ESG Compliance & Waste

What Your Business Needs To Know

What is ESG?

ESG stands for “Environmental, Social, and Governance.” ESG is a holistic concept that advances the idea that the quest for sustainability extends beyond environmental concerns. ESG reporting provides stakeholders (investors, employees, customers, and suppliers) with a framework for managing risk. It also identifies opportunities for improvement. Companies that embrace ESG compliance and implement a comprehensive ESG strategy may see improved financial performance and boost operating profits by 60%.

ESG Components

ESG’s ‘environmental’ component addresses adverse environmental impacts by citing what an organization is doing to mitigate current or potential impacts.

Examples include:

• Greenhouse gas emissions (both direct and indirect impacts)
• Stewardship over natural resources
• Organization resilience in the face of climate change, fires, and flooding
  
  

The ‘social’ component speaks to an enterprise’s relationship with every stakeholder category. For example, when it comes to employees, are wages fair? And does management engage with workers to an appropriate degree? What is a company’s impact on the community in which it operates? What is the relationship with its supply chain partners? This is of particular interest where environmental and labor standards are inadequate.

‘Governance’ refers to an organization’s leadership and management. How well does an organization’s leadership align with shareholder rights? How well does it align with stakeholder expectations? Are there internal controls fostering transparency and accountability?

ESG represents a confluence of important considerations:

• Pollution and waste reduction
• Safety compliance
• Health issues
• Corporate philanthropy

Increasingly, stakeholders want to view an organization through ESG optics. ESG reporting helps an enterprise adapt amid changing social, economic, and environmental conditions.

The Evolution of ESG

Today’s focus on ecological, social, and governance is the product of a decades-long evolution.

The Environmental, Health, and Safety (EHS) movement dates to the 1980s. Enterprises increasingly assessed labor and safety standards via a vis economic growth. In the 1990s, the Corporate Sustainability movement extended the reach of EHG. Management opted to go beyond what environmental regulations demanded. Unfortunately, this effort occasionally devolved into a marketing tool that overstated ecological accomplishments. Some called it greenwashing.

In the early 2000s, the Corporate Social Sustainability (CSR) movement increased its focus on responding to the social issues of the day. Corporate philanthropy was one key component, while volunteerism was another. By the late 2010s, Environmental, Social, and Governance (ESG) emerged as more of a proactive rather than reactive movement.

Credit the investment community for some of ESG’s emergence. Reporting frameworks and rating agencies use it to deliver the transparency investors seek. Sometimes, ESG serves to enhance access to capital markets. Publicly-traded ESG investment vehicles help investors better align their values with their investments. These include everything from green bonds to ETFs and from mutual funds to index funds.

For example, ESG reporting has the support of the “Big Three,” BlackRock, Vanguard, and State Street. For example, BlackRock wants to see the use of two popular ESG frameworks – SASB and TCFD in order to allow BlackRock to manage ESG risk within its portfolio.

Meanwhile, both Vanguard and State Street have discussed their support of ESG investments and the use of the SASB and TCFD frameworks. State Street’s R-Factor score is based on the SASB framework. ESG reporting is still mostly market-led. While not yet required at the federal level, that may change soon. In Europe, there’s already a requirement that investment funds be classified as ESG or non-ESG.

In any case, ESG is here to stay. More than seven out of ten CEOs see it as their responsibility to align ESG policies with customer values. By 2024, Deloitte estimates that ESG-mandated assets will total $35 trillion – about half of all professionally managed investments.

Waste & Recycling

A key element of a company’s ESG success is its commitment to sustainability. Waste reduction and recycling efforts make a significant contribution. And acquiring accurate, quantifiable waste and recycling data is essential.

ESG Waste Regulations

Now more than ever, organizations and responsible parties are aware of the impact of waste on our air, surface water, and groundwater. ESG waste regulations serve to protect irreplaceable parts of our environment.

EPA & Resource Conservation and Recovery Act (RCRA) Regulations

The Resource and Conservation Recovery Act (RCRA) of 1976 (42 USC §6901 et seq. (1976)) amended the Solid Waste Disposal Act of 1965. The RCRA is the primary law regarding solid and hazardous waste disposal.

The RCRA established national goals for:

• Reducing waste generation
• Protecting people and the environment from waste disposal hazards
• Environmentally sound waste management
• Conservation of natural resources, including energy

RCRA regulations can be complex. Fortunately, there’s an online source of past EPA interpretations of RCRA regulations. RCRA Online is a database indexing letter, memoranda, and publications.

The 1984 Federal Hazardous and Solid Waste Amendments (HSWA) increased the EPA’s enforcement authority by setting more stringent standards for hazardous waste management. It also made the UST program more comprehensive. The HSWA helps to minimize waste by phasing out hazardous waste landfill disposal.

Hazardous Waste

The EPA’s Hazardous Waste Program (RCRA Subtitle C) sets standards for controlling hazardous waste, addressing everything from waste generation to disposal.

Regulations impact facilities involved in every aspect of hazardous waste generation. This includes transportation, treatment, storage, and disposal. For example, 40 CFR sec. 262.11 helps companies determine whether specific solid wastes it generates are hazardous. Hazardous waste includes battery acid, mercury, lead, and PCBs. Many cleaners, oils, and solvents are also considered hazardous waste. 

The kind and quantity of waste generated to determine a generator's class. There are three primary classifications: Large Quantity Generators (LQGs), Small Quantity Generators (SQGs), and Very Small Quantity Generators (VSQGs).

Every month:

• LQGs generate 1) 1,000+ kg of hazardous waste, 2) one kg of acutely hazardous waste, or 3) 100+ kg of acute spill residue or soil.
• SQGs generate between 100 and 1,000 kg of hazardous waste.
• VSQGs generate 1) less than 100 kg of hazardous waste, 2) less than one kg of acutely hazardous waste, or 3) less than 100 kg of acute spill residue or soil. 

First-time generators need to be aware of the rules so they don’t run afoul. Consultation with knowledgeable third parties mitigates risk.

GRI 306 Standards

The 300 series of the Global Reporting Initiative pertains to environmental issues. “GRI 306: Waste 2020” establishes waste reporting standards. It is effective for all materials published after January 1, 2022. Sustainability reporting standards guide organizations in reporting their environmental impact and more. GRI 306 is used in conjunction with GRI 101 (Foundation), GRI 103 (Management Approach), and the GRI Standards Glossary.

GRI 306 addresses a wide range of waste-related activities, products, and services. It applies to specific waste sources and waste generated across supply chains. GRI 306 helps an enterprise to understand its responsibility for waste generation better. It also encourages management decisions promoting positive, systemic change.

ESG Waste Data and Reporting

In the United States, only 28% of potential recyclables are actually recycled. However, ESG waste data and reporting are improving on that percentage. 

Verifiable, authenticated waste data is essential in ESG reports. Today, ESG scores matter to investors, customers, and the community. An accurate, transparent record of successful recycling and waste diversion efforts can improve one’s score. Detailed data and granular reporting are essential in this quest.

Importance of Collecting Waste Data

Regulators and critical stakeholders will increasingly expect data-driven, verifiable disclosures of waste data.

Mitigate process issues, better aggregate information, and get your data out of those isolated silos. Also, employ verifiable waste diversion reports to enhance your ESG initiatives. 

Ultimately, it is a form of reporting that makes your enterprise more attractive to employees, customers, shareholders, and investors.

How to Manage and Analyze Waste Data

The correct application makes it possible to manage and analyze waste data. Analyze tonnage trends by content type. Look at compactor haul information, including weight and service date. Access key performance indicators like landfill diversions and overall operational efficiency. Ranking within a portfolio reduces carbon footprints by driving competition among properties.

Optimize results by analyzing critical data, including:

• Equipment type, size, and location
• Commercial service schedules
• Property inspection reports

Sustainability Reporting

Sustainability reports enhance a company’s credibility with environmentally-minded customers. They also communicate to employees and shareholders that the organization is forward-looking. 

Reports may refer to a variety of standards. For example, the Sustainability Accounting Standards Board (SASB) specializes in providing financial information to investors. Companies often use SASB standards in their ESG reporting.  

The Task Force on Climate-Related Financial Disclosures (TCFD) establishes standards for various climate-related disclosures. These inform investment, credit, and insurance decisions. The Climate Disclosure Standards Board (CDSB) provides a framework for providing environmental information in corporate reporting. 

The Green Business Bureau (GBB) provides sustainability guides like EcoAssessment and EcoPlanner. GBB initiatives further contribute to substantive ESB reporting. The GBB Green Seal certifies sustainability accomplishments. Finally, ISO 14001 provides yet another framework for reporting environmental performance. 

How to Incorporate ESG into Sustainability Reporting

ESG reporting differs from sustainability reporting in two ways. First, it is a broader, more inclusive concept. Second, the two kinds of reporting speak to somewhat different audiences. ESG reporting helps investors evaluate performance and risk. Sustainability focuses more on the interests of customers, employees, and shareholders. 

Once ESG data is analyzed, it can be restated for audiences focused on sustainability. This includes employees, customers, investors, and shareholders.

Ensure Compliance: Partner with Keter

Keter Environmental Services delivers turnkey waste and recycling programs to a global constituency. Our end-to-end, data-driven solutions benefit many sectors, including manufacturing, distribution, healthcare, commercial, and construction.

Keter helps clients achieve their ESG and sustainability goals with a new level of confidence.

Our proprietary eTrac application transforms real-time data into actionable insights. Analyze performance indicators critical to evaluating the success of your recycling/waste program and customize reports to better serve your needs. With eTrac, stakeholders enjoy unlimited access to critical metrics, fostering desired transparency.  

Keter delivers a dedicated team of professionals with expertise in recycling and waste best practices, helping you improve these programs Get the actionable and auditable data you need for your modern enterprise.