Smarter Business: Smart Design

Ian Yolles

photo: Recyclebank

While other green companies vanished from sight during the recession, Recyclebank grew and built its name recognition across the country. Based on the idea that economic incentives for community members will boost municipal recycling rates significantly, Recyclebank now operates in 300 municipalities in both the United States and Britain. Working from this base, new CEO Jonathan Hsu plans to build Recyclebank up to a multi-billion dollar IPO, as reported in Inc. We spoke with Ian Yolles, Recyclebank’s sustainability director about the company and its plans.

What does Recyclebank do?

The core value proposition of Recyclebank was that we could divert waste from landfill to the recycling stream and increase recycling rates in local communities. As we increase recycling rates, municipalities see economic savings by reducing the costs associated with dumping waste in a landfill. For example, during its first year in the Recyclebank program, the city of Hollywood, Florida, saved nearly $500,000 in waste disposal fees while generating more than $250,000 in recycling revenue. Furthermore, the program encouraged nearly two-thirds of all city residents to participate each month and increased recycling tonnages by 130 percent.

The positive environmental impacts associated with waste diversion and increased recycling rates make up a second dimension of our value proposition.

A third dimension of the value proposition is that we’re putting economic value in the citizen’s pocket based on their recycling behaviors. We’re able to measure and track the amount that you’re recycling and provide economic rewards: points that can be redeemed with local business partners. We’re also supporting local business activity as those points provide additional customers and business.

How do you measure recycling rates on the ground?

The original model was that we would contract with the municipality to implement our measuring system. A radio frequency identification chip was installed in all bins, which enabled us to ID it and know if you've set it out on any given week. We would then weigh your bin on the truck and award you points based on the number of pounds recycled. You could then go online to redeem your points using an online catalog.

We also have a second model: Instead of weighing each individual bin, we weigh the collective amount of recycling going on in a community. Points are allocated across the number of people that have recycled in any given week. So there are the individual weight-based and the community weight-based models.

One of the inherent limitations in the models is that it's very difficult to employ them in apartment buildings and multi-family dwellings, as you don’t have individual bins for each family. So we're now looking at a new model that could enable us to serve high-density, multi-family occupancy settings.

Can anyone join Recyclebank’s programs?

Yes, anybody can join. If you join and we don't have a contract in the municipality that you live in, you can't participate in the recycling aspect. But there are other avenues for engagement via education and product partnerships.

How do these partnership work?

There's an innovative concept that we've just launched in partnership with SC Johnson's Ziploc brand. SC Johnson is an extremely committed and progressive company when it comes to their overall sustainability agenda. With Ziploc, they've taken steps to reduce packaging and plastic and they have a longer-term agenda to create recyclable and biodegradable plastic.

In the shorter term, SC Johnson realizes that every year over 100 million pounds of Ziploc product ends up in a landfill. So we asked them if there is a way we could help create the equivalent of a carbon offset. The concept is, could they invest in Recyclebank to catalyze our growth into new communities so that over time we generate incremental increases in recycling over the baseline rate for each community? We’re going to match pound-for-pound the amount of product that is going in to the landfill with the incremental recycling gains in various communities over a defined period of time. By helping catalyze that growth, SC Johnson is offsetting the impact of their product going into landfills.

Another example of a product partnership we have is with Kashi, a progressive and innovative cereal company. Kashi's packaging is recyclable. They have been seeking ways to encourage people to recycle their cereal boxes. So now there's messaging on the Kashi packaging that talks about their partnership with Recyclebank, the recyclability of their packaging, and includes a specific code on their boxes that people can use online to earn points with Recyclebank if you pledge to recycle the box. So this is another way people can become involved with the program.

What makes Recyclebank stand out to investors?

Recyclebank focuses on how we educate, build awareness, and motivate individuals in communities to change their actual behavior and action. That is very different from the larger tech space where the overwhelming amount of dollars is going to the technology and infrastructure side. And I’m not saying that’s a bad thing; that is absolutely necessary and we need greater investment to spur innovation. But if we’re going to get to the level of change that’s required, millions of people have to be mobilized to do the right thing and that’s the kind of systems innovation that we’re focused on.

You plan to add two million more members this year alone—what is Recyclebank doing to make this happen?

First and foremost, we will continue to build out the core of the business around recycling. We will continue to add partnerships with municipalities in the U.S. and the U.K., which is a critical part of the expansion strategy.

Secondly, we're moving into energy as another way for people to engage with us. And then we're looking at other segments such as motivating people to reduce their water use at home or change their transportation choices. So that's another dimension to the growth strategy and impact strategy.

A third dimension is digital engagement to support offline action. The digital environment is important because you can aggregate millions of people. You can engage people in a local movement that facilitates a global goal. You can also create instant attention across multiple channels and multiple points of engagement.

Furthermore, we're now cultivating partnerships with some major brands as a way to stimulate growth, education, learning, and impact. So alongside corporate partners, we're creating accessible, online educational content around sustainability issues. We're essentially rewarding people to engage and pass along the content that allows the community to learn and grow organically.

last revised 7/25/2011

Share | |
Find NRDC on
YouTube