In the autumn of 2021, Ron Gonen sat across from me and made a call that sounded like activism: fossil fuel assets were already stranded, the smart money was gone, and anyone divesting that year was a decade too late. He said it during the best year energy stocks had had in a decade. For eighteen months, he looked flat wrong.

He wasn’t. This is a re-release, and before the interview I score the thesis against what actually happened. In 2024 the S&P’s fossil fuel components returned 5.7% against 25% for the index; the sector has underperformed in seven of the last ten years and shrunk from 30% of the index in 1980 to about 3% today. The regulation he predicted arrived: seven states now have packaging producer-responsibility laws, up from two. And the single national recycling company he said the US needed — which did not exist when we spoke — he built a year later. It’s Circular Services, now the largest privately held recycler in the US, with close to a billion dollars behind it from Brookfield, Microsoft, Nestlé, PepsiCo, Starbucks and Unilever.

Ron Gonen is the Founder and CEO of Closed Loop Partners, an investment firm and innovation center built entirely around the circular economy. He founded and ran RecycleBank, served as New York City’s Deputy Commissioner of Sanitation, Recycling and Sustainability, and wrote The Waste-Free World. In this conversation he lays out why the linear “extract, use, landfill” economy is a subsidised anomaly, why he thinks circular investing carries a clear financial edge rather than a moral discount, and how he underwrites it — value investing, price-to-value discipline, and a corporate LP base that tells him where the market is going before it gets there.

The one part he under-called was the politics — and that’s the live risk. Federal policy went the other way, every gain came from the states, and the fight he once compared to a bug bite is now a 17-state lawsuit. He was right on the assets, the regulation, and the infrastructure. The open question is whether the politics catches up.

In this episode we discuss:

• Why he called fossil fuel assets “stranded” in the middle of their best year — and how that call has aged
• The financial case that circular and sustainable portfolios beat the market, not lag it
• Why the linear economy only works because extraction and landfill are subsidised
• How George Soros’s writing turned an idealistic student into an investor
• Value investing applied to the circular economy: strict price-to-value discipline and a sub-$10M entry screen
• How a corporate LP base of the largest CPG companies can de-risk the thesis
• Redirecting $100 billion in fossil fuel subsidies — “without costing taxpayers a cent”
• Why he builds a circular economy rather than thinking of himself as an investor

Featured guest:

• Ron Gonen, Founder & CEO, Closed Loop Partners

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  Key Takeaways:
  • Stranded means stranded. Ron called fossil fuel assets impaired in 2021, with the divestment window already a decade closed. By 2024 the S&P’s fossil components returned 5.7% against 25% for the index.
  • The moral discount is a myth. He argues circular, stakeholder-aligned portfolios outperform — a fund built on the “greediest” companies would never have screened out Enron, WorldCom, or Tyco.
  • The linear economy is subsidised, not natural. Extraction and landfill dominate only because they’re propped up; the fossil fuel industry that makes plastic takes roughly $20 billion a year in US subsidies.
  • Value investing, applied to circularity. Every fund runs a strict price-to-value discipline. On the venture side the hard screen is a sub-$10 million post-money valuation, then whether the tech can become a business, then the team.
  • The corporate LP base is the edge. Closed Loop’s LPs include some of the largest CPG companies, and they signal where supply chains are heading — turning an “idealistic” thesis into a realistic one.
  • Redirect the subsidies. His biggest structural idea: move $100 billion over five years from fossil fuel subsidies into circular and renewable industries. As reallocation, not new spending, he argues it costs taxpayers nothing.
  • The politics is the unhedged risk. Every recent gain came from the states, not federal policy, and incumbent resistance has escalated from a “bug bite” to a 17-state lawsuit — the one variable no investor controls.
    
    
    Additional Resources
    
    Ron Gonen on LinkedIn: https://www.linkedin.com/in/ron-gonen-807a49/
    Closed Loop Partners: https://www.closedlooppartners.com/
    Circular Services:  https://circularservices.com/
    The Waste-Free World (book): https://www.penguinrandomhouse.com/books/646769/the-waste-free-world-by-ron-gonen/