Many waste and recycling systems around the world are under-developed. Some struggle against pollutive and exploitative practices, and few provide transparency or traceability. The reason for this can be tied to a pernicious cycle of insufficient supply and unreliable demand for recyclables. While communities lack the infrastructure to deliver clean, ethically sourced material to recycling markets, weak demand from industry undermines the business case for investing in that infrastructure.
To help solve this issue, McKinsey.org—a private foundation founded by McKinsey—incubated Rethinking Recycling, an initiative to create a globally scalable model to manage waste and help communities rapidly increase the amount of material recycled into productive use. Three years later, Rethinking Recycling is now the flagship initiative of Delterra, a new environmental nonprofit. To hear more about its vision and plans behind the spin-off, we spoke with McKinsey global social responsibility leader Anu Gupta.
Tell us about McKinsey.org and its ambitions.
We founded McKinsey.org in 2014 to develop innovative approaches to the world’s most pressing problems, like unemployment and climate change. Through it we’ve incubated new, scalable solutions to societal issues by applying McKinsey’s capabilities and by partnering with leaders from the private, public, and social sectors.
The first initiative of McKinsey.org was Generation, which focuses on the intractable challenge of global youth unemployment. We spun Generation off in 2017 as its own nonprofit, and today nearly 50,000 people have graduated. Over 80 percent are employed within three months of the program’s completion.
In 2018, we launched our second initiative, Rethinking Recycling, to address the challenge of circularity and the opportunity around recycling. What started as proof-of-concepts in 2019 in Argentina and Indonesia has matured into scale-up programs that address entire cities or multiple villages at once. These are now projected to give up to 15 million people access to daily segregated waste collection services by 2025.
Rethinking Recycling has now become the flagship initiative of a new nonprofit, Delterra. How will we support the nonprofit going forward?
In just three years since its launch, we’ve helped Rethinking Recycling develop community-owned, self-sustaining waste management systems that produce a reliable stream of high-value recyclables. On the demand side, we’ve worked with corporate players to build aggregation, inventory traceability, and logistics solutions, and to create local markets to consistently absorb the supply of recycled material at a fair price. For example, the program partnered with city staff and local labor cooperatives in Buenos Aires to provide residents with door-to-door waste collection and recycling services. Cooperatives now benefit from the income generated by the sale of recyclables.
To continue to build on this success, McKinsey.org will provide $6 million in multi-year funding as well as a $3.5 million challenge grant. The most valuable support, however, will be in the form of our people. As we’ve done with Generation, McKinsey consultants will commit to six to 12 months as fellows with Delterra. Through problem-solving skills, stakeholder management abilities, and functional expertise, the fellows will help realize Rethinking Recycling’s goal to deliver green, inclusive, and economic recycling to countries across Asia, Latin America, and Africa.
What drove this transition and why now?
This is about growth and scale. Rethinking Recycling is ready to scale—to new cities, regions, and countries. Over the past three years, the initiative has improved the livelihoods of more than 450 waste workers, many of whom are marginalized women, by increasing their salaries by up to 200 percent and providing them with access to health care and safe working environments, often for the first time. As a new environmental nonprofit, we believe Delterra is the right place to grow the Rethinking Recycling initiative to have even more impact.
As we look to the future, what are McKinsey’s plans for helping to create positive, enduring change in the world?
Our aspiration as a firm is to help create sustainable and inclusive growth and commit to social responsibility. From serving clients, to developing insights, to giving back to our communities, and acting responsibly as a firm, sustainability is embedded in everything we do. We are on a journey, and our recent social responsibility report shares our commitments that include racial and social equity, achieving a net-zero future, and our goal to provide $2 billion in cash and in-kind support to social responsibility efforts by 2030.
Finally, you mention our social responsibility report. Leave us with one story from the report that makes you feel proud.
One story that is very close to my heart is the Rethinking Recycling team’s response to the challenges COVID-19 brought to the communities they served in Argentina in early 2020. When the pandemic hit, newly established recycling centers shut down, which deprived essential workers of earned income. In response, Rethinking Recycling teams focused their efforts on food security for the affected waste workers and their families. In collaboration with government agencies and sponsors, they helped to distribute thousands of food packages and continued working to protect the health of the communities in which they were living in.