EPR Programs and the “Power of 3”

Balancing the Stakeholder Trinity

Venn Diagram - Recycling Today articleThere are many different types of recycling programs, from those run by municipalities and private organizations to programs managed by product stewardship organizations. Regardless of how a recycling program is managed, who administers or funds it, or where collections take place, success depends not solely on recycling or stewardship, but also on balancing the needs of many stakeholders.

As with any venture, a recycling initiative must first identify and understand their priority audiences and clarify to whom they’re accountable before they can construct an appropriate  business model.  Extended producer responsibility (EPR) programs—which are funded by manufacturers for the proper end-of-life disposal of their products—focus on balancing the complex wants and needs of a trinity of distinctly different stakeholders: governments (or policymakers) and non-government organizations (NGOs), stewards or those financing their model, and retailers and consumers that generate the material for the program.

Balance and the Stakeholder Trinity

Imagine each stakeholder group—with different priorities, somewhat opposing constraints, and separate definitions of success—positioned as part of a traditional Venn diagram. Three circles, each weighted the same, each overlapping equally. This is the ideal “Power of 3” stakeholder model. Achieving balance between the three stakeholders and managing the sometimes disparate needs of each audience is a powerful source for environmental change.  For EPR programs, the more defined the common ground (at the center of the diagram) the greater their influence, credibility and impact will be with their stakeholders:

  1. Policymakers and NGOs want the industry to lead in every aspect of a recycling program. They want each industry to service all related aspects of the program; to be accessible to even those most remote public areas; to collect every possible recyclable within an industry’s product category.  Cost matters little. Most would measure success by the volume (or weight) of materials collected for recycling along with any public complaints that might arise.
  2. Industry stewards or those funding an EPR program want a stewardship or recycling management organization to fulfill their mandated obligations, prevent lawsuits, avoid bad publicity and maintain low costs. Stewards would define a successful program as one that is cost-effective and minimizes their risk with the government entity overseeing the program.
  3. Retailers and consumers, as key players in the collection of materials, share a desire for convenience, low or no cost and as little intrusion into their behaviors as possible. Retailers that serve as collection sites may have similar expectations for the managing organization as they do with their other service providers: they want great customer service, with the organization meeting retailers’ needs despite the fact that the take-back program is free for them.

No EPR program can fully satisfy all of the needs of all stakeholders. The key is to balance the sometimes conflicting, sometimes overlapping issues, and to recognize that those needs are ever-changing.

For example, envision a state with a government-mandated recycling law, such as for batteries.  And, to comply with the law, several stores agree to serve as collection sites for accepting batteries from their customers for recycling.

In urban and suburban areas of the state, those stores may be convenient for consumers. Their battery collection boxes might be filled regularly, with consumers recycling a significant percentage of their batteries. This would result in a reasonably cost-efficient process: a set cost is determined to collect, process and transport a large box with more than 40 pounds of batteries. All of the stakeholders would likely be satisfied and agree that the program is successful.

In more rural areas of that jurisdiction, however, the process and results may be very different. With fewer drop-off points, the percentage or volume of batteries collected will likely be much lower, with much higher costs. When a location collects only two batteries in a week, and the cost to collect, process and transport those batteries is more than you might see in other areas, would any stakeholders judge the program to be successful? The stewards focused on minimizing costs would be unhappy.  Would it be more responsible for the stewardship organization to spend those funds on other recycling efforts, such as educational programs for consumers?

Complicating the issue is that most stewardship organizations were born from, and remain an extension of, industry trade associations. Since industry pays the bills, programs look at the trade association as the primary or even sole customer. Many EPR programs feel most accountable to participating companies that are seeking to minimize cost.

The larger benefit of balancing the trinity: Credibility

Some recyclables, like paper, glass and plastic are relatively easy to divert from the waste stream. Other, more complex products including paint, motor oil and batteries, do not lend themselves to simple recycling programs. Materials like these require coordination from all stakeholders to properly and safely collect, sort, transport and process.

EPR programs that earn a reputation for equitably representing and meeting the needs of the trinity establish a unique foundation from which they can serve all without favoring any one. This allows them to navigate compromises and trade-offs and help ensure that mandated policies make sense for all parties. Greater balance in the trinity also earns high-levels of credibility. EPR programs can then influence more expansive projects, such as development of legislation and education, and help it secure funding.

Legislation is a decisive example of balancing stakeholders’ wants and needs.  State and local governments may want to achieve the most collections but often don’t have the budgets to pay for it, and they support laws to minimize their costs. These laws may place an unnecessary burden on retailers to consistently and effectively recycle products in all stores statewide let alone nationwide, and make it easy for consumers.  A thoughtful approach to legislation that intentionally includes all stakeholders as part of the process offers the best chances for success.

With balanced legislation in place, and the trinity in harmony, education becomes a priority.  From consumer awareness campaigns to institutional and trade-related best practices, EPR programs can lead stakeholders to work together to advance environmentally responsible practices and move people from knowledge to action.

Funding is an issue for every environmental program–glass recycling to water conservation. EPR programs are no different. In an ideal world, the best and most successful EPR program would involve all manufacturers of a given material.  Respected, credible EPR programs may see greater success in participation with producers funding the proper disposal of the products they put into the marketplace. Since it would be impossible to restrict recycling to materials from certain manufacturers, each would share equally in the responsibility. This level of participation is difficult, if not impossible to achieve. However, this ideal should guide every aspect of a program.

Consequences of dismissing balance in the trinity

The “Power of 3” model leverages balance to achieve success. But what happens in the absence of this balance?  Common consequences are patchwork regulation, environmental repercussions and alienating essential relationships.

Patchwork regulation—the result of EPR programs initiated, designed and mandated by state and municipal governments or NGOs—presents a unique challenge to recycling. What can be recycled, what must be recycled, and how it should be handled, can vary by state. Retailers are hit the hardest: those in neighboring states may have to meet very different regulations, while national retailers may need to comply with several different state laws. When different jurisdictions mandate different regulations, compliance is confusing at best and sometimes almost impossible.

As a result, retailers are often of two minds: if only one or two states have laws about recycling a specific product, the retailer likely favors regulation at the state level. But when more than two states have EPR requirements, retailers prefer federal regulation, which can ensure uniform statutes across state lines. Uniformity offers ease in compliance which, to date, hasn’t occurred.

Without balance in the trinity, there are environmental repercussions—some level of chaos and missed opportunities to positively affect change, which is the ultimate goal in any recycling effort.  Across North America, there are examples of stewardship organizations that couldn’t garner industry support or couldn’t satisfy the aspirations of legislators.  In the end, this hurts the environmental benefits of why the programs were set up.

EPR programs that do not balance the needs of the stakeholders risk alienating relationships with those that can be integral to their success.  Successfully managing disparate interests is an aspiration—it is too easy to overemphasize an obligation to one and inadvertently forsake the others.  Collecting three times the amount of material than was initially planned could financially jeopardize the health of a stewardship organization and harm the industry participants, even though public organizations may be thrilled.

Finding the sweet spot: Results, impact and influence

By balancing the needs of the trinity and equitably addressing fundamental requirements, EPR programs can succeed with real, measurable results. Importantly, successful and effective recycling programs have the potential to lead by example. As an organization, they can emerge as a recognized and respected voice on broader issues related to product stewardship and end-of-life product disposal. Even better, they earn the ability to influence initiatives that minimize health, safety, and environmental risks, while maximizing benefits.

First published in Recycling Today

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