Waste Management Leads with Green at Investor Meeting

Reuters Recyclery, Florida
WM Single Stream Recycling Facility

At today’s Waste Management Investor Summit, a 200 slide 4 hour presentation about all aspects of the business, I was in the minority.  There were very few other women in the room, and I was the only representative of the media.  Nearly every non-WM attendee was analyst or banker.  And judging by their questions at the end of the report, none of them cared about green.  So I was rare in that sense too.  Given that setting, I was impressed by WM’s bold prioritization of sustainability.  The tagline on every slide is “Think Green.” They are eagerly repositioning themselves as an environmental services provider rather than waste collector, and backing up that change with investments. Barry Caldwell, SVP of Public Affairs and Communications, candidly noted that WM used to make a wonderful profit hauling waste to the landfill and doing no more.  And this shift to diversion is driven in large part by consumer demand for better solutions.  And WM is still making money, so they must be doing something right.  In addition to customers caring, WM is dedicated to green because they care (or at least a majority of the executive team must), and they see green as a growing trend which has already gained them trust and favor according to their brand research.

The conundrum that I kept coming back to is this – WM’s revenues are driven by price and volume of trash.  So when volumes decline, so does revenue.  That is to say, reducing the amount of stuff that Americans throw out is not in WM’s best interest.  The recession was tough because there was less trash (among other things).  An outlook with increased volumes is rosier than declining volumes.  This isn’t to say WM would actually sabotage waste reduction efforts.  In fact, they’re quick to point out that their Upstream teams actually advise large companies on how to achieve (or move closer towards) ZeroWaste. For WM, the focus is on extracting more and more value from the waste.  For example they noticed that people bring them $8 to 10 billion worth of waste each year.  What you don’t want still has value and WM does its best to capture that value in new and inventive ways.

Here are some of the things WM is doing in green.  These are also all ways that WM extracts value from the “junk” we toss out, listed in the Investor Day report:

  • Waste-to-energy (energy from waste): WM has 23 plants which generate power for 1 million homes and is looking to build or acquire more (including in China)
  • Curbside and commercial recycling
  • Landfill-gas-to-energy or -fuel: 119 WM landfills capture and utilize gas for use, with plans to triple power output by 2015 compared to 2005
  • C&D recycling
  • Roof shingle recycling
  • Greenopolis and GreenOps: internally developed system for tracking and rewarding consumer recycling
  • WM LampTracker®: Florescent light bulb recycling system
  • ThinkGreenFromHome.com: Batteries and universal waste mail back recycling system
  • eCycling: Electronics recycling is WM’s fastest growing revenue stream
  • Harvest Power: Composting/aerobic and anaerobic digestion

New technology in organics:

Each of the above is worth a discussion of its own really.  Look for more in later posts.  In my next post however, I’m going to try to answer the questions I fielded before this event as well as any more you may have.  What other questions, comments or concerns come up about WM’s investments, processes, priorities, etc?  Ask away, and I’ll try to make sure they all get addressed either in comments or the next post.

Also, for those of you who want to really dive deep, you can find the entire WM Investor Day presentation online here.

Ed Note: In the interest of full disclosure, WM covered Amie’s travel expenses to the Florida summit

Amie runs Cobblestone Solutions, LLC, a consultancy focusing on business development, marketing, communications and strategy for mission driven companies. Previously, Amie served as Director of Business Development for Viv (a Bay Area environmental start-up), Program Manager for Social Venture Technology Group (a boutique consulting firm focused on measuring social and environmental impact), and Associate Consultant at Bain & Co (a global management consulting firm). She is particularly interested in innovations that reduce waste, altering consumer behavior for good, and leveraging the power of business to solve the climate crisis. You can read more from her on her blog, on GreenBiz.com, and on JustMeans.

15 responses

    1. Thanks for your question! They didn't really bring it up, but when I did they acknowledged my point and pointed out that how much waste consumers produce is not really their territory. They deal with it once we're done with it and aren't trying to impact creation of waste, except perhaps in their Upstream consulting business to some extent.

  1. Hi Amie,

    WM business business relies on landfilling, burning garbage, and putting organics into landfill cells to generate methane gas. I would argue that none of these strategies are truly sustainable. “Waste-to-energy” means taking materials that could have been recycled or composted and instead burning them. Gasification and Plasma technologies are nothing new. When you start scratching at the surface of these “new technologies,” you'll discover that very few (if any) business is actually making money with gasification or plasma. I suggest you check out: http://www.no-burn.org/ to get an alternative (and in my opinion, a credible) viewpoint on this subject.

    As for the Revenue/Volume conundrum, this is a phenomena that is well understood by any economic entity (private or public) that relies on garbage volume to fund its enterprise. Local governments that use landfill & transfer station taxes and/or solid waste franchise fee revenues are particularly vulnerable to this “death spiral” of revenue. Solid waste haulers that charge by volume are also affected.

    Careful with Waste Management. They're the biggest in garbage. But, that doesn't necessarily make them the last word in zero waste.

    Good luck,


    1. Paul,

      Thank you very much for your thoughtful comments. Very much appreciate your input. I definitely agree with you that landfilling and simply burning waste (with no energy capture) is not the way to go and we should push away from that. And that is exactly what I see WM doing. I think that the GAIA site that you recommended proposes solutions that go hand in hand with what WM is doing – http://www.no-burn.org/article.php?list=type&ty…. Extended producer responsibility, medical waste management, waste picker rights, clean production, zero waste and global justice are all fantastic ideas and movements, but they won't really solve waste for a long time and we have a lot of work to do. In the meantime, someone has to haul our trash and WM does its best to maximize diversion through recycling and its myriad other programs. GAIA is recommending what to do on the consumer side before we toss things, which WM doesn't have direct control over. We as consumers need to push on those issues. Perhaps one of the WM executives will chime in here but I think they would probably be in favor of all that GAIA stands for (well, perhaps aside from the waste-to-energy part).

      I don't think WM is the last word in ZeroWaste, though they might like to be and perhaps they'll get there. Wouldn't that be great for the largest waste hauler to become the biggest proponent of ZeroWaste? At the end of the day we all need to work together, so I think we need to congratulate WM's efforts and give them honest feedback if we think they've gone astray.

      1. You're right. We aren't there yet. As a company or as a society. This planet's waste challenge is enormous. At WM we do envision a future when perhaps we have achieved zero waste. And it is our commitment to help our customers get there, providing environmental solutions that change with their needs and giving us progressively better environmental performance.
        Lynn Brown, VP of Corporate Communications at Waste Management

  2. Hi, Amie,
    My immediate thought on the revenue / volume problem is to check out the electricity industry. Utilities traditionally make money per kwh delivered so they have no incentive to make their customers be more energy efficient.

    However, California and I think many other states in the country are “decoupled” markets. That means that the Investor Owned Utilities (e.g. PG&E, Southern California Edison, SDG&E) don't make money based on the volume of energy and the regulatory agency actually compensates them for running efficiency programs. Partly due to this decoupling, California has one of the lowest per capita energy usage in the country.

    I'm not sure the model could be directly translated over to municipal waste but it'd be an interesting idea to explore.

  3. Isn't there a name for a business model where, in the theoretical utopia to come, you put yourself out of business? Since it's never going to happen, I don't think any company based on dealing with waste has to worry about going out of business any time soon. But yeah, it's clearly an issue – but still, WM is obviously looking to get more creative with wast that simply burying it. They've got a long way to go, but it's good to see them moving in the right direction – that's a heck of a lot more than oil companies are doing, for example. Think about it – WM has a zillion business possibilities in front of it that don't involve burying or burning waste – recycling, sorting, selling waste, consulting about efficiency, consulting about achieving cradle to cradle…. the list goes on and is likely to offer business opportunities for decades.

    If WM won't do it, new entrepreneurs will. So really, I think the waste as your revenue model is real, but it's temporary!

  4. Thanks for the great post, Amie!

    Here's a koan from a wise friend of mine who insists that “waste” should be only used as a verb, not a noun: “It's not waste until it's wasted.” (It's worth pausing on this idea and tossing it around in your mind for a few minutes…isn't all waste just a *resource* in the wrong place/wrong time?)

    If WM were to embrace this idea, “Waste Management” could come to mean something else entirely! And the company could find themselves in a new business with endless possibilities for innovation, I would think.

  5. PLEASE: The word 'green' is not a catch-all. You use it in your post as though it were a verb, noun, adjective and everything in-between. It is SUSTAINABILITY, or environmental consciousness, or green business. Not simply 'green.'

    Now, that being said, Waste Management is one of the biggest offenders in the green-washing category I can think of. “Think Green” is nothing new. It's been their slogan for years.

    You assert the following: “In addition to customers caring, WM is dedicated to green because they care (or at least a majority of the executive team must), and they see green as a growing trend which has already gained them trust and favor according to their brand research.” Prove to me that they “care.” It's impossible. They are trying to make their brand green so that consumers don't boycott them in rage. If the average consumer knew how much they landfill, how they manipulate their pricing, how they landfill almost everything they claim to recycle, we would storm their gates.

    I bet the average person has no idea that Waste Management will not actually recycle the things you put in your recycling bin unless they can make money doing so. If the commodity markets for, say, paper are bad and they can't get enough per ton to make the whole process pay for itself, they simply dump it in a landfill. And never disclose that.

    Don't simply buy their 200 slide presentation as some kind of religious devotion to “green.” The only green they are concerned with is that in their bank account.

    1. Kurt, I think it's good to be critical, but why is it a problem for them to not recycle things that are not profitable to recycle? They're a business.

      The challenge, of course, is to figure out ways to make recycling and reuse profitable – and some of that responsibility lies with the government and some with the original manufacturers of whatever the product in question is. I have no idea if it's in WM's policy to make inroads in working with manufacturers and governments to change the way things are manufactured in the first place, but it would be an interesting business challenge!

    2. Kurt,
      Thanks for your comments. I can tell just how much you dislike WM.

      I definitely did not just buy their 200 slide deck and I appreciate your concern. And I'll try not to use the word green so broadly – good point. I actually hate the word green as its so overused. Bad habit I guess?

      But in any case, I'm curious about your claims of WM dumping recycling in landfill when they can't get good rates? Can you prove this? I agree that would be atrocious. For the record I have no idea if they are – and it would maybe be useful to enhance the transparency of what they're doing. Last year recycling cost them money but I didn't get the sense they let up at all since their customers didn't let up. Yes, perhaps it's their customers more than they themselves that really care about landfill reduction, but I really think they are doing their best to listen. We can all do better, as can they. But the thing that really got me was that the audience for this investor day thing was analysts and bankers who really could have cared less about environmental performance. And yet that was a centerpiece for them.

      Here's my question to you – how could WM do better in your eyes? What information or actions do you need to see to demonstrate improvement and that they're not dumping recyclables in the landfill etc?

  6. First, many thanks to you, Amie, for covering this. It's an exciting topic (at least for some). I appreciate the comments about your minority status in the room, on multiple levels. My experience at the United States Composting Council conference was somewhat similar, if less pronounced. I'm a Whole-Foods-Shopping, green-leaning, foodie from D.C. I have been drawn to composting (and other organics recycling technologies) because it just seems to make too much sense not to dispose of organic waste this way. Why throw away a perfectly good resource when you can repurpose it into a soil amendment, especially when a soil needs all of the help it can get? But many the participants had likely never heard of Omnivore's Dilemma or thought about organic farming except in passing. These participants where in the waste-disposal industry. They manufactured or purchased large machinery and hauled yucky stuff around, what most professionals from the burbs would never consider doing. I'm not making a judgment here; I've certainly never tried to squeeze a living out of what people throw away. The waste management industry is not populated, in large part, by folks who read Triple Pundit.

    Which, brings me to the point the Kurt raises, WM and other firms are in this for the money. I don't think this makes them “bad,” many people who read this blog want to make money in the “green” industry. But WM's first priority is to turn a profit. There is money in having a green brand. The unanswered question for WM is whether their initiatives will be the real thing or mere green washing. I do know that the waste management industry is trying to pitch landfills as being “green” by promoting methane capture technology and by saying that landfills can be covered and turned into parks and other green space. Of course landfills should use methane capture technology. But landfills are not the most efficient method to deal with organic waste. Landfills are designed to mummify everything put into them, including food waste. Organic waste (i.e., food and yard waste) will decompose in a landfill, but slowly. If that same waste is composted or placed in an anaerobic digester, the food would be converted into compost with little methane production (compost) or the methane would be captured (anaerobic digestion). At the end of either process, you also have a product, compost, that can be returned to the soil (cue birds chirping). I recommend that readers check out Dr. Sally Brown's writing on the issues, which she publishes in BioCycle (http://www.biocycle.net). I also understand from Dr. Brown that the only thing you can grow on top on capped landfills is grass. Putting trees on them, apparently, can result in a crack in the cap. Lovely.

    But this waste is money for the waste management industry so they will fight to keep it in a landfill if it benefits them. Some states – Georgia, Florida, Minnesota, for instance – passed bans or yard waste in landfills. This has greatly benefited the compost industry in those states. But recently (and I'm not sure where WM stands on this) some landfill operators in those states have had lawmakers introduce legislation to overturn those bans. Hoisting the “green” banner, they argue that yard waste should be landfilled so that landfill operators can capture the methane. For reasons noted above, disposal of yard waste in a landfill is not an optimal “green” solution. What the landfill operators really want is the tipping fees they get for picking up the material. Landfill operators don't make money when compost operators get the yard waste. But as evidenced by all the bankers at the WM conference, landfill operators have a lot more money that the composting industry, and can afford to hire the best lobbyists.

    Nevertheless, WM and other companies may be able in some instances to turn a profit by partnering with composting facilities. As Amie notes, WM has purchased a minority share in Harvest Power, a company using large-scale anaerobic digestion. WM had access to the “feedstock,” that is, the waste, that Harvest Power needs. Harvest Power doesn't want to get into the trucking business, hence a marriage of convenience is born. Hopefully we'll see more of this out of companies like WM.

    So, we'll see which direction WM goes and whether greed is, in fact, good.

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