Waste Management CEO says recycling must brace for change
Wednesday, September 07, 2016
Posted by: Anne Piacentino
Source: Resource Recycling
Dan Leif, Sept. 1, 2016
David Steiner is OK feeling the wrath of some recycling professionals – as long it leads to better business.David Steiner
"We believe the recycling industry needs to change and it is changing," the Waste Management CEO said in the keynote address at this week's Resource Recycling Conference in New Orleans. "Our leadership position [on that issue] led to criticism, but if it leads to changes that help the industry, I'll take that criticism."
Steiner has regularly bemoaned the state of municipal recycling in public statements over the past several years as prices for commodities have fallen and costs to process recovered materials have risen.
Those statements have sparked pushback from some members of the recycling community, who have wondered what the high-profile executive's ultimate goal has been in calling out the current economic issues.
In his keynote, Steiner said his aim is to ensure the long-term viability of recycling and to help start a dialogue about how to focus materials recovery going forward.
"For good portions of the last years, we've been losing money in recycling," the CEO said. "Guess what follows losses? Disinvestment. … We needed the wider community to understand what was going on."
'Not going to apologize'
Steiner, who said publicly traded Waste Management processed 11 million tons of recyclable material last year, made it clear that any shifts the company makes in the recycling space will be driven first and foremost by cost-effectiveness. "I'm not going to apologize for being a for-profit company," he noted on several occasions.
But he also indicated that despite continued projections for low oil prices and slow economic growth globally, Waste Management feels materials processing can remain a revenue center.
Doing so will require several shifts in approach, Steiner explained. One specific strategy he brought up was focusing on trying to collect and recycle a more narrow spectrum of materials.David Steiner
He referenced a set of studies Waste Management has recently begun publicizing that helped the company understand which materials offer the most bang for the collection and processing buck.
The list will not be surprising to industry veterans: fiber, plastic bottles and metals.
But Steiner said those materials, all of which enjoy well-developed infrastructure and strong markets, are not just attractive because of the profit margins they generate – they also lead to the biggest environmental benefits for each processing dollar spent. In this way, he said, the company is following the model of sustainable materials management being promoted in a number of corners of the industry.
"We're using facts to create smart goals," said Steiner. "It's a life-cycle thinking approach."
And where would that leave materials, such as organics and glass, that many communities want to recycle but that don't score high using Waste Management's profitability/sustainability criteria?
Steiner said Waste Management is happy to continue to find ways to divert those streams but that communities or another "natural payer" will need to be ready to cover the associated costs if the company cannot generate sufficient revenues through end markets.
"It's pretty simple math," said Steiner. "If we can somehow get the price of glass up, we'll recycle more glass. But it's not just glass; it's any material."
Surviving the storm
Steiner built his remarks around the idea of perseverance, comparing recycling's economic challenges to storms that have hit the Gulf Coast region recently – and throughout history.
He said Waste Management can play a key role in helping the industry navigate current choppy waters by acting as an "incubator of new ideas" as long as those ideas can be implemented in a profitable format. He added that Waste Management's perspective toward recycling is one defined by the long term.
"Like New Orleans, we're not here for one generation," he said, "but for generations to come."