Embed Size (px)
Citation preview
The Circular Economy:
RRS Global Corporate Sustainability Susan Graff, Vice President
Anne Johnson, Vice President
Making the Business Case
EHSS Roundtable
November 19-20, 2014
Washington, DC
2
• The Circular Economy – Mindset Shift and Value Returned
• Why Now – Marketplace Catalysts• A Framework for Success• Case Examples
• Private-Public Partnership: The Carton Council • A Voluntary Industry Initiative: Paws2Recycle
• Discussion
In this Presentation
Providing solutions to
meet sustainability
and waste recovery
goals of clients and
their supply chains
4
About RRS
RRS is a trusted advisor in sustainable
material management, with a sole focus
on providing competitive strategies that
create business value – lower risk,
increase financial returns and enhanced
brand reputation.
Bon Secours Health System Caterpillar, Inc. Crystal & Company The Coca-Cola Company Delta Air Lines Dow Chemical EPA, state environmental agencies Glad Interface, Inc. Kellogg Foods Kimberly-Clark Corporation KB Home
Kraft Foods
Mandarin Oriental Hotel Group
MedImmune
Nestle
PepsiCo
Sara Lee Corporation
Skanska USA
Tetra Pak
Unilever HPC
US Nonwovens
Walmart
Our clients include:
5
The Circular Economy: Mindset Shift and Value Returned
6
The Circular Economy
A Simple Definition:
The evolution of industrial processes from Take -> Make -> Waste
linear industrial processes to closed loop processes.
Results in more restorative mechanisms that keep resources in use
for longer periods of time
“It is a huge challenge to shift our economy from linear to circular…it requires systems redesign at every level”
– Ellen MacArthur, MacArthur Foundation
7
#1 - Requires a Change in Mindset
Environment
Society
Business
Environment
Society
Business
“Business is a wholly-owned subsidiary of the environment”
– Ray Anderson, Chairman and Founder, Interface
8
#2 - Focus on Value Returned is Key
In the Circular Economy, Value Returned is Both Tangible and Intangible: Calls for Accounting Beyond Traditional Ledger.
9
#3 Requires a Supply Chain Focus
10
#4 – Recognition of Waste as an Economic Good
Source: MacKerron, Conrad. “Unfinished Business: The Case for Extended Producer Responsibility for Post-Consumer Packaging,” As You Sow, San Francisco, CA, 2012.
Example : Value of Wasted Packaging Material in US
11
WHY NOW: MARKETPLACE CATALYSTS
12
Why Now: Marketplace Catalysts
• Latest consumer research demonstrates the importance of recycling to key customer segments
• NGO campaigns around the globe, including shareholder activism targeted at consumer brands
• Landfill diversion has become a top priority, primarily driven by policies and by B2B supply chain expectations
• The Closed Loop Fund was a major 2014 signal of market driven support for materials recovery on the part of major retailers and consumer brands
13
Increased Regulatory Activity
14
A FRAMEWORK FOR SUCCESS
15
Framework for Success: Cooperation is a Value Multiplier
ManufacturersBrands
Retailers
Consumers
Municipalities
MRF Operators
Reprocessors
Haulers
Converters
B2B byproduct exchange, resale, remanufacture, disassembly
Closing the Loop Closing the Loop on Waste
Private-public partnerships are instrumental to success
17
Critical Success Factors
• Successful projects require private/public partnership and collective action, since improving recovery requires cooperation with key members of value chain
• Use of influence over direct control is very important to establish a collective focus on significant impacts in the value chain (e.g., consumer use)
• Benefit: Pooling resources reduces cost through voluntary ‘shared’ responsibility
• Avoids costs of compliance as regulators focus enforcement efforts on other unaddressed environmental issues
• Collective action projects today are leveraging global knowledge hubs to build local recovery infrastructure
18
PARTICIPATING IN THE CIRCULAR ECONOMY TO MAINTAIN COMPETITIVENESS AND
FINDING THE LEADING EDGE
The largest food packaging company in
the world by sales
Carton Council
20
The Carton Council is a group of carton manufacturers united to deliver long term collaborative solutions to divert valuable cartons from the landfill.
Associate Member
Who is Carton Council?
The Strategy
1. Build sustainable markets- Build the Demand
2. Build sustainable infrastructure- Build the Supply “Pipeline”
3. Develop consumer awareness and participation- Fill the Supply “Pipeline”
21
Carton Recycling Access Campaign
• Pro-active industry partnership for voluntary producer responsibility
• Pushing carton friendly financial and technical resources into supply chain
• Capital support for sorting facility upgrades
• Marketplace assistance for movement of cartons
• Community/hauler communications and outreach support for carton recycling access
22
Achieving the “Right Formula”
Source: CCNA
23
Carton Recycling Access Rate in US
Source: CCNA
START in 2009 As of 12/2011
24
Post-Consumer Carton Pricing
25
OVERCOMING INFRASTRUCTURE AND CONSUMER AWARENESS CHALLENGES FOR EMERGING MATERIALS AND
PACKAGING TO BUILD THE CIRCULAR ECONOMY
-8%
-6%
-4%
-2%
0%
2%
4%
6%
TTL MSW Gen 1990 = 208 MTTTL MSW Gen 2012 = 251 MT
Increasing prevalenceDeclining prevalence
Ch
ange
fro
m 1
99
0-2
01
2 Plastics are diverse and represented just under 13% of all waste generated in 2012.
Packaging Stream Evolving
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
RRS, 2014
20
12
Rec
yclin
g R
ate Most is not collected thru
curbside
Core cost model of MRFs
Increasing prevalenceDeclining prevalence
Recycling Rate Relative to Evolving Packaging Stream
End ofLife
Sourcing Manufacture Use
While flexibles perform well from an LCA perspective and the environmental impact of packaging is nominal at the end of life, the financial and social impacts are not nominal from the POV of many stakeholders.
Total Life Cycle Management
Understanding Recyclability
Collection Programs – Consumer access to community-based collection programs
MRF Compatibility - how well something sorts in a typical MRF and the probability it end up in the correct commodity bale.
End Markets – the availability of markets to accept and reprocess the recovered commodity
30
• Pre-competitive Consumer Facing Industry Initiative
• Take Back to Retail to Recycle Woven Polypropylene Pet Food Bags
• Cause Marketing as an Incentive to Consumers • Heavy emphasis on brand and community
enhancement
Case Example: Paws2Recycle (P2R)
Nestlé Purina
Mars
Walmart
Rachael Ray
Big Heart Pet
Ainsworth
31
P2R: Companies with Woven Pet Food Bags
Paws2Recycle
32
Using current avg EU EPR fees for PP bags it would cost approx. $71 M/yr to manage US woven PP pet food bags
P2R: Regulatory and Customer Drivers
Existing Framework laws
EPR legislation introduced since 2011
EPR legislation introduced in 2013
CA Rigid plastic packaging requirements & recent bag ban
Paws2Recycle
33
P2R: Advocacy Issues that Impact Brands
Paws2Recycle
of U.S. households own a pet.1
34
The Market
65% Pet food is 39% of pet industry sales and growing.2
The Consumer The Industry
$21B is spent on pet food per year.
1 Brennan, Andy. “IBISWorld Industry Report 45391 Pet Stores in the US.” September 2013.2 American Pet Products Association. “Pet Industry Market Size & Ownership Statistics.” Web. December 30, 2013. http://www.americanpetproducts.org/press_industrytrends.asp3 2011 Gauge Report by Gfk Roper and SC Johnson.
The NEED
We estimate there are between
320-350 MM woven PP pet food bags landfilled each year and growing.
Want a better ending for the story of this package.
Note: 3.5B seed & feed bags are landfilled/yr
In 2011, Roper reported 75% of Americans feel good when they take steps to help the environment
ANDtwice as many (58%) recycle regularly today as did 20 years ago.3
P2R: Putting the Pieces Together for the Pet Industry
Paws2Recycle
35
THE SYSTEM
• Most consumers recycle curbside
• MRFs sort and bale material
THE HANDLING CONCERNS
• Polypropylene (PP) in a MRF is in the form of rigid containers.
• Laminated woven PP will not flow through the disk screens nor are the volumes high enough for MRFs to handle.
THE END MARKET REQUIREMENTS
• PP bag recyclers require homogenous bales of woven tough bags and desire low levels of contamination.
• Industrial woven PP bags are currently recycled in quantity. Recyclers welcome post-consumer bags as long as they meet their specifications.
P2R: Why not Recycle at the Curb?
Paws2Recycle
Campaign to drive consumer awareness and participation
Pet consumer is ideal demographic with right campaign and incentive for bringing bags back
Volume & Collection Logistics
Correct location to test concept
Atlanta selected as first pilot location
Goal will be to grow to other large metro areas
36
Intergroup Int’l partner for Atlanta
1
2
3
4
End Market & Reprocessor
Retail partners supporting take back to retail
P2R: Elements of a Successful Take Back Program
Paws2Recycle
37
Using a cause marketing campaign that resonates with pet owners, the goal is to create an incentive for consumers to bring their bags back to stores by making a donation to local pet welfare orgs based on the amount of bags returned.
P2R: Using Cause as an Incentive
Campaign
Paws2Recycle
38
Convenient:Map and Locations
Easy to Update,Responsive Website
Educational:Woven Bag Info
Unique Marketing:Sponsor InfoRelationship Building
Prototype
Website
P2R: Bringing the Campaign Alive
Paws2Recycle
39
WHY:
Connect pets, community and environment. Learn what pet owners think about Paws2Recycle. Report pilot performance and donations to pet welfare organization.
Prototype
Website
P2R: Cause, Community, Recycling
Paws2Recycle
Susan Graff, Vice President
[email protected] 202.716.1795
Anne Johnson, Vice President
434.823.6973
@recycle_com
Resource Recycling Systems
What Do you Think?
