Words: Helena Morgan

TerraCycle CEO Tom Szaky is the first to acknowledge waste’s bad reputation.

“It’s literally the opposite of sexy,” he admits. “It’s smelly and nasty and there’s a bunch of weird anomalies.”

However, he believes we need to reevaluate how we look at waste.

Szaky invites people to partake in role play and lean into an opportunistic streak to realise the complex yet rewarding value of investing in recycling and reuse.

“Let’s say that from the corner of your eye right now, you see some money on the floor. What would be the smallest amount of money you would bother getting up and going to get?” he says, illustrating the cost of collection and processing is greater than the value collected.

“It’s fair to say that you wouldn’t go after say a $2 coin or a $1 coin because your cost of collecting and processing is greater than the value of collecting,” Szaky posits. 

“It takes effort to get up out of your seat, walk over and put it in your pocket. That’s the collection cost. And the processing cost is, well, it’s not easy to spend small money today!”

He explains that understanding the cost and reward of waste management involves tossing out definitions as part of a larger learning and unlearning process – rigorous, successful and sustainable waste management necessitates tweaking of terminologies.

“When someone says hard to recycle or easy to recycle, they should actually be shifting the terminology to say profitable to recycle or not profitable to recycle,” says Szaky. 

Szaky hopes this role play communicates that the value of a recycled product is sometimes not immediately apparent. “95 percent of all objects are not recyclable only because it’s not worth it now. Our job is how to solve that.”

Where business and purpose intersect 

Four-year-old Szaky and his family fled Hungary following the Chernobyl disaster and after a period of travelling from country to country as political refugees, they eventually settled in Canada.

Szaky developed an early passion for entrepreneurship and strategy – he hired his first ‘employee’ as a fourteen-year-old – alongside a gift of the gab and a willingness to locate possibilities and potential.

Upon arriving at Princeton University, Szaky started engaging with the philosophy and psychology behind business and how meaning can be derived from service and selling. 

“When I got to university, I was really thinking about whether business can intersect with purpose,” he says.

Unintuitive anomalies of waste management

The vastness and ubiquity of waste piqued Szaky’s curiosity. After identifying contradictions and inconsistencies in waste management, he decided to capitalise on the potential behind these “unintuitive anomalies”.

“I became fascinated with the idea of waste because garbage is a very big issue, and so it’s very purposeful to solve, but it’s also filled with a phenomenal amount of unintuitive anomalies,” he says.

He was confounded by the fact that garbage comes in hefty supply but negative demand. 

“People are willing to pay to get rid of it and there’s no other material that behaves that way,” says Szaky. 

Additionally, he was intrigued by how all worldly possessions are born with the destiny of falling into the hands of a garbage company, alongside waste being the least innovative industry per dollar of revenue. It is also difficult to endow a dirty industry with appeal and glamour. 

These revelations galvanised Szaky into action and led to the creation of TerraCycle, which has recently celebrated 22 years in business. 

Szaky says the most effective way for brands and manufacturers to develop supply chains and ensure hard-to-recycle waste is recycled, is to refrain from championing the concept of hard-to-recycle.

Harnessing the power of reuse 

TerraCycle shines as a global recycling business that specialises in helping companies reuse and recycle a vast array of materials, from razors and toothbrushes to blister packs and soft plastic packaging. 

Szaky has sustained a fierce determination to develop business models that can purposefully elevate waste to recycle or reuse material, and the journey is not over. 

“We’ve grown quite a bit, but there’s still a lot in front of us as well,” he says.

Szaky alludes to an inspiring example of waste management that demonstrates recyclable content’s value as a fuel for energy conversion. 

“In the Nordics, they import waste, but to fuel incinerators, so they put in a lot of infrastructure around incineration,” he says. “The irony is that the things that burn at the best energy value are the things that are also the most recyclable.”

Szaky emphasises the immense circularity of this policy. 

“They are incinerating most of the recyclable stuff and then importing more recyclable stuff for incineration.”

Although he deems reuse as the “highest elevation of waste”, Szaky ranks incinerating waste as falling below recycling in terms of efficient waste management.

He elucidates the tension inherent in burning waste and destroying recyclables. “I think the part to be cautious on is that energy conversion is the best linear thing to do with waste and the best way to dispose of it,” says Szaky.

Tossing out the idea of ‘hard to recycle’

Szaky says the most effective way for brands and manufacturers to develop supply chains and ensure hard-to-recycle waste is recycled, is to refrain from championing the concept of hard-to-recycle.

TerraCycle interviews people from all around the world about the meaning attached to recycling and whether it should be perceived as a public service.

“Usually people will say recycling is a public service or projected as a public service,” says Szaky. “And then they say what makes an aluminium can or a PET bottle recyclable is that it can be, and what makes a pen or a toothbrush or a crisp packet not recyclable is because it cannot be.”

He denotes recycling as a for-profit and “open” system, as no actor or party in the equation has to behave, in a sense. 

“The manufacturer doesn’t have to make things that are easy to recycle. The retailer doesn’t have to sell those things and the consumer doesn’t have to buy those things. In fact, we get fined for littering, which is sort of pushing us up the waste hierarchy, but we don’t get fined for not recycling.”

He explains a product that is selected for recycling is the product with the biggest profitability potential. 

“An aluminium can or a PET bottle is profitable to recycle and what doesn’t get recycled is what is not profitable,” says Szaky.

Value and collection reward 

Szaky uses the humble pen to further articulate the difficulties of navigating cost and collection in recycling. 

“The issue with pens is that they can be recycled, but they cost more to collect and process than the results are worth,” he says. 

Szaky prescribes a possible remedy – manufacturing pens from better quality materials. However, a slew of issues and complications emerge – namely cost reduction – and businesses are forced to roll up their sleeves and try again. 

“The problem then is the price of every object you sell goes up, which is inverse to the biggest megatrend in product and package design – cost reduction and how to make something cheaper tomorrow than today,” he says.

Voluntary funding is another way to solve the complication of using better quality materials while pursuing cost reduction, Szaky says. He suggests asking pen companies such as BIC or suppliers like Officeworks to fund the cost of collection and process, minus the value of the pen, or pay someone an additional amount to recycle it. 

Driving value that is measurable 

When looking to increase the robustness and longevity of recycling programs and imbue the service with credibility, Szaky says it boils down to the relationship between investment and value. This synergy is a common conundrum encountered when walking the tightrope towards cost-effective future-proofing.

Szaky addresses the frustratingly common rebuttal people provide for refraining from jumping on board sustainability initiatives – the rewards are often initially unseen to the naked eye.

“The biggest issue of all in sustainability is that the cost of sustainability shows up on the profit and loss statement, and that’s a huge challenge for businesses to grapple with,” he says. “They see the cost, but they don’t see the value in their budget.”

Combatting the impacts of this challenge is the sole responsibility of nearly 150 of TerraCycle’s 500 employees worldwide. 

“How do we drive value that is measurable? How does it create excitement for the brand itself, but also value for customers?” asks Szaky. 

Businesses that offer a recycling solution set themselves up to deliver an appealing point of difference, as this feature allows companies to remain front of mind, says Szaky. People are intrigued by recycling programs. “If you do it well and give it time, then the programs can get immensely large”, he says. However, discipline and patience are required.

Is our need for waste leading to more waste?

There is a school of thought that suggests the need for recycling may be paradoxically lapsing into wasteful territory. Some worry that businesses and companies are creating plastic bottles for the purpose of recycling into board shorts or activewear and that this will in turn lead to an excessive amount of plastic bottles destined to be recycled. 

Szaky remains unworried as this concern overlooks the fact that plastic bottles will never lose their true purpose of holding a beverage, therefore the demand for waste would not prompt more production.

“I don’t think that tail wags that dog, because the reason to make a plastic bottle is to sell a beverage,” he says. “What drives plastic bottle sales up or down is beverage purchases. And if we buy more beverages, we get more plastic bottles. If we buy fewer beverages, we get less, but there wouldn’t be anything else that drives bottle sales.”

He points to the contents of a homegrown product to emphasise how demand for waste would not accelerate wasteful production rates.

“Vegemite is made from brewery waste like hops, but if the demand for Vegemite increases, you’re not going to suddenly see more beer production,” he says. “It wouldn’t correlate because it just wouldn’t push those businesses in that way.”

Szaky says it is important to extrapolate such cause-and-effect tensions as it normalises discussions of the war on waste and allows the discourse to snugly nestle into the sustainability zeitgeist.

Remaining empathetic to a company’s purpose 

Recycling ventures are exciting, yet overwhelming, and throughout his long tenure in a sustainable industry, Szaky has observed businesses jump the gun and make mistakes.

He cites a primary blunder on TerraCycle’s part as not extending empathy and compassion to an organisation’s core goal and instead allowing sustainable waste management to usurp a company’s purpose. Szaky hints at the purpose of a diaper company, for example’s sake.

“We go to diaper companies and say we figured it out. We know how to collect it and we know how to process it. Isn’t that great? You make up three percent of landfills. And then we ask if they can fund it.”

Many people struggle to embrace sustainability ventures due to misunderstandings and assumed financial roadblocks, so Szaky recommends taking a step back. 

“We realised that we have to be deeply empathetic to an organisation’s core goals. Why do they hire their employees? Why is a diaper company in the business of selling diapers? They’re in the business of winning market share,” Szaky explains.

With empathy for the purpose, comes willingness to embrace a sustainability venture.

“You have to get the value to show up,” he says. “And the way you get the value of recycling to show up for diaper companies is to spend effort on how that will help them win market share. And the more you do that, the bigger and more exciting and scaled the solutions become.”

Szaky says connecting to the company’s core purpose will allow solutions to have gumption and avoid lapsing into tokenistic last-ditch efforts. “You need time to really grow the sustainability solutions to not become symbolic things that come and go,” he says.

The best form of incentive is excitement and purpose amplification

Szaky underlines the dangers of framing sustainability as a sacrifice. “Sustainability activities are framed as a sacrifice and it’s very hard to get people to sacrifice,” he says.

But tapping into excitement and delight unlocks enthusiasm to participate.

“The best form of incentive is excitement and happiness. How do you get the program to put a smile on someone’s face?” Szkay asks companies to consider.

He suggests turning a recycling program into an arcade game. “The waste item goes through it, lights up the bin, or a sound goes off and people go nuts for it because it’s an excitement,” he explains. 

Szkay also advises companies to harness the powers of purpose amplification – using recycled material to build a bench or playground or a tool for workplace bonding.

“If you’re running an office recycling program, these can be boring, and you get apathy, which means people don’t use them or use them poorly,” says Szaky. 

Evolution of the sustainability landscape

What do the next 22 years have in store for TerraCycle? Off the back of recently expanding TerraCycle Pickup, acquiring Complete Recycling Solutions and increasing partners for Loop, Szaky says the company is eager to focus on organic and inorganic growth, consider more acquisitions and enable stakeholders to easily access recycling solutions.

“One of our biggest strategies this year is to work with schools and shopping centres and medical facilities, even doctors’ practices and think about what are the right ways to get them involved and interested in these types of programs,” says Szaky. 

He is also keen to establish precedents for other companies to follow. 

“We’ve seen good traction on our Loop platform in France and Japan, and so we’re thinking about how to scale those so that we can then get other countries to do the same thing locally,” says Szaky. 

He has relished witnessing the evolution of the sustainability landscape and chuckles when recalling that 20 years ago, small initiatives would receive hearty applause.

“Any little thing got a gold star, such as making the company lunch vegetarian for one day a month,” says Szaky. 

As the severity of climate change increased, so did the rigour of sustainability efforts, as people worked to make environmental responsibility synonymous with cost-savings, he says. 

“Eco-efficiencies became the big focus,” Szaky explains. “Fill up a truck better, turn off the light bulb and use less toilet paper. These are easy because they directly connect to the budget, and if you are smarter with your resources, that’s also better for the environment.”

A challenging – yet hopeful – time for sustainability  

Szaky defines the current sustainability epoch as “challenging”. The youth-mobilised anger and frustration noted a few years ago that led to the emergence of activists such as Greta Thurnberg and the School Strike 4 Climate, has simmered, he believes.

“As we go forward, we’ve got to do the hard work and invest in these sustainability activities that are not just going to immediately save money, but really invest in the future,” says Szaky. 

And while the current physical and socio-political climate is daunting, and the poisoned chalice hand-balled to successive generations gets worse every day, Szaky believes there is ample room for hope.

“There’s more of us, each of us consumes more per capita every day than the day before,” he says. “There’s a lot of headwinds on macroeconomics and instability from a geopolitical point of view – none of those things help.”

“There’s a lot of leaning in, and I think that’s the hope. I’m hopeful that all stakeholders, legislators, lawmakers, corporations and individuals will lean in. And if that happens, then there’s certainly room for hope.”

A version of this article appeared on fmmedia.com.au

Photography supplied.