Stop Wasting Waste: Fixing the Travesty of Lost Value in Recycling

It's become an encouragingly common story to see evidence of how recycling can generate more value than landfilling waste. The recent GreenBiz article The Successes Possible from a Jigsaw Puzzle Theory of Recycling outlined one such business model, Donco Recycling Solutions -- a firm constantly seeking innovative uses for scrap or waste from one industry in manufacturing streams of others. In essence, a high value matchmaker who plays a small but meaningful role within the larger puzzle of this untapped system.

It's untapped because only 34 percent of U.S. municipal solid waste found its way to recycling or composting in 2010.Combine the remaining 66 percent with other non-hazardous sources of industrial waste and there exists a veritable gold mine of material flows which, if accessed, could generate the classic triple bottom line -- economic, environmental, and social benefits at all points in the value chain. In some cases such as used beverage containers this amounts to over $2.9 billion in lost value [PDF] annually.

What then is preventing rampant investment in closed loop material recovery by the U.S. business sector? At the outset it appears that a compelling business case doesn't exist. But dig deeper and you start to find that even companies who have realized the economic and environmental benefits of recycling can't seem to create effective systems at scale. Add the potential of efficient systems to the social benefits of recycling from job creation (up to 70,000 jobs from increasing recycling rates of beverage containers alone) and we should be prepared for the perfect storm.

Truth is, the value chain of production, use and end of life that encompasses manufacturers, designers, retailers, consumers, recyclers and waste haulers is extremely interwoven and complex. Unleashing the value of such a system requires a significantly different approach. And I believe that the real challenge lies in two separate but related issues.

One is the chicken and egg problem that my colleague Sean Martin previously explored in Going Local to Fix a Broken Recycling System, i.e. efficient markets for recycled materials will exist when supply chains of waste streams are equipped to provide these markets with high quality material. And vice-versa. Question is, what comes first?

The other is the lack of a system wide approach to solve this problem. Most often industries react to legislation (such as Extended Producer Responsibility) instead of creating market-based alternatives. Doing so also alienates key groups of stakeholders essential to creating the solution.

Both challenges demand visionary and innovative sustainability leadership with a requisite ability to build trust based collaboration with competitors and key stakeholders within their value chain.

I am lucky enough to be part of one such bold effort being undertaken by the leading battery manufacturers in the U.S. They represent a small but committed group of companies proactively taking a leadership position to co-create a compelling vision for the future.

Their vision is to launch [PDF] an industry-led, net-environmentally-positive, voluntary, national primary battery collection and recycling program in 2013. The success of their effort is embedded in an approach that builds relationships with competitors to work together and accelerated by the co-creation of solutions based on individual strengths of stakeholder groups -- in effect, a solution designed by the system for the system.

Watch this space. While pioneers such as Donco and the Battery Industry might appear as outliers today, they are playing a crucial role in establishing market based role models necessary to scale efficient recycling and closed loop systems.