For our sustainability reporting, we analyze revenues according to the disposition of the materials collected, rather than according to operating business units as described in our annual report.
Our sustainability reporting specifies each revenue stream as it would be reported according to federal and state definitions of “green” services, such as recycling and renewable energy generation. The intent is to look carefully at how we are evolving our business from a simple collection-to-landfill model to one that seeks to find value in discarded materials. In the process, we go behind the numbers in our Annual Report on Form 10-K filed with the SEC to separate collection revenues from trucks carrying waste to traditional landfills that serve to contain and monitor waste, from revenues associated with activities such as collection to recycling centers or facilities generating “green” energy.
Our accounting methodology is very specific. For example, in the “recycling” category, we drill down to a material’s final destination in order to reclassify materials collected in the ordinary course of garbage collection, but separated to sell as recyclables. Reporting for our recycling facilities excludes processing residuals (i.e., contamination destined for landfill). For our innovative service lines, we include revenues associated with:
- Waste Management Sustainability Services’ integrated project management and consulting to help customers meet sustainability goals;
- New ventures like conversion of landfill gas-to-fuel; and
- Treatment services provided to the energy production sector.
Our business mix ratios have changed over time in several ways. Green energy production declined in 2015 by 40 percent due to our divestiture of Wheelabrator Technologies’ waste-to-energy plants. Although we continue to support that line of service by supplying feedstock to Wheelabrator plants, we no longer retain ownership or an operating role.
This divestiture of a major green energy revenue source has had a corresponding impact on the relative distribution of our other revenues. Our landfill gas-to-energy plants remain strong, increasing from 108 plants in 2007 to 136 plants in 2015 and providing power equivalency needed to power 470,000 homes.
We do not have current plans to site new greenfield municipal solid waste landfills, and we already have installed landfill gas-to-energy plants at most landfills producing gas at levels sufficient to support this technology. As a result, we recognize that it is unlikely we will attain our 2020 goal of producing waste-based energy sufficient to power the equivalent of 1 million households. During the upcoming two-year reporting cycle, we will be evaluating a new energy goal with a specific focus on life cycle outcomes in terms of GHG reduction and substitutes for fossil fuels.