Editor's Note: This is the second post in a three-part series on sustainably-focused innovation at Alpine Waste & Recycling. In case you missed it, you can read the first part here.
By Graham Russell
Part 1 of this series showed how Alpine Waste & Recycling used sustainability thinking to establish a position as a sustainability leader in the market. Here, we show how Alpine built upon its initial success to develop a sustainability-focused service product that is unique in the waste industry.
Alpine’s experience, like that of many other companies that have embarked on a serious sustainability-based strategy, is that sustainability builds on itself with new ideas emerging from existing successful initiatives. In Alpine’s case, as the market began to understand that sustainability was a key element in the company’s customer service message and a key point of differentiation from its competitors, the company’s leadership realized that it needed to continue to consciously broaden its range of sustainability-focused services to build on the success of earlier services and sustain momentum in its marketing strategy.
Most recently, this has led to a new service offering known as Automated Sustainability Reporting or ASR. Founder and CEO John Griffith became aware that responsible waste handling is a major source of LEED points in office buildings and that large property management companies such as CB Richard Ellis and Jones Lang Lasalle were searching for ways to quantify the proportion of their waste being diverted from landfills. In response to their requests, Alpine’s sales staff were manually calculating the volumes of waste recycled or composted and the information was printed on the back of customer invoices. To eliminate this laborious task and improve the accuracy of the data in 2012 Alpine developed its unique ASR system, in which all of its vehicles are equipped with on-board scales and computers which weigh and record every trash, recycling and compost container picked up.
This data is uploaded wirelessly together with the account information (identified by the truck’s GPS) into Alpine’s CRM software system, which in turn develops a comprehensive record of each customer’s ongoing track record in terms of recycling and landfill diversion performance. Competitors are simply unable to provide more than broad estimates of these figures.
ASR uses EPA conservation ratios to provide customers with an indication of the environmental impact of their waste diversion efforts in terms of greenhouse gas emissions avoided, trees saved, gallons of fuel saved, etc. Customers use all of this information to feed into their own broader GRI, CDP or other sustainability reports. ASR also delivers comparative data on recycling and waste diversion rates for all of its customers so that a company can benchmark its own performance against other companies in the same industry.
Beyond that even, individual stores within a large retailing company like Whole Foods can compare their performance with other stores in the group. Alpine charges customers a monthly fee of just $10 for this information, a trivial sum for any company anxious to be able to quantify the impact of its own sustainability initiatives. ASR is unique in the waste management industry and is now used by nearly 1,000 Alpine customers. The company calculated that the return on investment on the development cost of ASR would be no more than 5 percent, even though management was virtually certain it would be a powerful marketing tool that would bring in new customers. However, as in the case of the previously described unexpected labor productivity benefit associated with the refueling of the compressed natural gas-powered trucks, ASR delivered a financial benefit that hadn’t been anticipated. The system provided management with much more accurate data on the types, weights and volumes of waste material being handled for each customer.
This information showed that certain customers’ contracts had been incorrectly priced. When these contracts came up for renewal, the resulting negotiations led to the abandonment of certain customers who could not be persuaded to pay more for their waste handling services but, more often, to improved contract terms that enhanced Alpine’s overall profitability.
Alpine has taken advantage of Colorado Department of Health & Environment grants to help finance the construction of both its recycling facility and its composting plant as well as Federal tax credits on the purchase of its compressed natural gas vehicles. However, because the company has focused its sustainability efforts on market-oriented initiatives like ASR rather than internal operational improvements, financial incentives in areas like renewable energy, energy efficiency and green building improvements have not played a role in supporting Alpine’s sustainability program. Its sustainability initiatives have been financed largely from internally generated cash flow and have had to be justified on their own merits just like any other type of investment project.
Watch for Part 3 of this series on Alpine Waste, which will show how the company has benefited financially from its relentless focus on sustainability as a wellspring for innovative products ands services.
Sustainability4SMEs: Graham Russell & Martha Young
Graham Russell brings 25 years of CEO experience in the environmental services industry to his current role as a sustainability professional. He currently teaches sustainable business in the University of Colorado, Denver MBA program and chair’s the School’s Managing for Sustainability Advisory Council. He provides sustainability and cleantech consulting services to SMEs through TrupointAdvisors and is on the board of the International Society of Sustainability Professionals.
Martha Young has been an industry analyst and writer for 20 years. Her expertise is in small and mid-sized businesses, information technology and energy. Young co-authored four books on virtual business processes (cloud computing), and project management for IT. She is on the board of two small Texas-based businesses, and acts in a technical advisory and business strategy capacity for an east coast venture capitalist.