The Purpose of Business and the Circular Economy
In college, one of my professors taught a popular theory of economics that a company’s sole purpose is to deliver profit to shareholders. Since then I’ve found that, yes, of course you want a company to be profitable so it can continue to exist. But the purpose of business to me is what it does — what service it provides, what product it makes, and how it helps people, society, and the planet.
In the pursuit of purpose, I resolved to create businesses that put those things first. Twenty years later, I stand at the helm of companies that do just that. Today operating in 22 countries, TerraCycle® is known for creating first-of-its-kind recycling solutions for nearly everything the world would consider trash: empty writing utensils, plastic litter collected off beaches, even dirty diapers, cigarette butts, and used chewing gum.
Circular Economy New Business Models | Tom Szaky, 2020 ChangeNow conference in Paris
Companies work with us to sponsor collection programs for their own products, as well as entire categories of waste, to bring solutions at no cost to customers. To fill in the gaps, the Zero Waste corner of our business allows anyone to recycle everything else through turnkey, pay-as-you-go solutions that can be used to reduce waste at home, the office, in public and community spaces, and at events.
Corporations, municipalities, small businesses, and individuals bring TerraCycle’s programs to life, while manufacturers use our collection infrastructure to source unique materials for new production, driving value through this story. So far this model has diverted nearly 8 billion pieces of traditionally non-recyclable material away from landfills and towards a new supply chain of recycled content.
We also offer large-scale recycling and compliance services for facilities across the United States through our Regulated Waste division. Handling items such as batteries, fluorescent lamps, and e-waste as regulated by the EPA, we’re able to help businesses remain compliant while saving money on storage and labor costs and improving workplace safety for their employees and staff.
Simply put, the main function of our business is to solve problems related to waste. For example, it was estimated global waste increased 30% in the first year of the global pandemic. As part of our efforts, TerraCycle scaled and adapted its existing solutions for PPE (personal protective equipment, such as disposable masks, gloves, and face shields) to address the flurry of these discarded items.
The actions of individual consumers and citizens of course have an impact, but our main target is businesses: retailers, manufacturers, and service facilities providing a product. It is through partnership that we are able to help companies offer a better alternative to their customers, the individuals that collectively steer the market through their choices.
A couple years ago TerraCycle launched Loop, a reuse engine for brands and manufacturers to reimagine their single-use packages as durable, refillable containers. Similar to TerraCycle, companies big and small partner with us to offer a way for customers to enjoy their products without the packaging waste. Ulta Beauty, the leading beauty chain, is one brand in partnership with Loop to bring its personal care shelf into the no-waste space.
Loop is today in an exciting growth phase as it launches in new markets around the world (most recently Japan), and building upon the success of in-store space at Carrefour in Europe, will soon pilot at retail locations across the United States. Guests will soon be able to purchase products and drop off their empty containers at participating stores.
The spirit of where TerraCycle started twenty years ago — in my college dorm room as a submission to a business competition, feeding food waste to worms to make fertilizer — carries through in our work today. We saw the value and opportunity in the things people throw away, and today use our business to change perspectives about waste, allowing businesses to drive change.
As we continue to grow, we’re launching new models and are fortunate to have the world’s biggest brands and retailers as clients, all the while staying true to a mission to eliminate the idea of waste, which in turn furthers a circular economy.
Aligning human consumption with nature’s activities, the circular economy keeps resources in use and cycling around as long as possible, reducing the strain on the Earth’s finite cradle of resources and impacts on the environment. Recycling, reduction, and reuse are elements of a circular economy.
This is in contrast to the linear economy; simply put, it’s a take-make-waste model that extracts new resources for production and sends them in one direction: the trash.
The linear economy has long done well to drive profits, create jobs, and inspire innovation, but not only this is not sustainable from an environmental perspective, there is a real business case for being the ones to change the paradigm towards one that is regenerative and keeps responsibility for products and their impacts with the companies that produce them.
Consumers are looking to the brands they buy to make it easy for them to lighten their footprint while still enjoying the products they’ve come to know. They want it to be convenient, cost-effective, and socially valuable for them to make that switch. They already report being willing to pay more or switch brands for ones doing this work for them. We help brands do this work.
This is our purpose, to drive this change, and we cannot do it alone.
Our ability to be profitable has allowed us to seek out new partnerships, strengthen the core revenue streams of our business, and incubate entirely new lines of business. Our profitability is what supports and frees us in our initiative to address the changing needs of our customers. The world is waking up to the great problems with waste and the companies that produce it, and we’re here to help them all be a part of the solution.
Article by Tom Szaky, founder and CEO of TerraCycle, a global leader in collection and repurposing of complex waste streams. TerraCycle operates in over 20 countries, working with some of the world’s largest brands, retailers and manufacturers to create national platforms to recycle products and packaging that currently go to landfill or incineration.
Through TerraCycle, Tom creates circular solutions for hundreds of difficult waste streams such as cigarette butts, dirty diapers and used chewing gum. TerraCycle operates the largest supply chain for ocean plastic in the world, partnering with companies to integrate this material into their packaging.
In May 2019 TerraCycle launched Loop, a circular reuse platform that enables consumers to purchase products in durable, reusable packaging. Loop is available in Paris, France, Canada, the UK, Japan and the 48 contiguous U.S. states, and is a key step in helping to end the epidemic of waste that is caused by ‘single- use’ consumption. In 2022, Loop will become available in Australia.
Tom and TerraCycle have received hundreds of social, environmental and business awards and recognition from a range of organizations including the United Nations, World Economic Forum, Fortune and Time Magazines, and the U.S. Chamber of Commerce.
Tom is the author of four books, “Revolution in a Bottle,” “Outsmart Waste,” “Make Garbage Great” and “The Future of Packaging” and created, produced and starred in TerraCycle’s reality show, “Human Resources” which aired from 2014-2016 and is syndicated in more than 20 foreign markets on Amazon and iTunes.