October 13th, 2017

How do waste companies become circular economy companies?

5 minute read

by Jade Kelly

 

The idea that we should work towards a circular economy is becoming increasingly mainstream. The recent launch of the UK Government’s Clean Growth Strategy suggests that, whether under EU law or in response to a purely domestic agenda, resource efficiency and the prevention of waste will be a high priority in the decade ahead.

Some  companies have been doing credible work to improve resource efficiency for years – Marks & Spencer’s Plan A  springs to mind – while other, more recent converts are starting to burnish their green credentials. If there’s one sector that has an obvious affinity with the circular economy, though, it’s the waste and recycling companies that have a huge role in determining what happens to the waste other businesses produce. So how can you tell if your waste management contractor is making a meal out of a spot of greenwashing, or really pushing to achieve circular economy principles?

 

Principle issues

One simple question is whether they walk the talk. I’ve lost count of the number of waste management sites that I’ve either visited or worked at over the years that have been woefully lacking in their recycling facilities. Granted, sites based out in rural industrial parks might find their options for commercial food waste or battery collections rather limited. Yet if there is nothing but a general waste bin in the offices of a recycling centre or a MRF, then that’s a pretty big sign that the company isn’t institutionally committed to circular economy principles.

Another tell-tale sign is the company’s approach to marketing. It’s surprising how many recycling companies are happy to produce disposable items branded with the company logo, knowing that most of them will promptly make their way into the bin. If the items aren’t recyclable, so much the worse – but the whole idea of such promotional exercises shows a distinct lack of circular economy thinking.

Internal policies can also be demonstrative of how much thought a company has given to circular economy thinking. It is still not unusual to find large national companies expecting employees to regularly travel long distances, often for tasks that can be carried out remotely. In doing so, they promote the excess use of carbon-intensive transportation. It is generally the case that roles involving a lot of travel are attached to benefits such as car allowances or company cars, normally purchased brand new and further incentivising the excessive use of raw materials. Such policies can have a big influence on how people conduct their work, and can serve to influence certain attitudes and behaviours.

 

Own goals

Reward structures, such as targeted bonuses, can also be culprit in this. The primary driver is normally financial, which is not a bad thing in itself – after all, a business needs to make money. But often these goals are not well thought through, and promote behaviours and decisions counter to circular economy principles.

 

Bins

How do you make a bin company stand out as a driver of the circular economy? Photo: Public Domain.

 

If you are a waste collections sales manager tasked with signing up as many customers and as much tonnage as possible, do you have an incentive to encourage customers to change their practices and switch waste from residual to recycling? Even if you’re a MRF manager, if your only goal is to get as much tonnage through the door as possible to achieve your bonus, that won’t incentivise you to ensure that the material coming in is of good quality and recoverable.

Ultimately, short-sighted target setting like this doesn’t do the company’s bottom line any good either, but will only become apparent further down the chain, long after the relevant bonuses have been paid. Applying a more joined up, ‘systems thinking’ based approach to staff incentives can therefore benefit the company’s overall finances, while also benefiting its corporate image and message.

 

Money talks

At a strategic level, there is also the question of whether the company’s business model and future investment plan align with circular economy principles. How much of the company’s retained profit margin comes is made from residual waste, and what proportion of its planned investments are in facilities that will move material higher up the waste hierarchy?

As Eunomia’s Residual Waste Infrastructure Review highlights, incineration seems set to increasingly compete with recycling for material: there is little question that today’s incinerator feedstock contains a great deal of material that could have been recycled if it had been put in a different bin. Whether badged as an ‘Ecopark’, or described as a renewable energy power station, incineration is a low rung on the waste hierarchy that waste companies should be seeking to advance beyond if they’re to transform into resource management companies.

This is not to say that waste management companies are trying to pull the wool over their customers’ eyes; after all, waste companies are only one part of the sector, which first and foremost requires robust policy interventions to achieve circular economy principles. But if a company’s “green” sales pitch to customers is to offer “zero waste to landfill”, it perhaps still has some way to go before it will be playing a leadership role in the transition to a circular economy.

The industry has weathered massive change over the last two decades, rapidly shifting their landfill-centred businesses models to more sustainable alternatives. The change of mindset involved in bringing recycling to the fore has been substantial, and is still far from complete, and it will take time for genuinely circular economy thinking to trickle down from corporate strategy into local policies and resourcing decisions. So let’s applaud those who are trying, and push them to do more.

 

Jade Kelly

 

 

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