Sustainability In Your Ear Transcript: Turning Waste Into New Products And Packaging With Overlay Capital's Elizabeth Blankenship-Singh

Welcome to Season Six of Sustainability In Your Ear.

Before we jump into the interview, an update from the banks of Elk Creek: We haven’t seen Sputnik, our ailing cervid neighbor since Christmas Day, when we suspected he was on his literal last legs.

As I related last week, my goal when moving here was to develop a deep understanding of our place, a holler where the land rises in all directions from my home in the Southern Cascades, through which Elk Creek flows to meet the Rogue River. We’ve been here for two years, and what I know is that I have a lot to learn. I started by inventorying the rocks, plants, trees, animals, and a variety of features that, I hope, will serve to orient me, to focus my attention where it will make the biggest difference to my understanding. This winter, the water level in the creek has remained very low—the imediate area has received far less than its typical rainfall, which points to a dry, unnerving wildfire season ahead.

So, what do I know about this place at this point? I have lot of lists, and the barest scraps of insight; a sliver of comprehension of the vastness we occupy, not a thorough understanding. And it is all the more so with my human neighbors, with whom we’ve established a few friendshops.

Jackson County, and its governmental seat, Medford, along with its surrounding communities, is a collection of about 224,000 people. It would be easy, and is too often the case in media and conversation, to characterize it as a rural, backward place. But living here, in a county that votes consistently down the middle, roughly 51-49% in recent elections, you can see there is no easy categorization to be made.

Yet, we love to jump to conclusions about one another. My city friends ask about the backwardness of my neighbors sometimes; my local neighbors speak of cities as anathema, the source of many ills. It would be easy to fall into those blunt characterizations, but I’d rather not, because neither of these perspectives is informed by experience. Now is not a time to simplify, but to dig deeper, as my lists of rocks, animals, and plants has made me recognize.

The two different worlds we Americans like to think we live in—urban and rural—is a gross oversimpification that I recognized this weekend when we wandered down the Jackson County Expo on Friday night to watch the first of two evenings of championship bullriding competition, where the crowd solemnly and enthusiastically recited the Pledge of Allegiance, prayed, and saluted the National Anthem as other Americans protested the shooting by ICE in Minneapolis of Renee Good. The contrast was sharp, though not intended nor called out; it represents the different focal lengths of public opinion rather than that the frontlines of a national conflict run through local events.

Americans’ perceptions of one another are bent by the need in any medium to be brief, to get to the point, and too often, that it to reduce others to the status of the enemy or an intractable opposition rather than reflecting on the breadth of this nation and its many local concerns. In the midst of all the media available to us these days, it’s very easy to find, fall into, and defend one perspective instead of exploring many views to get a sense of our reality.

Bullriding is great, athletic fun to watch, and it is an elaborate production involving bull, rider, coaches, wranglers, and clowns (whose jobs are dead serious). It moves fast, one ride after the other, and in this sequence the bull shows how much action can follow the end of a ride.

Click to see the bullriding video below if it isn’t visible in your email.

The local quality of the experience—the company that pumps our septic tank was a sponsor, along with a nearby tribal casino and our favorite farm supply store, instead of the remote global brands that advertise in major sports venues and programming. It drove home the particularly regional quality of micromedia that, when shared widely, can open new windows into our culture. Maybe, we can build bridges.

Listen to the interview while you read along.

Mitch Ratcliffe  0:00

Hello, good morning, good afternoon, or good evening, wherever you are on this beautiful planet of ours. Welcome to Sustainability In Your Ear. This is the podcast conversation about accelerating the transition to a sustainable, carbon-neutral society, and I'm your host, Mitch Ratcliffe. Thanks for joining the conversation today.

And welcome to 2026, a pivotal year on the road to a sustainable future. And today we're going to be talking about money, which, as they say, makes the world go around. But the question is whether we're going to use money to keep the world healthy and wise as well.

The circular economy runs on a simple premise: what we call waste is actually misallocated feedstock, the raw materials for the next generation of products and packaging. Circular economics have started to prove out this thesis. It's become expensive to be wasteful. Landfill tipping fees now exceed $60 per ton in major metropolitan areas. Virgin plastic prices are increasingly volatile, and domestic sourcing is reshaping supply chains.

According to research cited by the World Economic Forum and the United Nations Development Programme, the circular economy could unlock $4.5 trillion in new global value by 2030, and investors are racing to capture part of that.

Our guest today, Elizabeth Blankenship-Singh, is the Director of Innovation at Overlay Capital, an Atlanta-based alternative investment management firm whose new Waste and Materials Fund is investing in early-growth innovation companies developing next-generation materials and in later-stage recycling operations with established processing and recovery infrastructure. In other words, they're trying to make the infrastructure we have better.

Overlay's innovation portfolio offers a window into where smart money sees the materials transition heading. They've invested in, for example, Cruz Foam, which converts shrimp shell waste into compostable packaging foam, and Simplifyber, which has developed a 3D molding process that bypasses spinning, weaving, and sewing entirely to create biodegradable soft goods from a proprietary cellulose liquid.

They also have money in Terra CO2, a low-carbon cement investment which just closed a $124 million Series B round to scale its technology to reduce concrete, 8% of the global CO2 emissions annually.

Elizabeth joined Overlay after working at two early-stage climate-focused venture capital funds, and she holds an MBA with a concentration in innovation and sustainability. At Overlay, she leads venture and private equity investing across energy, waste, and materials, applying deep materials lenses to opportunities spanning infrastructure, recycling, and next-generation industrial systems.

So we'll talk today with Elizabeth about how Overlay evaluates whether a circular technology is ready for commercial deployment or still just a promising pilot, what connects investments across packaging, foam, textiles, and cement, and how the fund competes for deals against established circular economy investors like Closed Loop Partners.

You can learn more about Overlay Capital at overlaycapital.com—Overlay Capital is all one word, no space, no dash—overlaycapital.com.

Can the idea that waste is feedstock deliver competitive returns and measurable climate impact? Let's find out right after this brief commercial break.

[COMMERCIAL BREAK]

Welcome to the show, Elizabeth. How you doing today?

Elizabeth Blankenship-Singh  3:44

I'm good, Mitch. Thank you for having me.

Mitch Ratcliffe  3:47

Oh, thank you for joining us. I want to start off with a kind of an obviously dumb question, but what, from your perspective, is waste, in a nutshell?

Elizabeth Blankenship-Singh  3:57

I'm going to answer, actually, that I think waste is not a disposal problem. It's actually just a material problem. So what we think of as trash is often just materials that have been pulled out of the economy, kind of pulled out of the loop.

So most of the materials that we produce and that we use every day could be recycled or reused. And so waste becomes not like a problem where we have to find space, and we throw it in the ground, and we figure out how to cover it up. It becomes an opportunity.

Mitch Ratcliffe  4:28

When you're looking at the market, or you're looking around your home, and you recognize something that we currently waste, how do you start to think about it as an investment?

Elizabeth Blankenship-Singh  4:37

So we're interested in a couple different specific buckets, which are really the materials that we use the most often. I think there are also two different buckets of materials in general. So maybe let me start there at the high level, which is that there are the materials which are very easy to recycle and reuse. That would be aluminum and metals, cellulose, usually PLAs, most plastics—like hard plastics that you would get on like a detergent bottle or a Coke bottle.

There's also then the second bucket, the materials which are harder to reuse or recycle. And so that's a conversation about maybe finding replacements or new recovery methods.

So I think I'll focus on the first bucket first, which is the easy to recycle or recover. We're really interested in metals, as I mentioned, infinitely recyclable aluminum. But also incredibly important to our economy, incredibly important to how we see technology advancing in the future, and sort of future society's needs.

The second bucket would be construction and demolition materials. So everything we need to be able to build—that goes from cement to steel to wood—it's the number one material by volume that goes to landfills every year, even though most of it is actually reusable or recyclable in some way.

Third would be electronic waste, e-waste, which does go back to some metals, of course, but also critical minerals and rare earths, which is something that we haven't necessarily figured out a perfectly reliable recovery or recycling chain for yet domestically, but is incredibly important for us going forward, not just the U.S., but globally.

And then the last would be textiles. It's also an enormous amount of waste that's being created each year, and is actually recyclable and does have this technology in place, it just hasn't been scaled or adopted.

So those are the main buckets that we're looking at every day.

Mitch Ratcliffe  6:36

So when I hear that array of types of materials, some of those are obviously already being addressed by our curbside system. But do we need to expand that curbside system, or do we need to invest in a more complex network of services in order to capture all these different materials?

Elizabeth Blankenship-Singh  6:50

Effectively, I would actually say the most elegant solution is the simplest, which is that we really only need one bin from households. And in the future, we see the ability to have one bin—put your trash, your food, your metals, your plastics, everything. And it's because technology has advanced enough to be able to do better sortation and recovery than humans could ever do.

And so there are various startups, some of which we have invested in, and some which I'd love to talk about in more depth, but there are startups that have created AI-driven sortation systems, which are faster and more accurate, and look at the chemical composition of every single material. So it's actually easier for them to be able to properly sort than, you know, having the consumer do it at home, and it's not necessarily correct, because the problem is it's different every single city.

So like, I live in New York, but I'm in Atlanta today. I could recycle a milk carton at my house in New York very differently than here. So it's already a little bit complicated. Then there's also the contamination effect, where people inadvertently end up contaminating some of their recyclables because—it's because we're right now putting the onus on consumers, and it's difficult, and it's not clear what should go where, when, and what place.

It actually would be easier to move to a very simple one-bin system and rely upon technology instead of people.

Mitch Ratcliffe  8:20

That's a really interesting perspective. It's probably the most bold "we can go one way" that I've heard in a while. But I mean, you can imagine a lot of materials that we design that are not recyclable. Let's take a coffee pod—I used one this morning. You put it in the trash. It's got an organic substance in a metal; somehow has to be separated. Is there a separation technology play here as well?

Elizabeth Blankenship-Singh  8:46

There is. So I guess, for a coffee pod, specifically, that kind of goes into sort of the design of the material, which is that, like, you know, some brands do actually take them back, and they already do have separation technology that could be scaled.

There is also technology already in some of the MRFs—the material recovery facilities—around the country, which can do separation. So I know a facility in Chicago that has the separation machine for pre- and post-consumer waste and for foodstuffs. And many MRFs also have, like, liquid separation technology, so they have a waterway system which helps effectively create separation between the materials.

There are also multiple passes that you could do. So right now, in a lot of MRFs, when it's super manual, and people are having to pick the recyclables off the line, it really only goes through once or twice, because it's expensive, it's labor-intensive. It takes a long time.

When you do have a fully automated system, you can send it through multiple times, in which case, some things are naturally separated automatically. And so, because you can get more accurate and do it so many times, the coffee cup, for example, a coffee cup has a laminated paper cup, and then it also has the corrugated paper sleeve, and then it has a plastic top. Well, if you put it through the system twice, all those things would separate naturally. And so there's a little bit of that. And then there's also, yes, some separation technology involved.

Mitch Ratcliffe  10:13

Stepping back from the specifics, what about the quality of the market where we are today? You have a barbell strategy. Some of your investments are early-stage. Some are later stage. Do you see most of these technologies at one or the other end, spread evenly across the barbell? How would you describe our progress toward that vision

Elizabeth Blankenship-Singh  10:32

I think right now is a very interesting time. I would dare to say it's an inflection point in which a lot of the technology has advanced far enough to be ready for commercialization and scale, which is why we're trying to invest first in the innovation itself, so the technologies and the startups, and then second in the implementation.

So we're also investing in a lot of the platforms, more PE-style investments of the actual operators who are adopting the technology. And this is a really interesting time, because a lot of these startups have been in R&D pilot stages for 5–10 years, and there's an opportunity right now to start adopting this on the ground, like on the shop floor, and be able to see serious progress.

Mitch Ratcliffe  11:19

It's interesting. It reminds me of the conversation we're having about AI, where the chip manufacturers invest in the model builders, and the model builders give money back to the chip manufacturers. And it looks like a kind of a Ponzi scheme to some people, but what it really is is a systems investment.

And you're describing an environment where we're moving from point solutions within the technology ecosystem to thinking about the entire system. So, given that kind of background, what we've been talking about so far, what are the verticals you're most excited about?

Elizabeth Blankenship-Singh  11:53

Yeah, I think we're looking for a step change, not incremental improvements, which is really what you're speaking to. And I know that's possible, absolutely within waste infrastructure itself.

And if we're talking about both waste and materials, they kind of all have one similar bottleneck, which is sortation. So I'll use aluminum, maybe as an example, because aluminum is, I think, our second most used metal. The U.S. is the number one exporter of scrap aluminum and the number one importer of aluminum. And it's because we did not have domestic sortation ability.

So, an end-of-life vehicle, for example, when it gets shredded, it would get exported to be sorted, and then we'd have to re-buy back the inputs.

Well, there is now at least one technology, one startup, if not more, that are creating the ability to use AI and various technologies like X-ray to properly sort the alloys here domestically, which means you can have a facility near a Ford factory or near an automobile manufacturer in Detroit, and take the aluminum from the factory line, as well as any end-of-life vehicles, resort out all the alloys to a high purity level and be able to reuse the materials here.

That saves so much on the front end of the feedstock cost, but it also increases the margin, because, in general, the price of your raw material is less, and so it's a win-win-win for every person involved. So the manufacturer themselves is able to, one, not buy as much, because they're able to reuse some of their own materials, and then two, have a lower cost of goods. And then the recycler as well, who needs the sorter. So the recycler—it also is a win for them, because they have a domestic, cheaper option for sortation.

And so I think that's one example of a waste infrastructure play that's hitting sortation. We also have, of course, the sortation of household trash. I loved your conversation with the CEO of Glacier recently. I'm also very familiar with and close with the AMP team, which I think you mentioned as one of their competitors.

AMP is a really, really amazing technology, and they announced recently a partnership with SPSA, the southeastern municipality in the Hampton Roads area in southeastern Virginia, where they've closed a 20-year contract to be able to sort all of the trash from those four to five cities. And seeing a startup scale like that by using sortation as the selling point is really impressive, and it kind of unlocks all these other things. It's like a domino effect.

So if you kind of fix sortation, then you increase recycling, you reduce the amount of material going to your landfill, which extends your landfill life, and you just have win after win after win in your portfolio.

Mitch Ratcliffe  14:59

Your portfolio includes a variety of materials and process investments. What characteristics connect Cruz Foam, which makes bio-based packaging, Simplifyber, which is cellulose-based soft goods, and Terra CO2, a low-carbon cement company? Can you take us into the investment committee conversation about why those all fit together?

Elizabeth Blankenship-Singh  15:22

Sure, one piece is that they are critical materials for everyday life. They're things that we use abundantly and extensively. The second would be that they all have very available feedstocks. It's something that is achievable at full scale, globally. And then third is that they're all better, faster, cheaper, and more sustainable than the material or type of material that they're replacing.

So I'll speak kind of one by one, starting with Terra CO2, because cement and concrete are the second-most-used materials on Earth, only behind water. It's clear that, you know, there is the ability to make a massive impact by improving the materials that go into cement and concrete, and reducing the amount of CO2 that is naturally released, which is, I think, about 8% of greenhouse gases every year.

So Terra is really, really fascinating. They're based in Colorado. They are building their very first commercial facility right now in Texas, just below Fort Worth, Texas, and they are using a natural byproduct. So another thing that connects all these investments is that they're using waste or byproduct to make a primary material.

So Terra can use the rock that is a byproduct of the mining industry. They can also use just widely available rock. It's a silica-based rock that makes up about 80% of the Earth's crust. So in an industry like cement and concrete, where everything is hyper-local, they have a hyper-local solution that can work almost anywhere, which is a significantly lower carbon footprint and is also price competitive.

So that's one of the most important things, also that connects every investment—it is extremely price competitive to the incumbent.

Mitch Ratcliffe  17:10

How do you evaluate feedstock risk? This is a greenfield moment where we're looking at all these materials through a new lens, but you have to think about it both in terms of supply security, which is pretty easy when everybody's just starting to recognize the opportunity, but also in terms of future competition for those waste streams—for instance, the rock that you just mentioned. Are we at a point where there's plenty of room for investors and companies to play without running into one another or ultimately exhausting these supplies and undercutting the value of the investments?

Elizabeth Blankenship-Singh  17:45

Fortunately, with rock and cement, I think there's plenty to go around for everyone. It's such a largely used and abundantly available material. I think if we get into rare earths, maybe that's a different conversation.

But maybe to talk about Cruz Foam for a second. They use chitin. They use chitin to be able to make a Styrofoam alternative which uses absolutely no oil, which is the basis of current Styrofoam. And chitin is, I think, the second most common natural material behind cellulose on Earth. It's in any arthropod. It's in all crustaceans.

And so in terms of feedstock security, it's already available. It's already a byproduct of our food industry. So you can think of like the bag of shrimp that you buy from the freezer section. It's all been de-shelled. Cruz is taking those shells and turning them into the Styrofoam, which, when you order a new TV, your TV is protected with a layer of hard Styrofoam inside the box. It's the only way to get the electronics safely to you.

And so, in that regard, because we know it's so abundantly available anywhere and everywhere on the planet, it removes a little bit of the concern. I think having a scalable feedstock is probably the number one most important thing when you're making a new material or trying to make a competitive replacement material.

The same could be said for Simplifyber, which you mentioned. They use cellulose. So it's the number one most abundant, so it's right in front of chitin. It's in every tree, cotton plant, and so in that regard, it also has a protection in which it's abundantly available.

We also have, in particular, a cellulose problem, because paper is one of the things that we as, you know, modern society uses for everything. So you can think of it like an Amazon envelope. When you're ordering your purchase, it's right now, it's brown paper, right? And so we do have to have an outlet that matches the scale. So part of the equation is like, you know, what is the scale of the material right now, and then do you have a circular solution for that?

Another company that I've met with that's been on our radar, that kind of answers this in a different way, is called CRDC. And they take non-recyclable plastics and turn them into an aggregate for concrete. And they've done this really well. They've matched the scale—the amount of unrecyclable plastics that's available and environmental plastics. So they also take the plastics that are in waterways, oceans, and rivers.

The scale of that material can only be matched by something which is already abundantly being used at, you know, by the tonnage every day, which would be cement and concrete. And so they've really done an interesting job being able to pull these two things together to create a circular loop.

Mitch Ratcliffe  20:36

With what circular loop in mind and clear vision—after a great first half of this conversation, I need to take a quick commercial break, folks. We're going to be right back. Stay tuned.

[COMMERCIAL BREAK]

Welcome back to Sustainability In Your Ear. Now, let's get back to our conversation with Elizabeth Blankenship-Singh. She's Director of Innovation at Overlay Capital, a boutique investment firm that seeks to advance solutions in waste and materials.

Elizabeth, in our first part of the conversation, we talked about MRFs and how they sort and dispose of stuff, and landfills get filled up, and then we dig big new holes and fill that up, and so forth. But are we really missing the fact that all of our trash, everything at the curb, is raw material, and how do we start to rethink the economics of collection, processing, and reproduction, using new versions of old materials so that maybe our waste system supports itself and we don't pay fees anymore?

Elizabeth Blankenship-Singh  21:40

Absolutely. I mean, what we're throwing away is the biggest opportunity that we're all kind of missing right now. And so far, historically, within MRFs and municipalities, there's just been a mismatch of incentives. You haven't had great incentive alignment to foster better recycling practices, I might say.

So the municipality gives a contract to a MRF, to a processor, to be able to sort out the recyclables, and then that MRF is responsible for taking everything that wasn't recyclable to the landfill.

When you get to a landfill, you pay a tipping fee. However, it's not the MRF that's paying the tipping fee. It's actually the municipality. And any recyclables that the MRF is able to recover, there's usually a revenue share in terms of the selling of the commodities between the MRF and the municipality itself.

So the MRF gets the upside on any recyclables they're able to recover and sell. But, you know, within the last 6, 8, 10 years, commodity prices have been lower, and so that hasn't really outweighed the cost of using the labor to do better recovery and better recycling, pulling more out of the sortation line.

So, because the MRF doesn't see the downside of having to pay to send the stuff to the landfill, it's actually usually cheaper. And so, you know, if we're able to move to a new system in which everyone is incentive aligned to be able to recover, then we have a good blueprint for how we can keep all of these reusable materials in the loop.

Going back to SPSA for a second in southeastern Virginia, they already know that they have a landfill problem coming up. In general, we've done the math on how much usable landfill space is left in the U.S., and we calculated it at about 12 years on average. However, in the Northeast, where I'm from, we have 4.1 years. The entire East Coast has less than the Midwest or the West, let's say.

And so, because we already are running out of landfill space, this is a pressing problem for municipalities to figure out, because you don't necessarily have the ability to just go and be like, "Yeah, we'll open up new land." Well, where are you going to do that? In New York, there's no space left, and it's also not good for communities.

So, you know, forward-thinking municipalities are already working on this, which is really amazing to think, because usually people make fun of governments for moving slow or not being innovative. And right now in waste, I think that a lot of municipalities are actually being very innovative.

So if we talk about what incentive alignment might look like: if you reduce the cost of sortation, but you can also reduce the cost of the trucking on the front end, the pickup and collection, by having one bin or less bins, so you're already having a cost savings there on the front end for the municipality or the hauler. And then if you're able to recover more so that the MRF itself makes significantly more money and the municipality makes more money, then the municipality also saves on any tipping fees, because less material is going to landfill.

There's something we haven't talked about in the recovery aspect, for why this is also increasing the margins for the MRF, which is purity. So there's throughput and volume, but there's also higher purity.

You got at it already when you're asking about the separation. But because these machines can run the same materials through multiple times at a faster pace than normal, you're also able to get a higher grade, because right now, commodities and recyclables are already kind of graded by purity, so you would have your A-plus or A or A-minus.

Because they're able to sort better and more effectively, you're getting higher purities, you're selling for a higher price. So it really does make a significant difference to the margins.

Mitch Ratcliffe  25:36

You mentioned earlier how we export our aluminum and buy it back, and we're in an era of reshoring, and it sounds like reshoring is the key. Should we think about these closed loops that we need to build to keep materials in flow, in use, as local, regional, or national? Where does Overlay think about the scale of an opportunity like that?

Elizabeth Blankenship-Singh  26:06

Material by material, it differs. So some would be regional, some would be national, some would be city. It's kind of helpful for me—I usually frame things and think of each individual place maybe as an island.

So for cement, it's an incredibly small island, and it has to be within about 15 miles to make sense. For Styrofoam, it's actually a larger region, so it would be for the entire East Coast. You could make Styrofoam in one region and effectively get it to where it needs to be, and still be price competitive.

So it's material by material dependent. However, what I would like to kind of frame reshoring as is, we're really seeing this not as a temporary trend. I think for sustainability, this is something important—to lay the groundwork now, while there are political tailwinds helping to sort of bring some of this material production and manufacturing back to the U.S., because producing a material near where it's going to be used and distributed significantly lowers its carbon footprint.

And we, you know, we globalized a lot of industries and went—for many, many decades, went to where things were produced in one place, the material was produced in India, then it was shipped to China, where the garment was made, and it was shipped to the U.S. It's a significantly larger carbon footprint than is needed if you have all the materials to do all those things within the country in which the garment will be used.

And so I think reshoring and nearshoring are amazing for sustainability, and this is an opportunity to be able to utilize any other geopolitical fragmentation and/or something like the Genesis Mission, actually, from the U.S. Department of Energy. The Genesis Mission, which is using AI to advance science, has identified material discovery and recovery as something very important to national security. We absolutely agree, and I think it's going to foster a lot of innovation as well as implementation in the next five to 10 years.

Mitch Ratcliffe  28:22

I'm curious, as an extension of that, do you also see materials science investments where you could look at all the molecules that you have in your waste stream and start to think about creating new materials out of it—something that Overlay is thinking about as you look out into the future?

Elizabeth Blankenship-Singh  28:39

Absolutely, that would be an amazing outcome. All of these technologies, like AMP, can look at the chemical composition that's within the trash. They see all of the individual elements. You can report that back to the manufacturer of the material, to the brand itself.

The same is true of Sortera, which is a company that is sorting aluminum domestically. They look at the chemical composition of every alloy. It would be entirely possible to then discover new combinations or new materials that you could create.

We are looking at AI-based, or AI-powered, material discovery to be able to replace what I called that second bucket of materials, which are the things which are not easily recyclable right now. So there are materials that we need to wean off of, and there are materials that we need to completely replace. And I think we might finally have the juice. We might finally have the power to be able to discover how to do that, cost-effectively, at scale, which would be probably utilizing a technology like AI to move the material discovery faster.

And I think there's amazing data sets for them to use, because you have the entire data set of everything that goes through a MRF. You have all—that's basically a footprint of every material every consumer uses every day.

Mitch Ratcliffe  29:57

You're describing a remarkable opportunity, a new world. There's a lot of competition for shares in the companies that are going to solve that problem. How does Overlay compete against Circulate Capital, Closed Loop Partners, and others? What's your differentiation story when you go in and pitch a team on taking your capital?

Elizabeth Blankenship-Singh  30:19

Fortunately, we're quite close with most of these groups. I am working on a deal with Closed Loop right now. It's a small enough industry. I think of people who actually focus on this as their core thesis, that we work together really well, because it does take a lot of capital to move a lot of these technologies and companies forward, because they're not solving small problems, they're solving a problem that could replace the, you know, the number one most used material on Earth.

So it's great that we work together. I think Overlay really does bring something interesting to the table for these founders, though, which is the fact that we invest not just in the innovation, but also in the implementation.

So, for example, John Felts from Cruz Foam—I've had many conversations with him about coming into our MRF that's in North Carolina, and working with them on how much Styrofoam came through, what materials, how easy it was to pull in and out, data that could be helpful to the development of Cruz.

You know, AMP—especially because we've invested in AMP, and we've also invested in a platform of MRF roll-up that is implementing AMP technology within those facilities. We have an interesting sort of value proposition, which is that we are working towards getting your technology implemented.

Mitch Ratcliffe  31:42

That's great leverage. And at this time, when you can say, "Look, we can help you productize, but more importantly, we can help you partner and get this into use," is absolutely critical.

One of the things I was curious about, as I was learning about Overlay, is how you characterize your investments to investors, which, typically, in this field, are described as impact investors, as they're trying to make an improvement in the world. And generally, there's an assumption that there's sort of a discount on your ROI as a result, because you're getting some good stuff for the rest of the world, as well as a return on capital.

Are we at a point where impact investing is going to become leading edge and the most profitable investing? And how do you talk about that with your limited partners

Elizabeth Blankenship-Singh  32:31

I think any limited partner, when they're looking at a potential investment into a fund, asks themselves first about the thesis. Do I believe their thesis is true or untrue? If they think true—I believe that this is the way the world will go in the next 5 to 15 years—then I guess the next question is, do I think I'm going to make money on it?

It's important. It's part of the capital equation. These are private markets, and you have to make a return. And what I think is so fascinating about our thesis, in particular, and the companies that we're investing in, is we're not investing in anything that is not at price parity, or has a clear path to price parity, which means you get all the sustainability and impact metrics, but you also know that it is actually competitive to the incumbents.

We do not sort of underwrite anything which is going to have a green premium, in which you are dependent upon someone making the choice to be sustainable to be able to adopt it. It's a hard equation. People have tried it for decades.

Really, the only way we've truly seen impact come to fruition and happen at scale is when it is also cheaper or the same price as whatever the alternative was. So the "better, faster, cheaper" really does come into play still.

And so in that way, we can attract LPs who want to invest because they are interested in a very large impact story and huge sustainability investment or category and sector, like waste and materials, but we also can attract limited partners who are interested in investing in a new sector and private market in which they could diversify and also make a nice return.

Mitch Ratcliffe  34:27

In that environment, do we need new policy? The EPA had announced a national recycling strategy, for instance. EPA isn't what it was when it made that announcement anymore. But what should we be talking with government about in terms of creating a better environment for a rapid transition to reuse of materials?

Elizabeth Blankenship-Singh  34:48

I mean, the government does have a problem, and so it's going to eventually have to respond, which is the landfill space that we spoke of before.

We used to export a lot of our trash. In 2018, China passed the National Sword Act and stopped taking large amounts of our waste, and that created a little bit of a domestic problem. I know right now, from Long Island, the trash is trained already to Ohio. Eventually, Ohio will fill up, and that will no longer be an option. And so the government will eventually have to face that.

The goal would be to be able to, right now, already start implementing technologies, processes, and maybe even policies to prevent that from ever even becoming a problem. We don't want to actually get to 100%.

Mitch Ratcliffe  35:34

I think people in Ohio would be pretty upset if the trash became too much to fill Ohio. Does that mean we need incentives in place, or do we simply need policy that encourages—I'm not even sure what it would encourage, so I guess that's why I'm asking you.

Elizabeth Blankenship-Singh  35:52

I don't know if I've seen an incentive scheme work effectively for something like this. I think of SAFs—sustainable aviation fuel—as an example. So, policy, I think, would be our most reliable lever to pull here. And some municipalities, cities, and/or states are already enacting some policies.

There have been really innovative pilots done in Arizona on food waste scraps. So multiple cities in Arizona partnered with the company Mill to roll out their smart bin system to be able to reduce the amount of composting—like there are a lot of really amazing innovative things happening, and I have really high hopes for government-related policy rollouts.

I think it makes it easier when you see something like the AMP 20-year contract, where, you know, okay, if they did it, then maybe it's safe for me to do it too. Because, you know, the government can't—it isn't usually a first mover, because it has so many different stakeholders that it completely relies upon.

So I think, you know, we are making some headway, but we aren't going to completely rely upon that. We are also moving forward anyway with implementing innovation in the private sector as much as possible.

Mitch Ratcliffe  37:12

Well, one must be pragmatic, particularly in challenging times. Elizabeth, this is a fascinating story. How can our listeners keep track of what Overlay does?

Elizabeth Blankenship-Singh  37:22

So please follow us on LinkedIn at Overlay Capital. We do post about a lot of our portfolio companies and exciting developments there. You can also get in touch with us directly at [email protected].

Mitch Ratcliffe  37:35

Well, thanks so much. I hope that this continues to pan out as a vision. It's been an inspiring conversation.

Elizabeth Blankenship-Singh  37:42

Thank you, Mitch.

[COMMERCIAL BREAK]

Mitch Ratcliffe  37:50

Welcome back to Sustainability In Your Ear. You've just heard my conversation with Elizabeth Blankenship-Singh, who is the Director of Innovation at Overlay Capital in Atlanta. The firm is a leading investor in growing a more sustainable circular economy, from the development of nature-based recyclable materials to building a recycling system capable of sorting, separating, and reusing what we toss into household garbage and recycling bins.

You can learn more about their work at overlaycapital.com. That's all, one word, no space, no dash—overlaycapital.com.

As I said at the outset of the program, we're at an inflection point in history. Despite a fierce attack on federal policies that support renewable energy and carbon reductions across the economy, local and state governments, along with many businesses, are doubling down on their investments in sustainable technology. It's going to take some time, probably a generation, to reach that goal, as well as to recover from the divisive politics of the past decade.

However, by 2050, it is entirely conceivable that the profitable reuse of most of the materials we count on in daily life will be standard operating procedure for American business.

And we heard several key ideas to keep in mind from Elizabeth.

First, recycling, as well as reuse, repair, composting, and other sustainable or circular activities, must be economically viable. That means they must be self-sustaining and profitable.

Second, they need to be transparent. That is, in the sense that businesses and consumers can see into the systems to understand the value that they contribute to that process, and to get confirmation that their effort to put a material back into the system—to become a raw material for another generation of products or packaging—was effective. That may come in the form of a free recycling system at some point, one that moves away from making households pay the cost of disposal—you remember those tipping fees we talked about—to a free service designed to encourage more reuse. In other words, free bins, great sorting, everything is easy to do, so that it is just as convenient as life in the industrial economy we live in. Bottle deposit programs are an early example of what this world may look like. I mean, in that case, you put five or ten cents per can or bottle in a package into the system, and if you return them, you get the money back, or that money supports somebody else taking the time and effort to clean up the mess.

Third, we heard about materials purity, the key to earning the highest return on what's recycled. Sorting materials effectively —which Overlay is investing in—robotics and rolling up MRF operations to accelerate—are just the first steps in the process. Even if you can run the material through the sorting process multiple times, separating them, like removing the coffee from the metal coffee pods that I asked about, will take another generation of robotics to address. But technology generations are much faster than human generations, and we might see the efficient disassembly of products on the recycling line within a decade.

Finally, designing for reuse, including recyclability and compostability, from the development of natural materials like Cruz Foam's bio-based alternative to polystyrene, or Simplifyber's cellulose-based textiles, or the low-carbon cement made by Terra CO2—all of these can reduce the product complexity that stymies current technologies when something comes back for recycling.

For now, we need more recycling and reuse. In fact, more reuse first, based on a robust repair and logistics system to ensure that we keep materials in productive use as long as possible, because it's going to be a long time before everything that goes into the garbage can be separated and reused by municipal recycling systems.

In the meantime, we need more specialty services in the recycling system, organizations focused on taking hard-to-recycle materials out of the waste stream to create outlets for those recycled materials that Elizabeth rightly says are the key to building a self-sustaining, profitable circular economy.

Now, that is a lot of challenges. Nevertheless, the economic imperative has sunk in, and investment is flowing, even in the face of federal resistance. And that's partly because of the focus on reshoring manufacturing, that requires an effective recycling system to keep consumer products and industrial raw materials prices low. In other words, we need a circular system to supply an insular U.S. economy.

And the transition to a sustainable, low-carbon economy needs champions like you. When you bring this conversation to your community, you help spread the word. So please take a look at the more than 540 episodes of Sustainability In Your Ear in our archives, and share one—just one of them—with your friends.

Writing a review on your favorite podcast platform will help your neighbors find us. Folks, you're the amplifiers that can spread more ideas to create less waste. So we'd appreciate it if you'd tell your friends, family, and co-workers. They can find Sustainability In Your Ear on Apple Podcasts, Spotify, iHeartRadio, Audible, or whatever purveyor of podcast goodness that they prefer.

Thanks for your support. I'm Mitch Ratcliffe. This is Sustainability In Your Ear, and we will be back with another innovator interview soon. In the meantime, folks, take care of yourself, take care of one another, and let's all take care of this beautiful planet of ours.

Have a green day.

Despite the atmospheric rivers that drenched the Northwest and California, here in the Upper Rogue Valley, the rain has been an infrequent visitor this winter. Precipitation here is about 5% below normal, compared to 64% above normal levels just 40 miles south at Mount Shasta. Elk Creek has not come near its typical high-water mark, so it may be a dry, fire-prone summer ahead.

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