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How I got here… Rob Kaplan, CEO, Circulate Capital

The former Walmart sustainability director runs a US$100 million fund to eliminate plastic waste in Asia. He tells Eco-Business about how a 'crazy idea' has become real.

The proudest moment of Rob Kaplan’s career so far came last month, when the Singapore-based company he founded, an investment firm backed by likes of Coca-Cola, Unilever, Danone and Dow, secured its first deals.

Circulate Capital, which was started in 2018 with a US$100 million fund to support the circular economy for plastics in South and Southeast Asia, invested US$6 million in two recycling businesses, one in India, the other in Indonesia.

“It was a culmination of different parts of my career to date, on the corporate side and in social impact investing,” said Kaplan, who has worked in corporate sustainability for Brown-Forman, the wine and spirits giant that makes Jack Daniel’s, and Walmart, the world’s largest retailer, where he was director of product sustainability.

After three-and-a-half years at Walmart, he co-founded Closed Loop Partners, a New York-based investment firm that, like Circulate Capital, invests in how products are designed, manufactured and recycled to eliminate waste and continually re-use resources.

The investments in Lucro, a Mumbai-based converter of low-value flexible plastic, and Tridi Oasis, a Jakarta-headquartered recycler of PET, are evidence that Kaplan’s plans are coming together, and a “crazy idea is turning into something real”. 

In sustainable investing, the conversation always runs into a brick wall when it comes to who’s going to pay for it.

But Circulate Capital’s investments have been made at one of the most difficult times in the history of the recycling business. Waste management services have ground to a halt in many parts of the region as a result of Covid-19 containment measures, and plastic pollution has become an even worse problem than before the outbreak.

In this interview, Kaplan talks about the importance of capital in achieving sustainability ambitions, his early struggles in navigating the politics at Walmart, and how the Covid-19 pandemic is affecting the circular economy.

What’s your education background?

I studied political communications at George Washington University in the United States. Then I went back to graduate school at Berkeley for a MBA in general management, marketing and corporate social responsibility.

What prompted you to choose a career in sustainability?

I have always been passionate about the environment and that’s why I started my career with a focus on it, but on the public policy side. After my time working in Washington DC, I became interested in the role the private sector could play in making the business case for the causes that I believe in. So I went back to business school, and wrote my business school application essay on that very idea.

I worked for corporates for 10 years, working on supply chains, sustainable packaging and green investment programmes. I was interested in continuing down the sustainable investment path, and looking at how capital could be used as a tool for impact.

What made you realise the importance of capital in sustainability?

It was my time at Walmart. One of the things that Walmart is excellent at is driving alignment across the value chain. As the world’s largest retailer, people listen. You can pretty much get any CEO in America to call you back.

In sustainable investing, the conversation always runs into a brick wall when it comes to who’s going to pay for it. You look around a room and see multinational corporations that have access to capital. But how do you unlock it? And how do you invest in a way that everybody has confidence that it’s going to the right places?

Because I was leaving, I just didn’t care about the politics anymore, and it was much easier to tell everybody exactly what I thought.

The Circulate Capital Ocean Fund is a good example. Not all the capital is going to come from corporations. It has to come from capital markets, investors and public sector financing. And that means a much broader investment strategy. It was a completely different conversation. My angle is how do you enact those massive corporate value chains with institutional capital to solve that brick-wall problem that we keep running into—which is who’s going to pay for it?

Who has been your career mentor, and what was the most valuable thing you learned from them?

I struggled a lot when I first got to Walmart. My mentor, Ed Romero, who’s now a senior executive at Sam’s Club [a chain of high-end membership-only clubs under the Walmart banner], really helped me understand how to navigate the corporate environment, and how to get buy-in.

In what way did you struggle at Walmart?

The politics—which is true of any large organisation. Walmart is one of the largest employers in the world. With so many people, the politics of decision-making is very complicated. My biggest mistake at Walmart was focusing too much on other people and not trusting my gut. In meetings, I would be very concerned about what other people in the room were concerned about, rather than what was important. Ed [Romero] helped me avoid wasting time with politics by being very clear and direct about what I wanted to achieve.

When I was leaving Walmart, I gave a little extra notice than the usual—six weeks, to finish some things up. Because I was leaving, I just didn’t care about the politics anymore, and it was much easier to tell everybody exactly what I thought. It was a big lesson for me. I found that I had more power in business relationships than I realised. When I told people what I thought, they respected it more than when I was being too careful with how I communicated.

Collaboration was clearly key to your role in sustainability at Walmart. How important is it to your job now at Circulate Capital?

Getting collaboration right is extremely challenging, and we have a team in the US that manages stakeholder relations. But we’ve had to find the right balance with our personnel. Sourcing deals is also a very tricky area, and we have needed experienced professionals on the ground to help us navigate a complex investment environment. Investment managers are not really the sort of people to do stakeholder management work. Their job is to work with entrepreneurs and help them be successful. They’re not built to spend all day in meetings with stakeholders. At the end of the day, we are an investment firm, not an NGO. 

How do you see Covid-19 affecting your job and the circular economy?

Covid-19 is going to change consumer behaviour for the foreseeable future. For instance, more people are going to consume off-premise rather than on-premise [with implications for packaging use]. In Southeast Asia, rising affluence has meant growing materialism, but post-Covid that may change that—and that will have a direct impact on the circular economy. 

We are seeing a surge in single-use plastics, and that means a surge in ocean plastic. But I see public outrage over plastic pollution increasing just as much as single-use plastic becomes a bigger problem—so they could balance each other out.

Covid-19 has driven a big trend towards localisation, which we’ve seen in Singapore with the debate over food security and the reliance on imported food. I think this trend will accelerate with waste and recycling too, as companies look to focus more on local manufacturing and closing the loop on what they produce at a local level.

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