Rubicon’s first ESG report emphasizes software pivot, $208M potential savings for cities

Dive Brief:

  • Rubicon’s first-ever environmental, social and governance (ESG) report leans into recent efforts to rebrand as a software provider, with new data on $208 million in projected savings for U.S. municipalities that use the company’s smart cities platform. Among multiple examples, Rubicon cites its headquarter city of Atlanta, which reportedly reduced costs by around $783,000 per year.
  • The company touts 2.7 million “user service locations” and outlines successful case studies around waste reduction and organics recycling from clients such as Chipotle, Best Buy and Wegmans. Rubicon also notes that in 2019 the company began tying a portion of annual bonuses for certain employees to the amount of waste reduction they could help achieve, and similarly has diversion incentives for certain large clients.
  • While the report does not include new sustainability benchmarks, climate-based metrics are under consideration. “As we move forward to articulate our proposition we are evaluating which of the environmental frameworks make the most sense for us as a company to include in future reports.” Chief Sustainability Officer David Rachelson told Waste Dive.

Dive Insight:

Rubicon has seen a high-profile and at times tumultuous rise in the waste industry since launching in 2008. Much of this growth, including multiple acquisitions, has focused on servicing commercial customers through third-party hauling partners. More recently, the company pivoted to highlight its software offerings and put additional focus on municipal clients. Rubicon has worked with over 45 U.S. cities since 2017.

As laid out in the report, Rubicon believes cities can find long-term savings by investing in subscription-based products that help make routing more efficient, streamline customer service, reduce paperwork, track a variety of broader data points and improve recycling quality. As one previously reported example, the report notes Rubicon software assisted Atlanta in a program that reduced recycling contamination rates by 57%.

According to the report, the broader $208 million potential savings figure was based on an assessment conducted by 10EQS Consulting Services that factored in “reduced disposal costs, optimized fleets, and other metrics.” Chief Strategy Officer Michael Allegretti told Waste Dive the assessment included information from existing customers and was “extrapolated over a diverse set of American cities that vary in sizes.”

While multiple cities are now faced with the prospect of budget cuts due to the coronavirus pandemic, and some have cut sustainability programs, Allegretti said that outlook was not universal in his experience.

“A far larger percentage of cities are recognizing that this pubic health crisis has exposed the need for them to redefine resiliency in the face of the pandemic, and they are searching for out-of-the-box solutions to help them run more efficient and effective government operations,” he said. “Nowhere is this more relevant than in the operation of municipal solid waste or recycling services.

Repeatedly, in both the report and an interview, Rubicon emphasized the concept of a “waste wake-up call” that has been happening since China’s new scrap import policies and other global factors altered the market. According to Rachelson, the goal of this initial report was to lay out “what we believe is the business and economic model that will deliver circularity to the world and solve this challenge.”

Outside of an existing pledge to increase the amount of recycled plastics it collects 15% year-over-year by 2025, the report itself is more anecdotal about how this plan may proceed. Rubicon is believed to be the only North American waste and recycling company to have set that target as part of the Ellen MacArthur Foundation’s New Plastic Economy Global Commitment. In a 2019 progress report, Rubicon shared examples of retail solutions in the public report and gave specific collection data to the foundation privately.

The ESG report does include detailed diversion and reduction metrics from Rubicon’s Atlanta office, but Allegretti said “in terms of getting our portfolio of customers toward the same thing, that is a longer journey.” Rachelson noted Rubicon already reports a significant amount of data as a B-Corp and the company has been re-certified twice since 2012, with its overall score increasing each time.

Still, Rubicon executives recognized expectations are changing for companies of all types and see room for sharing more public information in the future. Major industry players, such as Waste Management and Republic Services, have set their own climate targets and released more detailed metrics, while investment firms like BlackRock say they want to see more tangible environmental progress and many customers are looking to do the same.

“This isn’t about [corporate social responsibility] anymore, this is actually now about investment flows and about the bottom line,” said Allegretti. “So we believe that as we have seen, and we know from our portfolio of companies, that the best companies are now going to have to work with partners like Rubicon in order to remain viable to Wall Street.”

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