In the details

Features - IC&I Focus

Waste and recycling companies increasingly are recognizing the need to provide consistent and reliable data for their clients’ ESG reporting initiatives.

December 2, 2021

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Environmental, social and governance (ESG) factors are of growing importance to investors, who are incorporating this information into their analysis as they attempt to gain a fuller understanding of the companies they want to invest in. Providers of waste and recycling services are being asked to help provide data that is used in corporate ESG reporting, and some have embraced this role and the associated opportunities.

“Over the past few years, an organization’s environmental, social and governance performance has become ‘the new currency,’” says Rick Perez, founder and CEO of Avangard Innovative, a waste and recycling optimization company based in Houston. “Contrary to what used to happen 20, 10 or even as recently as five years ago, when companies needed to choose between financial performance and sustainability, today companies create enterprise value through the disclosure of data relating to their ESG performance. That is because ESG reporting provides a snapshot of the business impact on investors, customers and wider stakeholders.”

He adds, “ESG reporting has become one of the top priorities for major public companies as capital markets are measuring the ethical impact of the companies they choose to invest in.”

What is ESG?

According to the CFA Institute, headquartered in Charlottesville, Virginia, a growing number of investors are applying the nonfinancial factors of ESG as part of their analysis process to identify the material risks and growth opportunities of public companies. “ESG metrics are not commonly part of mandatory financial reporting, though companies are increasingly making disclosures in their annual report or in a stand-alone sustainability report,” the CFA Institute says.

Environmental criteria that companies are measuring include their energy consumption and use of other resources, carbon emissions and their waste outputs. Social criteria can include labor relations and diversity and inclusion initiatives, while governance encompasses a company’s internal practices, controls and procedures for self-governance. It includes how companies comply with the law and meet the needs of their external stakeholders.

The Global Reporting Initiative, the Sustainability Accounting Standards Board and the Task Force on Climate-related Financial Disclosures are among the organizations working to establish and advance standards related to ESG reporting.

Jeff Feeler is president and CEO of Boise, Idaho-based US Ecology, a provider of environmental services to commercial and governmental entities that includes treatment, disposal and recycling of hazardous, nonhazardous and radioactive material. He says, “Today, more than ever, customers and stakeholders are aware [of] and valuing ESG initiatives to increase performance ratings both internally and by chosen partners and vendors.”

That means the company’s customers are asking for more information about US Ecology’s ESG solutions in requests for quotes and bids, Feeler says. “They are looking for an environmental solutions provider whose ESG initiatives help their Scope 3 ESG performance. They also are looking to partner with a company who is focused on improving our own internal Scope 1 and 2 performance.”

Seth Goodman, CEO of East Longmeadow, Massachusetts-based Northstar Recycling, says ESG reporting is important to his company’s clients because it is important to their investors and customers. “All of our clients have goals around sustainability,” he says, adding that waste and recycling is a particular area of focus for most of them. “And it will be for all of them,” he says. “We believe it is just a matter of time.”

Northstar provides managed waste and recycling solutions to consumer packaged goods (CPG) companies and other industrial clients.

“What’s most important is that the data that they get from us is accurate and timely,” Goodman says. “What we have found when we have won new national clients, particularly in the CPG space—that is where we focus a lot of our growth efforts—prior to working with us, the data has been either poor or nonexistent. Our ability to aggregate that data for all the waste streams they are producing at all of their facilities and deliver it to them is extremely beneficial to our clients. It enables them to feed that information very easily into their ESG reporting platform, whatever that might be.”

Data of interest

Customers of recycling and waste services providers are looking for information on their own waste diversion efforts and their service providers’ ESG efforts in some instances.

Perez says customers are looking for data on their general environmental impact and their recycling and waste management efforts.

“For general environmental impact, we will commonly find data related to emissions and carbon footprint, as well as energy usage, water usage, climate risk mitigation and overall environmental policy,” he says.

“For recycling and waste management indicators, we find more specific metrics, like volume of waste diverted and specifically the volume of waste to landfills, reuse and source reduction; cost-effectiveness; overall sustainability, like reiterative circular models, for example,” Perez continues.

Goodman says Northstar’s clients are interested in the grades and weights of materials that have been diverted from the waste stream and the form that diversion took. He says Northstar ensures that the same terms are being used across its clients’ sites to describe the materials in question and that the units of measurement are consistent.

“We are flexible enough to customize our data in any way they want to see it,” Goodman adds.

Northstar provides baseline data from when a client begins using its services so it can track its progress toward achieving zero waste, Goodman says. To do that, Northstar must first understand what qualifies as “zero waste” for a client because definitions can vary.

“If we have a truckload of packaged food [and] if we send that to an animal feed company that depackages all of the product, extracts the food for their animal feed operation, there is still that packaging left over. Some of our clients consider that not going to landfill. But we have other clients that are more stringent.” Those clients want the packaging to be recovered and sent to a nonlandfill use, Goodman says.

In the area of Scope 3 emissions, or those that result from activities from assets not owned or controlled by the reporting organization but that indirectly affect its value chain, clients also can be interested in learning more about the ESG policies of their waste and recycling service providers, US Ecology’s Feeler says. The company receives ESG-related questions about how US Ecology has undertaken its own sustainability initiatives in the areas of planning and transportation; its efforts to reduce its waste generation, energy consumption and carbon footprint; and emissions reductions initiatives.

“US Ecology has dedicated teams and resources to ensuring our commitment to strengthening ESG solutions for our company and for our customers is well-communicated,” Feeler says. “We continue to identify data points that can be collected to better reflect the ongoing solutions we have in place that contribute to our overall ESG performance rating.”

Data collection and delivery

“One of the biggest changes we’ve made in the past two years is focusing on circular economy solutions. Previously, we concentrated on providing customers the ability to manage recycling streams,” Perez says. “Now, we offer an integrated circular solution where we provide our customers with the ability to track, measure, optimize and monetize their waste and recycling workstreams. We do this by using our proprietary technology platform, which includes hardware and software, called Sustayn. When our customers retrofit their current equipment with the Sustayn platform, they are able to effectively drive efficiencies, transparency, traceability and trackability on all their total waste and recycling programs.”

He continues, “We have learned companies can’t productively manage and optimize what they can’t see and measure. By using Sustayn, they now have a way to drive behavioral change with real-time accurate data.”

Goodman says Northstar uses software from cieTrade Systems Inc., Norwalk, Connecticut, to track clients’ waste and recycling data. That data is pulled into another software program that allows the company to create more robust visualizations and analysis for its clients.

“There is also a lot of work we do in [Microsoft] Excel because a lot of our reports can be directly uploaded by our clients from Excel to their ESG reporting platform,” he says.

Goodman adds that Northstar is nimble when it comes to how it delivers this data to clients to conform with their preferences and requirements. “We are constantly investing in our data reporting capabilities so we can do these integrations as seamlessly as possible.

“We see more and more of our clients wanting this type of information,” he continues. “Not all of them want it now, but we know that they will want it, so we are investing a lot of money on the data and the tech side of our business to be able to be ready for that.”

Perez says integrating data into clients’ ESG reporting software is important.

“Our Sustayn platform gives our clients the ability to track, measure and view transparent and accurate data to drive change,” he explains. “Our ability to provide visibility to workstreams that used to have immense blind spots makes us highly valuable to our customers. Furthermore, our relationships are strengthened and lengthened by the integration of a full circular solution, where data is obtained and analyzed, operations are tracked and optimized, and outputs are repurposed and monetized.”

To report its own ESG impacts to clients, Feeler says US Ecology uses a manual process. “As each software platform asks unique questions, our hands-on response approach provides a more customized response unique to each customer.”

Customization, consistency and accuracy appear to be key factors when providing data to aid clients in their ESG reporting efforts.

The author is editor of Recycling Today and can be contacted at