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In 2018, McKinsey & Company embarked on a journey to build a new, independent nonprofit, McKinsey.org, and started to explore the areas where it could make a real difference on critical global issues, like the waste and recycling challenges facing cities around the world. This past year, McKinsey.org took a step forward to make that vision a reality through launching on-the-ground pilot programs under its first initiative Rethinking Recycling.

Together with leading nonprofits, governments, and corporate partners, Rethinking Recycling is working in Bali, Indonesia and Buenos Aires, Argentina to develop and test solutions that will put all waste to productive use for the benefit of communities and the environment. The world generates 3.5 million tons of solid waste every day, a figure that has increased 10 times over the last century and is growing rapidly. Rethinking Recycling aims to prove the economic, environmental and social benefits of recycling, so that they can be scaled across the world, improving the lives of citizens exposed to the effects of air pollution and climate change.

In its first year, Rethinking Recycling’s Argentina program has created the first formal recycling program in Buenos Aires’ Barrio 31, working with roughly 5,000 households and training more than 120 workers from 8 different cooperatives. Through a human-centered approach for behavior change, the program managed to go from 0% to 30% compliance with recycling among community households. Rethinking Recycling also created the first community-run sorting facility for dry recyclables, such as plastic, paper and glass, as well as established the first-ever residential composting service in the City of Buenos Aires.

In Bali, Rethinking Recycling has been working with a community in the capital Denpasar to demonstrate how recycling centers can deliver both economic and environmental impact. The community run program has been economically profitable for over six months, while ensuring all workers receive fair wages and safe working conditions including access to medical care – unfortunately still a rarity for such facilities. The program has also achieved extremely promising levels of source separated waste with as high as 90% of households adhering versus the 11% Bali average, and diverting over 50% of waste from landfill. The center is being heralded for both its economic and environmental success and we are now building an Academy to scale its impact and capability build others in the Indonesian waste space.

As an exciting, impactful year comes to a close, McKinsey.org is immeasurably grateful for its partners – ecoBali, Almado, Civic Response Team, Waste Concern, as well as PRAISE and the City of Buenos Aires Secretariat for Social and Urban Integration – who have worked hand-in-hand with its teams, helping to build a zero-waste world where every community is empowered to build sustainable, inclusive, and economically sustainable recycling systems.

2019 Impact

Bali

In Indonesia, McKinsey.org has partnered with a consortium of six leading CPG players called PRAISE: Danone, Unilever, Coca-Cola, Nestle, Tetra Pak, and Indofood, and the local recycling company, ecoBali – on the end-to-end Rethinking Recycling program, from community education to recycling operations to developing solutions to drive market demand for recyclables.

Rethinking Recycling’s Bali program, known as Desa Kedas or “clean village” in local language, has launched a successful behavioral change and education campaign to drive households to separate waste with figures as high as 90% compliance. The program has focused on training up local youth and community leaders to deliver the campaign to ensure the long-term sustainability of the program.

To demonstrate the scalability of the program we have focused on driving lean and efficient operations which ensure the center is break even and even generating a small monthly profit while ensuring all workers have fair wages and safe working conditions.

Desa Kedas has attracted much attention, being heralded as one of Bali’s best practice waste management centers by both national and local government officials, and featured in multiple new outlets including national news network Metro TV and other news channels in S.E.Asia.

Buenos Aires

In Argentina, McKinsey.org has partnered with the City of Buenos Aires on community and recycling operations and convened a working group of corporate players including Dow, AB InBev, Amcor, Danone, and Veolia to explore demand-side solutions.

At the Buenos Aires site, McKinsey.org has made considerable progress in its pilot community, a large informal settlement called Barrio 31, where the city government of Buenos Aires has integrated Rethinking Recycling’s methodology into a holistic inclusive development program.

In Barrio 31, McKinsey.org has built a waste management and recycling program from scratch, training more than 120 workers from 8 different cooperatives to operate a professional collection service and recycling center with ongoing data tracking, as well as to run education campaigns for residents. Through this program, Barrio 31 is now selling #1 (PET) plastic directly to a plastics processor within the formal market, achieving a 5x increase in income from these plastics.

Through co-creation with the community, McKinsey.org has developed low-cost innovations that make a big difference in changing behavior, such as QR code labelled hooks for hanging cleanly separated waste.

McKinsey.org in the News

McKinsey.org on Indonesia’s national MetroTV primetime – “Plastics are clogging our oceans but stemming the tide of waste starts here on land.”

McKinsey.org’s Shannon Bouton and Cynthia Shih in GreenBiz – “The first step toward unlocking investment in new recycling capacity should be to establish less-volatile supply and demand conditions.”

McKinsey News’ feature on Rethinking Recycling – “It’s exciting to be bringing McKinsey & Company’s expertise and capabilities to directly addressing those challenges while working through innovative partnerships to create solutions that can scale up quickly.”