Ron Gonen, Co-Founder and CEO of RecycleBank, has a solution for reducing waste in U.S. landfills: pay people to recycle. Through its incentive-based recycling programs, RecycleBank seeks to revitalize municipal recycling by incentivizing consumers through consumer rewards programs. Households earn points based on the amount they recycle that can be redeemed at local businesses. RecycleBank combines consumer self-interest with a sound business model to address a major societal challenge, while encouraging consumers to embrace, and feel good about, environmental sustainability. Tell us about how RecycleBank started and how it works We launched it in early 2005 with a pilot program in Philadelphia. From there, we gained contracts in South New Jersey, Southeastern Pennsylvania and Wilmington, Delaware. RecycleBank rewards consumers for the amount of waste they recycle. In one of our client cities, Wilmington, Delaware, every home we service gets a RecycleBank container with an embedded computer chip designed to measure how much the household recycles. The volume of recycled materials translates into RecycleBank Points. A participating household can log onto www.recyclebank.com and can see how many Points they’ve earned. It’s as easy as reviewing an online bank statement. Participants can use their points to shop at over a thousand different stores, get free movie tickets, or discounts of $10 to $50 at local supermarkets. Or, they can donate points to local schools to support environmental initiatives. How have consumers responded to the idea of being incentivized and rewarded to recycle? Our programs are popular in every community we service, from the poorest to the most affluent. As a start-up, we focused on providing great service, rather than growing the company as quickly as possible. We were fortunate in that we received a great media coverage, which helped validate our business model and eventually raised two rounds of venture capital funding. How were you inspired to create your unique business model? Years ago, I saw a map with zigzagging lines representing garbage trucks driving around the country, trying to find landfill space. Although I didn’t know that much about the recycling industry, I saw a major inefficiency in our waste system. America has always had a hard time getting citizens to recycle. The result is that garbage trucks must search for increasingly scarce landfill space. This costs cities a lot of money, while denying manufacturers access to recyclable material. Our goal centered on motivating households to use the recycling bin rather than the trash bag. I believed that having incentives like points would encourage households to recycle. This would provide additional value that would trickle down to other stakeholders. Do today’s consumers reward companies that positively impact communities? I believe socially responsible business practices have a powerful impact on consumers. Companies realize that people want products and services that provide something better for their families, themselves, and their communities. There’s a price point that will limit their desire, but if the price is close between the products or services of two companies, they’ll choose the socially responsible company. You’ve built your business on free media exposure. How has PR helped RecycleBank become Slightly Famous? I think a lot of it has to do with what’s going on in the environmental space. In recent years, the media has been buzzing about solar, wind and the next electric car, all of which are incredibly important initiatives. We’ve been very fortunate because we have not put much effort into cultivating media exposure; it just sort of comes our way. The media likes our story, which centers on providing a practical solution to a widely recognized challenge. It helps that when the media visits a RecycleBank community, the mayor is excited about our program. When the media does stories about our company, and people have good things to say about RecycleBank, the story comes off looking phenomenal. Can you talk about your community partnerships, such as the Green Schools Program? We want to encourage schools to recycle. We’ve created a unique program where schools apply for a grant that will fund an environmental initiative, such as composting or putting solar panels on a school roof. Grant recipients have the opportunity to gain funding from others in their RecycleBank community network that can donate points to those school initiatives. Coca-Cola will then match the donated Points with a dollar contribution. The feedback on these programs has been phenomenal. Among RecycleBank households, the Green Schools Program is one of the top twenty most popular places to spend points. I hope to inspire other businesses to consider ways to assist in solving today’s challenges. What do you feel is the future of corporate social responsibility and businesses playing a larger role in society? I believe there are tremendous opportunities for businesses to make massive, positive impacts on multiple segments of society. Consider our nation’s oil dependency. Anybody who does not recognize this problem is completely out of touch with reality, or has an ulterior motive tied to greed. How do we solve that problem? Well, there’s public transportation, solar, wind, creating more bike lanes, getting people to recycle, because plastic is made out of petroleum. The solutions are all out there. It’s just a matter of how can businesses create market-based incentives to stimulate adoption and demand. Coca-Cola’s fleet of trucks, I think, is larger than FedEx and UPS combined. The CEO of Coca-Cola can look at sustainability and the environment in two ways. He can say, “I can’t worry about any of that stuff. I’m just trying to grow my bottom line.” Or he can say, “We’ll place a massive order with any company that develops a hybrid truck.” Truck manufacturers will scramble to create a hybrid truck, enticed by that incentive from Coca-Cola sitting at the end of the line. Meanwhile, Coke can save a lot of money through reduced fuel costs and then give that money back to their shareholders. There are many opportunities for a company to be recognized by embracing social responsibility. The media will reward companies that develop solutions to seemingly intractable problems by publicizing the companies’ efforts. Your customers and clients will then support and believe in what you’re doing.
