Alcoa and BluSkye: Pushing green firms to the next level

The Gunther Report

Alcoa and BluSkye: Pushing green firms to the next level

Into my inbox every day come press releases about this company putting solar panels on a roof or that one making its fleet more efficient. These incremental steps are laudable but also (1) boring (2) old hat and, most importantly, (3) unlikely to get us the environmental change we need.

Transformational change, by contrast, usually requires entire industries or groups of industries to work together, often with NGOs, sometimes with government. That's been going on for years -- Unilever and WWF organized fisheries, NGOs and companies to form the Marine Stewardship Council back in 1997 to promote sustainable fishing practices -- but lately, there seem to me more of these cooperative but complicated efforts. That's reason for optimism.

Last fall, for example, I attended a Starbucks "cup summit" at the MIT Media Lab where the company, with the help of business guru Peter Senge, brought together paper companies, NGOs, government officials and rivals like Green Mountain coffee to figure out how to design a system to eliminate waste from coffee cups. [See The Starbucks Cup Dilemma in Fast Company.] Now Alcoa, with the help of sustainability consultant BluSkye, leading a broad and even more ambitious effort to drive up recycling rates across the US.

To learn about the Alcoa initiative, I met last week in San Francisco with Jib Ellison, the founder of BluSkye, and talked by phone with Kevin Anton, Alcoa's chief sustainability officer.

The problem, as they both described it, is simple: Between $1 billion and $2 billion worth of aluminum cans end up in landfills each year.

Now that's waste!

In 2008, Alcoa, which is the world's biggest aluminum company, said it would try to lift the recycling rate for aluminum cans from about 52 percent to 75 percent by 2015. It has inched up to about 58 percent since then, but Kevin's not impressed.

"We're moving in the right direction, but if you contrast that with the rest of the world, we're definitely lagging behind," he told me. Globally, aluminum recycling rates average about 73 percent; they exceed 90 percent in Austria, Belgium, Brazil, Germany, Japan, Sweden, and Switzerland, partly for cultural reasons, partly because those countries have better recycling infrastructures.

Cans that end up in trash are not just a waste of money, but an entirely unnecessary environmental problem. Aluminum is "the perfect recycled material," Kevin says. Cans made from recycled aluminum require 95 percent less energy and generate 95 percent less emissions that aluminum made from bauxite, and aluminum is almost infinitely recyclable. According to Alcoa, 75 percent of aluminum ever produced since 1888 is still in use. Who knew?

Alcoa promotes recycling and it has, until recently, pushed for bottle bills -- they drive up recycling rates -- but, as Jib told me: "That's not going to happen for a bunch of reasons, mostly political." The company's customers -- Coca-Cola, PepsiCo and the big beer companies -- strenuously oppose bottle bills through their trade group, the American Beverage Association. The soft-drink and beer industry favor a more systemic and inclusive approach to the trash problem is required.

That's what Alcoa and BluSkye are seeking, using a technique they call getting "the system in a room." Last month, nearly 80 business, government and environmental leaders met for two days in Dallas to see if they could figure out ways to push recycling rates higher.

Participating companies included Waste Management and Owens-Illinois, along with folks representing "more than 70 percent of the soft drink industry, 90 percent of the glass container market and all of the aluminum cansheet industry," according to the trade magazine Resource Recycling. (Neither BluSkye nor Alcoa would say who attended.)

To help drive consensus, legislative approaches including extended producer responsibility (EPR) and container deposit systems were ruled out from the start. But all other options were on the table.

"It's a bit chaotic, at times, but it's about rapid-cycle prototyping, feedback, presenting, sorting out the actual work streams.," Jib says. "Our role is to drive, drive, drive and keep the pressure on."

It's too soon to say what will come of this first meeting, but the plan is to break the problem down into pieces that will then be attacked by groups of companies, governments and NGOs.

Waste haulers and municipalities, for example, will look for ways to drive up rates of curbside recycling, by offer positive incentives like the rewards at RecycleBank or negative ones like charging homeowners for what they throw away. "You can put five gallons or 95 gallons of waste out there and pay the same," Kevin notes. Dumb.

Others will focus on office-based recycling, or focus on public places like sports arenas, college and corporate campuses. The packaging industry will be asked to streamline the confusing array of plastic containers. Social marketing will surely come into play.

Jib and his colleagues at BluSkye have becomes masters at this kind of change-making. They're best known for their work at Walmart, which put together "sustainable value networks" of suppliers and NGOs to help shape its green initiatives.

More recently, BluSkye has worked with the battery industry and the dairy industry to lower their footprints, and it played a key role in putting together the Sustainable Apparel Coalition, a group of companies that together will measure and report on the footprint of clothing and footwear.

The idea is to push beyond the limits of what any one company can do. "Most companies have changed the lightbulbs by now," he says. Of the work with Alcoa, he says: "This is not an incremental project. We're looking for a breakthrough."

Driving dramatic changes in recycling rates won't be easy. Others have tried before. But the economics make sense -- almost no one benefits from waste. A robust recycling industry will save money, create jobs and reduce costs. What's not to like?