Savings in Times of Crisis? Companies Focus on Waste Management
18. 5 .2020,
Under the influence of the difficult current financial situation, many companies are beginning to take the path of circular waste management. While ecology and enviromental awareness may be the motivation for some, the predominant reason is now to seek financial savings. In particular, CSR managers of multinational companies find an interesting way in circular waste management to link sustainability goals and make a sacrifice on the altar of corporate savings in times of budget savings. From our experience, this is the way for saving your company couple of thousands EUR and at the same time save several hundred thousand tons of CO2 for this planet
According to the International Monetary Fund (IMF), we are facing the biggest economic crisis since the 1930s. EU, as a traditionally pro-export economy heavily dependent on the automotive sector, is likely to replicate this year's fall in GDP of around 6-7%. The current pandemic has caused CFOs problems of a whole new dimension. Redundancies have begun, production is being reduced. Firstly, agency employees were cut and than savings on new investments in technology began. Today's question is where to optimize and look for savings to keep the company functioning.
One of the areas that offers the greatest scope for quick savings and long-term efficient settings is long-neglected waste management. What we monitor in the company today in this area are the costs of waste treatment, transport and disposal, the amount of raw materials that become waste during the production process and the costs that arise as a result of compliance with regulations and standards. In short, these are only the costs and the monitoring of compliance with standards. Today, however, the average company in this area already costs a large amount, up to tens of millions of crowns a year. The parent company ŠKODA AUTO, which is VW member, states in its annual report the costs in this area of 1.8 billion czech crowns. Above all, landfill companies, are happy with that.
The path to financial savings leads through circular waste management, in which we monitor not only the necessary legislation, but also the minimization of waste generation, because we know its true value. According to our experience, 5 steps lead to circular waste management:
- We prevent the generation of waste and minimize its generation. The ideal waste is the one that will not be created at all. Try to think about the production process or transport in your company so that the amount of waste is reduced. For a start, it is good to focus on the groups where there is the largest amount of waste and discuss with colleagues how to eliminate its generation. Disposable pallets, for example, are often a waste in companies. Try switching to plastics, which are more expensive but last a long time and have a relatively fast return on investment. The problem is also that many materials are classified as waste completely incorrectly, typically packaging material (barrels, paper boxes, etc.), so instead of selling, we get rid of these valuable raw materials as waste and pay dearly for it.
- We sort waste into its recyclable components. We have waste, which is therefore inevitably part of our production or operation. Subsequently, we will start directing it for further use. The value of waste is a function of its quality, purity of sorting and quantity. Thus, for example, so that we can sell plastic foils for CZK 4,500 / t and not have to pay CZK 300 / t for them, as the previously unnamed discount chain did, we need to sort the waste and have the process set up. In order not to transport air, it is often necessary to press the material. Of course, it is not necessary to own the press, a recycling partner can gladly lend it to you.
- We sell the generated waste and we know where it ends. We have great news for you: Your waste has value. A waste company employee may not share your enthusiasm, but once you have the waste sorted, ingredients such as plastics, paper, glass, wood, metals and more are waste that you can get paid for instead. We were recently approached by the Slovak branch of a large furniture retailer, stating that their collection company is asking for 500 thousand crowns for 126 tons of plastic waste. A week later, thanks to the connection via Cyrkl.cz directly to the plastic recycler, he was paid for his waste. By connecting to the final processor, you know where your waste really ends up, but you also find a partner who has a production opportunity from the given material, and thus perceives the waste as a valuable material.
- We use secondary raw materials in our production. The use of secondary raw materials is a great source of potential savings in purchasing when controlling its quality. Thanks to the purchase of new technologies and a better waste collection system, a growing number of companies today have, for example, high-quality plastic regranulates. These are up to 50% cheaper compared to the primary input, which depends on the price of BRENT crude oil. If you are an e-shop, you can buy second-hand paper boxes. The developer will then appreciate that many recycled products are already certified by many companies today. Plus, you know exactly what you can do with it for a fraction of the price of the primary.
- We know the composition of our products and we know that they are recyclable. This is important for several reasons. If we know that our product is made of recyclable materials, which, moreover, is actually recycled in the given conditions, then we will avoid reputational risk. We don't want to see your product roll freely in nature. In addition to thanking your CSR manager, you will also comply with the principle of ecodesign and new European legislation, which significantly expands the obligations of producers in this area.
As we have shown, the right corporate waste management approach can save company a significant amount of resources that will so badly needed during upcoming financial crisis.
‐ Cyril Klepek, CEO Cyrkl