WASTE DIVE: Your recent sustainability report sets new goals and defines the "moonshot" plans. Those goals are on a 20-year timeframe, but we're also seeing climate reports that say we may have less time. How do you factor that in? Is 20 years too long to be setting some of these targets?

JIM FISH: Yeah, that's why I think we're accelerating some of them. If you look at the goal to eliminate four times the greenhouse gas impact of our operations, [it's] moving much more quickly. Last year was our biggest addition to our fleets ever. We added 1,800 trucks. On a fleet of 18,000, that's a lot – it's 10%. This year, we'll probably add somewhere in the neighborhood of 1,600-1,800 again. That is accelerating our shift into CNG from diesel. So I think that in and of itself speaks to our urgency, if you will.

Waste Management was recently named to the CDP A List, and the company's report cites you as the primary person responsible for "climate-related issues." I know operations have experienced some tough effects from recent hurricanes. Has the sense of urgency ramped up at all because of that?

FISH: I think so. I think with these hurricanes, you almost have to ramp up a little bit.

I feel like the earth is changing so much that it requires us, particularly as corporate citizens, to really accelerate what we're doing to improve things. I know that's kind of a broad, generic statement, but I do believe that accelerating the actions that we take ... it's part of what we talked about at the forum today, actions that we're taking and trying to make a cultural change within the company. So the fact that we recognize that we have to do things more quickly — by the way, not just related to the environment — the entire company is moving more quickly, and that's a bit of a cultural shift for us.

In a recent Houston Chronicle interview, you said other competitors may think you're a little "nuts" sometimes for trying the things you are. How do you balance that? You want to be viewed as the leading edge, biggest company, face of the industry. You've still got to report to the shareholders and maybe not get too far ahead of the competitors, because then you might be at a disadvantage. What's the balance there?

FISH: Honestly, from a technology standpoint, I think the industry has been a bit behind. Particularly as you think about customer-facing technologies, but also technologies that help us with this turnover of our organization of employees. So, driver turnover, heavy equipment turnover.

We're doing a pilot with Caterpillar at one of our landfills on remote operations of heavy equipment. We're meeting with [the Volvo Group and Mack Trucks] next month to talk about autonomous vehicles, over-the-road vehicles. 

So we've got to step forward. And you're right. I don't want to spend a billion dollars and find out that I've actually, in an odd sort of way, put myself behind the other competitors.

But I do think, spending wisely, assessing what the customer wants ... and sometimes the customer is not just the spoken customer. Sometimes it's just the environment. I always talk about that as being the voiceless constituent.

What does the customer want and need? Using technology to further that is, I think, very important. And I think our competitors, I kind of half in jest said, I think they believe I'm a little crazy for spending significant dollars there. I also believe they're smart and will be fast followers, if they discover that this is worthy of the expense.

Under climate-related opportunities in its CDP report, Waste Management cited the "medium-term" potential for "more value being assigned to opportunities for recycling, use of renewable alternative fuels and renewable energy, and sustainability consulting offerings." Based on annual recycling revenues of $1.6 billion, the report estimated a 5% increase in recycling-related revenue could generate $100 million.

During his speech, Fish noted new market opportunities had made him "confident that we will see sustainable recycling programs develop and flourish in spite of our recent challenges."

You and I have talked before about how a big increase in recycling revenue is not going to happen overnight. How should we think of that timeframe now? Is Waste Management headed in the direction where food waste and more recycling is part of the portfolio, or do you still feel constrained by the market?

FISH: It already is today. I'm putting anaerobic digesters in New York, LA, Boston, so–

The pre-processing facilities right?

FISH: Yeah, the pre-processing facilities. Which feed the digesters, right?

So I think we recognize that organic material is 40% of the overall waste stream. It's a big, big component.

It's very important for us to find a solution for organics. We're somewhat unique there in the industry that we have a venturing group that is spending dollars, looking world-wide for solutions for organics. Looking worldwide for solutions for landfill replacement. Looking at mapping technologies for autonomous vehicles.

We've invested in several venture capital groups — one in Europe, one in Canada, one in the U.S. And those investments, while we'd like to get a return from those, are really more about learning what we can learn and having access to these technologies. I'd love [for] one of these VC firms to find it and sell it to me at some multiple, and then have the technology myself. That's part of the impetus behind the investment.

As far as climate-related opportunities, fair to say that's high up on the list?

FISH: It is high up on the list. And I think it's a differentiator for us, potentially.

The CDP report covers multiple risk areas, including facility resilience and disaster preparedness. For example, Waste Management estimates that 47% of its MRFs are in "high flood areas" and 8% are in "extremely high flood areas." It also includes a section on potential reputational risks, noting, "If our revenue was to decrease 1% due to negative public perception of our capabilities or long-term investment in sustainable assets, that could be a loss of $120 million dollars."

One thing that stuck out was the reputational risk, this idea that if somehow the public feels Waste Management's sustainability efforts are not moving fast enough, for example, it could result in a loss of revenue. Is that a new concern based on the general level of climate discussions?

FISH: I don't think it's a new concern. We present an enterprise risk management report to our board each year. We go through and determine what those risks are, and certainly environmental is one of them. There's other risks on there — like, cyber is a big risk.

But I'm not sure that there's a huge reputational risk. I view the risk as almost being kind of an opportunity cost for us. If somebody else comes up with this technology, and we don't, then there is a risk to our revenue stream at that point. So, I view it more along those lines than on the lines of "We could do something wrong, or we could have some big kind of disaster that would create reputational damage." I guess that could happen, but I kind of view the risk more as being, "If we get beaten to the finish line, then there's risk to our revenue stream."

That makes sense, but the reputation piece is important as well, I'm sure. It's the reason you're hosting this event. You want to have that image.

FISH: Absolutely. I would tell you this, Cole: I think our reputation is at an all-time high, and our stock prices are at an all time high.

And I don't think that it's coincidence. I think our reputation — not just from the sustainability forum, although that certainly doesn't hurt ... [We're] building a reputation of innovation, building a reputation of really understanding and caring about the environment, of trying to develop new solutions that benefit the environment, and benefit shareholders. I mean, this is not singular. I've said it many times: sustainability has to be both environmentally and economically sustainable.

And then continuing to build our brand around the customer as well. I believe that reputationally, brand-wise, we're at an all-time high right now. But that doesn't mean we stop here — I think we have a ton of room to go.

So where does the ocean plastics piece fit into that? I've got to admit, I was surprised to see that be the focus this year. I get why — it's in the news and it's a big issue — but as far as what Waste Management can do practically, aside from investing in one of the big new projects... Why is that a priority now?

FISH: I think there's potentially a symbiotic relationship between that problem and the problem that we have currently at our single-stream recycle plants, where we really don't have a great solution for a whole bunch of the plastic that's coming through.

[Vice President of Recycling Brent Bell] was talking about a lot of these odd items that come through our recycle plants. The Aquafina or the Dasani water bottles — those are natural plastics for us that work well through our plants. But when you start getting these bags and the thin films and all of that, that's terrible for your recycle plant because it clogs up the machinery and the equipment. So this was a bit of a natural extension for us as we looked at ocean plastics, and while we were looking at it, deciding, "Is there some solution for this low-value plastic?"

That's, in large part, what a lot of ocean plastic is: low-value plastics. So as we think about that, we think, "Could there be a natural use of that within our own network today?" It felt like it was more than just a worthwhile, altruistic approach to the environment. It felt like, yes, it's altruistic, but it's also a good business opportunity if we can find a solution that handles low-value plastics.

And presumably a domestic solution? Because once it gets exported it's harder to manage.

FISH: Yeah. We're not going to take this to Sri Lanka any time soon.

But ultimately, we think it has application within the U.S. I think we'd probably, almost certainly, try to apply this here first, because we are a North American company.

If we felt like this had application beyond the borders of the United States and Canada, where it could really benefit this ocean plastics problem, probably the first place we go would be India, because we do have almost 500 employees in India.

And we have some contacts within the administration there that are interested in talking to us about that. So I think there may be an opportunity for us to try and apply this to our own recycling business, and then an out-cropping of that would be really working on this ocean plastics problem.

By the way, I think the problem with the ocean plastics is it connotates all this plastic floating out in the middle of the Pacific, and really we have zero expertise in any of that. We don't have any marine transfer expertise, we have no collection expertise in the water.

And so I think this would not be us figuring out how we go out to the middle of the Great Pacific Garbage Patch and pick it up. It would be, how do we put something on land — maybe not even involved with the Ganges or any of these waterways that National Geographic showed us — but putting something on land that handles plastics that would otherwise get into the rivers and then eventually get into the ocean. That would be a potential business model for us.

And that's why, by the way, we've started to kind of dip our toe in the water (no pun intended there) on ocean plastics — because we think it has real possible application for our own problem that we have with waste plastics here. And if it really does have application to this big world-wide problem, then let's take advantage of that.

The Waste Management Phoenix Open's "zero waste" designation is a key component of the event's branding as the largest of its kind. In recent years, the company hasn't even placed waste bins anywhere on the golf course, leaving attendees to instead choose between "recycle" or "compost" bins.

How should I square that with trying to move away from weight-based goals toward sustainable materials management goals, which we've talked about before? What is the overall message you want people to take away from this event?

FISH: You know, it's funny because people will say, "Why would you ever be a proponent of 'zero waste,' because you have landfills?" That is true, but we're somewhat ... In a world where both businesses are running well — and right now recycling is not running very well, but we're really trying to fix that business — then we're pretty agnostic about where a ton goes, whether it goes to a recycle plant or landfill.

But as far as the expectations being set, you've talked before about not promoting "diversion" just for the sake of it — how that's not always the most useful conversation.

FISH: Part of this is just trying to re-frame. I mean, you notice we don't use the word "diversion" anywhere at the golf tournament.

It's all about recycle, reuse. And so recycling is what we've tried to convey at this forum and through the golf tournament. It should be the goal, as opposed to diversion.

Because diversion doesn't necessarily mean that you save natural resources. In my mind, that's kind of the definition of recycling: that you save the use of future natural resources by taking something and either converting it into something else, or converting it back into another — turning a plastic water bottle into another plastic water bottle, or turning it into carpet. In any event, that's recycling, because you're not using natural resources to create that carpet or create that extra plastic water bottle.

And trying to frame that conversation through this event is hugely helpful. It's part of why we decided to sign for another 10 years.

We like the message, and it helps us. It's interesting how big this event has grown. It's being talked about in places like South Africa, Japan. Whereas [before] we would never have gotten that type of exposure, now that it's being talked about there, we can use it as a forum to really convey messages that we want to convey.

So the message there is that recycling is good when it's a good use of natural resources. And the idea of no trash bin — what message does that convey? Because it's still a part of the business, right?

FISH: Yeah it is a part of the business. More than anything, I think we're trying to convey that, look, it is possible to go "zero waste."

We don't broadcast what our financial returns are for the event, with respect to that "zero waste" versus 60% recycling and 40% landfill. In this case, everything is "zero waste."

And so the message is that it's possible to do it. The second step, of course, is, "Okay now we've got to make sure we refine the economics behind it."