MRW looks at how three of the UK’s leading companies have embedded waste and resource effiicency into the business and seen the benefit of doing so.
Marks & Spencer
Back in 2007 M&S launched its Plan A strategy, setting itself 100 commitments to achieve to help it become a more sustainable retailer. It set itself a deadline of 2012 to achieve these, grouping them into five ‘pillars’ to achieve its objectives, with ‘waste’ one of the pillars.
In 2010 it extended the number of commitments to 180 and created another two ‘pillars’: ‘Involving customers’ and ‘How we do business’.
It also made an ambitious declaration: to be the world’s most sustainable retailer by 2015. And by 2020, the company wants to ensure that each of its products has a Plan A quality built into it.
Its strategy to integrate sustainability has resulted in significant bottom line benefit for the business. In its first year of Plan A it cost the company a budgeted £40million, its second year saw it break even, and by its third year, it was generating £50m in net benefit. In the years following, this figure increased to £70m, £105m and then £135m.
Over the six years Plan A has been operating, its net benefit has been £320m – of which it acknowledges that waste has played its part.
It embedded the strategy into the business by integrating it from top down: its executive directors and directors all have Plan A targets, linked to their personal performance payments. It sets clear targets and measures, monitors and reviews progress: it has an internal auditing team and uses Ernst & Young to monitor its progress.
It has also set up a Sustainable Retail Advisory Board, jointly chaired by chief executive Marc Bolland and Jonathon Porritt, founder director of Forum for the Future. This was set up to define what becoming ‘the most sustainable retailer in the world’ involves and how to measure progress. It has included discussing new business models that involve closed loop resource and help with developing a reporting model to show how Plan A activities support commercial success for shareholders, suppliers and employees – as well as social and environmental benefits.
Having achieved its goal of sending no waste to landfill in 2012, the company is focusing on reducing the amount of waste it generates, making it easier for customers to reuse and recycle and - wherever possible - to start closing the loop by reusing materials in the manufacture of new products.
Mandy Keepax, head of facilities offices, store cleaning, waste & pest control at M&S tells MRW that when embedding the strategy into the business, meetings with the senior retail team were arranged, and recycling areas were set up at the back of stores for all the plastics, card, food waste and other dry mixed recyclables. Each store was met with, and shown how to recycle properly. With the exception of food waste, it efficiently backhauls these materials from stores to its distribution centres. Each bale of material is marked with a bar code, which identifies the store it came from. This helps the retailer know exactly what types and volumes of waste are coming out of each of its stores. It also helps address any contamination issues, with offending bales identified back to stores.
Keepax explains: “We have set up a database and a portal, so that we can see how individual stores perform.” To help with eliminating contamination issues and ensuring materials are segregated properly, it uses pictorial signage and on-going engagement with stores. Store teams “are very passionate” about Plan A, and it is constantly refining the way it does things.
For example, as retail is competitive by nature, it is looking at introducing a league table competition between stores as an additional motivator. It can also boost and reward performance in this area through its employee of the month scheme.
Closing the loop with the materials collected is a focus for the business, so M&S has been working with reprocessors to do this. For example plastics backhauled from stores goes into making carrier bags and other film for wrapping merchandise. Store team staff are also engaged in this process, and invited to see what happens to the materials at the processing plants. Buy-in from employees has been key to the scheme’s success.
The company thoroughly audits all of its processors’ sites to understand what drives them and also meets their managing directors to ensure they share the same core values.
“We check the processing, how efficient it is and where we can close the loop,” she explains.
M&S uses service provider Helistrat to help it manage its waste and recycling. The company ensures that material which goes back to the distribution centre is checked, contamination issues are dealt with, weighbridges are checked and vehicles are tracked, for example. It ensures that the entire process is guaranteed – and that its objective of getting as much recycled material back into a closed loop process is met.
Keepax explains that the retailer is always looking at innovative ways to close the loop and reuse waste materials. For example, it is looking at using plastic pellets made from waste and coffee grounds to create a coffeeboard that can be used to manufacture furniture, essentially an alternative to MDF that can be broken up and recycled again.
But asked whether the company might look to invest in its own reprocessing plant and there is a little laugh. “We are a retailer, we don’t want to become a waste processor,” Keepax replies.
Keepax explains that before Plan A, M&S did use a national waste contractor, but it sought to do things differently when implementing the new strategy. “When we embarked on this journey one of the things we needed to understand was who were the waste providers that could change their operation to assist us to achieve Plan A and who were going to be the most innovative and proactive in helping us achieve that target of zero waste to landfill in five years.”
After a thorough tender process, it took on a new contractor, on the understanding that it would be running down its service over time, as it increasingly used its own vehicle systems and backhauling.
“That is why now, for the last four to five years, we have not used a waste contractor and we run direct to the processors and use our backhauling process, with Helistrat helping me manage the entire process.”
In October 2012, home improvement group Kingfisher, which includes the B&Q and Screwfix brands, launched its Net Positive initiative to “contribute positively to some of the big challenges facing the world, while creating a more valuable and sustainable business for our stakeholders”.
Net Positive sets the company targets that make a positive difference across four areas: timber, energy, innovation and communities. It is an integral part of its corporate strategy: good for business and the planet.
According to Kingfisher’s 2012/13 Net Positive report, the initiative will “enable us to secure the resources that we use, unlock new opportunities and drive growth”.
It adds: “Each of our priority areas is tightly linked with business goals, and achieving our targets will create measurable business benefits including new markets, new sources of raw materials and financial savings.”
Kingfisher has set itself a clear plan, so that it can achieve the targets it has set itself for 2020. It acknowledges that its journey to becoming a Net Positive business will require it “to pioneer new approaches and business models” and to work collaboratively with others.
It has also extended its data collection so that it can track its progress against a baseline.
Its priority area of ‘innovation’ is the one that is focused on designing out waste. The vision here is of “creating and using products that waste nothing”. The aspiration is for every Kingfisher product to “enable a more sustainable and ultimately Net Positive lifestyle” and its target, set for 2020, is for 1,000 Kingfisher products to have closed-loop credentials. It has calculated that 90 of its products from its 2012/13 ranges have at least one closed-loop credential.
Within the sphere of innovation, the company clearly states the benefits to its bottom line: “developing closed-loop systems that design out waste can significantly reduce costs and create value”. Kingfisher quotes the figure from the Towards a Circular Economy report published by the Ellen MacArthur Foundation in 2012 that says $630bn (£373bn) a year in materials costs savings could be available across Europe through using a closed-loop approach.
Part of its work in this area will be looking at how it can develop new business models, how it can change how customers use products and services, and how it can influence the design of products for reuse, repair or being remade at end of life.
It is developing an impact measure to assess the value that is created or increased by regenerating, reusing or repairing materials. And one of its first steps towards its closed loop approach was to develop criteria to identify, assess and clarify what a product’s closed-loop credentials are. (See box)
Through B&Q UK, it is a founding partner of the Ellen MacArthur Foundation which works on progress towards a circular economy. The business is exploring the potential for rental services to replace the sale of physical products and believes this could generate value for the business.
Alongside Net Positive Kingfisher has also set targets for improvements in three other areas: environment, partners and suppliers, and employees. Within the area of environment, it has set itself a target to send zero waste to landfill by 2020. And it clearly states that this approach brings bottom line benefits: “reducing waste helps to avoid rising costs associated with waste disposal, including the UK’s landfill tax”. In total, the group has set itself 50 targets across these three areas and its NetPositive priorities.
The group recycled 68% of its waste in 2012/13, compared to 65% the year before. But Screwfix is leading in terms of recycling rates (see box).
Kingfisher is increasing its recycling rates, but the overall amount of waste generated has also increased, partly due to business growth. It has acknowledged that this needs to be addressed “in line with our vision that by 2050 creating and using products wastes nothing”.
Brico Depot France has been hailed as a good example within the group of exemplar recycling rates – and the associated bottom line benefits. It is already recycling 76%, achieved through segregating materials at each store and integrating targets on waste into performance reviews, linked to bonus payments for store managers and logistics centre managers.
Progress from each site is monitored on a monthly basis and stores must report in if they do not meet their waste targets. Stores also receive visits from the CSR manager who reviews their waste practices and areas for improvement. And there is a segment on waste and recycling within a sustainability e-learning session that 75% of its employees have completed so far. As well as the high recycling rate, this has brought with it cost savings of Euro1.6m (£1.3m) over three years.
Embedding Net Positive into the business
The group chief executive, also the chief sustainability officer, retains ultimate responsibility for Net Positive. The chief executives of the operating companies are responsible for putting in place the processes and controls for monitoring progress against targets – they are visited by an internal audit at year end with KPMG providing a limited assurance opinion on selected aspects.
Monthly meetings and Net Positive reports are generated which go to the group board. Key employees are also incentivised at senior level: there is a requirement to demonstrate Net Positive behaviours included in their bonus criteria.
The group is working on a sustainability accounting project to help it quantify the financial value of Net Positive to the business. This will initially focus on three areas, including the commercial value generated from reducing, reusing and recycling waste, as well as the value associated with packaging improvements including reducing materials costs. This should also help it communicate the business benefits to investors.
An advisory panel, made up of senior figures from NGOs, academia and industry organisations also provides advice and reviews progress.
Kingfisher’s criteria for closed-loop
Kingfisher sees ‘closed-loop’ as where materials are either safely returned to nature or reused continually, without degrading their quality.
- Made from 90% or more recycled materials or materials diverted from landfill
- Designed to be disassembled into component parts
- Can be brought back to Kingfisher for repair or recycling
- To achieve this it believes “we will need to continually improve the closed-loop credentials of each product as well as progressively changing our business models and the way we work”.
AstraZeneca describes itself as a “global innovation-driven biopharmaceutical company specialising in the discovery, development, manufacturing and marketing of prescription medicines that make a meaningful difference in healthcare.” In terms of resource efficiency, the company says that it recognises that managing waste also brings business benefits as it means striving to improve production techniques and adopting more efficient processes.
AstraZeneca has collected data on both waste produced by its own operations as well as those produced by outsourced operations. It has found that waste generated from outsourced manufacture, formulation and packing is similar to its own activities. The latter comprising around 40,000 tonnes in 2012 compared with a total of 47,000 tonnes from its own sites.
It defines its own waste as either ‘hazardous waste’ (chemical waste) or ‘other waste’ (rubbish) according to the national legislation of the company in which it is operating. Its approach follows the waste hierarchy and it tries to take a wider view and select waste disposal options that have the least environmental impact.
The targets it has set itself to meet by 2015, set against 2010 figures, are as follows:
- Reduce hazardous waste amount (indexed to sales) by 15%
- Decrease non-hazardous waste amount (indexed to number of employees) by 15%
- Increase proportion of waste sent for material recycling/recovery/reuse from 40% to 50%
- Decrease proportion of non-hazardous waste sent for landfill from 26% to less than 10%
It has also adopted a target to reduce material use in manufacturing processes. The company uses G3 Global Reporting Initiative (GRI) guidelines to measure and report its performance in sustainability areas.
Waste disposal data, with 2012 as the reference point for change, can be seen in the table below.
|Hazardous waste (ktonnes)||26.8||24.8||26.8||22.5||13.1||-42%|
|Index (kg/$million sales)||860||750||800||800||510||-36%|
|Other waste (ktonnes)||23.2||22.1||22.7||21.2||19.6||-7%|
|Index (kg/$million sales)||740||670||680||760||760||+1%|
|Total waste (ktonnes)||50.0||46.9||49.6||43.6||32.8||-25%|
|Index (tonnes/$million sales)||1.6||1.4||1.5||1.6||1.3||-18%|
|Waste sent for material recycle, recovery or reuse (%)||36||40||44||47||47||+1%|
|Non-hazardous waste sent to landfill (%)||22||26||22||13||9||-27%|
During 2013 around 4.9 thousand tonnes of construction waste (98% of which was non-hazardous) was generated and 84% of this went to material recovery or reuse. The company is also working on reducing Volatile Organic Compounds (VOCs) that are released from the use of solvents in manufacturing and research.