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September 1, 2016

CEO David Steiner Keynotes at Recycling Conference

David Steiner, CEO of Waste Management, recently gave the keynote address at the 2016 Resource Recycling Conference in New Orleans. The conference, now in its seventh year, brings together industry leaders to discuss the most important policy issues facing materials management today. Read excerpts from his speech below (edited for length), or download the entire speech here.

We have more than 3,000 Waste Management teammates in our recycling business, and we processed and brokered over 11 million tons of recyclables in 2015. We invested over a billion dollars to build the largest residential recycling business in the entire world.

So, we are committed to recycling, and yes, it hurt when the wheels started to fall off in recycling. It hurt both our employees and our shareholders. And consequently, it hurt our investment in recycling infrastructure.

So, how did we get here? Between 2012 and 2013, we saw economic trends in China and projections for slower growth there, and we knew that would reduce their demand for fiber products. We then saw the correlation between the price of oil and recycling commodity pricing—along with the projections for future years. We started to get a picture of what we could expect in coming years, and it didn’t exactly paint a rosy picture of a line of our business that had, up until then, been a focus for growth and investment for us. So we set out to turn that around, to continue to provide the recycling services we know our customers want at a return we know our shareholders demand.

Our goal was to elevate the dialogue, and to work together to ensure the long-term viability for recycling so that it could survive and thrive even during the wild swings and volatility in commodity markets.

Changing individual consumer behavior combined with weathering weak global market conditions means that recycling is going through a pretty significant evolution. And while change is hard, every industry goes through it—and more often than not, for the better. Innovation, adaptability, and evolution are pivotal to any industry’s survivability and future growth. And the recycling industry is no different.

So, how has the recycling industry innovated, adapted and evolved? And what’s ahead?

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By the beginning of the 21st century, recycling rates had more than doubled since the 1970s, and we began to innovate to take recycling to the next level. Recycling more was the goal, and cities developed high recycling goals, and even Zero Waste goals. We all measured success by the tons collected for recycling and began to focus on growing those tons. Resource-poor China was growing at the same time, so they absorbed much of our recyclables. As a result, recycling rates went –up—in fact, they more than doubled in some communities where we offered single stream recycling.

But more recently, the world has been changing. More plastic, less paper. More small single service containers, more contamination (where consumers place non-recyclables in their containers), and lower demand for recyclables as the world economies slowed down.

So, what’s the solution to all this? To get there, I think we have to start with the question, what’s the goal? Is it to recycle everything we can? Is it ultimately to reduce greenhouse gas emissions? Or is it to take a holistic environmental view and adapt each situation to maximize environmental benefits and meet our customers’ needs?

If the goal is to recycle everything we can, we have a great deal of work to do. There is a high cost to achieving this goal, and business-as-usual is simply not an option. Although we all started with weight-based recycling goals, we now have much more sophisticated data that allows us to address environmental benefits more surgically—to get better results, more cost-effectively. We need to shift to the idea of lifecycle thinking to help set goals, to broaden the conversation, and to encourage us all to think about our goals and our priorities differently.

In setting the right goals, we needed to know the environmental impacts associated with the materials we manage. To get there, we looked at the entire spectrum of services we offer our customers and the greenhouse gas reduction benefits of each of those services in relation to the cost per ton of CO2 emissions reduced. We realize this is only one way to look at the issue, and we recognize there are other ways to look at it, but here is what we found:

Reducing the use of virgin resources is the biggest winner for the environment. But, when you combine state-of-the-art landfill gas-to-energy systems with best-in-class recycling—that’s all of the fiber products, plastic bottles and cans possible—you get 84 percent of the greenhouse gas reduction benefit. That’s where you get the biggest bang for the buck environmentally. Beyond this level of diversion, the cost goes up—a lot – especially in relation to the smaller increments of greenhouse gas benefits obtained by recycling additional materials, like organics and glass.

Given that, should we try to recycle every last drop of material at a very high cost per ton of carbon reduced? Or, should we focus on recycling those materials that will get us the “biggest bang for the buck”—the best environmental benefits at the least cost?

Our study shows that we should be working harder than ever to recycle more of the materials that we’ve been recycling for years: plastic bottles, cans and fiber products. In other words, focus on recycling the right materials, rather than spending a lot of money trying to recycle things with a smaller environmental benefit, but a huge cost.

We see a lot of change in the future, but we also see a lot of opportunity for recycling. Seizing that opportunity is going to take the collective efforts of all stakeholders in the chain, working together, to do some things differently, so we all—together—create successful and sustainable environmental programs for the future of our communities. And we need to make the solution lasting, to ensure sustainable investment in our future environmental programs.

It’s time to use new knowledge to educate consumers about recycling, to develop new contracts, and to change our goals and metrics in an effort to get it right when it comes to impact on the environment.

The challenges of the past five years have forced us to be smarter and more efficient at what we do. Our industry has shown its resilience and is primed for the next chapter—a chapter that recognizes recycling as a critical environmental service. One that recognizes that we can’t keep looking at our goals and programs through the same lens we did 20 years ago. One that uses data and new information to work smarter, focusing our efforts on recycling the right things to get the greatest environmental impact.

We believe that recycling and materials management can survive this storm and thrive, and can create lasting, positive environmental impacts. And I hope that we, through recycling and our other collective environmental stewardship, can leave the entire planet in better shape than when we inherited it.