Increasing Recycling by Business in the ACT. An analysis of barriers from the perspectives of businesses and waste service providers

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1 Increasing Recycling by Business in the ACT An analysis of barriers from the perspectives of businesses and waste service providers November 2010

2 Pty Ltd Ground Floor, AMP Building 1 Hobart Place CANBERRA CITY ACT 2601 GPO Box 2067 CANBERRA CITY ACT 2601 P: F: W: ABN: Acknowledgements Inovact would like to acknowledge the generous contribution of time made by the businesses involved in the research process. Disclaimer The information contained in this report has been compiled from data and other materials supplied by the ACT Government and publicly available information. Every effort has been made to ensure the information presented and the conclusions reached are realistic and not misleading. However, Pty Ltd makes no warranty as to the accuracy of the information contained in this report and will not accept responsibility or liability for any loss incurred by any person or entity relying on the information in this report. This report is solely for the use of client personnel. No part of it may be circulated, quoted or reproduced outside the client organisation without their prior written approval.

3 Overview This report provides insights into the current status of recycling in the ACT from the perspective of people responsible for waste management in business. The report is based on the findings of a telephone survey of 400 waste generating businesses in the ACT and qualitative interviews with 11 operators of small waste management businesses. The survey of waste generators has identified that a majority of businesses are concerned about waste management and many are willing to pay more to increase recycling rates. Key drivers of concern amongst businesses are the environmental impacts of waste and the cost to the business of waste management. Most businesses have improved their rates of recycling in the last five years and are actively and many successfully seeking information to help their business change its waste management practices over time. The survey has however identified some clear external and internal structural barriers for businesses seeking to improve recycling rates. In particular access to appropriate recycling services, the lack of understanding amongst decision makers in businesses of the relative costs of waste and recycling services, and the opportunity cost of devoting staff time to waste management rather than revenue earning activities are restricting increased recycling by business. Recycling performance also varies between waste types and types of businesses. However amongst the diversity of situations identified by the survey there are three groups of businesses that should be recognised in future policy development: 1. The first group are small businesses who are disconnected from the waste management system as their operations are located within larger complexes that generally have centralised services. These are commonly office based businesses, restaurants and cafes, and retail outlets. While these businesses are concerned about the environment and often willing to pay more, they do not know the costs of waste management to their business, do not contract services directly and are less likely to have increased recycling over the last five years. 2. The second group are small businesses who are highly connected to the waste system including landscapers and small building contractors. These businesses are highly aware of waste management costs and often self-haul their waste. These businesses are highly cost sensitive and also see devoting staff time to recycling (e.g. sorting of waste) is a significant barrier to increasing their current level of recycling. 3. The third group of businesses are larger businesses including supermarkets, shopping centres and markets. While these businesses pay directly for waste management services, the person responsible does not often know the costs involved for the business. These businesses are larger and face internal management challenges when seeking to increase recycling rates but are likely to have increased recycling in the last five years. These groups operate their waste management in quite different contexts and experience different barriers. Driving improvements within these businesses requires a different policy approach. Overall however, the survey shows that improving internal management of waste to enable recycling and service availability are the key barriers preventing better rates of recycling in the commercial sector. iii

4 Some understanding of the service availability issue can be drawn from engaging with people involved in service providing businesses. The study engaged 11 of these businesses through qualitative interviews to understand the barriers to more effective recycling systems being provided by the private sector. This included a selection of businesses providing waste haulage services and businesses providing niche or other recycling services. The interviews focussed on the small business part of the waste service industry. This group of businesses operate in a challenging environment. They are mostly committed to recycling and resource recovery on a personal level and are seeking opportunities to diversify their services enabling them to both grow their businesses and improve environmental outcomes. However in most cases, these businesses are finding that recycling is a difficult business for small operators. While there appears to be a high level of entrepreneurialism and innovation within the group, many of the businesses interviewed have operated recycling businesses that have proven to be unsustainable or are on the verge of being unsustainable. The exceptions in this situation are the niche recyclers who are focussed on particular types of waste where there is little competition and a regulatory driver for recycling and resource recovery. Discussion of the barriers to recycling with this group revealed three key areas of concern. The first involves upstream issues and particularly the difficulty of securing a reliable supply of recyclables when the potential supply is fragmented across many businesses that are often locked into existing contracts with major service providers or unwilling to change their practices. The second relates to downstream issues including the difficulty in developing local markets for waste and the increasingly strict requirements of larger recyclers in the ACT in relation to accepting mixed or contaminated waste for recycling. The third area relates to the operating environment including access to infrastructure for recycling operations, an uncertain policy and regulatory environment in the ACT and the challenges of being small players in an industry where large players hold significant competitive advantages. Despite these significant challenges, there are opportunities to improve recycling amongst these businesses. These businesses also provide valuable niche recycling for products that are unlikely to be recycled by major service providers and a broader level of competition in the market. The interviews identified that this part of the sector is particularly vulnerable to government policy and regulatory decisions which determine the market for their business and their ability to make a contribution to recycling in the ACT. iv

5 Recommendations Reducing Waste to Landfill from Businesses in the ACT The research shows that barriers to greater recycling by businesses are complex and related primarily to the internal structures and process of businesses. These prevent the implementation of better waste management practices. In light of these findings the following recommendations are made for future ACT waste policy and programs. That the ACT Government: 1. focus on the development of improved downstream waste management and treatment systems as the most effective means of further reducing waste to landfill from businesses in the ACT 2. use the information in this report to further refine the implementation of the ACTSmart programs, recognising that the research confirms that these initiatives are well targeted towards different industry segments 3. repeat the survey of businesses as a basis for monitoring changes in the sector and the effectiveness of policy and programs. Developing and Managing the Private Service Sector The private sector is playing and increasingly important role in waste management. The role of government is changing and moving towards influencing the industry through regulation, and investment in services and facilities necessary to achieve policy outcomes that are unlikely to be provided effectively by the private sector. The information in this research suggests that there are opportunities to enhance the contribution of the private sector by facilitating the development of an innovative and competitive market for waste service. It is recommended that the ACT Government: 4. consider how its policy and procurement decisions can encourage industry competition and support an operating environment that provides certainty for the wider ACT waste management industry 5. examine ways to facilitate service innovation in the private sector to overcome service barriers by taking advantage of the willingness of businesses to pay for improved waste services. v

6 Table of Contents Overview... iii Recommendations... v Introduction... 8 Results from the Survey of Businesses...9 Survey of Businesses... 9 Characteristics of the Sector and the Sample... 9 Waste Generation...10 Waste Services...11 Segments...13 Small businesses disconnected from the service system...13 Small businesses connected to the service system...13 Large businesses...14 Predictors of Engagement in Recycling...15 Levels of Concern...15 Rates of Recycling and Change Over Time...16 Barriers to Recycling: Generators Perspectives...19 Cost of Waste Services and Willingness to Pay for Recycling...20 External Barriers...23 Already Recycling at the Maximum Level...26 Knowledge and Skills...26 Commitment to Recycling as a Barrier...27 Policy Implications...28 Barriers to Commercial Recycling Industry Perspectives...30 Characteristics of the sector in Current Services...31 Barriers to Recycling and Waste Recovery...33 Opportunities for Increasing Recycling Business Perspectives...39 Policy Implications...41 Appendix - Questionnaire Page 6

7 Tables Table 1: The Sample... 9 Table 2: Demographics of the Sample...10 Figures Figure 1: Waste Generation and Rates of Recycling... 1 Figure 2: Principal Providers of Waste Services...11 Figure 3: Concern about Waste Management...15 Figure 4: Reasons for Concern about Waste Management...16 Figure 5: Average Percent of Waste Recycled...17 Figure 6: Changes in the Percentage of Waste Recycled...18 Figure 7: Principal Barriers to Recycling - Unprompted...19 Figure 8: Who Pays for Waste Services...20 Figure 9: Monthly Cost of Waste Disposal and Recycling...21 Figure 10: Willingness to Pay for Higher Levels of Recycling...22 Figure 11: Reasons for Not Recycling - Unprompted...23 Figure 12: Changes in the Type and Availability of Waste Services...24 Figure 13: Main Types of Change to Waste Services...25 Figure 14: Results of Information Searches...27 Page 7

8 Introduction The ACT has been very successful in increasing levels of recycling in the last 15 years. In the ACT, households receive a government collection service for both their household waste and recycling. The recovery rate of the household kerb-side recycling collection is 80%, while 90% of green waste is recycled using free drop-off points around the ACT. Unlike households, the commercial sector in the ACT, which includes retailers, businesses, offices, restaurants, construction and light industry, is responsible for arranging their own waste and recycling services. Currently only an estimated 53% of Commercial and Industrial waste is recovered and recycled. This is significantly lower than household recycling levels. There are three dominant waste service providers that operate in the ACT: Theiss, SITA and Cleanaway. Beneath this, are a large number of smaller operators who provide niche recycling and waste services to Canberra businesses. The ACT government is currently developing a new waste management strategy for the Territory. This strategy will grapple with how to increase recycling in the commercial sector. For the government to provide meaningful solutions and successful strategies for waste management over the coming years, it is necessary to have a detailed understanding of the current situation. This report provides an insight into three aspects of the waste management stream: its current characteristics and successes, the barriers experienced by business to increased recycling, and the solutions that businesses see as the best way to overcome these barriers and seize the available opportunities. These three aspects are analysed from two perspectives. From the perspective of commercial waste generators and from the perspective of smaller waste and recycling service providers. To collect this information, a sample of 400 ACT businesses were surveyed. We collected data on the types of waste businesses generate and recycle, the types of waste services available, the cost of waste and recycling services, the type of information businesses have sought on recycling, the reasons their business does not recycle and factors which may increase recycling by their business. We also conducted face to face interviews with 11 small waste and recycling service providers. We gained their perspectives on: the types of waste being successfully recycled in the ACT, the current structure of the waste management industry and how it has changed, what is currently being successfully recycled and opportunities to increase recycling, the main barriers that these businesses face to increasing recycling, and how these barriers might best be addressed. Together these insights provide a powerful basis for policy analysis and decision making by the Government as part of its wider policy work on waste issues. Page 8

9 Results from the Survey of Businesses The survey conducted of the business community was designed to garner information about the views and behaviour of ACT businesses towards recycling and waste services. Survey of Businesses A total of 400 telephone interviews were conducted with businesses across eleven categories. The sample was designed to reflect the requirements of the project brief and our preliminary understanding of the commercial waste management system in the ACT. The Yellow Pages was used as the basis for identifying participants. The questionnaire was developed by and pilot testing was conducted prior to the full study. The full questionnaire can be found in the Appendix. Table 1: The Sample Number Percent Business Type Restaurant / Café Office Based Business Small Construction Contractor Landscaping Contractor Light Industrial Retail Shop Supermarket 22 6 Property Management 11 3 Shopping Centre/Market 8 2 Accommodation 20 5 Pub / Nightclub / Social Club 19 5 Total Characteristics of the Sector and the Sample The business community in the ACT is diverse. It includes restaurants and cafes; office based businesses; small construction and landscaping firms; light industrial businesses; supermarkets; property managers; shopping centres and markets; accommodation; and pubs, nightclubs and social clubs. The demographics of the sample are shown below in Table 2. Most businesses sampled were small businesses. There was an even distribution of the number of years that the business had been operating at their current location. Page 9

10 Table 2: Demographics of the Sample Years in Business at Site 0 to 5 years to 10 years to 20 years plus years Work at various sites 7 2 Number of Staff 1 to 5 staff to 10 staff to 25 staff plus staff Gender Male Female Age 15 to 39 years to 54 years plus years Prefer not to say 3 1 Total Waste Generation Office paper and cardboard was overwhelmingly the largest proportion of waste generated by ACT businesses. 82 percent of businesses reported that they regularly dispose of office paper and cardboard. Plastics (47%), metal (38%), food waste (37%) and glass (34%) were also generated by a significant proportion of businesses. Figure 1: Waste Generation and Rates of Recycling Office paper and cardboard 82% 78% Plastics Metal 47% 42% 38% 67% Food waste 9% 37% Glass Wood Building and demolition waste 26% 23% 34% 50% 49% 49% Polystyrene Cooking oil Garden or green waste 23% 20% 21% 14% 77% 79% Electronic equipment Paints, chemicals or solvents 9% 9% 34% 39% Textiles 5% 12% Rubber 4% 50% Automotive oil 3% 67% % Generating Waste % Generating who Recycle Page 10

11 Figure 1 also shows that for several materials, a high percentage of businesses already recycle. In particular, 78 percent of businesses reported that they recycle office paper and cardboard, the type of waste the most number of businesses produce. 79 percent of businesses also report recycling garden or green waste. A similarly high proportion of businesses recycle cooking oil (77%), metals (67%) and automotive oil (67%). Although there remains scope for improvement, these are all high rates of recycling. This high level of recycling probably reflects the relative ease of recycling these types of waste through commonly available services, the regulations around waste management of oils and/or the fact that these wastes are seen as a valuable resource by the wider economy. In other categories there is significant scope for businesses to improve their rates of recycling. Importantly, the responses to the survey indicate that it is possible to recycle all the materials listed. This demonstrates that some businesses have developed effective ways of recycling these materials despite the barriers that obviously exist. For others, the barriers remain largely insurmountable and consequently rates of recycling for these materials are very low. The area where there is most scope for improvement is food waste. 37 percent of businesses generate food waste, yet it has the lowest recycling rate of any waste type, with only 9 percent of businesses recycling the food waste they produce. Waste Services 37 percent of businesses used one of the three largest waste service companies to pick up their business waste. 18 percent used Sita Environmental Solutions, 14% used Cleanaway and 5 percent used Thiess. 6 percent of businesses also used ACT Trade Waste. An additional 13 percent of businesses removed the waste their business generated themselves. Figure 2: Principal Providers of Waste Services Pubs, nightclubs and social clubs (47%), light industrial businesses (38%) and accommodation businesses (35%) were more likely than other industries to employ Sita Environmental Solutions to pick up their business s waste. Shopping centres and markets (75%) and accommodation businesses (50%) were much more likely than other industries to use Cleanaway. Page 11

12 Landscaping contractors were much more likely to self haul, with 62 percent of these businesses reporting that this is how they dispose of their business s waste. 20 percent of small scale businesses (with 1-5 staff) have no pick up service and self haul their waste. This is significantly larger proportion than that reported amongst larger businesses. Page 12

13 Segments When examining the data collected from the survey of ACT businesses, it was clear that there was a considerable difference in the waste that different industries generated and recycled. Consequently, there were also large differences in attitudes to recycling. This diversity means that it is unlikely that there will be one policy measure which will effectively increase rates of recycling across all industries. However within this diversity, there are three clear groups who share some important characteristics. These are: small businesses that are disconnected from the waste service system small businesses that have a close connection to the waste service system, and large businesses. These three segments include a majority of industry groups surveyed and provide an integrated insight into the situation for businesses in the ACT. Small businesses disconnected from the service system This segment includes offices, restaurants and cafes, and retail. The size of businesses in this industry does not vary greatly from the average. These businesses are much more likely to generate plastic and food waste than other businesses. These businesses appear more than others in the ACT to be disconnected from how the waste their business generates is dealt with by the waste services industry. For example, businesses in this segment are significantly less likely to pay directly for the waste services their business uses than the average business in the ACT. Consequently, they are much less likely to know the cost of waste disposal or recycling. This segment is also significantly less likely to have increased the percentage of waste that their business recycles in the past 5 years. This suggests that there is a real connection between how directly a business experiences the costs of waste disposal and their rates of recycling. This group s concerns about waste management are more likely to derive from concerns about the environment. When asked if they would increase recycling if relevant information was provided to their business, these businesses were more likely than the average to answer yes. Small businesses connected to the service system This segment includes small construction contractors and landscaping contractors. These businesses are very small operations and they are much more likely only to have 1 to 5 staff. This group of businesses is much more likely to generate wood, and building and demolition waste and significantly less likely to generate office paper, plastic, glass and food waste than the average business. It is more likely that these businesses self-haul their waste and they have mostly increased recycling in the past 5 years. Businesses in this segment are much more focused on cost. The concern these businesses feel about waste management is much more likely to be driven by concerns about cost. They are more likely to know the cost of waste disposal and recycling to their business and if they have noticed change in the industry, it is more likely to be cost related. They are less likely to be willing to pay much higher costs to increase the level of recycling in their business. Page 13

14 Unsurprisingly, they are more likely to think that cost is the main barrier to increasing recycling, with monetary cost being the principal driver behind this. When prompted, this segment is more likely to think that devoting too much staff time to recycle is a major factor preventing increases in recycling. The solutions that these businesses prefer reflect the type of waste they generate and the way they interact with the waste services system. This segment is more likely to think that if the government improved the infrastructure and facilities needed for waste management and recycling this would increase the rates of recycling done by their businesses. When prompted, these businesses were more likely to respond that they would definitely increase recycling if recyclables don t need to be sorted, if you got paid for taking recycling to a collection point or if more local drop off centres were provided. Large businesses This segment includes supermarkets, shopping centres and markets. Businesses in this segment are much more likely to have over 25 staff. They are much more likely to generate plastic and food waste. It is more likely that these businesses have not notice changes in the type and availability of waste services Businesses in this segment are more likely to pay directly for waste services. However, respondents were more likely not to know the cost of waste disposal or recycling. This may reflect the fact that in larger businesses, employees are more likely to have specialised roles and therefore may not be aware of all the different operating costs and that internal management issues are more complex. These businesses were more likely to think that cost is the main barrier to increasing recycling; this was driven by concerns about the cost of time rather than monetary expenses. However, the results were more mixed when prompted about factors which may limit businesses recycling rates. Businesses in this segment were much more likely to think that it taking too much staff time to recycle is not a factor or concern. Yet they were more likely to think staff not being trained to recycle is a factor or concern, again reflecting an internal management challenge. These businesses are more likely to increase recycling if the government offers more incentives. For these businesses, having the appropriate infrastructure and relevant information is less of a problem. They do not see changing policies in this area would have an impact on their rates of recycling. Page 14

15 Predictors of Engagement in Recycling A business s willingness to recycle will depend on their levels of concern about the issue and the basis for that concern. A business s reasons for concern about waste management may also point to the most effective ways to encourage increased recycling. Levels of Concern A business willingness to seek or accept change will depend in part on how concerned they are about the issue. Those that are highly concerned about an issue are more likely be engaged and willing to be active in potential solutions. Overall, ACT businesses have a high level of concern about managing the waste that their business produces. Waste is clearly an important issue, with half of all businesses (49%) reporting that they are extremely or very concerned about waste management (Figure 3). 84 percent of all businesses have some level of concern about waste management. The industries that are most concerned about waste management are pubs, nightclubs and social clubs (95%), restaurants and cafes (90%), and small construction contractors (90%). Property management (63%), light industrial (74%), retail shops (74%) are the industries that reported the least overall concern about waste management. Figure 3: Concern about Waste Management There are three significant drivers of concern for businesses. Figure 4 shows that equal numbers of businesses, 24 percent each, see either the environment or cost as the principal reason that waste management is of concern to their business. Taken together these two drivers account for almost half of all businesses. For a further 22 percent of businesses, their main concerns about waste management relate directly to issues around recycling; either how Page 15

16 to maximise their businesses levels of recycling or issues around the correct management of recycling. Figure 4: Reasons for Concern about Waste Management Cost 24% Environment 24% Recycling everything we can 12% Correct management of recycling 10% Time/effort 6% Lack of facilities/ variety of materials that can be recycled 5% Regulations 4% Minimising waste/ don't like waste 4% Logistics Safety 3% 2% Amount/ disposal of waste from packaging 1% How waste is disposed/ where it ends up 1% Other 4% Small landscaping contractors and landscaping contractors were more concerned about waste management due to issues about cost. Environment was more of a concern for restaurants and cafes, office based businesses and retail shops. Office base businesses and retail shops were also more likely to be concerned about a lack of facilities for recycling. Rates of Recycling and Change Over Time This section examines the current rates of recycling by ACT businesses and how this has changed in the last 5 years. This will give an indication of whether the issue of waste management has stagnated or if businesses have gradually been changing their behaviour around recycling and waste management. This may also signal the level of willingness for further to change on the part of the business community. However, high levels of change may also indicate that easy to achieve gains have already realised and that to increase recycling further may require significantly more effort. On average, businesses report that they recycle just over half (55%) of all waste their business generates. Interestingly there was no statistical difference in the average rates of recycling by businesses that reported being concerned about waste management (54%) and businesses that reported not being concerned (59%) suggesting that concern is not a strong driver of behaviour (Figure 5). Landscaping contractors recycle 79 percent of all waste generated, which is much greater than the average. This is probably due to the fact that many of the types of waste Page 16

17 landscaping contractors produce, like green waste, is relatively easy to recycle. Conversely, accommodation businesses and restaurants and cafes only recycle 36 percent and 39 percent of total waste generated respectively. This is much less than the average business. Figure 5: Average Percent of Waste Recycled All Businesses 55% Landscaping contractor 79% Office based business 66% Light Industrial 62% Supermarket 57% Property Management 56% Retail shop 55% Shopping Centre/Market 52% Pub / Nightclub / Social Club Small construction contractor Restaurant / café Accomodation 50% 44% 39% 36% The rates of recycling are also improving among Canberra s business community (Figure 6). 56 percent of businesses report that they now recycle a higher percentage of their waste than they did five years ago. This suggests a willingness within the business community to change their behaviour towards waste management. There is also a high degree of consistency across different industries. The restaurant and café industry is the only industry to report increases in the rates of recycling (33%) which are much lower than the average of all businesses. In contrast there have been large levels of change by shopping centres and supermarkets (100%); small construction contractors (77%); pubs, nightclubs and socials clubs (74%); and property management businesses (73%). Large businesses (with more than 25 staff) were significantly more likely to have noticed changes in the percentage of waste recycled by their businesses than smaller businesses, with 79% percent of these businesses noticing change over the past 5 years. Page 17

18 Figure 6: Changes in the Percentage of Waste Recycled Page 18

19 Barriers to Recycling: Generators Perspectives The survey of businesses found that there are two main barriers which effect businesses willingness and ability to recycle: the cost of recycling to the business both monetary and the cost of time; and external factors which the business has limited or no control over (Figure 7). Initially survey respondents were asked detailed questions about the cost of recycling and waste disposal services, the availability of services and also on the information their business had sought about recycling. Participants were asked an open ended question on the main reasons their business does not recycle more waste. The answers were very varied suggesting that barriers to increasing recycling in the business sector are complex and multi-dimensional. Survey respondents were then given a list of common reasons for low levels of recycling and asked to tell the interviewer if each was a major factor or concern, minor factor or concern, or not a factor or concern for their business. Price is an important economic motivator and it is unlikely that businesses will engage in costly behaviours unless they can see short or long term benefits for their business. By eliciting businesses willingness to pay for higher levels of recycling this survey has started to paint a picture of the relationship between cost and the willingness of businesses to recycle. Individual businesses have very little or no control over the availability of recycling services and the infrastructure and recycling facilities their business uses. These two external barriers were both important barriers for many businesses in the ACT. Figure 7: Principal Barriers to Recycling - Unprompted A sizable proportion of businesses also reported that they are already recycling as much as possible. This illustrates which industries have very high resource recovery rates, but it also may indicate that businesses are prevented from recycling more due to other barriers. Page 19

20 Cost of Waste Services and Willingness to Pay for Recycling Cost can be a significant barrier to change for businesses. All businesses have a strong incentive to minimise costs. No business, unless it sees it as a strategy for differentiation, is likely to choose a service like recycling if it is more expensive, or perceived to be more expensive than the alternative. There is also evidence that when faced with complex choices, humans have the tendency to make no choice or revert to the default option, the same is true of businesses. For businesses the default option will be their current waste management service provider, which may nor may not include recycling services. Even if it is cost effective to change to service providers who could increase the levels of recycling by the business this predisposition towards the default option may decrease a business willingness to change. Figure 8 shows that for 59 percent of businesses, the company pays directly for waste pick up services. Supermarkets (91%), pubs, nightclubs and social clubs (89%) and accommodation businesses (85%) much more likely to pay directly for waste services. Office based businesses (32%) and retail shops (38%) are much less likely to pay directly for their waste services. Restaurants and cafes (45%) and retail shops (44%) are much more likely to have their waste paid for by a landlord or property manager. Medium and large businesses (with over 11 staff) were significantly more likely than smaller businesses to have the company pay directly for waste management services. Figure 8: Who Pays for Waste Services These figures are important, as they demonstrate which businesses should be able to directly identify the cost of waste services to their business. Those who pay for waste services as part Page 20

21 of other business costs like rent or who self-haul are less likely to know exactly how much their business pays for waste services. It is likely that changing costs of waste and recycling services will have a larger impact on the incentives of those businesses that pay the costs directly than others in the business community. More than half (52%), of ACT businesses do not know the cost to their business of disposing of waste that goes to landfill (Figure 9). A smaller percentage (30%), do not know the cost to their business of recycling services. Several factors may be behind this statistic. For many businesses waste disposal and recycling services may be included in the rent they pay for their premises and therefore hard to distinguish from these other costs. One of the waste disposal businesses interviewed as part of the consultation process commented that their business provide both waste disposal and recycling services as a package deal for their customers because they found customers appreciated only having to consider one, integrated cost. If this costing structure is also used by the larger waste service providers it may mean that businesses are not aware of the cost of each individual service. A large number of businesses, 45 percent, pay nothing for recycling services. Several factors may explain this. Some of these businesses may not be recycling at all, although other survey results suggest this is probably a very small group. Depending on how the waste service providers market their products, the costing structure mentioned above may also partly explain this result. Businesses who self-haul their waste to a free facility, like green waste, may report no cost of recycling for their business even though this behaviour costs the business in labour, time and petrol. Figure 9: Monthly Cost of Waste Disposal and Recycling Property management businesses (91%) and office based businesses (88%) were much more likely to not know the monthly cost of waste disposal. Businesses with over 5 staff were also statistically more likely to not know the cost of waste disposal than small businesses with only 1-5 staff. In contrast, small construction contractors (75%) and landscaping contractors (68%) were much more likely to know how much waste disposal costs their business each month. Page 21

22 Of the respondents that knew the cost of waste disposal and recycling, most businesses reported no increase, or a small (1-10%) increase in the cost of waste disposal (68%) and recycling (70%). Willingness to Pay for Recycling Through a series of questions, respondents were asked if they were willing to voluntarily pay more for waste services to increase the amount of recycling. They were progressively asked if they would be willing to pay 50, 25 or 10 percent more. By asking the questions in this way, the answers should reveal the business willingness to pay more to achieve higher levels of recycling. Although almost half (48%) of businesses were unwilling to pay any more for waste services, a sizable proportion of businesses, 32 percent, were willing to pay more to increase recycling (Figure 10). Of these businesses exactly half, 16 percent of the total businesses surveyed, were willing to pay 50 percent more for waste to increase recycling. Figure 10: Willingness to Pay for Higher Levels of Recycling Restaurants and cafes (27%), supermarkets (25%) and office based businesses (24%) were much more likely to be willing to pay 50 percent more for waste services to increase the amount of recycling. Large businesses with more than 25 staff were also significantly more likely to be willing to pay 50 percent more than businesses with only 1 to 10 staff. Page 22

23 Overall, this suggests a willingness amongst many businesses to bear cost increases in return for better recycling outcomes. The Opportunity Cost of Staff Time Cost was identified as a major barrier for businesses with 30 percent of respondents reporting that monetary and time costs were the main reason their business didn t recycle more (Figure 11). Interestingly, the cost of time was a much larger proportion of this group than those who reported monetary cost as a barrier. 21 percent of businesses saw the cost of time to recycle as a barrier to recycling. This includes factors like it takes too much time/effort, it is easier to put with general waste and the inconvenience of separating recycling/sorting. The direct cost or expense of recycling is a barrier to recycling for 8 percent of businesses. Supermarkets (33%) are more likely to see the time and effort recycling takes as a significant barrier to recycling. Shopping centres and markets (25%) and small construction contractors (22%) are more likely to see the cost of recycling as the main reason the business does not recycle more. Businesses who reported they were concerned about waste management were significantly more likely to report that the time and effort of recycling is a significant barrier to recycling than those who do not see waste management as a concern. Figure 11: Reasons for Not Recycling - Unprompted NB. The percentages may add to more than 100% because multiple responses were included. Only items with more than 1% of responses are shown in the figure External Barriers There are two key aspects relating to recycling that the businesses have limited or no control over. Technological limits and the availability of recycling services and processing facilities mean that it is not possible to recycle some types of waste in the ACT, or that doing so Page 23

24 requires large amounts of effort or cost on the part of the generator. Many businesses are also limited by the facilities at their business or provided by their waste service provider. Service Availability Almost half (45%) of businesses have noticed changes in the types and availability of waste services in the last 5 years (Figure 12). Small construction contractors (60%) are much more likely to have noticed changes in the type and availability of waste services. Supermarkets (73%) and pubs, nightclubs and social clubs (68%) are much more likely not to have noticed any changes in this area. Figure 12: Changes in the Type and Availability of Waste Services Figure 13 shows that the main types of change to waste services have been improved recycling services (7%), an increase in the types of waste that can be recycled (6%) and improved infrastructure which enables recycling (5%). 7 percent of businesses have also noticed that waste services are now more expensive. Page 24

25 Figure 13: Main Types of Change to Waste Services NB: Only items with more than 1% of respondents are shown in the chart Service Availability as a Barrier to Recycling Despite reported service improvements, service availability remains a key barrier for commercial and industrial recycling. When asked to nominate the principle reason their business does not recycle more waste, 28 percent of businesses see lack of service availability as the largest barrier to recycling (Figure 7 and Figure 11). This includes the waste is not recyclable or there is no service to recycle materials, there is no one to recycle the waste and there is no pick up service. Shopping centres and markets (38%) are more likely to not recycle because the waste the business generates in not recyclable or there is no recycling service for those types of materials. When respondents were prompted about a range of common factors which prevent businesses recycling, 49 percent of businesses saw the absence of a service to recycle the waste as a factor in not recycling waste products. This reason was statistically more likely to be a major concern for businesses. Food waste received by far the most mentions as a type of waste businesses were not able to recycle. Treated wood, polystyrene, clean fill, plastic wrap, insulation, construction materials, confidential material and e-waste were also mentioned. Inappropriate Facilities as a Barrier to Recycling For 13 percent of businesses, inappropriate facilities are the principal barrier to their business increasing the amount of waste they recycle (Figure 7 and Figure 11). This includes a lack of bins, the variety of bins offered, lack of access to bins, lack of space or storage room and a general lack of facilities or services. When businesses were prompted, not having room to sort or store recyclables was a major or minor concern for the largest number of businesses, with 55 percent reporting this to be the case. This was also the factor that the most businesses (32%) saw as a major factor or Page 25

26 concern. This reason was statistically more likely to be a major concern for businesses than other reasons suggested in the survey. For accommodation businesses (70%) and small construction contractors (70%), not having the room to sort or store recyclables until pick up was much more likely to be a barrier to recycling than for other industries. This was much less likely to be a factor or concern for shopping centres and markets (25%). Already Recycling at the Maximum Level A quarter of respondents (24%), did not think it was possible for their business to increase recycling. There are two possible drivers behind this response (Figure 7 and Figure 11). The business may have complete resource recovery. It is also possible that this response indicates other barriers, for example current technological limits to recycling. Landscaping contractors (42%) and pubs, nightclubs and social clubs (42%) are more likely than other industries to report that they are already recycling as much as possible. For landscaping contractors this is consistent with the industry recycling an average of 79 percent of waste (Figure 5). However, pubs, nightclubs and social clubs only report recycling 50 percent of the waste generated, lower than the average for all businesses (55%). This suggests that for some respondents already recycling as much as we can may be indicative of other barriers to recycling. Knowledge and Skills Not having the right information and knowledge about recycling can be a significant barrier to increasing recycling. The evidence from the survey of businesses suggests that this is an issue for some businesses, but also that many businesses are pro-active about addressing gaps in their knowledge about recycling. 36 percent of businesses have sought information about recycling in the last 5 years, which reflects a willingness to increase the knowledge and skills of their business. Shopping markets and centres were much more likely to seek information on recycling options for their business with 75 percent of that sector seeking information in the last 5 years. Conversely, the 64 percent of businesses who have not sought information are likely to reflect two very different groups: those that are very informed about recycling and consequently already have high rates of recycling, and those that choose to remain uninformed about recycling. Businesses who identified themselves as concerned about waste management were significantly more likely to have sought information about recycling than businesses who reported not being concerned about waste management. Businesses that have been working at the same site for more than 20 years were significantly more likely to have sought information on recycling in the last 5 years than all other businesses. Larger businesses (with more than 11 staff) were also significantly more likely to have sought information on recycling than smaller businesses. General internet searches were the primary source of information for businesses, and were used by 52% of businesses that sought information on recycling. The ACT Government Website (22%) and the Yellow Pages (21%) were also important sources of information. Page 26

27 Seeking information has had a positive impact on the rates of recycling done by those businesses. 56 percent of businesses that sought information on recycling now recycle more as a result. However, a large proportion of businesses, 27 percent did not find that increasing their knowl edge enabled increased recycling (Figure 14). Figure 14: Results of Information Searches Knowledge and Skills as a Barrier Not having the knowledge or skills to recycle is not a significant barrier to recycling for most businesses (Figure 11). Only 4 percent of businesses volunteered a lack of knowledge or skills as the main a barrier to recycling for their business. Rather, the survey suggests that knowledge is readily accessible with only 8 percent of businesses who sought information on recycling not finding any information to match their needs. Commitment to Recycling as a Barrier For a sizeable minority of businesses issues around their business commitment to recycling were the main barriers to increasing the levels of recycling in their business. 10 percent of businesses don t produce enough recycling to bother with and 7 percent of businesses are disinterested in recycling. This includes being too lazy or not caring as well as businesses that haven t thought about it (Figure 11). Retail shops (22%) and office based businesses (20%) are more likely than other industries to not recycle because the business does not produce enough to bother with. Businesses with between 1 and 10 staff are also significantly more likely to see not producing enough waste to bother with as a barrier than businesses with over 11 staff. Shopping centres and markets (25%) are much more likely to see disinterest as the primary barrier to increasing recycling in the business. Page 27

28 Policy Implications There are several generic ways in which the government can seek to influence waste management by businesses that generate waste to landfill. The aim of interventions may be to reduce the volume of waste generated by a business or to increase the level of resource recovery from business waste. The methods available can be broadly summarised as: influencing business behaviour to reduce waste generated through changes to business systems and procurement influencing business behaviour to establish better systems for separation of recyclables for collection establishing systems or services for sorting of mixed wastes after they are collected from the business. The first two solutions can be characterised as upstream as they occur prior to waste entering the system. The third are downstream solutions which are focussed on waste after it enters the management system. The ACT government is engaged in policy development and programs across each type of intervention including the delivery of the ACTSmart programs with individual businesses and is currently considering the merits of investments in new downstream sorting and processing facilities. The research provides some useful information for considering the suitability of each policy approach to the current situation in the ACT and the likely impact of the interventions on waste to landfill. It is clear from the results that there are significant business specific barriers to recycling that need to be overcome at the business level if commercial recycling rates are to be improved in the ACT. The research shows that the key barriers are mostly structural in nature and relate to: arrangements for management of waste within businesses including infrastructure and space for separation and storage of recyclables staff training, knowledge and skills, and the availability of services. The research also shows that businesses mostly exhibit a good level of concern about waste management and those who seek information generally are successful in meeting their needs using the current information systems. This evidence and the other findings of the research suggests that the general approach to developing change in businesses being undertaken by the ACTSmart programs is appropriate and designed in a way that targets the key barriers for many businesses. The impending evaluation of the Programs will provide more detailed insights into the achievements of the Programs to date and the impact they are having on the amount of waste that goes to landfill from businesses. The key implication for future policy flows from the evident complexity of upstream barriers to recycling in the commercial sector. The research has not revealed the basis for interventions Page 28