Sustainable Operations: How Leaders Can Achieve ESG Goals With Waste Reduction Solutions

Debjani Mallick, Senior Manager Supply Chain and ESG

Part 3: Waste

This blog post is the final entry in a 3-part series on energy, water and waste optimization in commercial facility management and industrial operations. Subscribe to The Protiviti View to follow sustainability topics.

Energy, water and waste form a triad of concerns for organizations seeking more sustainable operations. As with energy and water, waste management links to environmental, social and governance (ESG) goals and regulations while also enhancing bottom lines.

Leaders recognize that effective waste management aids in conserving global resources, decreasing landfill and reducing greenhouse gas (GHG) emissions. There’s untapped energy in the waste that organizations have historically sent to landfill. Through more efficient capture and processing, organizations can extract value from waste.

In this post, we’ll discuss how energy, utilities, manufacturing, distribution and telecommunications enterprises can progress toward more sustainable waste management, and measure and report on their attainments.

Regulatory drivers and regulatory reporting

In March of last year, the U.S. Securities and Exchange Commission (SEC) announced a proposal that will require listed businesses to report on their energy consumption. Proposed requirements link more effective management of waste to more efficient use of energy and reduction of greenhouse gas (GHG) emissions. Finalization of this proposal is slated for this Spring.

The SEC’s proposal borrows from the Greenhouse Gas Protocol’s (GHG’s) scope framework:

The Corporate Value Chain (Scope 3) Accounting and Reporting Standard allows companies to assess their entire value chain emissions impact and identify where to focus reduction activities.

Organizations must report emissions from all relevant Scope 3 categories to meet GHG Protocol standards. One of Scope 3’s 15 categories covers waste generated from operations; additional categories discuss processing, use and end-of-life treatment of sold products.

Internationally, there’s growing awareness and action on reducing waste as well.

Approaches to effective waste management

Some organizations will choose to demonstrate small, quick wins early; for instance, recycling organics, paper, plastics, metals and glass is achievable by office buildings and heavy industry alike. Others will pursue more capital-intensive approaches, as discussed below, to yield more meaningful results. Either way, a roadmap of planned efforts will help operational and facilities leaders manage the complexity of improving waste reduction efforts and demonstrating progress year over year.

Many solutions discussed in this series’ energy and water posts are equally relevant to waste management. For instance, we discussed building management systems (BMS) that support overall sustainability strategies encompassing energy and water conservation as well as waste reduction. Internet of Things (IoT) solutions — in conjunction with BMS and other systems — are another approach to addressing the triad of energy, water and waste together. IoT smart grids enable visibility into inputs and outputs in a systemic way, which supports performance optimization. Automated controls can respond to triggers based on a building’s health and needs.

As unique as industrial processes are, solutions should be tailored to each enterprise. Outside assessments, therefore, are helpful. Activities might include value chain analyses that identify opportunities to reduce waste, conserve resources and convert waste to energy. An assessment will surface technology and process optimization opportunities, which could be prioritized according to costs and benefits. Some experts will go farther, assisting with vendor selection and even remaining onsite to oversee and test solution implementations.

Each organization will have its own waste solution “recipe,” but all of these efforts contribute to achieving waste management targets:

  • Smart bins, renewable compactors and other devices can be implemented for speedy payback. They make smaller impacts than solutions further down this list.
  • Waste-to-energy solutions take organic waste, feed it through an anaerobic digester and generate electrical and thermal energy from the resulting methane. This is as capital-intensive as it sounds, but its benefits are two-fold — it saves businesses from having to buy additional energy while also reducing waste.
  • Recycling electric vehicle (EV) batteries reduces requirements for extracting, refining, and transporting new minerals. The U.S. Inflation Reduction Act includes tax credits for clean vehicles, and in January of this year, the Treasury Department published its anticipated direction regarding implementation of this credit. In 2020, the European Commission proposed measures to require collection of used EV batteries and set standards for recycled content in new batteries. In 2018, the Chinese government called for EV battery designs that facilitate recycling.
  • Industrial process recovery systems reconfigure operations to use raw materials more efficiently and generate less waste. Businesses typically locate specialists who can derive the most meaningful results from this approach.

Documenting attainments

The SEC has not specified a method for reporting waste reduction progress. Meanwhile, organizations can benchmark their waste management service contracts and analyze operations to quantify waste/yield ratios. These activities establish a baseline, and organizations can remeasure annually and after significant interventions.

The EPA established the Waste Reduction Model (WARM) to estimate GHG emissions reductions attributable to waste management improvements; this model could help organizations quantify progress as best reporting practices emerge.

Waste management efforts conserve resources, ease demand for landfill and reduce GHG emissions. Prioritizing waste reduction initiatives helps organizations achieve ESG goals while also saving money. As SEC-listed companies await clarity on waste reduction reporting requirements, they can pursue initiatives that signal sustainability commitment and sustainability performance.

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