facilities, more [inaudible] building large-scale digester for food waste. No one has been able to figure out how to bring it down to the household level and that is important for a number of reasons. One that I will just mention is that in emerging markets you oftentimes do not have the road infrastructure to actually drive what we think of as a waste or sanitation vehicle down the time and the capital required to build large-scale digesters or advanced landfills takes years and billions of dollars, and so similar to what happened in the cell phone or the Telecom world where the cell phone leapfrogged static telecom infrastructure. We think that home biogas can leapfrog traditional sanitation infrastructure by literally going directly into the home and saying you can put all of your food waste even your biological waste into this appliance. It will convert it to gas that you can then cook off of. So that is an example of a technology and a company that we think is massively catalytic and solves a number of issues around the world from sanitation to pollution issues to clean energy to socio-economic issues in a lot of regions, so that is one that we are excited about. Another company I will mention is a company called MOR, M-O-R, it is a company that came out of MIT and Tufts[?] and MOR has created an odorless and tasteless Silk protein that gets sprayed on fruits vegetable, and meat that creates an oxidization barrier to eliminate spoilage. With that type of Technology, you can now eliminate all of the plastic packaging and wrapping that goes into food preservation. And that is one that we did with MIT invested, Bill Gates invested, and we invested.

John: So when does that get commercialized? When do we see that being used in the whole foods in our great supermarkets, we all shopping?

Ron: You will see MOR commercialized in the next twelve to twenty-four months.

John: Wow

Ron: They already passed the pilot stage and home biogas is already being sold in over fifty countries if thousands of systems out there on the market.

John: When you buy it for your house, what is the ROI on something like that on the home biogas?

Ron: Oh, it is very quick. So a home biogas system only costs about five hundred dollars

John: What? I mean, that is less, so every home in America and around the world should be one day buying this system.

Ron: Yes.

John: Unbelievable.

Ron: If you think about the cost, I mean if you think about for the United States when a municipality rolls out a curbside organics program and wants to take your food waste to a compost [inaudible] anaerobic digester or even if they are still kicking up your food waste in the garbage, what is required is a very expensive truck with a lot of fuel, a lot of maintenance on the hydraulics, a driver, it got to drive around and pick up the stuff, drive it to either a landfill or a compost [inaudible] anaerobic digester. If a municipality can strip out all of that cost and just say “hey, John, here is this appliance for your home it is going to take care of your food waste for you and by the way create gas for cooking that takes care of about forty to fifty percent of the waste that an average American Home generates.”

John: For our listeners, viewers, and readers who just joined us. We have got Ron Gonen. He is the founder and CEO of Closed Loop Partners. More importantly for today, he is also the author of the Waste-Free World. You can buy it on Amazon, Barnes & Noble, and other great book stores, please do buy and read it. Ron you just mentioned MOR and the plastic issue, are we going to be able to tackle this critical issue that the media covers all the time and clean up our oceans or rivers or lakes, our environment from this horrific problem that has now made its way back even through our water systems across America and across the world, our drinking water systems, what is the future of cleaning up this plastic problem?

Ron: We are going to be able to solve it, but the problem is so expansive and severe. In the best-case scenario, it will probably take us a decade to solve it.

John: Okay

Ron: One thing that is important for your readers to understand about how severe and pollutive[?] the issue is that most people do not realize that plastic is virgin plastic namely comes from petroleum.

John: Right

Ron: When you get plastic in the water system that you are digesting or in fish that you are eating that is exactly the same as digesting gasoline. It is exactly the same. So that just gives your listeners a sense of how dangerous to our health this is and that gets again back to my comment about externalizing cost is you have lots of people around the world who get sick because of the amount of plastic that we digest and it is our Healthcare System that has to deal with that.

John: The aftermath.

Ron: That is not how capitalism should work out. An even more acute example of that and this is one of the reasons why the plastic issue I think will get solved is you are now seeing the plastics industry run up against another powerful industry. So it is no longer the Plastics industry against environmentalists. Now, you have got the plastics industry running up against let us say the hotel and tourism industry where somebody builds a billion-dollar Resort in Southeast Asia and people pay top dollar to come and stay at that Resort, and all of a sudden you got plastic rolling up on the beach. You got your customers coming to you and saying this is not what I paid for I am not coming back and I am going to give you a review that you got plastic rolling up on the beach the owner of this billion-dollar resort is thinking themselves, “but you do not understand customer, I am not at fault for that. I did not put the plastic there. I do not want the plastic there.”

John: Right

Ron: See the tourism industry started to say this needs to get resolved because it is eating in my profit. The same thing with the fish industry, if you get people who say, “you know what I am not going to eat fish anymore because of all the plastic that is in it, or maybe my family is just going to eat one piece of fishless a week because of all the plastic issue” that has huge ramifications for the fish industry, so you can see the fish industry also say we got to keep our oceans clean because that is a direct correlation to my sales and so you are seeing a confluence of self-interested parties say “we got to get this done” and that is oftentimes how-

John: How change happens.

Ron: -how change happens, so it will get solved but it is a severe and massive problem that in the best case scenario it is going to take us about a decade.

John: When people read your new book the Waste-Free World, if you boil it down, Ron, what is their take away? If I am on an elevator and someone says, how is that new book? You just read the Waste-Free World, what do you want my takeaway to be so I am able to share that message with others?

Ron: There is an economic system called the circular economy that will drive a lot more prosperity if we can eliminate the linear system we have been operating under and transition to a circular economy. It is about prosperity and how we achieve that prosperity and we do that by developing circular business models.

John: It seems though, you know given the political times we live in with the Biden presidency and the interest level both from Asia and Europe that the stars are aligned for this to happen are the next four years make it or break it in terms of us breaking through and making a permanent breakthrough in that model?

Ron: I do not know that I would use the term Make It or Break It because I think that there is a number of influential players.

John: Okay.

Ron: I would say is we have a generational opportunity-

John: Okay

Ron: -right now because you have got the Biden administration that is very focused on this. You have got the EU that is very focused on this.

John: Right

Ron: You have got a number of investors that are very focused on this.

John: Right.

Ron: Consumers are focused on it. You have got local Regulators focused on it. So you have got this confluence of interested parties all ready right now to work on it. It is a generational opportunity that if we do not take it, it is not to say it make or break, it is to say that it would be a lot more challenging and the cost we will end up incurring would be massive.

John: Ron, you have done so much over the years and now with Closed Loop Partners, what is your vision in the years ahead with Closed Loop? How big can Closed Loop be? How big can that portfolio grow? How big can your funds grow? We already have the who is who of what is what in terms of institutional and corporate investors? What is the future of Closed Loop double and tripling in the years ahead five times, ten times, what is going on?

Ron: Yes. That is a good question. We view the transition to a circular economy as the biggest transition of capital from one system to another since the Industrial Revolution. We are talking about hundreds of billions of dollars that will transition from production using virgin and raw material to production systems that are using recycled material or product design software that eliminates waste. So from an opportunity standpoint as a firm, we would like to be the leader or one of the leaders in that multi-hundred-billion-dollar transition. That is the aspiration. On a day-to-day basis, we just focus on delivering results for our investors the way we told them we would for that particular fund with a belief that if we do a good job for this set of investors on this fund it will lead to them becoming larger investors in our next fund and more investors joining us and slowly but surely will continue to build value, but we can never take our eye off of what do we need to get done today?

John: And with that, I am going to leave it for today and for our listeners and viewers out there to find Ron and his colleagues, please go to www.closedlooppartners.com to buy his new book, the Waste-Free World which I have read and I love and I think is really important for everybody to read right now given the times that we live in. Please go to amazon.com, Barnes & Noble, or other fine bookstores. Ron Gonen you are not only a great friend, but you are an inspiration throughout my career. I just want to say thank you for all you do to make the world a better place. The world will be a lot worse off without you. I wish we have fifty of you but thank God for you.

Ron: Thank you John and great to be on your show again and look forward to continuing to build value together in the future.

John: This edition of the Impact podcast is brought to you by trajectory Energy Partners. Trajectory Energy Partners brings together landowners electricity users and communities to develop solar energy projects with strong local support. For more information on how trajectory is leading the solar revolution, please visit trajectoryenergy.com.