Strategy and Management Processes

Environmental excellence and compliance are hallmarks of sustainability and core elements of our management framework. An important tool for integrating sustainability into our business has been our strategic business framework, which includes “scorecard” tracking of key metrics to reinforce alignment with key objectives. (See figure under Governance section of this appendix.) Using this performance framework, we align stakeholder perspectives and market opportunities that will guide the entire organization for the year and beyond. Compensation is affected by alignment with company goals (including, as applicable to a business unit, sustainability goals), and compliance and sustainability are part of our performance review structure.

Our senior leadership uses this performance process to ensure that our entire organization (field operations and staff functions) focuses on strategic objectives. The measures also assist with legal and regulatory compliance and support environmental performance, stewardship goals and promotion of our values.

Our Performance Evaluation Process

  1. When establishing our strategic objectives, we take into account the perspectives of our customers, shareholders, employees, community members, regulators and other stakeholders, as well as our performance against key internal metrics and our reputation as measured with key audiences. We often employ “heat maps” that identify the geographic scope and intensity of risks and opportunities.
  2. and 3. We align our major financial, operational, environmental, community, people, safety, compliance and customer objectives with those specific company-wide programs and initiatives that have been approved and funded as critical to achieving our strategic objectives. Performance expectations are communicated throughout the organization, and senior leadership assigns quarterly and annual targets to which our field operations are held accountable.

    An ongoing initiative focuses all employees on knowing our customers better, optimizing assets, innovating in technologies, creating more efficient systems and extracting maximum value from the waste stream. Notably, this initiative closely aligns with our 2020 sustainability goals.
  1. We set targets as part of our annual budgeting process. The targets represent commitments we have made to our stakeholders and include improvements and metrics that are factored into employee evaluations. For example, targets have been created on the following topics:
    • Financial: Traditional financial measures that our investors have found to be important to our success.
    • Customer/Community: Customer engagement, improving customer interactions and service, and our community relations programs. We seek to improve Waste Management’s reputation by developing and maintaining strong community partnerships and measuring our reputation among key stakeholders.
    • Process: Efficiency and cost-per-unit measures across our collection, disposal, recycling and waste-to-energy operations.
    • Compliance: Our primary safety measures and overall environmental scores.
    • Learning and People: Employee engagement, recruitment, development, retention and training.
  2. Our operations at all levels report progress in reaching the targets. At the corporate level, monthly and quarterly reports are prepared and presented to the Board of Directors at each of its meetings. There are Monthly Business Review and Quarterly Business Review meetings to continually engage layers of management on progress toward company goals. This format and target-setting process (using specific key performance indicators) was integrated into our annual performance planning process to ensure consistency among strategy, performance planning, and performance measurement and accountability.

Sustainability Oversight

Waste Management’s sustainability service offerings are discussed at most Board of Directors’ meetings because these services are linked so closely with company strategy. Topics discussed include recycling goals; market conditions and operations; generation of renewable energy and related acquisitions; and innovations in operations to increase efficiency and provide environmentally superior service. Customers’ sustainability goals (e.g., waste reduction, recycling and materials reuse, expansion of renewable energy capacity) are discussed annually during Waste Management’s Senior Leadership Team’s strategic planning meeting.

The Audit Committee of our Board is responsible for assisting the Board in monitoring the company’s compliance with legal and regulatory requirements. Accordingly, the Audit Committee and the Board regularly receive environmental, health and safety compliance reports from management. Our Compliance Audit Services department supports these efforts and oversees compliance audits at all company-owned, -operated and -controlled facilities and operations.

For more than nine years, Waste Management’s annual strategic planning initiative has included benchmarking of national accounts and municipal customers to determine the scope and nature of our customers’ sustainability goals. Our formal materiality review for this report has been incorporated into this benchmarking. The Senior Leadership Team reviews these data to ensure that new developments in sustainability are an integral part of our business strategies. This strategic planning process helped to identify trends that were a key factor in our decision to acquire new recycling assets in 2011 and 2012, and then to shift our focus in 2014 and 2015 to the efficiency and productivity of our recycling network.