As more people and companies pursue a zero-waste future — looking to reduce what they dispose of and maximize the reuse of materials — and expectations around ESG reporting grow, a new industry has emerged that uses software and other technology to advance these goals.
One leader in the growing zero-waste field is Rubicon, founded by Nate Morris, who serves as Chairman and CEO. The Lexington, Kentucky and New York City-based company was born from his combined interests in public policy, the environment, and the application of technology solutions to solve complex problems. Now, he and the rest of the Rubicon team enables businesses and governments to reduce their waste and manage their recycling while also finding ways to help their customers save money and meet sustainability goals.
“Waste is a design flaw,” Morris says. “If you’re producing a lot of waste, there is something not functioning efficiently inside your organization. It is really an indicator of a sophisticated business if you have a very lean and efficient recycling operation.”
As a Certified B Corporation, Rubicon also amplifies its mission to end waste by diverting waste away from landfills and protecting the planet’s future. To learn how Rubicon uses technology to shrink clients’ trash piles and enhance their ESG (environmental, social, and governance) credentials, I talked with Morris as part of my research on purpose-driven business.
I’m curious about the story behind Rubicon — why and how did you start the business?
Nate Morris: Rubicon really represents a passion that I’ve had since high school around public policy and the intersection of government and business, and using free market solutions to solve the biggest and longest-standing challenges our world faces. And waste is one of the oldest of those. It goes back to the beginning of civilization, and is one of those issues that we don’t want to think about — we just want to keep it out of sight and out of mind.
Often it’s thought that making money and doing something good for the environment are mutually exclusive propositions. But I believe we can do both, and that the greatest catalyst for environmental change can come through business. Where government has sometimes struggled with solutions to these kinds of complicated problems, innovative businesses have stepped up and found ways to tackle them. That is really what drove me to start looking at a lot of these kinds of broader, human issues and what would ultimately lead me to waste.
Waste tells a story about what we are leaving behind — a legacy of sorts — and there is a prime opportunity for my generation of entrepreneurs to reimagine this category. We have an industry that’s been built almost entirely around landfills and burying garbage in the ground, and I felt strongly that that needed to change.
How does Rubicon use technology to make waste reduction more efficient and feasible?
Waste is known as the toughest industry in the world, and one with very little transparency into its actual functions and operations.
Very few people, if any, ever ask questions about their waste. What’s going on with my waste bill? How much is my recycling? How much am I paying each month? It’s sort of out of sight, out of mind. But technology allows us to leverage the ability to be transparent and to actually get real-time information about what’s happening with our waste and recycling.
It’s also an industry in which businesses are handed down through the generations, which makes it extremely difficult to break in as a newcomer. Now those relationships from prior generations are being upset by sophisticated technology, the application of data and analytics, software products, and a vision for how the industry is going to evolve and ultimately influence the direction that the environmental movement takes in the future.
Rubicon is a completely digital company, it’s a software business. Our business model incentivizes other means of disposal — something other than burying trash on the ground. We don’t own trucks. We don’t own landfills. So our incentives are radically different compared to the way the industry has operated historically.
Think about it: If you own the truck, you have to run it to make your profit. So that brings with it a risk that the account is overserviced, meaning that an account that should be picked up five times a week may get picked up seven times a week. We are using our software to analyze the millions of locations we have in our database and adjust the level of service accordingly. Refinements like these can generate six figure, maybe even seven-figure savings right out of the gate, depending on the business. It also results in less wear and tear on the vehicles and the roads themselves and, finally, less drive time, so there’s an environmental benefit in that you get tremendous carbon savings, too.
The data doesn’t lie, and the data that we have around the country gives us a great indication of what the correct level of service should be, and our mapping capabilities show us the most efficient route. Our CTO tells a great story that in the old days, prior to Rubicon, a collection route could be thrown off for the entire day if the driver preferred Taco Bell over Kentucky Fried Chicken for their lunch stop.
But now we are able to have a more robust industry that is fairer, more open, and that supports small business growth and empowers new entrepreneurs. We’re also very excited to see the next generation of entrepreneurs that have recently joined the space and brought diversity to it. There are new haulers that are minority-owned, veteran-owned, and female-owned in our network and they are making it look more like a true reflection of today’s America.
Obviously waste is a big issue in the E dimension. But, regarding your ESG reporting business, what about the S and G dimensions — for example, helping companies examine gender dynamics and racial composition of their workforce and governance issues and things like that?
ESG reporting has become a mainstay, and that’s because it’s what the free market demands. We’re listening to the market, and what we’re hearing leads me to believe that there is no greater force for environmental change than business itself. The key driver today is companies saying: I’ve got to partner with Rubicon because of ESG reporting requirements. And if I don’t get Rubicon, I’m not going to get the information that I need to be able to report accurately. They need a credible third party validating those metrics and benchmarks, looking at how they’re doing better year over year related to waste.
I think it’s accurate to say that waste is a design flaw. If you’re producing a lot of waste, there is something not functioning efficiently inside your organization. It is really an indicator of a sophisticated business if you have a very lean, efficient waste and recycling operation. Our software uncovers opportunities for more diversion, which helps to drive up revenue.
We believe the future of Rubicon is going to be centered around what used to be a nice-to-have — reporting around recycling and diversion — becoming a must-have. A whole generation of consumers are now making purchasing decisions based upon the environmental footprint of the companies with which they spend their money. They look at what you’re doing to offset externalities and make sure that you’re being responsible with the materials you have.
What the customer and what households are looking for today is sophistication around material. They want to know how to repurpose that material and how to thrive in the 21st century business climate. Customers are voting with their wallet today and are using products to do so — they are aligning their dollars with their values.
That’s part of why we became a B Corp. It’s just the way we run our business. This is not a moniker that we put up or a nice accreditation. B Corp Certification has informed a lot of our decisions about how we’ve run and grown our business.
Can you share some examples of companies you started working with and how it has helped them?
One of the businesses that really helped build Rubicon was Papa John’s Pizza. We went to Papa John’s because it was right in our backyard in Kentucky. I remember walking into the meeting and saying to an executive from the company, “You know, I’ve started this waste company.” And he said, “That’s great. And you know, I have no idea what we’re doing with our waste.
So that’s often the first conversation that you have with senior executives from a lot of companies. They’re focused on selling, whether it’s pizzas or groceries or whatever their product or service might be. They’re not usually focused on what they’re doing with their waste.
We’ve also seen important gains in reverse logistics. With another client, a national variety store chain, we use a robust reverse logistics program where we’re able to backhaul tons and tons of cardboard. When the trucks drop a load, rather than the trucks going back empty, we load them with cardboard and send that to be recycled. That’s one example of how re-engineering the supply chain can create tremendous revenue and tremendous diversion from landfill. Beforehand that cardboard was just going to the landfill and being thrown away.
We have also partnered with grocery chain Wegmans on their zero-waste journey and made progress toward the circular economy by giving a second life to materials used in the ordinary course of business. Food waste in particular is a massive problem. The U.S. Department of Agriculture (USDA) estimates that 30-40% of the food supply is wasted annually. It’s not surprising, then, that committing to zero-waste targets in a grocery setting is a huge challenge that requires elaborate systems thinking — revisiting supply chains, establishing sustainable purchasing policies, accurately forecasting demand to minimize spoilage, and managing waste generated in operations. Our program with Wegman’s aims to cut food waste in half by 2030.
Throughout our partnership, we have also worked with Wegman’s to identify ways of repurposing, refurbishing, and recycling a variety of materials, including non-food products. For instance, we’ve recycled thousands of pounds of granite countertop, and found a second use for seafood containers and bakery racks. We also developed a program to recycle kitchen oil and grease, and to convert meat products into biofuels. Each solution brings Wegmans closer to their zero-waste goal.