Emerald launches investment fund to drive packaging value chain’s circular transition

19 Apr 2022 --- Emerald Technology Ventures is introducing a fund for environmentally sustainable packaging in one of the first venture-backed investment vehicles targeting the full packaging lifecycle. Industrial and consumer goods companies Beiersdorf, Chevron, Henkel and WM will join the fund as founding limited partners.

The industrial technology venture capital company says the fund aims to catalyze leaps in advanced materials and industrial technologies that will benefit the planet and earn significant returns. It notes that the global packaging sector is poised for rapid growth amid a major push to reduce waste and greenhouse gas emissions.

In March, UN member states unanimously agreed to develop a legally binding treaty to end plastic pollution. Significantly, the treaty will address the entire lifecycle of plastics from production to disposal.

“The fund targets packaging startups from the entire value circle, from raw materials, converters, FMCG players, retail, waste collection and management, as well as circularization to provide raw materials for a ‘next pass’ around the packaging circular economy. We support the open innovation strategies of our limited partners by reviewing startups from proof-of-concept to pre-IPO,” Neil The fund is one of the first venture-backed investment vehicles targeting the full packaging lifecycle.Cameron, partner at Emerald and the fund’s co-lead, tells PackagingInsights.

“Differences in end-of-life recircularization infrastructure can limit the addressable market for packaging technologies and may exclude some from our ‘wheelhouse.’ However, we believe that working closely with our strategic industrial limited partners around the value circle will drive innovative solutions to these kinds of challenges.”

“In packaging, the value of a broad spectrum of engagement is critical because the value circle is complex – there are significant upstream and downstream dependencies. The opportunity to have real impact via collaborative engagement among corporate partners and with startups is significant. Traditional plastics offer effective and often inexpensive packaging solutions. We are interested in technologies that provide more [environmentally] sustainable outcomes for these inputs.”

Circular investments
Leveraging its two-decade track record of spurring transformation among more than 50 global corporate partners, Emerald will seek investments in sectors across all stages of the circular economy ranging from raw materials to plastics recycling. The fund will target investments in the following six categories:

Low footprint feedstocks
Functional and smart materials
Design for reuse and recycle
Collection, sorting, cleaning and recycling technologies
Digital and connected solutions
New business models (for example, packaging as a service)

The fund will sit alongside Emerald’s existing vehicles, targeting energy, water and industrial innovation, pillars of Emerald’s “open innovation” approach that connects startups with established companies amid the shift toward an environmentally sustainable future.

The fund aims to invest in early-stage and fast-growing startups worldwide, with an allocation for a select number of seed investments. Like other Emerald funds, investors will be able to join at their discretion.

“There is a rich pipeline of top-tier corporate partners poised to join us and startup entrepreneurs around us, adding further depth and sophistication to the family,” says Cameron.

Progress reports
The multi-disciplinary team behind the fund will regularly measure and report on its portfolio companies’ efforts to reduce both greenhouse gas emissions and waste – a key component of the fund’s strength. As Emerald’s recent inclusion into the Ellen MacArthur Foundation New Plastics Economy Global Commitment signifies, achieving quantifiable impact is “a major plank of Emerald’s ambition.”

“The fund is a recognition that the packaging industry plays an increasingly proactive role in the shift toward a circular, low-carbon economy,” says Emerald managing partner Gina Domanig. “As we reimagine the future of packaging, we’re excited to join with giants of the global industrial landscape in a mission to supercharge the technologies that will make that transformation a success.”The fund will regularly report on company efforts to reduce greenhouse gas emissions and waste.

“As part of our corporate transformation toward [environmental] sustainability, the packaging of our products plays a central role,” explains Michael Becker, head of global packaging R&D at Beiersdorf. “As a partner of Emerald, we aim to collaborate with dedicated startups to identify and implement new climate-friendly packaging technologies.”

“Emerald’s sustainable packaging fund has the potential to drive the wider adoption of a lower carbon circular economy,” says Jim Gable, vice president of innovation and president of Technology Ventures for Chevron. “It aligns well with our Future Energy Fund, which focuses on industrial decarbonization, emerging mobility, energy decentralization and the growing circular economy.”

“Packaging is among our core businesses at Henkel and [environmental] sustainability has been an integral part of our strategy for decades,” adds Paolo Bavaj, head of corporate venturing at Henkel Adhesive Technologies. “Over the course of our partnership with Emerald, we have become familiar with their skilled and diversified team of experts. We are convinced that they are a strong partner who can help us gain access to startups in a broad variety of fields, from material and technology innovation to recycling improvement.”

According to Innova Market Insights, 42% of global consumers believe FMCG companies can be effective in solving the global plastic pollution crisis. Meanwhile, 25% believe supermarkets and retailers are crucial to this aim.

By Joshua Poole