Nestlé is to invest CHF 2 billion ($2.1bn) to support its move from virgin plastics to food-grade recycled plastics and to accelerate the development of innovative sustainable packaging solutions.

To create a market for food-grade recycled plastics, the company has committed to sourcing 2 million tonnes of food-grade recycled plastics and it will allocate more than CHF 1.5bn ($1.56bn) to pay a premium for these materials between now and 2025. Nestlé will seek operational efficiencies to keep this initiative earnings neutral.

Meanwhile, Nestlé is to launch a CHF 250m ($259m) sustainable packaging venture fund to invest in start-up companies that focus on packaging innovations – including the use of new materials, refill systems and recycling solutions.

“No plastics should end up in landfill or as litter,” said Mark Schneider, chief executive of Nestlé. “Making recycled plastics safe for food is an enormous challenge for our industry. That is why in addition to minimising plastics use and collecting waste, we want to close the loop and make more plastics infinitely recyclable. We are taking bold steps to create a wider market for food-grade recycled plastics and boost innovation in the packaging industry. We welcome others to join us on this journey.”

The news has been welcomed by environmental groups. “We are pleased to see Nestlé commit a CHF 2bn investment toward creating a circular economy for plastics, alongside a reduction of its use of virgin plastics in packaging by one third by 2025,” commented Andrew Morlet, chief executive at the Ellen MacArthur Foundation.

Morlet added that “by eliminating the plastics we don’t need, innovating in areas like reuse models and new materials, and circulating the plastics we do need – also in more challenging food grade applications – we can create an economy where plastics never becomes waste.”