The world is changing more rapidly than ever. To sustain and succeed in the face of this change requires agility, adaptability and, above all, a resilient spirit. We see these qualities tested and proven countless times daily by our employees who manage the environmental needs of our customers.
And in 2017, we found these qualities tested as our organization managed — and prevailed over — challenges, including a series of natural disasters and a seismic change in the recycling industry. Waste Management’s resilience has enabled us to adapt and propel our business forward.
Uniting in the Face of Natural Disaster
In the summer of 2017, we were humbled by nature’s wrath in Texas and Florida where we have thousands of employees, millions of customers, and extensive operations. Then, fires and floods in the Western U.S. and Canada further tested the relationship between our communities and Mother Nature. As these disasters disrupted lives and businesses, resiliency, community and mutual support were headliners as our company and our neighbors came together.
Fortunately, no Waste Management employees were injured in hurricanes Harvey and Irma, but many were affected by damage. Our strategy was simple: take care of employees first and then help customers. In Texas, and in particular Houston where our corporate offices are located, the storm impacted every employee in some way and displaced 135 of them with their families. Yet, within a week, we were back on the streets of Houston providing vital environmental services.
The story was similar in Florida, where hurricane Irma destroyed several of our facilities in Key West, but we were back on the streets in most parts of the state within 48 hours of the storm. Again, we were grateful that all employees were safe, though 260 of them needed assistance from our Employees Care Fund.
I could not have been prouder of our employees’ response to each other and to the needs of their communities and customers. Our agility and adaptability in these difficult situations reflected not only the commitment of our employees, but also years of careful planning. That planning includes resiliency plans for each of our facilities that are customized for each region.
Driving Change in an Evolving Recycling Industry
Also in the summer of 2017, our recycling world began to turn upside down. For many years, China borrowed from the environment to fuel their economic growth. Once again, we were reminded of the connection between environment and economics, and how important it is to not take advantage of one at the expense of the other. China simply could not ignore its environment any longer and began to implement a series of policies that ultimately impacted the global recycling industry.
As the largest residential recycler in the U.S., and the seventh largest exporter of any commodity, Waste Management was impacted significantly by these import limitations. For perspective, in 2017, we exported 27 percent of our recycling tons to China and by the end of 2018, we were not sending any residential recyclables to China. Once again, planning and foresight helped us adapt quickly. Waste Management has in recent years begun to develop new markets for mixed paper and plastics, both domestically and around the globe. This advance planning helped insulate the company from the most severe impacts of China’s import restrictions.
We are mindful, however, that we are not alone — we need a vibrant and sustainable global market. We are doing our part to drive needed change in recycling by encouraging all stakeholders to rethink recycling. This starts by remembering that recycling is not simply about landfill diversion. It is about product transformation and reuse, and it’s about real environmental and resource conservation benefits. Today, recycling must be part of a sustainable materials management model — one that carries a cost of service and serves as feedstock to the manufacturing sector.
With this perspective, Waste Management, and the entire industry, can shift our focus from recycling everything just for the sake of “recycling,” to recycling the right things well to ensure optimal environmental and economic outcomes. It’s a big change in mindset, but a necessary one to ensure continued resilience and success in a dynamic and evolving marketplace.
Investing in the Future Now
Disruption also can be a powerful positive force. Today, we’re seeing how the disruptive power of technology can test our adaptability while enhancing customer centricity, operational efficiency and carbon reduction. Waste Management has long been an industry leader in technology investments, and the past year was no exception. Our investments included:
- Placing our first robot in a recycling facility located in Houston. Robotics at recycling facilities can help with quality control, and also enhances worker safety.
- Purchasing a new generation of natural gas collections trucks with engines that reduce emissions to “near zero.” These new engines improve air quality in the communities in which we operate.
- Producing and using more of our own low-carbon fuels in our natural gas trucks. An early leader in the production of renewable natural gas from landfill biogas, we now have four facilities producing renewable transportation fuel at our landfills. This means 6,500 route trucks are running on natural gas, 32 percent of which run on renewable natural gas, which reduces the emissions from these trucks by over 90 percent.
- Testing the use of on-board cameras and computer technology to provide customers with immediate recycling quality feedback through photos, emails and even phone calls — all with the hope of improving the quality of recyclables collected and reducing contamination.
- Deploying CORe® technology to reduce the environmental impacts of urban food waste. Waste Management’s CORe® technology increases the renewable energy output of wastewater treatment facilities by 50 to more than 100 percent.
We provide a service that is as old as the planet, but we rely more and more on technology. These and other technology investments are critical to ensuring that our strategy is always future focused, making us better at what we do and equipping us to adapt in a changing world.
Aiming Higher with New Goals
As we have publicly advocated in recent years, it’s time for the recycling industry to focus on GHG emissions reduction as the life cycle goal of waste and materials management programs. Matching words to action, we have set ambitious new goals for our business. Over the next 20 years, we intend for our waste solutions and services to result in an overall reduction of GHG emissions four times greater than generated by our own operations. In 2017, that ratio was three. Our journey to four will be supported by two additional goals: reducing fleet emissions by 40 percent through renewable fuel use in our growing fleet of natural gas vehicles; and collecting two million more tons of recycled materials to offset emissions associated with raw material use by 20 percent.
Just as we have revisited our sustainability goals in 2018, we expect that many of our customers will do the same — and we are prepared to support them however they need, whether by devising processes to generate less waste or implementing more community recycling services.
Although our business is shaped by global economics, we never forget that the services that we provide are local. Our communities have their own definitions of sustainability, and our goal is to provide them the information they need to make smart choices. From recycling education programs and organics handling services, to preserving what can be reused, we will provide services that reflect customer needs — and empower them to steer their choices toward environmental and community stewardship.
Not only managing change, but driving it remains our focus for ourselves and those we serve.
President and Chief Executive Officer