Coca-Cola promised to help fix recycling. Here's how it plans to deliver

The company has committed to making its bottles and cans out of at least 50% recycled material in the next 11 years. To do that, Coca-Cola (KO) needs to be able to capture recycled materials and use them to make new packaging

That's a big undertaking, especially considering the company produced over 3 million tons of plastic packaging in 2017, according to a new report compiled by the Ellen MacArthur Foundation, which works with companies to reduce waste.

Coca-Cola is one of many major companies that has made sweeping sustainability promises. Waste-reduction commitments are a way for brands to show customers, who are increasingly concerned about the environment, that they care, and to share that message with employees. Plus, recycling offers companies a way to take more control of their supply chains and avoid potentially volatile raw materials markets.

But recycling commitments are difficult to pull off. For Coca-Cola to fulfill its promises, the beverage company needs to make its packages fully recyclable, which it aims to do by 2025. It also has to persuade people to recycle correctly, and it would help if Coke customers live in places with sufficient recycling infrastructure.

If Coca-Cola wants to keep its promise, it needs to help fix recycling systems in the communities it serves.

Blue recycling bins are seen on a residential street in Portland, Oregon. Coca-Cola will use learnings from its Atlanta program to help scale its recycling efforts.

Starting small

On Thursday, the Coca Cola Foundation announced that it is giving $5.4 million in grants to a number of environmental organizations, including the Green Blue Institute in Orlando, Keep Houston Beautiful and the Boston Parks and Recreation Foundation.

The bulk of the money, about $4.15 million, is going to the Recycling Partnership, a national nonprofit group that uses corporate funding to help develop recycling infrastructure. The Partnership is using those funds to help improve recycling in Atlanta.

City workers tag recycling bins with contaminating items.

The goal for the city is to decrease recycling contamination by more than 25% and increase the capture of recyclable materials by 20% across about 100,000 households over the next three years, Cody Marshall, chief community strategy officer for the Recycling Partnership, told CNN Business. It's a "heavy lift," he said. "But we feel really confident we can do it."

Coke, supported by the partnership, is embarking on a "feet on the street" campaign. The initiative deploys city employees and temporary workers to check curb-side household recycling bins for contaminating items like plastic bags, food, liquids or electronics, and leave a tag explaining what's wrong on the bins where those items are found.

Workers note the violation in an app to help keep track of changes in recycling habits over time. The recycling isn't collected until people fish out the offending items.

Atlanta citizens will also get mailers, and the city will educate the public on proper recycling through its social media channels. Money from the grant will help fund recycling programs for multi-family residences and college campuses in the city, as well.

The city and the Recycling Partnership tested out a similar program on nearly 5,000 households in 2017. That pilot program yielded a 57% decrease in recycling contamination and a 27% spike in the collection of recyclable materials.

The recycling problem

Recycling is complicated.

Cities have different rules for what can be recycled, and throwing something that is generally not recyclable — like a paper coffee cup — into a recycling bin causes trouble for recycling facilities. The cups, for example, tend to gum up recycling equipment because their plastic lining gets stuck in machine filters. To get rid of the contaminating, non-recyclable items, recyclers have to separate the garbage out themselves and ship it off to landfills at a cost.

For a while, the economics made sense for recyclers. They earned enough selling recycled content to offset the cost of disposing of trash. But China recently enacted its "national sword" policy, which placed restrictions on the types of recycling the country is willing to import. The recycling business model has changed since then.

When China shut its doors to certain materials, some US recyclers were left without a key buyer. The hardest-hit states are those that previously sent most of their recycling to China, including New York.

Workers sort plastic waste at a plastic recycling plant in Mexico.

Municipalities in New York state, outside of New York city, "now face a collective cost of $42 million to pay for sorting and marketing recyclables, as the material value no longer covers sorting costs," explained Stephen Acquario, executive director of the New York State Association of Counties, in a message to the head of the National Association of Counties.

He added that many municipalities "have seen a 1,000-plus-percent increase in their recycling costs since 2017 due to the paper market recession." In places like Atlanta, which never shipped that much of its recycling to China, the ban has had a smaller impact.

"We have a really strong recycling infrastructure for bottles, cans and textiles not only in Atlanta, but in Georgia," said Kanika Greenlee, environmental programs director for the Atlanta's department of public works and executive director of the Keep Atlanta Beautiful commission. "So for us it hasn't been as great of a challenge."

Coca-Cola's 11-year plan

The fragmented approach — doling out funds to different groups supporting individual cities — is the most effective way for Coca-Cola to help improve recycling, said Bruce Karas, vice president of environment and sustainability for Coca-Cola North America.

"If you take recycling and waste and say, well it's a national issue, you're never going to solve it," he said. "It's a local issue." The company will be able to learn from the Atlanta program and figure out how to apply what works to other locations.

For Coca-Cola, a shift away from China could be a good thing.

"We need to develop the end markets here," Karas said. "It doesn't help us if it's on the other side of the world."

Coca-Cola plans to refine its goals based on what it learns from programs like the one being deployed in Atlanta.

"Right now, we're building out our pilots," Karas said. "With each year, we'll be able to refine what would be our target," he said. Karas is confident that the company will be able to hit its targets by 2030.

Coca-Cola has also been working with the Recycling Partnership and other groups to help boost infrastructure throughout the world. Later this year, Coca-Cola will launch a marketing campaign and local events designed to show people what recycled materials can be turned into.

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