The environment represents one of business’ core stakeholders, and Americans agree that companies should use resources efficiently and work to reduce their environmental impact. Cutting waste is a big step forward on both fronts.
Plastic pollution kills thousands of seabirds and other marine mammals each year, and breathable particles of microplastic may threaten human health as well. Landfills produce methane, which contributes to climate change, and living near one may also be bad for your health.
These are just a few examples of why corporate executives are under pressure to minimize waste that ends up in our land, air, or waterways — and why reducing product-related waste and recycling programs are key data points we measure when evaluating companies.
The task has become harder since 2018, when China stopped accepting imports of most low-quality recyclables. Much of the mixed paper and plastics that used to be shipped overseas is now piling up in American warehouses and landfills. But the move has also forced a reckoning, says Michael van Brunt, senior director of sustainability at Covanta, a major waste facility operator.
“Shipping to China was an easy outlet,” van Brunt says. “The removal of that outlet has caused companies to redouble their waste minimization efforts, which is a good trend.”
Rather than shipping out recyclables and other waste in an undifferentiated mass, more companies are separating out different kinds of recyclables at the source. They’re working harder to find and process “waste” products such as metals and resins that they can reuse or sell on the open market, van Brunt says.
More companies are also reengineering their manufacturing processes to reduce the amount of waste produced, because “the only waste that has no impact is the waste you don’t make,” he says. They’re also taking a harder look at the lifecycle impact of their recycling, and “focusing their waste management and recycling on the parts of the waste stream that reap the greatest environmental benefit.”
What exactly might these efforts look like? Every company produces different kinds of waste, so strategies vary widely. But here are just a few strategies gaining traction among the companies that JUST Capital evaluates and ranks.
1. Composting. Food waste has been identified as a major driver of climate change. A study by Project Drawdown, a coalition of experts focused on climate change solutions, ranks reducing food waste as the number three action item out of 80 — to the tune of more than 70 gigatons of carbon reduction. And there are studies that indicate as much as 11% of greenhouse gas emissions could be eliminated if food waste were brought to zero.
Chipotle is one example of a company taking steps to reduce their impact. The restaurant chain now recycles or composts waste at 88% of its restaurants, leading to a 25% reduction in average restaurant waste from 2016 to 2018. The company’s goal is 50% waste diversion from landfills by 2020.
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2. Take-back programs. For consumer goods companies, take-back programs are key to moving toward the “circular economy,” where resources for new products aren’t taken from the environment but extracted from used products in a closed-loop system. A few examples:
- Coca-Cola has “reverse vending machines” that dispense discount tickets to consumers who drop in recyclable plastic bottles.
- Apple’s device take-back program contributes to its commitment to creating a closed-loop supply chain wherein all new products are manufactured without “pulling new materials from the Earth.”
- Zero-waste platform Loop is working with big brands like Procter & Gamble to design premium reusable containers that can be shipped back to the manufacturer for reuse 100 times or more.
P&G is ranked second in its industry for its treatment of the Environment, in part for its commitment to making 100% of its product packaging recyclable or reusable by 2030.
3. Chemical recycling. Chemical recycling breaks down plastic so it can be turned into new, high-grade plastic. By contrast, traditional recycling results in lower-quality plastic that can only be recycled a few times.
Many big plastic makers and users such as Dow and Unilever and some large fashion brands, are counting on new chemical recycling processes to help them reach sustainability goals. But it’s worth noting that chemical recycling is heat-intensive and its full environmental impact isn’t yet known.
How JUST Capital Evaluates Companies on Waste Reduction
When evaluating whether a company uses resources efficiently, some of the key metrics JUST measures include the following:
- Solid waste: Total solid waste generated per dollar of revenue.
- Recycling: Percentage of all solid waste that is recycled.
- Programs: Companies receive credit for implementing product take-back programs or using recyclable packaging.
Reporting on waste and recycling is still evolving among the large companies that JUST Capital ranks: Only 28% report on their total waste produced, while 17% have disclosed a waste target. Slightly less than one-quarter of these companies report on their waste recycling, with those that do averaging a 53% recycling rate.
JUST encourages all companies to be transparent around waste generation, to commit to time-bound goals, and to report toward progress. We believe transparency has the power to drive real change. When companies disclose goals and measure progress — concerning waste elimination or a range of other important issues — it provides a powerful incentive to improve on those metrics, especially when that progress is measured by independent organizations like JUST Capital to ensure credibility.
Many of the companies JUST evaluates and ranks are in industries that produce relatively little waste, like software or professional services. But no matter the industry, all companies could benefit from an audit examining their sources and uses of materials. A waste audit is a good start to know if there’s anything a company can do in the process of production, in the use of raw materials, or on the back end that points at a more efficient solution.
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