WASTE MANAGEMENTResearch Brief

Sustainable Industry Classification System™ (SICS™) #IF0201

Research Briefing Prepared by the

Sustainability Accounting Standards Board®

March 2016

www.sasb.org© 2016 SASB™

WASTE MANAGEMENT

Research Brief SASB’s Industry Brief provides evidence for the disclosure topics in the Waste Management industry.

The brief opens with a summary of the industry, including relevant legislative and regulatory trends and

sustainability risks and opportunities. Following this, evidence for each disclosure topic (in the categories

of Environment, Social Capital, Human Capital, Business Model and Innovation, and Leadership and

Governance) is presented. SASB’s Industry Brief can be used to understand the data underlying SASB

Sustainability Accounting Standards. For accounting metrics and disclosure guidance, please see SASB’s

Sustainability Accounting Standards. For information about the legal basis for SASB and SASB’s

standards development process, please see the Conceptual Framework.

SASB identifies the minimum set of disclosure topics likely to constitute material information for

companies within a given industry. However, the final determination of materiality is the onus of the

company.

Related Documents

• Infrastructure Sustainability Accounting Standards

• Industry Working Group Participants

• SASB Conceptual Framework

INDUSTRY LEAD

Bryan Esterly

CONTRIBUTORS

Andrew Collins

Henrik Cotran

Anton Gorodniuk

Nashat Moin

Himani Phadke

Arturo Rodriguez

Jean Rogers

Levi Stewart

Quinn Underriner

Gabriella Vozza

SASB, Sustainability Accounting Standards Board, the SASB logo, SICS, Sustainable Industry

Classification System, Accounting for a Sustainable Future, and Materiality Map are trademarks and

service marks of the Sustainability Accounting Standards Board.

Table of Contents

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Industry Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Legislative and Regulatory Trends in the Waste Management Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Sustainability-Related Risks and Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Greenhouse Gas Emissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Air Quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Fleet Fuel Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Management of Leachate & Hazardous Waste . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Social Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Human Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Workforce Health & Safety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Business Model and Innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Recycling & Resource Recovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Appendix

Representative Companies : Appendix I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Evidence for Sustainability Disclosure Topics : Appendix IIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Evidence of Financial Impact for Sustainability Disclosure : Appendix IIB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Sustainability Accounting Metrics : Appendix III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Analysis of SEC Disclosures : Appendix IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

References

I N D U S T R Y B R I E F | W A S T E M A N A G E M E N T

I N D U S T R Y B R I E F | W A S T E M A N A G E M E N T | 1

INTRODUCTION

A closed-loop or circular economy is perhaps the

ultimate sustainable state, where neither virgin

materials are extracted nor waste is discarded. As

economies like the European Union (E.U.) move

toward a circular economy, the Waste

Management industry is increasing its scope from

managing waste to protect public health and the

environment to enabling recycling and resource

recovery.

Certain industries, such as steel, are at the

forefront of resource recovery: for others, such as

technology, it is still a challenge. While the

industry plays a major role in safeguarding public

health through proper management and disposal

of waste, mismanagement can result in harm to

public health and the environment, particularly in

communities neighboring waste management

facilities. The presence of a waste management

facility has the potential to affect the local

community through odors, respiratory illnesses,

and other health impacts.

Waste management services are increasingly

being privatized, and a vast majority of the

permitted municipal solid waste (MSW) landfill

capacity is privately held.1 However, there is a risk

that dissatisfied communities will resist waste

management companies that mismanage

sustainability risks and opportunities. Because the

industry provides an essential public service, it

relies heavily on its social license to operate. To

continue and expand operations, industry players

must carefully manage their environmental and

social impacts, enhance resource recovery, and

protect workers.

Management (or mismanagement) of certain

sustainability issues, therefore, has the potential

to affect company valuation through impacts on

profits, assets, liabilities, and cost of capital.

Investors would obtain a more holistic and

comparable view of performance with waste

management companies reporting metrics on the

material sustainability risks and opportunities that

could affect value in the near and long term in

their regulatory filings. This would include both

positive and negative externalities, and the non-

financial forms of capital that the industry relies

on for value creation.

Specifically, performance on the following

sustainability issues will drive competitiveness

within the Waste Management industry:

• Mitigating greenhouse gas emissions from

landfills;

• Minimizing impacts on local air quality;

• Improving fuel efficiency and reducing

transportation emissions;

• Managing the ecological impacts of

landfills and hazardous waste sites;

• Managing worker health and safety, both

in terms of acute and chronic risks;

• Addressing labor concerns to ensure

strong labor relations; and

SUSTAINABILITY DISCLOSURE TOPICS

ENVIRONMENT

• Greenhouse Gas Emissions

• Air Quality

• Fleet Fuel Management

• Management of Leachate & Hazardous Waste

HUMAN CAPITAL

• Workforce Health & Safety

• Labor Relations

BUSINESS MODEL AND INNOVATION

• Recycling & Resource Recovery

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• Contributing to a circular economy

through landfill diversion and recovery of

materials from waste.

INDUSTRY SUMMARY

The Waste Management industry includes

companies that collect, store, dispose of, recycle,

or treat various forms of waste from residential,

commercial, and industrial clients. Types of waste

include MSW, hazardous waste, recyclable

materials, and compostable or organic materials.

Certain industry players also provide

environmental engineering and consulting

services, mostly to large industrial clients.I Major

players, such as Waste Management Inc. (WM

Inc.)2 and Republic Services,3 are vertically

integrated, providing a range of services from

collection to recycling. Some operators specialize

in certain segments. Metalico Inc. for example,

recycles scrap metal. Note that the SICS industry

of Waste Management includes publicly listed

companies that offer various waste-related

services. Wastes handled on site are covered

under the generating sector, for example Coal

Ash Management in Electric Utilities industry.

Waste management companies offer various

services to different types of customers.

Companies collect residential waste directly from

residences under contract with municipalities,

homeowners’ associations, or other regional

authorities, or under individual monthly

subscriptions with households. They also collect

waste from commercial businesses, including

multi-family housing and institutions.

Companies offer transfer and landfill services to

municipalities, construction and demolition

I Industry composition is based on the mapping of the Sustainable Industry Classification System (SICSTM) to the Bloomberg Industry Classification System (BICS). A list of representative companies appears in Appendix I.

companies, and other waste collection companies,

as well as to residents who may directly use

landfills to dispose of items not collected

curbside. Revenue comes from the tipping, or

disposal, fees, typically calculated by weight,

charged to those using transfer or landfill services.

Waste management companies can also generate

revenue from processing and selling recyclable

materials, including paper, metals, glass, and

plastics. Certain companies provide niche services,

such as the disposal of medical and other

hazardous waste or engineering and

environmental consulting for site remediation.

Companies in the global Waste Management

industry generate $146 billion annually. Most of

the revenue (87 percent) comes from waste

collection and treatment and recyclable materials.

The rest is generated from environmental

engineering and consulting services.4 U.S.-listed

companies and those traded primarily over the

counter in the Waste Management industry

generated $61 billion in revenues in fiscal year

(FY) 2013.5

In the U.S., municipalities’ share of the waste

management market has been declining as the

private sector gains ground.6 In 2012, the U.S.

had 1,908 landfill facilities,7 a dramatic decrease

from 1988, when there were 7,924.8 The general

trend is toward a smaller number of private

facilities with greater capacity. Publicly owned

landfills fell from 83 percent of total in 1984 to

64 percent in 2004. However, publicly owned

landfills accounted for only 17 percent of

permitted MSW landfill capacity, indicating the

greater role of the private sector in providing

waste services.9

Per capita waste varies greatly across the world.

For example, Organization for Economic

Cooperation and Development (OECD) countries

generate 485 pounds (2.2 kilograms) per capita of

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urban waste daily, compared with 1.43 pounds

(0.65 kilograms) per capita in sub-Saharan African

countries.10 In the U.S., per capita municipal solid

waste has maintained a steady rate since the

1990s: about 4.4 pounds (2.2 kilograms) per

day.11 U.S.-domiciled firms provide collection,

treatment, and disposal services to domestic

customers,12 though some recycled content is

traded globally.13

Of the 251 million tons of MSW generated by

Americans in 2012, approximately 35 percent was

recycled or composted.14 Therefore, a majority of

the waste was deposited in landfills. MSW is one

of the main drivers of the industry. Per capita

MSW in the U.S. is fairly stable, but population

growth has led to increases in aggregate volumes.

The manufacturing and construction industries

produce much of the hazardous and bulky refuse,

respectively.15 Growth in these industries drives

demand for waste management services. High

commodity prices make recycled content an

attractive alternative to using virgin materials, so

when commodity prices are low, revenue from

recycling shrinks.16

The Waste Management industry is relatively

capital-intensive, with significant investment in

collection vehicles, collection containers, transfer

stations,17 and increasingly complex machinery for

sorting, recycling, and other activities.18 Labor is a

significant cost for waste management

companies. In FY2013, Republic Services reported

that labor and related costs (health and welfare

benefits, incentive compensation, and payroll

taxes) were 31 percent of its total cost of

operations.19 WM Inc. reported labor costs at 27.2

percent of its FY2014 operating expenses.20 Other

major expenses include those for maintenance

and repair; transfer and disposal, which include

tipping fees to third-party disposal and transfer

facilities; subcontractors, which include payments

to individual haulers who transport waste

collected by companies to disposal sites; and

fuel.21 Fuel costs accounted for about 9 percent of

the cost of operations for Republic Services,22 and

6 percent for WM Inc.23 Large waste management

companies are vertically integrated, since

operating and/or owning transfer stations and

landfills can reduce transfer and disposal costs.

However, ownership of landfills comes with

significant operating costs, including those related

to financial assurance, leachate management,

remediation, and other maintenance costs.

For larger integrated companies, such as, WM

Inc., Republic Services, and Waste Connections,

FY2013 net income margins were 0.7, 7.0, and

10.1 percent, respectively. In FY2014, net income

margins improved for WM Inc. and Waste

Connections to 9.3 and 11.2, respectively, while

Republic Services remained relatively consistent at

6.2 percent.24

The nonhazardous solid waste industry is

composed of entities of varied sizes and

ownership—a few national publicly owned

companies, several regional private and public

solid waste companies, and a multitude of small

private operators. Private-sector waste services

companies often compete with municipalities for

waste collection or disposal services.25 Vertically

integrated companies that collect and recycle

waste have a distinct advantage over small

industry operators. These large companies are

able to keep a stable stream of waste flowing into

their recycling facilities, regardless of the market

price for recycled commodities, ensuring stable

costs of input for their recycling facilities.26

U.S.-listed companies in the Waste Management

industry are focused on U.S. operations, especially

those that provide waste collection and landfill

services. Republic Services and Waste Connections

received 100 percent of FY2014 revenues from

the U.S., while WM Inc. generated 93 percent

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from the U.S. and 7 percent from Canada. Tetra

Tech, an environmental engineering firm,

generated 74 percent of its revenue from the

U.S., and Stericycle, a medical and hazardous-

waste services company, generated 70 percent of

revenue domestically, with the rest split roughly

equally between the E.U. and other regions.27

Therefore, the focus of this brief will be the U.S.

market.

In the industry, plastics grew from 10.5 percent of

MSW in 2000 to 12.7 percent in 2012, while

textiles grew from 3.9 to 5.7 percent. Other

waste categories also increased, in terms of both

amount and percentage of MSW, with the

exception of glass, paper, and paperboard. The

quantity of paper and paperboard discarded

shrank from 87,740 tons in 2000 to 68,620 tons

in 2012.28 During the same period, recovery of

materials from MSW has improved across the

board, from 28.5 to 34.5 percent of MSW

generated. One exception to this is aluminum

recovery, which decreased from 27 to 19.8

percent of aluminum waste generated over the

same period. Notable increases in recovery include

food, which more than doubled, from 2.2 to 4.8

percent of food waste generated.29

Company valuation is earnings-driven, so

measures that lead to higher revenues or lower

costs will improve company valuation. A

company’s valuation depends on its current

market share, the extensiveness of its networks,

and its ability to grow through acquisitions.

Forecasting of financials is likely to be more

accurate if various business segments are

considered separately, as financial characteristics

may differ significantly. In particular, a company’s

exposure to recycled commodity prices and the

electricity market, for those generating power

from MSW and landfill gas (LFG), will affect its

earnings potential.

Since labor costs are high and worker safety is a

major concern, companies looking to automate

operations and create a safer working

environment are seen favorably. Fleet conversion

to natural gas engines is considered as a factor for

improved margins. The development of alternative

revenue sources from the waste stream could be

another key factor in further boosting industry

revenues.

LEGISLATIVE AND REGULATORY TRENDS IN THE WASTE MANAGEMENT INDUSTRY

Regulations in the U.S. and abroad represent the

formal boundaries of companies’ operations, and

are often designed to address the social and

environmental externalities that businesses can

create. Beyond formal regulation, industry

practices and self-regulatory efforts act as quasi-

regulation and also form part of the social

contract between business and society. In this

section, SASB provides a brief summary of key

regulations and legislative efforts related to this

industry, focusing on social and environmental

factors.II

The main types of regulations affecting the Waste

Management industry are related to the

environment, worker health and safety, and

transportation. These issues are governed at the

federal, state, and local levels.

Federal environmental statutes in the U.S.

affecting waste management facilities and

operations include the 1970 Resource

Conservation and Recovery Act (RCRA), which

amended the 1964 the Solid Waste Disposal Act,

the Comprehensive Environmental Response,

II This section does not purport to contain a comprehensive review of all regulations related to this industry, but is intended to highlight some ways in which regulatory trends are impacting the industry.

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Superfund or Compensation and Liability Act

(CERCLA), the Clean Water Act (CWA), and the

Clean Air Act (CAA), among others.30

The RCRA establishes a regulatory framework for

the transportation, treatment, storage, and

disposal of hazardous and nonhazardous solid

waste. Various federal, state, and local regulations

govern the design, construction, and operation of

landfills, where waste is deposited into lined

cavities in the ground, compacted, and topped

with earth or another covering to prevent its

contact with the air and keep it from attracting

rodents, birds, and other pests. Landfill operations

must utilize available space and maintain

environmentally safe conditions.

The closure of landfills is also regulated.31 Landfill

owners must have a plan to maintain and monitor

closed sites during a 30-year post-closure period

or longer, if necessary to protect human health

and the environment. During this period, there

are costs associated with maintaining the site,

monitoring the LFG collection and groundwater

systems, sampling groundwater, preparing

analysis and statistical reports, managing

leachate, and controlling erosion related to the

final cap.32 At the end of the period, the operator

must certify that the post-closure care has been

completed in accordance with the official plan.33

The CERCLA requires cleanup of priority

contaminated sites such as landfills and other

waste facilities.34 It may also impose liabilities for

the cost of cleanup and damages to the natural

environment onto the current and past owners

and operators of a contaminated site, parties that

generated the wastes that were sent to the site,

and waste transporters that selected the site.

Financial-assurance provisions in CERCLA

settlements help ensure that responsible parties

bear the cost of cleanup.35 In addition to

hazardous waste sites, MSW landfills are also

subject to strict state waste regulations and

financial liabilities for cleanup of CERCLA sites.36

The CWA regulates the discharge of pollutants

into streams, rivers, and other bodies of water.

Since runoff from landfills may enter surface

waters, regular monitoring and sampling is

required to limit the quantities of pollutants

discharged.37

LFG has been regulated under the RCRA since

1980. In 1996, the U.S. Environmental Protection

Agency (EPA) promulgated regulations under the

CAA imposing more extensive LFG controls. States

implement these national programs. By law, new

source performance standards and revised

standards for existing landfills are updated and

made more stringent incrementally over time.38

States like California have particularly stringent

standards, going beyond the baseline federal

program.39 States must require monitoring and

control of LFG pursuant to RCRA and the CAA,

but conversion of LFG into renewable energy and

fuel is voluntary on the landfill operator’s part.40

The CAA imposes limits on air pollutants from

various waste-related operations, including

landfills, incineration, and waste transportation.

However, there is uncertainty around the limits on

LFG and whether existing landfills will be required

to further reduce methane emissions.41

In 1990, the EPA developed the maximum

achievable control technology (MACT) standards

under the CAA to reduce air pollution from MSW

combustors. This resulted in emissions of

hazardous air pollutants declining by 94 percent

over the following 15 years.42

The U.S.’s intended nationally determined

contribution for the 2015 Conference of the

Parties in Paris has implications for all sectors

contributing to the greenhouse gas (GHG)

inventory.43 However, the specific impact on the

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waste sector is not definite. The

Intergovernmental Panel on Climate Change’s

sectors include all large emitters: energy supply,

transport and its infrastructure, residential and

commercial buildings, industry agriculture, and

forestry, along with waste management.44 While

there are large uncertainties regarding the

quantification of emissions from the global waste

sector, it is estimated that waste is the smallest

contributor to the GHG inventory (less than 5

percent), with LFG accounting for more than 50

percent of the sector’s emissions. Widely

implemented LFG collection systems have led to a

stabilization of landfill methane emissions from

developed countries. The focus now is on

decoupling waste generation from economic

growth through recycling, reuse, and waste

minimization, and on using waste to generate

energy.45

The U.S. Clean Power Plan, which includes

emissions cuts for power plants, could play a role

in the growth of the waste-to-energy market.

Energy from waste is considered renewable

energy under this plan and could be used by

states to generate emission rate credits.46

However, in February 2016, the Supreme Court

issued a stay on the implementation of the Clean

Power Plan pending judicial review.47 Whether the

plan will be implemented or have an impact on

the Waste Management industry remains to be

seen.

Solid-waste transportation operations are

regulated by the Federal Highway Administration,

the Federal Motor Carrier Safety Administration,

and other regulatory agencies. Heavyweight

vehicles, such as those used to collect and haul

trash, are subject to increasingly stringent

emissions requirements. In 2015, the Obama

administration proposed new rules on increasing

the fuel economy of heavy-duty vehicles.

However, there is concern about the impact of

such regulations on the cost of vehicles, which

will likely be borne by vehicle manufacturers, fleet

owners, and operators.48 Regulators estimate that

fuel economy standards may increase the initial

cost of new vehicles but that the fuel cost savings

over the lifetime of the vehicle would make up for

this increase.

The Occupational Safety and Health

Administration (OSHA) enforces occupational

standards for industry workers.49 Waste workers

are often near heavy vehicles and equipment and

so are exposed to many hazards. Safety violations

that create unsafe work environments can be fatal

for industry workers.

In 2007, the U.S. Supreme Court ruled that state

and local governments could specify a disposal or

processing facility for waste generated within

their jurisdictions.50 Widespread adoption of this

rule could drive up industry operating costs, as

economies of scale may be limited. There is a

similar movement regarding the transboundary

transport of electronic waste (e-waste), which can

be very labor-intensive to recycle and toxic to

human health and the environment if it is not

handled properly.51 Strict limitations on the export

of e-waste could provide new opportunities for

waste management companies. The international

transport of hazardous waste is regulated by the

EPA and is limited to consenting foreign

companies under the Basel Convention.52

Federal laws regulate the recycling of hazardous

waste and nonhazardous special wastes, such as

electronics, batteries, and fluorescent lights.53

However, no federal law directly concerns the

recycling of nonhazardous MSW, which is

regulated under local and state laws. Zoning

restrictions control the properties available for

such facilities. Most cities perform or contract for

services to perform residential recycling, but

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commercial and industrial recycling is usually

handled by private contractors.

State regulations are often quite extensive. For

example, California law mandates that there must

be a recycling collection center in every shopping

zone where businesses bring in more than $2

million per year. States such as New York,

Vermont, and Michigan have a deposit-refund

system that requires recycling centers to pay a

specific deposit amount (5 to 10 cents per bottle

or can) to any person or business that brings

recyclables to their center.54

As of March 2014, businesses in Massachusetts

that produce more than one ton of food waste a

week cannot landfill their waste if composting or

anaerobic options are available.55 Connecticut,

Vermont, and the cities of Seattle, San Francisco,

and Portland, have all banned large generators of

food waste from landfills, although some locales

have a more graduated approach to reaching a

complete ban.56 These types of regulations are

intended to make the use of landfills less

attractive and encourage recycling, composting,

and other landfill-diversion methods. Such

regulations may have large implications for the

industry, as discussed in the Recycling and

Resource Recovery disclosure topic. Overall, as

waste gets diverted from landfills, less revenue

may be generated from tipping fees. Additional

opportunities exist to provide recycling and

composting services, but there may be

competition from other entities for these lines of

business.

SUSTAINABILITY-RELATED RISKS AND OPPORTUNITIES

Industry drivers and recent regulations suggest

that traditional value drivers will continue to

impact financial performance. However,

intangible assets such as social, human, and

environmental capitals, company leadership and

governance, and the company’s ability to innovate

to address these issues are likely to increasingly

contribute to financial and business value.

Broad industry trends and characteristics are

driving the importance of sustainability

performance in the Waste Management industry:

• Environmental impacts: The Waste

Management industry is uniquely

positioned to manage the environmental

impacts of waste generated by other

industries and consumers. To play this

role effectively, the industry must manage

the impacts of its own operations and

constantly innovate ways to dispose of

new types of waste.

• Closed loop system: Related to the

point above, there is a growing trend

from individuals, municipalities, and

others to divert waste from landfills—a

movement toward a closed-loop

economy. This challenge presents new

opportunities for waste management

companies to provide additional

financially viable lines of business.

• Extensive license to operate: Because

the industry provides an essential public

service, it relies heavily on its social license

to operate. Recent trends have been

toward privatization, and the industry’s

management of environmental and social

impacts will help ensure industry growth.

As described above, the regulatory and legislative

environment surrounding the Waste Management

industry emphasizes the importance of

sustainability management and performance.

Specifically, recent trends suggest a regulatory

emphasis on environmental protection, which will

serve to align the interests of society with those

of investors.

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The following section provides a brief description

of each sustainability issue that is likely to have

material financial implications for companies in

the Waste Management industry. This includes an

explanation of how the issue could impact

valuation and evidence of actual financial impact.

Further information on the nature of the value

impact, based on SASB’s research and analysis, is

provided in Appendix IIA and IIB.

Appendix IIA also provides a summary of the

evidence of investor interest in the issues. This is

based on a systematic analysis of companies’ 10-K

and 20-F filings, shareholder resolutions, and

other public documents, which highlights the

frequency with which each topic is discussed in

these documents. The evidence of interest is also

based on the results of consultation with experts

participating in an industry working group (IWG)

convened by SASB. The IWG results represent the

perspective of a balanced group of stakeholders,

including corporations, investors or market

participants, and public interest intermediaries.

The industry-specific sustainability disclosure

topics and metrics identified in this brief are the

result of a year-long standards development

process, which takes into account the

aforementioned evidence of interest, evidence of

financial impact discussed in detail in this brief,

inputs from a 90-day public comment period, and

additional inputs from conversations with industry

or issue experts.

A summary of the recommended disclosure

framework and accounting metrics appears in

Appendix III. The complete SASB standards for the

industry, including technical protocols, can be

downloaded from www.sasb.org. Finally,

Appendix IV provides an analysis of the quality of

current disclosure on these issues in SEC filings by

the leading companies in the industry.

ENVIRONMENT

The environmental dimension of sustainability

includes corporate impacts on the environment.

This could be through the use of natural resources

as inputs to the factors of production (e.g., water,

minerals, ecosystems, and biodiversity) or

environmental externalities and harmful releases

in the environment, such as air and water

pollution, waste disposal, and GHG emissions.

The Waste Management industry, by its very

nature, seeks to manage the environmental

impacts of waste generated by households and

other industries. It plays a key role in the

consumption value chain by properly disposing of

items that have reached the end of their useful

lives and, where possible, turning them into

valuable inputs for production.

Proper handling of waste is important, as both

hazardous and nonhazardous waste can have

detrimental effects on the environment and local

communities. Organic waste is a significant

contributor of methane, a potent GHG. Other

wastes, including e-waste and hazardous waste,

must be treated carefully to ensure that harmful

substances do not migrate into the environment.

In addition to managing the environmental

impacts of waste, companies that collect, haul, or

transfer waste must also manage vehicle

emissions.

Greenhouse Gas Emissions

Many publicly listed waste management

companies own or operate landfills. Publicly

owned landfills accounted for only 17 percent of

permitted MSW landfill capacity in 2012, meaning

that the vast majority are managed by the private

sector.57 Because of the natural decomposition

process, landfills generate emissions, known as

LFG. Though the exact composition and volume of

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the LFG generated varies depending on the type

and amount of waste and the environment, it

consists of roughly equal parts methane and

carbon dioxide, with trace amounts of non-

methane organic compounds and inorganic

compounds.58 Methane has 25 times the global

warming potential of carbon dioxide, making LFG

a significant anthropogenic contributor to global

GHG emissions.59

Given methane’s potency, federal regulations limit

LFG emissions, and it is likely that those

regulations will become more stringent over time.

Separate state laws, such as California’s Assembly

Bill 32, also require the monitoring and collection

of LFG. Landfills are therefore subject to

compliance costs and risks associated with climate

change mitigation policies.

Landfill emissions associated with new waste can

be mitigated by separating organic materials from

other waste prior to depositing it in a landfill. LFG

generated from already disposed waste or new

waste that includes organics can be reduced

through a variety of control technologies: LFG-

collection-efficiency improvements, LFG-control

devices, and increased methane oxidization.60

Methane trapped through LFG-capture systems

can be combusted in a flare, an engine, or a

turbine to dramatically reduce the overall toxicity

and potency of raw LFG.61

LFG capture is particularly important for owners

and operators of large landfills, which have been

the target of regulations. Although capital costs

are associated with LFG collection, the resulting

gas can be refined and sold for revenue or used

to fuel company operations.

Company performance in this area can be

analyzed in a cost-beneficial way through the

following direct or indirect performance metrics

(see Appendix III for metrics with their full detail):

• Gross global Scope 1 emissions,

percentage covered under emissions-

limiting regulation and percentage

covered under emissions-reporting

regulation;

• Total landfill gas generated, percentage

flared, percentage used for energy; and

• Long-term and short-term strategy or

plans to manage Scope 1 emissions,

emissions-reduction targets, and an

analysis of performance against those

targets.

Evidence

Postconsumer waste is a significant contributor to

global GHG emissions, accounting for nearly 5

percent of total emissions.62 The EPA estimates

that 18 percent of methane U.S. emissions are

generated by landfills; methane emissions

constitute 9 percent of total U.S. GHG

emissions.63 Therefore, even though landfill

methane accounts for only 1.6 percent of

domestic GHG emissions,64 landfills are among

the top man-made sources of methane.65

Despite the Waste Management industry’s

relatively low contribution to total U.S. GHG

emissions, the high potency of methane

compared with that of carbon dioxide emissions

and the potential for significant mitigation have

led to regulatory actions that affect the industry.

Current federal regulations require large landfills

to install LFG collection systems. In 1996, the EPA

enacted legislation requiring the monitoring of

large MSW landfills and mandating that

significant emitters have an LFG collection system.

Some state laws also require LFG emissions

monitoring.66

San Francisco also mandates the diversion of food

scrap and yard trimmings in order to reduce LFG

emissions.67 In general, landfill-diversion policies,

including banning organics from landfills, reduce

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the amount of waste landfilled and can reduce

revenues for waste management companies—or

at a minimum, require revised business-model

approaches to handle and monetize these

alternative waste streams.

The EPA estimates that gas collection systems

could come with capital costs of about $24,000

per acre, with $4,100 per acre in annual

operating and maintenance (O&M) costs.68 For a

large company like Republic Services, with 37,000

permitted acres of landfill,69 this translates to

about $888 million in capital costs alone, not

including annual O&M costs of $152 million.70

After collection, LFG can be flared to reduce

methane emissions; however, no revenue is

generated from this option. The typical capital

costs to generate power from LFG vary from

about $1,400 per kilowatt for turbines to $5,500

per kilowatt for microturbines.71

Given the high costs of control technologies and

the upfront costs of power generation from LFG,

it is generally more economical for large landfills

with high LFG-generation rates to install LFG-

control technologies than it is for small landfills. In

fact, many operators of large landfills currently

operate energy projects. As of March 2015, 595

U.S. landfills operated 645 projects to generate

electricity or supply gas as fuel.72 WM Inc. reports

in its FY2014 annual SEC filings that 123 of its

solid-waste landfills and four third-party landfills

have beneficial-use projects for LFG. The company

had 247 active solid-waste landfills in 2015.73 Of

these, 107 generated electricity sold to utilities or

power cooperatives, and gas from the rest of the

landfills was either sold to industrial customers

and natural gas suppliers or processed into

liquefied natural gas for vehicles.74 WM Inc.

earned 13 percent of its FY2014 revenue from

such “green energy.”75

In addition to generating revenue from the sale of

LFG, LFG-capture systems may be eligible to

generate GHG credits if a project developer can

demonstrate that methane reduction goes beyond

what is required by federal or other regulations.76

Landfill energy projects can qualify for subsidies,

which may sometimes be necessary for a project

to break even. Federal subsidies include payments

from the Renewable Energy Production Incentive

program and Section 29 tax credits, which were

established to encourage energy production from

unconventional sources. Additionally, several

states provide incentives for electricity generation

from renewable sources.77

Value Impact

Evidence suggests that GHG emissions from the

industry, particularly methane emissions, pose a

regulatory risk, with potential impacts on

operational costs and capital expenditures.

Diversion of waste from landfills can negatively

impact revenues from tipping fees, while

increasing the opportunity to process alternative-

waste streams.

Mismanagement of emissions could result in more

regulations that aim to curb landfill emissions or

divert waste from landfills. Depending on the type

of regulation, permits could be denied for setting

up new or expanding existing landfills, or terms

and conditions related to emissions abatement

could be required for issuing new permits. On the

other hand, an opportunity could exist to

generate revenue from sales of gas, as well from

as renewable energy credits from energy projects.

As more stringent or extensive GHG regulations

are implemented, the probability and magnitude

of these impacts are likely to increase in the

future.

The magnitude of regulatory impacts can be

estimated using companies’ Global Scope 1 GHG

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emissions and the ratio of those covered by

regulatory programs. GHG mitigation strategies

and targets constitute forward looking indicators

of a company risk exposure to stringent emissions

reduction schemes, which could significantly

impact high emitters in the form of taxes or cap-

and-trade.

Air Quality

Air pollution is the presence of air contaminants

in such quantities and duration that they can be

injurious to humans, animals, plants, or property.

It also includes contaminants that interfere with

enjoyment of life or property.78 Therefore, odors

and toxic gases, such as those emitted from

landfills, landfill fires, waste incinerators, and

waste treatment plants, are considered air

pollution.

Financial impacts from excessive air emissions vary

depending on the specific location of operations

and the prevailing air emissions regulations, but

they can include capital expenditures, increased

operating costs, fines, and lawsuits from affected

communities. Active management of the issue—

through technological and process

improvements—can mitigate the impacts of

increasingly stringent air-quality regulations.

Human health impacts and financial consequences

of poor air-quality management are likely to be

exacerbated by the proximity of waste

management facilities to communities.

Management of air pollutants and odors therefore

can help companies secure permits and protect

their license to operate.

The global waste-incineration market is expected

to grow. In certain European countries,

incineration already plays a large part in waste

management. As point sources, waste incinerators

have to comply with strict air pollution

regulations. Between 1990 and 2005, the EPA’s

MACT standards for MSW combustors drastically

cut emissions of mercury, cadmium, lead,

particulate matter, hydrogen chloride, sulfur

dioxide, and nitrogen oxides (NOx). With the

exception of NOx, which was reduced by 24

percent, all other pollutants were reduced by

between 88 and 97 percent from 1990 levels.79

The EPA’s Air Pollutant Emissions Trends Data

shows that waste disposal and recycling emissions

of major air pollutants—including carbon

monoxide, nitrogen oxide, particulate matter,

sulfur dioxide, and volatile organic compounds—

have been on the decline.80

Historically, hazardous waste sites, municipal

landfills, waste transfer sites, incinerators, and

other hazardous facilities have been

disproportionately located in low-income and

minority neighborhoods. A 1983 U.S. Government

Accountability Office report confirmed that racial

minorities are burdened with a disproportionate

amount of environmental risks and that income

was a factor in siting hazardous and toxic

facilities.81

Studies have established links between ailments

such as asthma, childhood cancer, and abnormal

brain development and environmental factors,

including exposure to air pollutants and

chemicals. People with low incomes and

inadequate access to health care are more

vulnerable to these health threats.82

The presence of a nearby landfill is linked to a

decrease in property value.83 The historical decline

in the number of landfills indicates the potential

difficulty of obtaining permits to expand or create

landfills in proximity to communities. Because the

industry provides an essential public service, the

effective management of environmental impacts

such as air pollution is necessary to maintain a

social license to operate.

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Actively managing emissions through

implementing industry best practices across

operations can lower the risk of violations and

monetary penalties. Informing the local

population in a timely manner about the hazards

of operational and incident-related emissions, and

steps to address these, can lower reputational and

litigation risks.

Company performance in managing air quality

can be analyzed in a cost-beneficial way through

the following direct or indirect performance

metrics (see Appendix III for metrics with their full

detail):

• Air emissions of the following pollutants:

NOx (excluding N2O), SOx, non-methane

volatile organic compounds, and

hazardous air pollutants;

• Number of facilities in or near areas of

dense population; and

• Number of incidents of non-compliance

associated with air emissions.

Evidence

Waste management facilities can be a significant

contributor of localized air pollution. Poor

management of air pollutants can lead to fines,

penalties, and mandated capital expenditures to

reduce emissions. For example, emissions of

harmful air pollutants resulted in a Department of

Environmental Quality (DEQ) fine for the owners

of Pilot Rock, a landfill for sawmill wood waste in

eastern Oregon. According to the DEQ, “years of

neglect” led to repeated landfill fires, which are a

source of harmful air emissions. The $790,000

fine was levied for Pilot Rock’s failure to properly

close its landfill and post a bond for closure

costs.84

In 2012, Forward Inc. of Manteca, California,

agreed to a settlement to resolve alleged

violations of air pollution laws resulting from

excess landfill and vehicle emissions. The

settlement required the company to spend $1.7

million to improve gas control and collection at its

Manteca landfill to minimize likelihood of fires.

The company was also required to pay $200,000

as a civil penalty for violating air pollution laws

and to upgrade its diesel trucks to cleaner-

burning vehicles. As a result of the settlement,

local communities are expected to benefit from

reduced emissions of particulate matter and NOx,

a pollutant that can have negative health impacts

and create haze and smog.85

Waste treatment facilities can also be a source of

air pollutants. Stericycle, one of the largest waste

management companies, agreed to pay a $2.3

million fine to settle allegations that its Salt Lake

City medical waste incinerator violated emissions

limits and falsified stack test results. Under the

settlement, the company can avoid paying half

the fine if it relocates its facility to a sparsely

populated area of the state in Tooele County.86

In 2012, 29 million tons of MSW—nearly 12

percent—was combusted for energy recovery in

86 facilities across the U.S.87 Waste incineration

has many by-products, including ash (roughly 10

percent of volume), greenhouse gas emissions,

and air pollutants such as lead, mercury,

cadmium, particulate matter, NOx, sulfur dioxide,

and hydrogen chloride. The CAA mandates the

reduction of these pollutants to mitigate harmful

effects on human health.88 About 15 to 25

percent of the weight of the MSW processed

remains as ash, of which 10 to 20 percent is fly

ash, which must be scrubbed from emissions; the

rest is bottom ash. The ash recovered from MSW

combustion is sent to landfill89 or used to make

cement. Facilities must carefully monitor emissions

to ensure that they are in compliance with air

quality standards.

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Although MSW incineration is still a relatively

small portion of the Waste Management industry,

the energy-from-waste market is likely to grow,

both in the U.S. and globally, as various air

pollution and carbon regulations come into effect

that may further drive the waste-to-energy

market.90 One example is the Clean Power Plan,

which includes energy from organic waste in its

definition of “renewable energy.” At the same

time, MSW incinerators must meet strict emissions

standards, such as those promulgated in Title V

permits. In its 2015 third-quarter earnings call,

Stericycle Chief Operating Officer Brent Arnold

acknowledged that new Title V requirements for

incinerators is leading to “higher operating costs,

particularly associated with the ongoing

maintenance of [this] new, more stringent

equipment to reach these levels.”91

Covanta Holding Corporation, a leading player in

the global energy-from-waste market, estimates

that the market will grow by 400 facilities by

2023, adding 100 million metric tons of

processing capacity globally. Many of the

company’s facilities are located near population

centers, which is likely to pose risks associated

with air pollution, as well as opportunities related

to supplying energy efficiently and sourcing

waste.92

Landfills and waste processing and transfer

stations can be a source of odors. Bridgeton

Landfill LLC, a subsidiary of Republic Services,

faced a 2013 class action lawsuit filed by local

residents for enduring foul odors. The company

agreed to a settlement of more than $6.8 million

that will be paid out to residents who live in the

400 homes closest to the facility. According to the

plaintiff’s attorney, the money is intended to

offset the loss in property values as well as anxiety

caused by the odors.93

Fines for landfill odors are not uncommon. An

industrial and hazardous waste landfill in Yukon,

Pennsylvania, was fined $70,000 by state

authorities for allowing odors to reach

neighboring properties.94 Another Pennsylvania

landfill was fined $160,000 for failing to control

odors.95 The financial impact of emitting an

excessive odor can be significantly higher when

the cost of remedial actions is taken into account.

Florida’s Broward County fined WM Inc. $99,000

and required the company to undertake odor-

mitigation activities at its Monarch Hill Renewable

Energy Park landfill. The total cost, including the

fine, equaled $1.6 million.96 Complaints from New

Jersey residents about odors from the landfill in

nearby Tullytown, Pennsylvania, resulted in fines

of $500,000. The Department of Environmental

Protection also limited waste-disposal operations

at the landfill to no more than two years,

meaning the landfill must be closed by May

2017.97

Value Impact

Air quality management primarily has implications

for a waste management company’s cost

structure and operational efficiency. Companies

are likely to face higher ongoing operating costs

due to greater limits on emissions. Companies

could face one-off impacts on cash flows as a

result of fines or capital expenditures. There could

be legal challenges from the local population or

businesses that are directly affected by poor air

quality, resulting in liabilities.

As seen in the Tullytown example, in extreme

cases, poor air emissions and odor management

can lead to the closure of facilities, restrictions on

the amount of waste processed, or nonrenewal of

permits, all of which affect companies’ ability to

generate revenue.

Active management of the issue—through

technological and process improvements—could

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allow companies to limit the impact of regulations

and benefit from operational efficiencies that

could lead to a lower cost structure over time.

If MSW incineration grows, the probability and

magnitude of the impact of air emissions

management on financial results will likely to

increase in the medium to long term.

The quantity of key pollutants emitted is an

indicator of a company’s success in mitigating

regulatory risk and costs associated with harmful

emissions. The number of facilities in or near

areas of dense population provides additional

context for analyzing a company’s risk exposure.

Fleet Fuel Management

In the Waste Management industry, the main

sources of GHG emissions are waste collection

vehicles and nonstationary equipment, waste

sorting, and landfill emissions. Although landfill

emissions, which are discussed in a separate topic,

are the greatest source of GHG emissions, the

emissions from transportation fuel use can be

significant. Fuel accounts for a significant

operating cost, and there is an opportunity for

large operators to fuel their natural gas fleets

with gas from landfills and organic waste

digesters.

Fossil fuel consumption in vehicle fleets can

contribute to environmental impacts, including

climate change and pollution. These impacts have

the potential to indirectly affect the operations of

waste management companies. Hedging fuel

purchases is a common tool used to manage fleet

fuel risks; however, more and more waste

management companies are upgrading to more

fuel-efficient fleets or switching to natural gas

vehicles. Companies are recognizing the

importance of managing their overall fleet fuel

efficiency, their reliance on different types of

energy and the associated risks, and their access

to alternative energy sources.

Companies can adopt various strategies to reduce

their direct GHG emissions. Since waste collection

relies on a heavy-duty fleet that generates GHGs,

a lower-emission fleet can help reduce vehicle

emissions. Another strategy is to use LFG to fuel

operations and vehicles, which is beneficial in

three ways: First, it diverts potent LFG emissions

to beneficial use, lowering regulatory risk and

providing an opportunity to generate returns on

capital expenditures for capture technology.

Second, it reduces fuel purchases. Third, LFG is

less carbon intensive and cleaner burning than

diesel, the fuel that usually powers heavy-duty

vehicles.

Company performance in this area can be

analyzed in a cost-beneficial way through the

following direct or indirect performance metrics

(see Appendix III for metrics with their full detail):

• Fleet fuel consumed, percentage

renewable; and

• Percentage of alternative energy vehicles

in fleet.

Evidence

In terms of private fleets, those belonging to WM

Inc. and Republic Services are among the

largest.98 It is no surprise, then, that fuel costs

make up 9 percent of operating expenses for

Republic Services99 and 6 percent for WM Inc.100

As of FY2014, fuel costs were $500 million for

Republic Services101 and $553 million for WM

Inc.102 According to its CDP survey, Progressive

Waste Services’ 2012 energy costs were between

5 and 10 percent of total operational spending.103

WM Inc. has nearly seven times more GHG

emissions related to transportation than it does

from its operational energy use (both direct and

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indirect).104 In its 2013 investor CDP report,

Progressive Waste Services breaks down its energy

use by type: 1,300 gigawatt-hours (GWh) of fuel,

47 GWh of electricity, and 28 GWh of heat.105

Most of the energy used is fuel, indicating the

potential for greater cost and emissions savings by

focusing on improving transportation efficiency.

Nearly 10 percent of WM Inc.’s 32,000 trucks are

natural gas vehicles. The company intends to

transition the rest of its 19,000 collection vehicles

from diesel to natural gas vehicles. With its

updated fleet, the company has so far reduced

emissions from 2.13 million tons of carbon

dioxide equivalent (CO2e) to 1.75 million tons of

CO2e in 2013, an 18 percent reduction. In

addition to reducing GHG emissions, switching

from diesel to natural gas has the added benefit

of lowering NOx and particulate matter

emissions.106

Investing in cleaner-burning vehicles can not only

save energy costs but also mitigate the risk of

fines and penalties. In 2012, Forward Inc. agreed

to a settlement to resolve alleged violations of air

pollution laws resulting from landfill and vehicle

emissions. The settlement required the company

to replace 19 diesel trucks with cleaner-burning

vehicles, estimated to cost $2.1 million. It was

also required to pay $200,000 as a civil penalty.

As a result of the settlement, local communities

are expected to benefit from reduced emissions of

particulate matter, which can have health impacts

and create haze and smog.107

Republic Services has 16,000 trucks; of these,

2,200 run on CNG, fueled through the company’s

natural gas stations.108 Transitioning to a natural

gas fleet reduces fuel consumption and fuel costs,

as well as emissions. Since CNG is not broadly

available, companies that are able to refine LFG to

fuel their fleets are likely to be more successful in

transitioning to lower-emissions vehicles. A review

of historic natural gas prices shows that in the

past five years, since 2011 the price has been

between $1.95 and $6 per million British thermal

units (Btus), with current prices down at around

$2.109 Since the market price of natural gas is

volatile,110 companies that are able to fuel their

CNG fleet with natural gas they produce will

protect themselves from the volatility.

Republic Services and WM Inc. have the fourth

and fifth largest private fleets in the U.S.,

respectively, according to the industry publication

Fleet Owner.111 Given the significance of fuel

consumption, many companies, including Waste

Connection112 and Republic Services,113 have

hedged their fuel purchases. During 2014,

approximately 20 percent of Republic Services’

fuel volume purchases were hedged with swap

agreements. The company disclosed that hedging

is a way to manage its “exposure to volatility in

fuel prices.”114

In 2014, Republic Services was able to recover 78

percent of its fuel costs by charging customers

fuel-recovery fees. The company estimates that a

20-cent-per-gallon difference in the price of diesel

fuel would change its fuel costs by approximately

$26 million and its fuel recovery fee by $25

million. Accordingly, a substantial rise or drop in

fuel costs could substantially impact its revenue

and cost of operations.115

The EPA has finalized fuel economy regulations

for heavy-duty vehicle fleets through 2018 and

light-duty vehicles through 2025. Companies in

the industry have mixed views about whether

increasingly stringent vehicle emissions

regulations will materially impact their financial

performance.

In its FY2014 Form 10-K, WM Inc. stated that

while the EPA continues to increase fuel economy

standards that could lead to higher fleet

operating costs, such regulations are unlikely to

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have a material adverse impact on its business.116

Republic Services was less certain about the

impact from federal fuel economy standards,

noting, “We cannot assure you that federal

efforts. . . to increase the fuel efficiency of light-

duty and heavy-duty vehicles will not have a

material effect on our consolidated financial

condition, results of operations or cash flows.”117

The difference in impacts could be due to a large

number of factors, including the average fuel

economy of its existing fleet and the company’s

ability to produce fuel for its fleet.

Value Impact

Fleet fuel management has direct implications for

a company’s operating costs. Changes in the total

amount of transportation fuel consumed by a

company relative to revenues indicate changes in

operational efficiency. Given that much of the

cost of fuel is currently passed on to customers,

significant changes in fuel prices can also affect

revenue.

Companies managing this issue well will likely

decrease their risk profiles stemming from

volatility in energy markets, climate change–

related regulations, and the EPA’s new fuel

economy standards for trucks.

Although the cost of energy and fuel is already

captured in financial results, overall fleet fuel

consumption indicates companies’ exposure to

possible increases in prices, resulting from

internalizing the growing environmental impact of

energy consumption. The use of alternative fuel

vehicles indicates a company’s performance in

mitigating its fleet’s environmental footprint, and

potentially, its exposure to fuel price volatility.

Management of Leachate & Hazardous Waste

This topic focuses on the main ecological impacts

of the Waste Management industry, which are

leachate from MSW and the accidental releases of

hazardous waste from facilities that manage

them. Air emissions from waste management

activities are discussed under the Greenhouse Gas

Emissions, Fleet Fuel Management, and Air

Quality disclosure topics.

MSW landfills receive household waste,

nonhazardous sludge, industrial solid waste, and

construction and demolition debris. Certain

household wastes, such as paints, cleaners and

chemicals, motor oil, batteries, and pesticides,

may be banned from landfill disposal because of

their hazardous nature.118 Landfills structures are

carefully designed to isolate waste from the

surrounding environment to prevent contact with

air, groundwater, and soil. The isolation of

leachate is accomplished with a bottom liner,

while a daily covering of soil prevents rodents

from reaching waste matter. Although under

these dry conditions trash should not decompose

much, over time water percolates through the

trash, dissolving contaminants (organic and

inorganic chemicals, metals, and biological waste

products of decomposition). This liquid is called

leachate and it must be collected and treated like

sewage, after which it can be released.119

Only designated facilities can accept hazardous

waste, as they are especially designed to

permanently contain waste and prevent the

release of harmful substances into the

environment.120 It is generally best to recycle

hazardous waste; however, if that is not possible,

it may be disposed in a number of ways,

depending on the substance. These methods

include incineration, stabilization, neutralization,

fuels blending, and disposal in a secure chemical

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landfill.121 Disposal involves placing waste in a

land disposal unit—a landfill, surface

impoundment, waste pile, land treatment unit, or

injection well. Although there is a risk of

groundwater contamination when liquid

hazardous waste is mishandled, placement in a

land disposal unit is the most common method of

disposal.122

Companies operating landfills are required to

manage all associated ecological impacts, such as

migration of gas and leachate away from the

landfill boundaries, groundwater pollution, and

soil contamination.123 Poor management of

landfills and other disposal sites can lead to

contamination of the soil, groundwater, and other

nearby water bodies, which can carry the

pollutants a long distance.124 Contamination can

lead to adverse health outcomes for humans and

animals that may be exposed to them.

Companies that release pollutants into the

environment may be found in violation of the

CAA, the CWA, and other laws, potentially

resulting in fines. They may also face reputational

risk and community pushback leading to

permitting delays and litigation.

Company performance in this area can be

analyzed in a cost-beneficial way through the

following direct or indirect performance metrics

(see Appendix III for metrics with their full detail):

• Total Toxic Release Inventory (TRI)

releases, percentage released to water;

• Number of corrective actions

implemented for landfill releases; and

• Number of incidents of non-compliance

associated with environmental impacts.

Evidence

Landfills, waste processing, and waste transfer

facilities manage hazardous and nonhazardous

waste to mitigate their environmental impacts.

The 1,908 currently active and approximately

6,000 waste facilities closed since 1988 in the

U.S. can be a source of environmental harm if not

managed properly.125 Specifically, this disclosure

topic includes management of hazardous waste

and leachate.

Companies that provide hazardous waste

management services rank high in the EPA’s toxic

release reports. They aggregate, handle, store,

and dispose of others’ hazardous waste, putting

them at higher risk of ecological impact than

companies in other industries because of the

amount of hazardous waste they need to manage

effectively. The TRI defines a release as “the

amount of a toxic chemical released on-site (to

air, water, underground injection, landfills, and

other land disposal), and the amount transferred

off-site for disposal.”126

The Montmorency-Oscoda-Alpena Solid Waste

Management Authority avoided fines after

reacting swiftly to an accidental leachate spill in

December 2013. The spill affected a 15-by-15

foot area, and workers removed about a foot of

the soil that had absorbed the leachate.127

The EPA listed hazardous waste facilities owned

by Clean Harbors and Chemical Waste

Management as top TRI emitters in California for

2011. That year, Clean Harbors’ Buttonwillow

facility released 9.8 million pounds of chemicals,

while Chemical Waste Management’s Kettleman

Hills facility released 3.9 million pounds. The

statewide total was 38 million pounds, meaning

that these two facilities alone accounted for 36

percent of the state’s annual toxic releases.128

These two facilities are also among top emitters

of persistent bioaccumulative toxic (PBT)

chemicals, which are of particular concern since

they remain in the environment for long periods

of time and accumulate in body tissue.129

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Companies involved in providing hazardous waste

services must be diligent to avoid environmental

harm. Many cases of environmental law violations

are caused by the mishandling of hazardous

waste and have resulted in litigation, regulatory

risk, and remediation costs. In March 2013, the

California Department of Toxic Substances

Control announced that Chemical Waste

Management agreed to pay $311,000 in fines for

failing to report 72 hazardous materials spills over

the previous four years. In 2011, the company

agreed to pay $400,000 in fines for failing to

manage polychlorinated biphenyl, a carcinogen. It

also agreed to spend an additional $600,000 on

necessary laboratory upgrades. As early as 1985,

the EPA levied fines of $2.1 million for violations

including operating additional waste ponds

without authorization. Furthermore, the company

has faced community pushback; residents from

nearby communities opposed the expansion of

the Kettleman landfill because of concerns over

PBTs.130 However, in 2014, California regulators

approved expansion of the hazardous waste

facility.131

Leachate management is a significant operating

cost for landfill owners, and the costs extend

beyond the life of the landfill, as leachate

continues to be produced. For landfills in

temperate climates, leachate management can be

20 to 30 percent of operations and maintenance

expenses.132

When waste management companies grow

through acquisitions, they may be legally

responsible for the environmental harm that

occurs or has occurred as a result of actions taken

at facilities prior to purchase. Closed landfills need

to be monitored for 30 years, and additional

remediation may be required to contain

pollutants. The Missouri state attorney is suing the

owner of closed Bridgeton Sanitary Landfill,

alleging that a fire at the landfill contaminated air

and water, jeopardizing the health of area

residents.133

Republic Services acquired the landfill when it

bought Allied Waste in 2008.134 As of December

2014, the company estimated that it has

environmental liabilities of $240.3 million, of

which $30 million should be paid during 2015. In

FY2014, the company spent $64.3 million on a

leachate management facility and related

infrastructure, as well as management and

monitoring of the remediation area at Bridgeton

Sanitary Landfill.135 Republic Services reported that

this “increase in operating loss primarily relates to

unfavorable remediation and litigation

adjustments in 2014 of $227.1 million recorded at

[its] closed Bridgeton Landfill in Missouri,

compared to $108.7 million recorded in 2013.”136

In December 2011, Harris County and the state of

Texas filed a lawsuit against WM Inc. subsidiary

McGinnis Industrial Maintenance Corp., alleging

that the company disposed of toxic paper-mill

waste in the San Jacinto River. The plaintiffs

sought attorneys’ fees and civil penalties for

violations of the Texas Water Code and the Texas

Health and Safety Code. Three years later, the

case was settled for $29.2 million. The company is

continuing its remediation efforts on the

contaminated site.137

Value Impact

Waste treatment and disposal requirements are

stringent, and violations of regulations create the

risk of acute impacts such as fines and contingent

liabilities from legal action. Waste management

companies may require capital expenditures or

regulatory compliance costs to remediate

ecological impacts, reducing operating income

and cash flows. Frequent fines or unexpected

abatement costs could result in a higher cost of

capital.

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The quantity of hazardous waste released gives

insight into the risks of regulatory fines and

remedial action, as well as ongoing operational

costs and capital expenditures related to waste

pollution abatement. Number of corrective actions

and incidents of non-compliance indicate

company success in mitigating environmental

impacts of releases and associated fines.

SOCIAL CAPITAL

Social capital relates to the perceived role of

business in society, or the expectation of business

contribution to society in return for its license to

operate. It addresses the management of

relationships with key outside stakeholders, such

as customers, local communities, the public, and

the government.

The presence of a waste management facility has

the potential to affect the health of the local

community through odors, respiratory illnesses,

and health impacts. These issues can be addressed

by managing environmental issues discussed

earlier. Companies that are unable to address

community concerns may erode their social

license to operate. This could come in the form

denied permits, lost market share, or frequent

disruptions to operations, as discussed above.

HUMAN CAPITAL

Human capital addresses the management of a

company’s human resources (employees and

individual contractors), as a key asset to delivering

long-term value. It includes factors that affect the

productivity of employees, such as employee

engagement, diversity, and incentives and

compensation, as well as the attraction and

retention of employees in highly competitive or

constrained markets for specific talent, skills, or

education. It also addresses the management of

labor relations in industries that rely on economies

of scale and compete on the price of products

and services. Lastly, it includes the management

of the health and safety of employees and the

ability to create a safety culture within companies

that operate in dangerous working environments.

Waste collection and processing has significant

workplace risks, since it involves working with

heavy machinery, vehicles, and potentially

dangerous waste materials. Maintaining a healthy,

productive workforce directly impacts worker

morale and labor productivity through the

avoidance of lost working hours and can lower

the payout of medical benefits. The industry is

dependent on a large workforce with many union

members who have a strong bargaining power.

The ability to maintain good labor relations will

reduce the risks of strikes and work stoppages.

Workforce Health & Safety

Hazardous working conditions mean that safety is

critical to waste management operations, and

accidents can have a great impact on workers.

The Waste Management industry has a high

fatality rate compared with that in other

industries. Fatal injuries are mostly due to

transportation incidents, contact with objects and

equipment, and exposure to harmful substances.

Additionally, temporary workers may be at a

higher risk due to lack of training or industry

experience.

Poor health and safety records can result in higher

health care costs, lawsuits, fines, and penalties

and an increase in regulatory compliance costs

from more stringent oversight. Conversely,

companies with a strong workforce health and

safety track record have the potential to create a

competitive advantage when seeking to secure

new contracts. Considering the dangerous

working conditions and the financial

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repercussions of accidents, waste management

companies must ensure that facilities and vehicles

are operated with the highest safety standards

and that the number and magnitude of injuries

and accidents is minimized. Creating a safety

culture is highly important. Companies can

develop proactive safety management plans and

training requirements for their employees and

contractors as well as conduct regular audits.

Companies in the industry recognize the

importance of maintaining high standards of

health and safety to their long-term value, despite

pressures to reduce costs in the near term to

protect profitability. Company performance in this

area can be analyzed in a cost-beneficial way

through the following direct or indirect

performance metrics (see Appendix III for metrics

with their full detail):

• Total recordable injury rate, fatality rate,

and near-miss frequency rate for direct

employees and contract employees;

• Safety Measurement System BASIC

percentiles for: Unsafe Driving, Hours-of-

Service Compliance, Driver Fitness,

Controlled Substances/Alcohol, Vehicle

Maintenance, and Hazardous Materials

Compliance; and

• Number of vehicle accidents and

incidents.

Evidence

While the injury rate for the industry is slightly

higher than the U.S. average, the fatality rate is

significantly higher, indicating that incidents can

result in serious harm to workers. In 2013, there

were 61 work-related fatalities in the Waste

Management and Remediation Services industry,III

which has nearly 400,000 employees.138 Workers

III Waste Management and Remediation Services industry falls under North American Industry Classification System (NAICS) code 562.

in this industry were five times more likely to

encounter a fatal work injury than employees in

other industries were.139 The total recordable

injury and illness rate was 4.7 per 100 full-time

workers, compared with the national average of

3.5.140

Waste workers are exposed to physical, biological,

chemical, mechanical, and psychosocial hazards.

A five-year (2003–2007) review of OSHA logs

from 37 MSW establishments in 11 states found

that workers suffer from respiratory illnesses due

to inhalation of various gaseous compounds, skin

disease, and musculoskeletal disorders. The

leading cause of injury was lifting heavy objects,

which can be attributed to moving heavy waste

bins. In the same study, authors compared worker

days away from work or on job restriction and

transfer and found that the solid waste industry

had the highest rate: 6 compared with 3.4 for

manufacturing, 3.3 for construction, and 3.9 for

truck transportation.141

Several major waste service providers have been

cited and penalized by OSHA following worker

fatalities. In 2011, Metalico was cited for repeated

and serious violations of safety standards after a

worker was fatally crushed. The company faced

penalties of $73,300.142 After a worker died from

fatal injuries at an Illinois recycling company,

OSHA cited the company for eight violations and

assessed nearly half million dollars in penalties.

The citations were for “failing to implement lock-

out tag-out and Confined Space Entry procedures,

in addition to not providing training to employees

who operate and maintain such equipment.”143

As noted, temporary workers are particularly at

risk. In November 2000, WM Inc. was cited for

violations after a temporary worker died after

falling from a recycling truck. OSHA cited the

company for repeat violations for not training

“temporary employees about safety procedures

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and practices when riding modified trucks and

working the routes.” The proposed penalties for

violations totaled $122,500.144 Republic Services

was cited for seven safety violations for exposing

workers to excessive heat after a temporary

worker died from heat stress in June 2013. The

proposed penalties totaled $20,000 for Republic

Services and $13,000 for the temporary labor

provider.145

While the magnitude of individual penalties is

small, repeated citations and penalties can be

indicative of widespread worker safety problems.

Poor safety records can impact worker morale,

productivity, and turnover rates.146 Poor safety

programs could also make recruiting difficult,

particularly in high-risk industries like Waste

Management.147

In addition to citations and penalties, companies

can also face lawsuits over injuries and fatalities.

Allied Waste settled a lawsuit with the family of a

garbage truck driver who was killed on the job.

The family’s attorneys alleged that the company

encouraged drivers to falsify driver logs and that

its trucks were not well maintained. The case was

settled for $6 million just weeks before going to

trial.148

Workplace safety is a major concern for industry

players and companies are taking steps to

improve it. Conventional components of a good

safety program, “management commitment,

employee participation, hazard assessment,

hazard abatement, and medical management”

can all help improve worker health and safety.149

Increasing automation of waste collection and

sorting can improve worker productivity while

reducing health risks.150 WM Inc.151 and Republic

Services152 report injury rates that are better than

the industry average by 43 and 42 percent,

respectively. In 2001, WM Inc. implemented the

initiative Mission to Zero, which promotes zero

tolerance for unsafe behavior. As part of the plan,

the company offers thorough training,

standardized rulebooks, and dashboard video

recorders in 95 percent of its collection fleet.153

In 2014 annual SEC filings, several major

companies stated that worker safety risks are

inherent to the business, and also highlighted the

importance of safety. For example, Republic

Services disclosed that it encourages workplace

safety through recognizing and rewarding

employees for outstanding safety records. In two

of the company’s safety incentive programs,

Dedicated to Safety and Dedicated to Excellence,

workers earn rewards based on their performance

on safety, customer service, attendance, and

other factors. During 2014, about 18,000 of

31,000 employees earned one of the two

awards.154

Value Impact

In an industry with higher-than-average accident

and fatality rates, a poor safety performance can

increase regulatory compliance costs. Recurring

health and safety incidents can lead to chronic

impacts on company value, affecting operational

efficiency. Companies with these records may

face higher ongoing regulatory compliance costs,

penalties, and medical costs, as well as impacts on

profitability from lower employee morale and

productivity. Training on processes that relieve

workers of physically demanding activities can

better protect worker health.

Serious incidents with a low probability of

occurrence but a high potential magnitude of

impacts can lead to acute one-time costs and

contingent liabilities from legal action or

regulatory penalties.

The various measures of worker safety illustrate a

company’s relative exposure to litigation, chronic

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increases in operating costs, and regulatory risks

related to workplace safety.

Labor Relations

Labor relations play an important role in the

Waste Management industry, as wages account

for its largest operating expense. Many workers

belong to unions with strong bargaining power.

Labor unions are prevalent in industries where

there are complete labor contracts—contracts in

which the conditions of the contract are explicitly

stated when it is signed. For example, complete

contracts exist in waste hauling: either workers

complete their daily route or they do not. Under

incomplete labor contracts, higher performance

can be met with higher wages. Because that is

not possible in complete labor contracts, wages

tend to be low. Therefore, unions play an

important role in protecting workers’ rights and

negotiating higher wages.155

The presence of unions makes the management

of labor relations critical, as conflict with workers

can result in labor strikes and other disruptions

that can delay or stop operations, leading to

losses and reputational damage. Continued labor

stresses can impact the long-term profitability of a

business.

For companies with low unionization rates in an

industry characterized by otherwise high union

participation, a short-term view on employee

compensation, contract terms, and working

conditions could create a potential for disruption

if workers begin to demand better standards

through increasing unionization or other actions.

Companies need to take a long-term view on pay

and benefits so that they can protect workers’

rights and enhance their productivity while

ensuring the financial sustainability of a company

operations.

Company performance in this area can be

analyzed in a cost-beneficial way through the

following direct or indirect performance metrics

(see Appendix III for metrics with their full detail):

• Percentage of active workforce covered

under collective-bargaining agreements;

and

• Number and duration of strikes and

lockouts.

Evidence

As noted, working conditions in the Waste

Management industry can be physically

demanding and hazardous. Labor unions play a

key role in representing workers’ interests and

managing collective bargaining for better wages

and safer working conditions. Unionization rates

within the industry vary.

On the low end, Clean Harbors, Waste

Connection, and Stericycle report unionization

rates of 11.5, 12.4, and 15 percent, respectively.

The largest companies reported higher rates; 21.5

percent of WM Inc. employees and 26 percent of

Republic Services employees are unionized.156

Overall industry unionization rates are higher than

the U.S. Bureau of Labor Statistics (BLS)

nationwide average for 2014. Around 11 percent

of wage and salary workers in the industry

belonged to unions; this is especially high

compared with the private sector average of 6.6

percent for all industries.157

Labor and related benefits are by far the highest

operating cost for waste management companies.

They make up 31 percent of operating expenses

for Republic Services158 and 27 percent for WM

Inc.159 Poor labor relations can result in work

stoppages that can affect company cash flow and

profitability. Unions have more bargaining power

to demand better wages and working conditions;

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therefore, with unions, the cost of labor disputes

can be higher.

In their annual filings, several companies said that

the presence of unionized workers and potential

labor disputes could have material impacts on

their operations. For example, Casella Waste,

which has a 4 percent unionization rate, stated

that wage conflicts could lead to serious

problems: “We may be subject to union-initiated

work stoppages, including strikes. Depending on

the type and duration of any labor disruptions,

our revenues could decrease and our operating

expenses could increase, which could adversely

affect our financial condition, results of

operations and cash flows.”160

In their SEC filings, Republic Services and Metalico

discussed the risks associated with potential

increases in the unionization rates of their

workforces. Republic Services stated in its FY2014

Form 10-K, “Additional groups of employees may

seek union representation in the future and, if

successful, the negotiation of collective

bargaining agreements could divert

management’s attention and result in increased

operating costs.”161

According to the BLS, mean hourly wages in the

Waste Collection, Waste Treatment and Disposal,

and Remediation and Other Waste Management

Services industries range from $16 to $19, which

amounts to annual wages between $34,000 and

$39,000. Mean hourly wages vary by state, with

California at $20.37 and New York at $25.38.162

Some municipalities are stepping in to facilitate

wage increases. Teamster recyclers in San

Francisco receive $21 per hour, which is much

higher than their counterparts in neighboring East

Bay cities. In December 2013, the Fremont City

Council passed a waste service rate increase on

the condition that the city’s contracted recycler

agree to raise wages for workers. The union

contract mandated a wage of $14.59 per hour in

2014, with annual increases that will hit $20.94 in

2019. The city of Oakland also requires wage

increases for recycling sorters under its new

recycling contract.163

Waste management companies can be subject to

worker strikes because of an inability to negotiate

wages, pension benefits, and other issues. The

presence of some union workers can also result in

dissatisfaction among nonunionized workers due

to pay differences. Work stoppage data from the

Federal Mediation and Conciliation Service

indicates that waste management companies

experienced at least 26 instances of work

stoppages between 2005 and 2014 involving

between 14 and 700 workers in each case. The

longest strike, at El Paso Disposal, lasted 261 days

and involved 60 workers. Major companies WM

Inc., Republic Waste, and Allied Waste have all

experienced work stoppages.164

Strikes can disrupt operations, and in some cases,

fines have been levied against companies that

have missed garbage pickup. Washington State

regulators proposed a $2.14 million fine to WM

Inc. for missing garbage, recycling, and yard

waste collection during an eight-day labor dispute

in 2013. The state’s Utilities and Transportation

Commission found that the company failed to

deploy sufficient replacement workers to maintain

service, which resulted in an estimated 200,000

missed pickups during the strike. Under state law,

a penalty of up to $1,000 can be levied for each

violation.165 According to the union the dispute

was over health and safety issues; however,

drivers involved in the strike mentioned the

$2.50-per-hour wage discrepancy between

recycling drivers and garbage truck drivers as the

cause of unrest.166

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Value Impact

Labor-intensive industries with well-defined

occupations are prone to high rates of

unionization, as employees with similar skills and

compensation have an incentive to resort to

collective bargaining in their negotiations with

management. The bargaining power that comes

with unionization leads to higher wages and other

compensation costs, including pensions.

Operational disruptions stemming from labor

unrest can affect profits because of cost increases

and operational shortfalls that lead to lost

revenue and regulatory fines and penalties.

The number of work stoppages provides a

measure of past performance on labor practices,

while the percentage of employees unionized

provides an indication of companies’ exposure to

compensation related cost increases and possible

future labor disputes.

BUSINESS MODEL AND INNOVATION

This dimension of sustainability is concerned with

the impact of environmental and social factors on

innovation and business models. It addresses the

integration of environmental and social factors in

the value-creation process of companies,

including resource efficiency and other innovation

in the production process. It also includes product

innovation and efficiency and responsibility in the

design, use-phase, and disposal of products. It

includes management of environmental and social

impacts on tangible and financial assets—either a

company’s own or those it manages as the

fiduciary for others.

Emerging environmental and social trends, along

with stricter regulatory requirements and scrutiny

of waste management practices, are creating new

innovation and business opportunities for

companies in the Waste Management industry.

The emerging focus on the lifecycle assessment of

products and cradle-to-cradle (C2C) design is

driving landfill diversion and waste reduction.

Recycling & Resource Recovery

Waste management companies can play a critical

role in the circular economy, particularly in

separating and recovering reusable materials.

Pressures from new regulations, customer

demand, and increasing costs of extracting virgin

materials are initiating the move toward a circular

economy. As a result, waste management

companies in developed countries are facing

stagnant or declining volumes of waste per capita

and an expanding recycling market, shifting their

sources of revenue growth.

C2C approaches initiated by other industries have

the potential to break down if the recovery and

recycling infrastructure or its technologies do not

exist. Waste management companies have to be

positioned to address the industry’s shifting

landscape through innovation and potential

business model shifts, or risk losing their

competitive advantage. Companies in the industry

need to both improve recovery and recycling rates

for easily recyclable materials and make recovery

and recycling of difficult materials, such as e-

waste, feasible and more cost-effective.

Innovation is necessary to make up for the loss of

landfill revenue, since companies can charge

recycling fees as well as generate revenue from

sales of recyclable materials.

Waste management companies recycle paper,

metals, glass, plastics, and other materials that

can be sold to and reused by other parties. Paper,

particularly newspaper and corrugates, and

metals, like lead, are the most recovered

materials. Some companies are innovating not

only to increase the percentage of materials

recovered but also to expand the range of

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materials recycled. There is also an increasing

focus on composting, which diverts organic

materials from landfills, thereby reducing landfill

emissions and generating valuable compost and

natural gas, particularly through industrial

composting.167 Incineration is another method for

diverting waste from landfills, although its

environmental impacts must be managed, as

incineration results in ash and can emit toxic air

pollutants.

As the digitalization of economies continues, the

proliferation of technology is raising concerns

about the environmental and social externalities

associated with both product manufacturing and

end-of-life disposal. The rapid obsolescence of

hardware is exacerbating the issue, making e-

waste a rapidly growing waste stream. Waste

management and other resource recovery

companies can play a valuable role in minimizing

externalities and improving the reuse and

recycling of materials from discarded electronics.

E-waste recycling can be a toxic and labor-

intensive process, making it very expensive. As a

result, much of the world’s e-waste flows from

developed countries, which generate most of the

waste, to developing countries, where low-cost

labor and lax environmental regulations make it

possible to harvest materials from the electronics

more cheaply. Much e-waste is dismantled in an

unsafe manner, which is harmful to workers and

the environments. E-waste can also end up in

landfills in both developed and developing

countries, although there are growing regulations

banning e-waste from landfills because of its toxic

nature.

Some companies offer e-waste services, including

helping manufacturers and retailers with take-

back programs. Growing volumes of e-waste and

bans on the transboundary e-waste trade present

areas of opportunities for waste management

companies.

Recycling, reuse, and composting are general

methods of diverting waste from landfills.

Prevention of waste at the source is another key

component of waste reduction, and waste

management companies can encourage

customers to prevent waste or divert it from

landfills. Landfill diversion can mitigate some of

the environmental impacts of landfills and reduce

the need for landfill expansion.

Company performance in this area can be

analyzed in a cost-beneficial way through the

following direct or indirect performance metrics

(see Appendix III for metrics with their full detail):

• Amount of waste incinerated, percentage

hazardous, percentage used for energy

recovery;

• Percentage of customers receiving

recycling and composting services, by

customer type;

• Amount of material recycled and

composted; and

• Amount of electronic waste collected,

percentage recovered through recycling.

Evidence

Growing awareness of the social and

environmental costs of extracting virgin materials

and resource depletion is leading to a focus on

recycling more and more products across the

economy. While diverting waste from landfills can

affect landfill-related revenues, waste

management companies can still benefit through

materials recovery and recycling. These practices

generate revenue from the sale of recycled and

composted materials, creating value from waste.

Additionally, companies can charge fees for

recycling, shifting the source of their revenue

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streams. Each method of waste diversion has

different challenges.

Landfill diversion is growing from all types of

customers—residential, commercial, and

industries. This is driven by a policy and regulatory

push toward a circular economy, growing

environmental awareness, and cost and

constraints associated with extracting virgin

materials.

Recovery and recycling rates vary depending on

the type of waste. In 2012, food waste and yard

trimmings together constituted 28 percent of

MSW generated in the U.S., yet only 4.8 percent

of food and 57.7 percent of yard trimmings were

recovered. Furthermore, although some metals,

such as aluminum, are infinitely recyclable—

meaning that they can be used and recycled

infinitely without the material losing the

integrity—only 19.8 percent of aluminum in MSW

is recovered. Paper and paperboard recycling is

the most well established, with 64.6 percent

recovered from MSW.168

E-waste is a growing waste stream in which

recycling rates are low. The average U.S.

household owns more than 20 electronic

products.169 In 2009, the EPA estimated that

215.6 million units of computers, televisions, and

mobile devices reached their end-of-life stage,

and that between 8 and 38 percent in each

category were collected for recycling. In terms of

weight, 2.37 million tons of electronics were

ready for end-of-life management, of which 25

percent were collected for recycling.170 Between

2000 and 2012, the amount of e-waste generated

in the U.S. increased from 1.9 million tons to 3.4

million tons.171 This represents a significant area

of growth, especially as concerns over e-waste

lead to more regulations on its safe disposal.

Commercial and industrial waste volume is highly

correlated with the level of economic activity, and

so the volume of nonmunicipal waste varies with

the business cycle.172 Large U.S. companies across

industries are starting to divert more waste from

landfill and have set waste-reduction goals. For

example, multiline retailer Walmart has a landfill

diversion rate of 81 percent for its U.S.

operations.173 Genentech reduced the absolute

volume of waste it sent to landfill from about

4,300 metric tons in 2009 to 2,700 metric tons in

2014. Of the waste diverted, 68 percent was

recovered as of 2014.174 Several auto

manufacturing plants are zero-waste facilities,

including 14 Ford plants around the world, and

33 GM and 10 Honda plants in North America.175

Electronic retailers such as Best Buy collect

electronic waste from customers and send it to

recyclers. Best Buy has a target of sending 2

billion pounds of e-waste to certified recyclers by

2020. As of 2014, it has collected 1 billion

pounds of electronics.176 Company recycling

activities are driven by changing customer

preference, cost of landfilling, and revenue from

recycling.

Another key factor driving the growth of recycling

is a commitment by manufacturers to incorporate

recycled materials in their products and

packaging. This creates demand for recycled

commodities, according to WM Inc.177

Regulations drive growth with specific mandates

to recycle or otherwise divert certain waste

streams. For example, Connecticut was the first

U.S. state to ban commercial food waste from

landfills. Other states have followed suit,

including Vermont, where all food waste will be

banned from landfills by 2020.178 Between 1990

and 2012, the percentage of MSW recovered for

composting grew fourfold, from 2 to 8.5

percent.179 Twenty-five states have passed

legislation on e-waste recycling programs, with

most holding the manufacturer financially

responsible for recycling.180

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Landfilling is a significant source of revenue for

many waste management companies. It accounts

for 20 percent of revenue for WM Inc.,181 and in

2014, revenue from landfill tipping fees alone

constituted 12 percent of total revenue for

Republic Services.182 WM’s landfill revenues fell

from $3.2 billion in 2006 to $2.5 billion in 2010,

the lowest in the past decade. Since then it has

been steadily increasing, to $2.9 billion in 2015,

still shy of 2006 levels. Recycling revenues also fell

during the recession but recovered quickly to pre-

recession levels.183

Although the volume of waste sent to landfills

continues to increase along with population

growth, the percentage of MSW waste diverted

grew by 19 percentage points between 1990 and

2012. As of 2012, 35 percent of MSW was

diverted through recycling, composting, and

incineration.184 As the volume of waste diverted

grows, companies that fail to provide waste

diversion services will find it difficult to remain

competitive. As WM Inc. stated in its FY2014

Form 10-K: “These developments reduce the

volume of waste going to our landfills which may

affect the prices that we can charge for landfill

disposal. Our landfills currently provide and,

together with our divested waste-to-energy

facilities, have historically provided our highest

income from operations margins.”185

Republic Services and WM Inc. both recognize the

risk to their businesses from changes in customer

behavior, such as zero-waste initiatives by large

companies. In its FY2014 annual SEC filing,

Republic Services stressed the potential impacts to

its bottom line: “Alternatives to landfill disposal

could reduce our disposal volumes and cause our

revenues and operating results to decline.”186

While food waste diversion is relatively new, yard

trimmings and other such wastes have long been

converted to compost or usable heat, electricity,

or fuel. These practices can be sources of revenue

for companies engaged in processing organic

waste. Composting can be done using aerobic

and anaerobic processes. The agriculture industry

uses the end product of the aerobic process as

fertilizers, soil amendment, and mulch. An

anaerobic digester produces biogas, a mixture of

methane and carbon dioxide. In the U.S., this type

of technology is commonly used in wastewater

treatment plants and is relatively new in solid

waste management.187

An alternative way to divert organic and other

waste is by incineration. As mentioned in the Air

Quality section, waste incineration can result in

the production of air pollutants as well as ash.

Companies involved in waste incineration must

manage its environmental impacts.

Between 1990 and 2012, waste recovery and

recycling grew from 16 to 35 percent of MSW,188

with paper products and certain metals recycled

at the highest rates. The range of materials that

can be recycled is also increasing, thanks to new

technologies and consumer education. Companies

that are able to expand their recycling offerings

may be better positioned to win contracts, given

the growing mandates on waste diversion.

Additionally, companies are able to charge their

customers extra fees for recycling and generate

revenue through sales of recyclable and recycled

commodities. In 2014, WM Inc. generated $1.3

billion—nearly 10 percent of its revenue—from

recycling, which consisted of tipping fees and the

sale of recyclable commodities to third parties.189

Waste Connections Inc. reported $58 million in

revenue from sales of recyclable material to third

parties for processing, which accounted for 2.7

percent of its total reported revenue in 2014.

(This was down from 4.4 percent in 2012 because

of decreases in recycled commodities prices and

the closure of two recycling operations.)190

I N D U S T R Y B R I E F | W A S T E M A N A G E M E N T | 28

Revenues from recycling fluctuate widely,

depending on the price of the comparable virgin

material. Although prices of virgin materials to

produce paper, plastics, glass have been low, the

long-run trend is for prices to increase, making

the cost of recycled materials relatively

competitive. As higher regulations on landfills

lead to an increase in tipping fees, bringing waste

to recycling facilities may be a more attractive

option.191

Besides facing the direct financial impacts of e-

waste laws in developed economies, electronics

manufacturers can face reputational risks if their

products are associated with toxic dumps in

developing countries. Studies estimate that

around 23 percent of OECD countries’ e-waste is

exported to seven developing countries: India,

China, and five West African nations.192 Therefore

manufacturers look for certified e-waste service

providers. For example, WM Inc. has “teamed

with major electronics manufacturers to offer

comprehensive ‘take-back’ programs of their

products to assist the general public in disposing

of their old electronics in a convenient and

environmentally safe manner.”193

As more regulations on e-waste are implemented

in the U.S. and around the world, companies

involved in safe recycling will have a growth

opportunity. The compound annual growth rate

of the global e-waste recycling market is

significant: an estimated 10.7 percent between

2014 and 2019.194 Additionally, as strategic

metals become constrained because of resource

depletion and the increasing cost of extracting

virgin materials, e-waste will be viewed as an

urban ore; thereby its value will increase, as will

the revenue from reselling waste-harvested

minerals. Estimates show that 50 pounds of gold,

550 pounds of silver, 20 pounds of palladium,

and more than 20,000 pounds of copper can be

recovered from one million discarded cell

phones.195 At current prices, the value of the

recovered metals totals nearly $1.3 million.196 This

market has a significant growth potential, as

215.6 million units of electronics reach their end

of life annually in the U.S.197

Value Impact

Companies that are able to develop service

offerings and alternative lines of business catering

to the trend toward closed-loop economies are

likely to ensure robust revenue growth by meeting

market demand for related services. For

integrated companies, investing in R&D and

capital expenditures in materials recovery may

generate economies of scale.

Expanded revenues from materials recovery and

recycling could mitigate the impact of slower

growth of landfill revenue. In addition, companies

diverting organics from landfill could reduce

capital expenditures for management of LFG

emissions, while staying ahead of related

regulation. Growing regulations are resulting in

mandatory recycling and the development of

producer and retailer take-back programs, which

present opportunities for waste management

companies to partner with manufacturers to

create additional revenue streams. At the same

time, the cost of revenue may increase when

providing these alternative services. The various

metrics measure the extent to which the company

and its customers use alternatives to landfilling.

The issue has a strong forward-looking impact.

Similarly, as the economy shifts to a closed-loop

system, companies that offer a range of recycling

and composting services may be better positioned

to win contracts and gain market share. The e-

waste stream is likely to be more strictly regulated

in the future, benefiting companies that are

currently well-positioned to manage e-waste.

I N D U S T R Y B R I E F | W A S T E M A N A G E M E N T | 29

APPENDIX I

FIVE REPRESENTATIVE WASTE MANAGEMENT COMPANIESIV

IV This list includes five companies representative of the Waste Management industry and its activities. This includes only companies for which the Waste Management industry is the primary industry, companies that are U.S.-listed but are not primarily traded over the counter, and for which at least 20 percent of revenue is generated by activities in this industry, according to the latest information available on Bloomberg Professional Services. Retrieved on March 12, 2015.

COMPANY NAME (TICKER SYMBOL)

Waste Management Inc. (WM)

Republic Services Inc. (RSG)

Stericycle Inc. (SRCL)

Tetra Tech Inc. (TTEK)

Waste Connections Inc. (WCN)

30I N D U S T RY B R I E F | WA S T E M A N A G E M E N T

APPENDIX IIA: Evidence for Sustainability Disclosure Topics

Sustainability Disclosure Topics

EVIDENCE OF INTERESTEVIDENCE OF

FINANCIAL IMPACTFORWARD-LOOKING IMPACT

HM (1-100)

IWGsEI

Revenue & Cost

Asset & Liabilities

Cost of Capital

EFIProbability & Magnitude

Exter- nalities

FLI% Priority

Greenhouse Gas Emissions 42* 72 4 Medium • Medium • • Yes

Air Quality 42* - - High • • Medium • • Yes

Fleet Fuel Management 33 78 5 Medium • • Medium No

Management of Leachate & Hazardous Waste

100* 89 1 High • • • High • Yes

Workforce Health & Safety 25 83 2 High • • Medium No

Labor Relations 25 90 6 High • High No

Recycling & Resource Recovery 75* 78 3 Medium • Medium • • Yes

HM: Heat Map, a score out of 100 indicating the relative importance of the topic among SASB’s initial list of 43 generic sustainability issues. Asterisks indicate “top issues.” The score is based on the frequency of relevant keywords in documents (i.e., 10-Ks, 20-Fs, shareholder resolutions, legal news, news articles, and corporate sustainability reports) that are available on the Bloomberg terminal for the industry’s publicly listed companies. Issues for which keyword frequency is in the top quartile are “top issues.”

IWGs: SASB Industry Working Groups

%: The percentage of IWG participants that found the disclosure topic likely to constitute material information for companies in the industry. (-) denotes that the issue was added after the IWG was convened.

Priority: Average ranking of the issue in terms of importance. 1 denotes the most important issue. (-) denotes that the issue was added after the IWG was convened.

EI: Evidence of Interest, a subjective assessment based on quantitative and qualitative findings.

EFI: Evidence of Financial Impact, a subjective assessment based on quantitative and qualitative findings.

FLI: Forward Looking Impact, a subjective assessment on the presence of a material forward-looking impact.

31I N D U S T RY B R I E F | WA S T E M A N A G E M E N T

APPENDIX IIB: Evidence of Financial Impact for Sustainability Disclosure Topics

Evidence of

Financial Impact

REVENUE & EXPENSES ASSETS & LIABILITIES RISK PROFILE

Revenue Operating Expenses Non-operating Expenses Assets Liabilities

Cost of Capital

Industry Divestment

RiskMarket Share New Markets Pricing Power

Cost of Revenue

R&D CapExExtra-

ordinary Expenses

Tangible Assets

Intangible Assets

Contingent Liabilities & Provisions

Pension & Other

Liabilities

Greenhouse Gas Emissions • • • •

Air Quality • • • • • •

Fleet Fuel Management • • • •

Management of Leachate & Hazardous Waste

• • • • • • •

Workforce Health & Safety • • •

Labor Relations • • •

Recycling & Resource Recovery • • • • •

H IGH IMPACTMEDIUM IMPACT

I N D U S T R Y B R I E F | W A S T E M A N A G E M E N T | 32

APPENDIX III

SUSTAINABILITY ACCOUNTING METRICS—WASTE MANAGMENT

TOPIC

ACCOUNTING METRIC CATEGORY UNIT OF

MEASURE

CODE

Greenhouse Gas Emissions

(1) Gross global Scope 1 emissions, (2) percentage covered under emissions-limiting regulation, and (3) percentage covered under emissions-reporting regulation

Quantitative Metric tons (t) CO2-e, Percentage (%)

IF0201-01

Total landfill gas generated, percentage flared, percentage used for energy

Quantitative

Million British Thermal Units (MMBtu), Percentage (%)

IF0201-02

Description of long-term and short-term strategy or plan to manage Scope 1 emissions, emission-reduction targets, and an analysis of performance against those targets

Discussion and Analysis

n/a IF0201-03

Air Quality

Air emissions of the following pollutants: NOx (excluding N2O), SOx, non-methane volatile organic compounds (NMVOCs), and hazardous air pollutants (HAPs)

Quantitative Metric tons (t) IF0201-04

Number of facilities in or near areas of dense population Quantitative Number IF0201-05

Number of incidents of non-compliance associated with air emissions

Quantitative Number IF0201-06

Fleet Fuel Management

Fleet fuel consumed, percentage renewable Quantitative Gigajoules, Percentage (%)

IF0201-07

Percentage of alternative energy vehicles in fleet Quantitative Percentage (%) IF0201-08

Management of Leachate & Hazardous Waste

Total Toxic Release Inventory (TRI) releases, percentage released to water

Quantitative Metric tons (t), Percentage (%)

IF0201-09

Number of corrective actions implemented for landfill releases Quantitative Number IF0201-10

Number of incidents of non-compliance associated with environmental impacts*

Quantitative Number IF0201-11

* Note to IF0201-11—The registrant shall briefly describe the nature and context of any fines and settlements.

I N D U S T R Y B R I E F | W A S T E M A N A G E M E N T | 33

APPENDIX III (CONTINUED)

SUSTAINABILITY ACCOUNTING METRICS—WASTE MANAGMENT

TOPIC

ACCOUNTING METRIC CATEGORY UNIT OF

MEASURE

CODE

Workforce Health & Safety

(1) Total recordable injury rate (TRIR), (2) fatality rate, and (3) near miss frequency rate (NMFR) for (a) direct employees and (b) contract employees

Quantitative Rate IF0201-12

Safety Measurement System BASIC percentiles for: (1) Unsafe Driving, (2) Hours-of-Service Compliance, (3) Driver Fitness, (4) Controlled Substances/Alcohol, (5) Vehicle Maintenance, and (6) Hazardous Materials Compliance

Quantitative Percentile (%) IF0201-13

Number of vehicle accidents and incidents Quantitative Number IF0201-14

Labor Relations

Percentage of active workforce covered under collective bargaining agreements

Quantitative Percentage (%) IF0201-15

Number and duration of strikes and lockouts** Quantitative Number, Days IF0201-16

Recycling & Resource Recovery

Amount of waste incinerated, percentage hazardous, percentage used for energy recovery

Quantitative Metric tons (t), Percentage (%)

IF0201-17

Percentage of customers receiving (1) recycling and (2) composting services, by customer type Quantitative Percentage (%) IF0201-18

Amount of material (1) recycled and (2) composted Quantitative Metric tons (t) IF0201-19

Amount of electronic waste collected, percentage recovered through recycling Quantitative

Metric tons (t), Percentage (%) IF0201-20

** Note to IF0201-16—The registrant shall describe the reason for each work stoppage (as stated by labor), the impact on production, and any corrective actions taken as a result.

34I N D U S T RY B R I E F | WA S T E M A N A G E M E N T

APPENDIX IV: Analysis of SEC Disclosures | Waste Management

The following graph demonstrates an aggregate assessment of how representative U.S.-listed Waste Management companies are currently reporting on sustainability topics in their SEC annual filings.

Waste Management

Greenhouse Gas Emissions

Air Quality

Fleet Fuel Management

Management of Leachate & Hazardous Waste

Workforce Health & Safety

Labor Relations

Recycling & Resource Recovery

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

TYPE OF DISCLOSURE ON SUSTAINABILITY TOPICS

NO DISCLOSURE BOILERPLATE INDUSTRY-SPECIF IC METRICS

72%

- 1

78%

89%

83%

90%

78%

IWG Feedback*

*Percentage of IWG participants that agreed topic was likely to constitute material information for companies in the industry.

1 The “Air Quality” disclosure topic was introduced after SASB convened IWGs and per stakeholder feedback.

I N D U S T R Y B R I E F | W A S T E M A N A G E M E N T | 35

REFERENCES

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30 Republic Services Inc., FY2014 Form 10-K for the Period Ending December 31, 2014 (filed February 23, 2015), pp. 9–12. 31 IBISWorld, Industry Report 56211 Waste Collection Services in the US, January 2015, pp. 32–33. 32 Republic Services Inc., FY2014 Form 10-K for the Period Ending December 31, 2014 (filed February 23, 2015), p. 56. 33 “Closure and Post-Closure Care Requirements for Municipal Solid Waste Landfills,” U.S. Environmental Protection Agency, last modified February 22, 2016, accessed March 4, 2016, http://www3.epa.gov/epawaste/nonhaz/municipal/landfill/financial/mswclose.htm. 34 “Superfund: National Priorities List,” U.S. Environmental Protection Agency, last modified December 29, 2015, accessed March 4, 2016, http://www.epa.gov/superfund/superfund-national-priorities-list-npl. 35 “Financial Assurance in Superfund Settlements and Orders,” U.S. Environmental Protection Agency, last modified November 4, 2015, accessed February 23, 2016, http://www.epa.gov/enforcement/financial-assurance-superfund-settlements-and-orders#fa. 36 “Guidance: Policy for Municipality and MSW CERCLA Settlements at NPL Co-Disposal Sites,” U.S. Environmental Protection Agency, last modified January 4, 2016, accessed February 23, 2016, http://www.epa.gov/enforcement/guidance-policy-municipality-and-msw-cercla-settlements-npl-co-disposal-sites. 37 “Summary of the Clean Water Act,” U.S. Environmental Protection Agency, last modified October 8, 2015, accessed February 23, 2016, http://www.epa.gov/laws-regulations/summary-clean-water-act. 38 “EPA’s Prior Determinations That Landfill Gas Is Not a Solid Waste,” White House, accessed March 4, 2016, https://www.whitehouse.gov/sites/default/files/omb/assets/oira_2060/2060_11162011-3.pdf. 39 “Solid Waste Facilities: Landfill Gas Regulations,” California Department of Resources Recycling and Recovery, last modified May 19, 2009, accessed March 4, 2016, http://www.calrecycle.ca.gov/swfacilities/Landfills/Gas/Regulations.htm. 40 “Landfill Methane Outreach Program,” U.S. Environmental Protection Agency, last modified February 25, 2016, accessed March 4, 2016, http://www.epa.gov/lmop/. 41 Republic Services Inc., FY2014 Form 10-K for the Period Ending December 31, 2014 (filed February 23, 2015), pp. 9–12. 42 “Air Emissions from MSW Combustion Facilities,” U.S. Environmental Protection Agency, last modified February 22, 2016, accessed March 3, 2016, http://www3.epa.gov/epawaste/nonhaz/municipal/wte/airem.htm. 43 “U.S. Cover Note, INDC and Accompanying Information,” United Nations Framework Convention on Climate Change, last modified March 3, 2015, accessed February 22, 2016, http://www4.unfccc.int/submissions/INDC/Published%20Documents/United%20States%20of%20America/1/U.S.%20Cover%20Note%20INDC%20and%20Accompanying%20Information.pdf. 44 Barker et al., Technical Summary, Climate Change 2007: Mitigation—Contribution of Working Group III to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change (Cambridge University Press, 2007), p. 29, accessed February 22, 2016, http://www.ipcc.ch/pdf/assessment-report/ar4/wg3/ar4-wg3-ts.pdf. 45 Ibid., pp. 71–72. 46 Dylan Sullivan, “Here’s What Happened to Different Electricity-Generating (or Saving) Technologies in EPA’s Clean Power Plan Final Rule,” Switchboard, National Resources Defense Council blog, October 19, 2015, accessed February 23, 2016, http://switchboard.nrdc.org/blogs/dsullivan/heres_what_happened_to_differe.html. 47 “Clean Power Plan for Existing Power Plants,” U.S. Environmental Protection Agency, last modified February 11, 2016, accessed February 23, 3016, http://www.epa.gov/cleanpowerplan/clean-power-plan-existing-power-plants. 48 David Morgan, “U.S. Proposes Tighter Emission Standards for Big Trucks,” Reuters, June 19, 2015, accessed February 22, 2016, http://www.reuters.com/article/us-usa-trucks-regulations-exclusive-idUSKBN0OZ1KL20150619. 49 Republic Services Inc., FY2014 Form 10-K for the Period Ending December 31, 2014 (filed February 23, 2015), pp. 9–12. 50 IBISWorld, Industry Report 56211 Waste Collection Services in the US, January 2015, p. 32. 51 Jackie Bennion, “Drowning in Electronics,” PBS.org, accessed February 23, 2016, http://www.pbs.org/frontlineworld/stories/ghana804/resources/ewaste.html. 52 “Basel Convention,” U.S. Environmental Protection Agency, last modified February 23, 201, accessed March 4, 2016, http://www.epa.gov/osw/hazard/international/basel.htm. 53 “Hazardous Waste Recycling,” U.S. Environmental Protection Agency, last modified February 23, 2016, accessed March 4, 2016, http://www3.epa.gov/epawaste/hazard/recycling/index.htm. 54 IBISWorld, Industry Report 56292 Recycling Facilities in the US, October 2014, p. 31. 55 Ibid.

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56 Mark Henricks, “More States Ban Organic Waste in Landfills,” American Recycler News, January 2014, accessed May 4, 2015, http://www.americanrecycler.com/0114/2428more.shtml. 57 O’Brien, “Contracting Out: Adapting Local Integrated Waste Management to Regional Private Landfill Ownership.” 58 “Landfill Methane Outreach Program: Basic Information,” U.S. Environmental Protection Agency, last modified March 3, 2015, accessed April 7, 2015, http://www.epa.gov/lmop/basic-info/index.html. 59 “Overview of Greenhouse Gases,” U.S. Environmental Protection Agency, last modified April 14, 2015, accessed May 4, 2015, http://epa.gov/climatechange/ghgemissions/gases/ch4.html. 60 U.S. Environmental Protection Agency, Available and Emerging Technologies for Reducing Greenhouse Gas Emissions from Municipal Solid Waste Landfills, June 2011, p. 10, accessed April 13, 2015, http://www.epa.gov/nsr/ghgdocs/landfills.pdf. 61 Natural Resources Defense Council, Is Landfill Gas Green Energy?, May 2003, accessed May 4, 2015, http://www.nrdc.org/air/energy/lfg/lfg.pdf. 62 Hoornweg and Bhada-Tata, What a Waste: A Global Review of Solid Waste Management, p. 29. 63 “Overview of Greenhouse Gases: Methane Emissions,” U.S. Environmental Protection Agency, last modified July 2, 2014, accessed March 31, 2015, http://epa.gov/climatechange/ghgemissions/gases/ch4.html. 64 Author’s calculation based on data from “Overview of Greenhouse Gases,” U.S. Environmental Protection Agency, last modified April 9, 2015, accessed March 31, 2015, http://epa.gov/climatechange/ghgemissions/gases.html. 65 “Landfill Methane Outreach Program: Basic Information,” U.S. Environmental Protection Agency, last modified March 3, 2015, accessed April 7, 2015, http://www.epa.gov/lmop/basic-info/index.html. 66 Republic Services Inc., FY2013 Form 10-K for the Period Ending December 31, 2013 (filed February 13, 2014), p. 12. 67 “Zero Waste FAQ,” SF Environment, accessed April 7, 2015, http://www.sfenvironment.org/zero-waste/overview/zero-waste-faq. 68 U.S. Environmental Protection Agency, Available and Emerging Technologies for Reducing Greenhouse Gas Emissions from Municipal Solid Waste Landfills, p. 9. 69 Republic Services Inc., FY2013 Form 10-K for the Period Ending December 31, 2013 (filed February 13, 2014), p. 9. 70 Author’s calculation, based on U.S. Environmental Protection Agency, Available and Emerging Technologies for Reducing Greenhouse Gas Emissions from Municipal Solid Waste Landfills, p. 9; and Republic Services Inc., FY2013 Form 10-K for the Period Ending December 31, 2013 (filed February 13, 2014), p. 9. 71 U.S. Environmental Protection Agency, Available and Emerging Technologies for Reducing Greenhouse Gas Emissions from Municipal Solid Waste Landfills, p. 9. 72 “Operational Projects,” U.S. Environmental Protection Agency, last modified March 13, 2015, accessed April 14, 2015, http://www.epa.gov/lmop/projects-candidates/operational.html. 73 Waste Management Inc., Sustainability Report 2015, p. 6. 74 Waste Management Inc., FY2014 Form 10-K for the Period Ending December 31, 2014 (filed February 17, 2015), pp. 8–9. 75 Waste Management Inc., Sustainability Report 2015, pp. 2, 6. 76 “LFG Energy Project,” U.S. Environmental Protection Agency, last modified March 13, 2015, accessed April 14, 2015, http://www.epa.gov/outreach/lmop/faq/lfg.html#13. 77 Natural Resources Defense Council, Is Landfill Gas Green Energy?, pp. 23–25. 78 “Odor Fact Sheet,” New Jersey Department of Environmental Protection, May 30, 2014, accessed February 10, 2016, http://www.nj.gov/dep/enforcement/docs/odor.pdf. 79 “Air Emissions from MSW Combustion Facilities,” U.S. Environmental Protection Agency. 80 Ibid. 81 U.S. Government Accountability Office, Siting of Hazardous Waste Landfills and Their Correlation with Racial and Economic Status of Surrounding Communities, June 14, 1983, accessed February 24, 2016, http://archive.gao.gov/d48t13/121648.pdf. 82 Rachel Massey, Environmental Justice: Income, Race, and Health, Global Development and Environment Institute, Tufts University, 2004, accessed April 19, 2015, http://www.ase.tufts.edu/gdae/education_materials/modules/Environmental_Justice.pdf. 83 Richard C. Ready, “Do Landfills Always Depress Nearby Property Values?,” Rural Development Paper No. 27, May 2005, accessed May 4, 2015, http://aese.psu.edu/nercrd/publications/rdp/rdp27.pdf.

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84 Sherri Buri McDonald, “DEQ Fines Landfill Owners $790,000,” Oregon Public Broadcasting, August 18, 2013, accessed February 9, 2016, http://www.opb.org/news/article/deq-fines-landfill-owners-790000. 85 “Landfills Make Air Pollution Too,” Environmental Protection, March 30, 2012, accessed February 9, 2016, https://eponline.com/Articles/2012/03/30/Landfills-Make-Air-Pollution-Too.aspx. 86 Andrea Smardon, “Stericycle Agrees to $2.3 Million Fine to Settle Emissions Violations in Utah,” Kuer.org, December 1, 2014, accessed February 9, 2016, http://kuer.org/post/stericycle-agrees-23-million-fine-settle-emissions-violations-utah. 87 U.S. Environmental Protection Agency, Municipal Solid Waste Generation, Recycling, and Disposal in the United States: Tables and Figures for 2012, February 2014, Table 27, 30, accessed April 14, 2015, http://www.epa.gov/solidwaste/nonhaz/municipal/pubs/2012_msw_dat_tbls.pdf. 88 “Air Emissions from MSW Combustion Facilities,” U.S. Environmental Protection Agency. 89 “Basic Information,” U.S. Environmental Protection Agency, last modified April 14, 2014, accessed April 20, 2015, http://www.epa.gov/wastes/nonhaz/municipal/wte/basic.htm. 90 Linda Dailey Paulson, “Global Waste-to-Energy Market Growth Expected,” RWL Water, November 16, 2015, accessed February 10, 2016, https://www.rwlwater.com/global-waste-to-energy-market-growth-expected; Covanta Holding, Analyst Day Transcript, August 12, 2015. 91 Stericycle Inc., Q3 2015 Earnings Call, October 22, 2015. 92 Covanta Holding, Analyst Day Transcript, August 12, 2015. 93 Blythe Bernhard, “Bridgeton Landfill Owners to Pay Nearby Residents $6.8 Million in Lawsuit over Stink,” St. Louis Post-Dispatch, April 18, 2014, accessed April 19, 2015, http://www.stltoday.com/lifestyles/health-med-fit/health/bridgeton-landfill-owners-to-pay-nearby-residents-million-in-lawsuit/article_9d74a35a-4524-5a86-834c-db5e698271e3.html. 94 Joe Napsha, “MAX Environmental Fined $70K by State for Landfill’s Noxious Odors,” Trib Live, August 18, 2015, accessed March 3, 2016, http://triblive.com/news/westmoreland/8933576-74/max-environmental-odors#axzz3nAjZOX62. 95 Rich Bruni Jr., “Rostraver Landfill Fined $160,000 for Bad Odors,” Trib Live, March 10, 2014, accessed March 6, 2016, http://triblive.com/neighborhoods/yourmonvalley/yourmonvalleymore/5735580-74/landfill-dep-order. 96 Ariel Barkhurst and Lisa J. Huriash, “Mount Trashmore Smell Prompts Resident Complaints,” Sun Sentinel, July 15, 2013, accessed March 3, 2016, http://articles.sun-sentinel.com/2013-07-15/news/fl-trashmore-odor-violations-20130711_1_monarch-hill-landfill-operator-waste-management-inc. 97 Ben Finley, “After N.J. Complaints, Pa. Fines Landfill Owner,” Philly.com, August 5, 2015, accessed March 3, 2016, http://articles.philly.com/2015-08-05/news/65208953_1_tullytown-odor-complaints-houston-based-waste-management. 98 “The Fleet Owner 500: America’s Top Private Fleets,” Fleet Owner, 2010, p. 29. 99 Author’s calculation based on data from Republic Services Inc., FY2014 Form 10-K for the Period Ending December 31, 2014 (filed February 23, 2015), p. 32. 100 Author’s calculation based on data from Waste Management Inc., FY2014 Form 10-K for the Period Ending December 31, 2014 (filed February 17, 2015), p. 48. 101 Republic Services Inc., FY2014 Form 10-K for the Period Ending December 31, 2014 (filed February 23, 2015), p. 15. 102 Waste Management Inc., FY2014 Form 10-K for the Period Ending December 31, 2014 (filed February 17, 2015), p. 48. 103 “Investor CDP 2013 Information Request Progressive Waste Solutions Ltd,” CDP, 2013, accessed April 15, 2015, https://www.cdp.net/en-US/Results/Pages/responses.aspx. 104 Waste Management Inc., Sustainability Report 2014, p. 67. 105 “Investor CDP 2013 Information Request Progressive Waste Solutions Ltd,” CDP, 2013, accessed April 15, 2015, https://www.cdp.net/en-US/Results/Pages/responses.aspx. 106 Waste Management Inc., Sustainability Report 2014, pp. 61–62. 107 “Landfills Make Air Pollution Too,” Environmental Protection. 108 Republic Services, 2014 Sustainability Report, p. 10. 109 “Henry Hub Natural Gas Spot Price,” U.S. Energy Information Administration, last modified March 2, 2016, accessed March 3, 2016, https://www.eia.gov/dnav/ng/hist/rngwhhdm.htm. 110 Waste Connection, FY2014 Form 10-K for the Period Ending December 31, 2014 (filed February 10, 2015), p. 23. 111 “The Fleet Owner 500: America’s Top Private Fleets,” Fleet Owner. 112 Waste Connection, FY2014 Form 10-K for the Period Ending December 31, 2014 (filed February 10, 2015), p. 23. 113 Republic Services Inc., FY2014 Form 10-K for the Period Ending December 31, 2014 (filed February 23, 2015), p. 15. 114 Ibid.

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115 Ibid. 116 Waste Management Inc., FY2014 Form 10-K for the Period Ending December 31, 2014 (filed February 17, 2015), p. 23. 117 Republic Services Inc., FY2014 Form 10-K for the Period Ending December 31, 2014 (filed February 23, 2015), p. 15. 118 “Landfills,” U.S. Environmental Protection Agency, last modified January 10, 2014, accessed April 14, 2015, http://www.epa.gov/epawaste/nonhaz/municipal/landfill.htm. 119 Craig Freudenrich, “How Landfills Work,” HowStuffWorks.com, October 16, 2000, accessed May 4, 2015, http://science.howstuffworks.com/environmental/green-science/landfill.htm. 120 “Land Disposal,” U.S. Environmental Protection Agency, last modified December 20, 2012, accessed May 4, 2015, http://www.epa.gov/osw/hazard/tsd/td/disposal.htm. 121 John R. Carpenter, “Where Does Hazardous Waste Go When It Is Disposed Of?,” EzineArticles.com, December 17, 2010, accessed May 4, 2015, http://EzineArticles.com/5573706. 122 “Land Disposal,” U.S. Environmental Protection Agency. 123 Mutasem El-Fadel, Angelos N. Findikakis, and James O. Leckie, “Environmental Impacts of Solid Waste Landfilling,” Journal of Environmental Management 50, no. 1 (May 1997): pp. 1–25, accessed March 28, 2016, http://www.sciencedirect.com/science/article/pii/S0301479785701314. 124 “Landfills,” U.S. Environmental Protection Agency, last modified February 22, 2016, accessed March 3, 2016, http://www3.epa.gov/epawaste/nonhaz/municipal/landfill.htm. 125 U.S. Environmental Protection Agency, Municipal Solid Waste Generation, Recycling, and Disposal in the United States: Tables and Figures for 2012, February 2014, Table 28, accessed April 14, 2015, http://www.epa.gov/solidwaste/nonhaz/municipal/pubs/2012_msw_dat_tbls.pdf; and U.S. Environmental Protection Agency, Municipal Solid Waste in the United States: 2009 Facts and Figures, p. 15, accessed April 14, 2015, http://www.epa.gov/osw/nonhaz/municipal/pubs/msw2009rpt.pdf. 126 “Toxics Release Inventory 2011 California Report,” U.S. Environmental Protection Agency, January 2013, accessed April 15, 2015, http://www.epa.gov/region9/tri/report/11/tri-2011california-report.pdf. 127 Steve Schulwitz, “No Fine for Landfill from Leachate Spill,” Alpena News, December 23, 2011, accessed May 4, 2015, http://www.thealpenanews.com/page/content.detail/id/519828.html. 128 “Toxics Release Inventory 2011 California Report,” U.S. Environmental Protection Agency. 129 Frank Maccioli, “USEPA Says Buttonwillow Facility Tops List of California Toxic Chemical Releases,” Examiner.com, January 17, 2013, accessed April 15, 2015, http://www.examiner.com/article/usepa-says-buttonwillow-facility-tops-list-of-california-toxic-chemical-releases. 130 Louis Sahagun, “Toxic Waste Site near Kettleman City to Pay $311,000 in Fines,” Los Angeles Times, March 27, 2013, accessed April 15, 2015, http://articles.latimes.com/2013/mar/27/local/la-me-kettleman-fines-20130328. 131 Louis Sahagun, “Waste Facility Allowed to Expand, Despite Community’s Health Concerns,” Los Angeles Times, May 21, 2014, accessed March 3, 2016, http://www.latimes.com/local/la-me-0522-kettleman-20140522-story.html. 132 “Getting a Handle on Landfill Leachate,” Corner Post, July 9, 2014, accessed March 3, 2016, http://www.cornerstoneeg.com/2014/07/09/handle-landfill-leachate. 133 Jeffrey Tomich, “Missouri attorney general sues Bridgeton landfill owner,” St. Louis Post-Dispatch, March 28, 2013, accessed May 4, 2015, http://www.stltoday.com/business/local/missouri-attorney-general-sues-bridgeton-landfill-owner/article_90e4b410-9a59-55f4-bea2-2a7a8652ac89.html. 134 Jacob Barker, “Republic Services Struggles to Gain Trust as It Deals with Landfill Headache,” St. Louis Post-Dispatch, August 31, 2014, accessed May 4, 2015, http://www.stltoday.com/business/local/republic-services-struggles-to-gain-trust-as-it-deals-with/article_f65f141d-95f1-5b94-81d0-69d707bed440.html. 135 Republic Services Inc., FY2014 Form 10-K for the Period Ending December 31, 2014 (filed February 23, 2015), p. 43. 136 Ibid., p. 39. 137 Waste Management Inc., FY2014 Form 10-K for the Period Ending December 31, 2014 (filed February 17, 2015), p. 114. 138 “Waste Management and Remediation Services: NAICS 562,” U.S. Bureau of Labor Statistics, accessed April 7, 2015, http://www.bls.gov/iag/tgs/iag562.htm. 139 Author’s calculations based on BLS data on NAICS 562 industry fatalities and employment, http://www.bls.gov/iag/tgs/iag562.htm#iag562iifs.f.P, and national fatal occupational injury rate, http://www.bls.gov/news.release/cfoi.nr0.htm, accessed April 7, 2015.

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140 “Table 1. Incidence Rates of Nonfatal Occupational Injuries and Illnesses by Case Type and Ownership, Selected Industries, 2013,” U.S. Bureau of Labor Statistics, last modified December 4, 2014, accessed April 10, 2015, http://www.bls.gov/news.release/osh.t01.htm. 141 Olumide Adewale Olorunnishola, Andrea Kidd-Taylor, and Lamont Byrd, “Occupational Injuries and Illnesses in the Solid Waste Industry: A Call for Action,” New Solutions 20, no. 2 (August 2010): pp. 211–23. 142 “U.S. Labor Department’s OSHA Cites Metalico Rochester Inc. Following Worker’s Death at Rochester, NY, Recycling Facility,” U.S. Department of Labor press release, November 4, 2011, accessed April 10, 2015, https://www.osha.gov/pls/oshaweb/owadisp.show_document?p_table=NEWS_RELEASES&p_id=21063. 143 “Worker Fatality Results in $497,000 OSHA Fine,” National Waste and Recycling Association News Feed, November 12, 2014, accessed May 4, 2015, https://wasterecycling.org/blog/2014/11/12/worker-fatality-results-in-497000-osha-fine. 144 “OSHA Fines Orange City, Fla., Waste Hauling Company $122,500 Following Worker Fatality,” U.S. Department of Labor press release, November 1, 2000, accessed April 10, 2015, https://www.osha.gov/pls/oshaweb/owadisp.show_document?p_table=NEWS_RELEASES&p_id=350. 145 “Houston, Texas, Waste Services Employer and Temporary Labor Provider Cited by US Labor Department’s OSHA for Worker's Death from Excessive Heat Exposure,” U.S. Department of Labor press release, September 16, 2013, accessed April 10, 2015, https://www.osha.gov/pls/oshaweb/owadisp.show_document?p_table=NEWS_RELEASES&p_id=24810. 146 Michael Behm, “Employee Morale: Examining the Link to Occupational Safety and Health,” Professional Safety 14, no. 10 (2009): pp. 42-9. 147 David Rechenthin, “Project Safety as a Sustainable Competitive Advantage,” Journal of Safety Research 35, no. 3 (2004): pp. 297–308. 148 “Evans v. Allied Waste—Trucking Wreck, Settlement,” Bordas and Bordas Attorneys, PLLC, June 18, 2004, accessed May 4, 2015, http://www.bordaslaw.com/?t=40&an=32143&format=xml&p=7076. 149 Olorunnishola, Kidd-Taylor, and Byrd, “Occupational Injuries and Illnesses in the Solid Waste Industry: A Call for Action.” 150 U.S. Environmental Protection Agency, Getting More for Less: Improving Collection Efficiency, accessed May 1, 2015, http://www.epa.gov/waste/nonhaz/municipal/landfill/coll-eff/r99038.pdf. 151 Waste Management Inc., Sustainability Report 2014, pp. 82–84. 152 Republic Services, 2014 Sustainability Report, p. 38. 153 Cheryl McMullen, “Waste Management Going Back to Basics for Employee Safety,” Waste 360, March 16, 2015, accessed March 3, 2016, http://waste360.com/features/waste-management-going-back-basics-employee-safety. 154 Republic Services Inc., FY2013 Form 10-K for the Period Ending December 31, 2013 (filed February 13, 2014), p. 12. 155 Sean Flynn, “Why Only Some Industries Unionize: Insights from Reciprocity Theory,” Journal of Institutional Economics 1, no. 1 (2005), pp. 99–120. 156 Data from Bloomberg Professional service, accessed March 12, 2015, using the BICS <GO> command. 157 “Union Members—2014,” U.S. Bureau of Labor Statistics press release, January 23, 2015, accessed May 4, 2015, http://www.bls.gov/news.release/union2.nr0.htm. 158 Republic Services Inc., FY2014 Form 10-K for the Period Ending December 31, 2014 (filed February 23, 2015), p. 32. 159 Author’s calculation based on data from Waste Management Inc., FY2014 Form 10-K for the Period Ending December 31, 2014 (filed February 17, 2015), p. 48. 160 Casella Waste, FY2014 Form 10-K for the Period Ending April 30, 2014 (filed June 27, 2014), p. 27. 161 Republic Services Inc., FY2013 Form 10-K for the Period Ending December 31, 2013 (filed February 13, 2014), p. 22. 162 “Occupational Employment and Wages, May 2014. 53-7081 Refuse and Recyclable Material Collectors,” Bureau of Labor Statistics, last modified March 25, 2015, accessed February 24, 2016, http://www.bls.gov/oes/current/oes537081.htm. 163 David Bacon, “Immigrant Recycling Workers Win Strike, Union Drive in East Bay,” In These Times, October 31, 2014, accessed May 4, 2015, http://inthesetimes.com/working/entry/17306/recycling_workers_strike_temp_agency. 164 Author’s calculation based on data from “Work Stoppage Data—Work Stoppages Ended 2005–2014,” Federal Mediation and Conciliation Service, accessed February 24, 2016, https://www.fmcs.gov/resources/documents-and-data. 165 “State Proposes Fining Waste Management,” RentonReporter.com, April 23, 2013, accessed May 4, 2015, http://www.rentonreporter.com/news/204365151.html. 166 Keith Ervin and Nancy Bartley, “Waste Management Drivers Strike; Trash, Recycling Collection Halted,” Seattle Times, July 27, 2012, accessed February 24, 2016, http://www.seattletimes.com/seattle-news/waste-management-drivers-strike-trash-recycling-collection-halted.

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167 U.S. Environmental Protection Agency, Municipal Solid Waste Generation, Recycling, and Disposal in the United States: Tables and Figures for 2012, February 2014, Tables 2, 4, 6, and 9, accessed April 14, 2015, http://www.epa.gov/solidwaste/nonhaz/municipal/pubs/2012_msw_dat_tbls.pdf. 168 U.S. Environmental Protection Agency, Municipal Solid Waste Generation, Recycling, and Disposal in the United States: Tables and Figures for 2012, February 2014, Table 2, accessed April 14, 2015, http://www.epa.gov/solidwaste/nonhaz/municipal/pubs/2012_msw_dat_tbls.pdf. 169 Laura Bradley, “E-Waste in Developing Countries Endangers Environment, Locals,” U.S. News, August 1, 2014, accessed April 16, 2015, http://www.usnews.com/news/articles/2014/08/01/e-waste-in-developing-countries-endangers-environment-locals. 170 U.S. Environmental Protection Agency, “Statistics on the Management of Used and End-of-Life Electronics,” November 14, 2012, accessed April 16, 2015, http://www.epa.gov/epawaste/conserve/materials/ecycling/manage.htm. 171 Electronics TakeBack Coalition, Fact and Figures on E-Waste Recycling, June 25, 2014, p. 3, accessed February 25, 2016, http://www.electronicstakeback.com/wp-content/uploads/Facts_and_Figures_on_EWaste_and_Recycling.pdf. 172 IBISWorld, Industry Report 56211 Waste Collection Services in the US, January 2015, p. 13. 173 “Sustainability,” Walmart, accessed March 3, 2016, http://corporate.walmart.com/global-responsibility/sustainability. 174 “Reducing Waste to Landfill,” Genetech, accessed March 3, 2016, http://www.gene.com/good/sustainability/waste. 175 Jim Motavalli, “Automakers Work to Achieve Zero-Waste Goals,” New York Times, March 1, 2013, accessed February 25, 2016, http://wheels.blogs.nytimes.com/2013/03/01/automakers-work-to-achieve-zero-waste-goals/?_r=0. 176 “Electronics and Appliances Recycling at Best Buy,” Best Buy, accessed March 3, 2016, http://www.bestbuy.com/site/Global-Promotions/Recycling-Electronics/pcmcat149900050025.c?id=pcmcat149900050025. 177 Greenbiz, Corporate Sustainability Practices: Waste and Recycling, July, 2014, accessed February 25, 2016, https://www.greenbiz.com/reports. 178 Mark Henricks, “More States Ban Organic Waste in Landfills,” American Recycler News, January 2014, accessed April 20, 2015, http://www.americanrecycler.com/0114/2428more.shtml. 179 U.S. Environmental Protection Agency, Municipal Solid Waste Generation, Recycling, and Disposal in the United States: Tables and Figures for 2012, February 2014, Table 30, accessed April 14, 2015, http://www.epa.gov/solidwaste/nonhaz/municipal/pubs/2012_msw_dat_tbls.pdf. 180 Electronics TakeBack Coalition, “State Legislation,” accessed April 16, 2015, http://www.electronicstakeback.com/promote-good-laws/state-legislation. 181 Author’s calculation, based on Waste Management Inc., FY2014 Form 10-K for the Period Ending December 31, 2014 (filed February 17, 2015), p. 5. 182 Republic Services Inc., FY2014 Form 10-K for the Period Ending December 31, 2014 (filed February 23, 2015), p. 9. 183 Data from Bloomberg Professional service, accessed February 25, 2016, using the FA <GO> command on WM US EQUITY ticker. 184 U.S. Environmental Protection Agency, Municipal Solid Waste Generation, Recycling, and Disposal in the United States: Tables and Figures for 2012, February 2014, Table 2, accessed April 14, 2015, http://www.epa.gov/solidwaste/nonhaz/municipal/pubs/2012_msw_dat_tbls.pdf. 185 Waste Management Inc., FY2014 Form 10-K for the Period Ending December 31, 2014 (filed February 17, 2015), p. 20. 186 Republic Services Inc., FY2014 Form 10-K for the Period Ending December 31, 2014 (filed February 23, 2015), p. 17. 187 “Composting and Anaerobic Digestion,” California Department of Resources Recycling and Recovery, June 18, 2013, accessed March 3, 2016, http://www.calrecycle.ca.gov/Actions/Documents%5C77%5C20132013%5C900%5CComposting%20and%20Anaerobic%20Digestion.pdf. 188 U.S. Environmental Protection Agency, Municipal Solid Waste Generation, Recycling, and Disposal in the United States: Tables and Figures for 2012, February 2014, Table 30, accessed April 14, 2015, http://www.epa.gov/solidwaste/nonhaz/municipal/pubs/2012_msw_dat_tbls.pdf. 189 Waste Management Inc., FY2014 Form 10-K for the Period Ending December 31, 2014 (filed February 17, 2015), p. 44. 190 Ibid., pp. 35, 38–39. 191 IBISWorld, Industry Report 56292 Recycling Facilities in the US, October 2014, pp. 3–7.

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192 Knut Breivik, James M. Armitage, Frank Wania, and Kevin C. Jones, “Tracking the Global Generation and Exports of e-Waste. Do Existing Estimates Add Up?” Environmental Science and Technology 48, no. 15 (2014): pp. 8735–43. 193 Waste Management Inc., FY2014 Form 10-K for the Period Ending December 31, 2014 (filed February 17, 2015), p. 7. 194 “Global E-waste Recycling Market 2015–2019,” TechNavio, February 2015, accessed May 4, 2015, http://www.researchandmarkets.com/research/fd4flg/global_ewaste. 195 United Nations Industrial Development Organization, “Green Industry Focal Area: E-waste Management,” November 5, 2012, accessed April 16, 2015, http://www.unep.org/gpwm/Portals/24123/images/home/GPWM_BC_Day1_E-Waste_Heinz_Leuenberger.pdf. 196 Author’s calculation, based on United Nations Industrial Development Organization, “Green Industry Focal Area: E-waste Management,” November 5, 2012, accessed April 16, 2015, http://www.unep.org/gpwm/Portals/24123/images/home/GPWM_BC_Day1_E-Waste_Heinz_Leuenberger.pdf; InvestmentMine, “Commodity and Metal Prices,” April 16, 2015, accessed April 16, 2015, http://www.infomine.com/investment/metal-prices. 197 U.S. Environmental Protection Agency, “Statistics on the Management of Used and End-of-Life Electronics,” November 14, 2012, accessed April 16, 2015, http://www.epa.gov/epawaste/conserve/materials/ecycling/manage.htm.

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