Waste Services & Circular Economy
Eddie Olmedo
Paul Rushton
Global Procurement Solution Lead - Waste
Global Sourcing Programs Manager
eddie.olmedo@cbre.com
paul.rushton1@cbre.com
Category
Overview
Category
Definition
- Waste Services and the Circular Economy involves the regular collection, transportation, processing and disposal or recycling and monitoring of different types of waste materials
- Global and national climate goals demand sharp emission reductions in both operations and construction, which can only be achieved through significant changes within the real estate sector (Forbes)
- CBRE is committed to decreasing the amount of waste generated through its own operations and its clients’, and promotes the reduction, reuse, repair, recycle and recover hierarchy for waste. CBRE champions the sharing of best practices and innovation in the field of waste
High Level
Strategy
- Drive efficiencies through current ‘downstream’ operations (utilising technologies to help reduce labour and logistics costs, enhancing recycling opportunities etc)
- Promote ‘upstream’ linear waste to circular waste strategy and ethos through supplier and regional stakeholder engagement (i.e. CBRE’s Zero Waste offering to augment account zero-waste planning)
Scope
- Implementation of Category Playbook to socialise processes, procedures, analysis, market intelligence
- Showcase opportunities for best practice in field of Waste Services and the Circular Economy
- Optimisation of the supply chain whilst offering credible 4x4 regional coverage for a range of services and solutions in line with CBRE’s Zero Waste commitment
Category Maturity
- Spend cube data integrity needs further work based upon stakeholder feedback (further sub-categorisation needed)
- 86% of spend with 10% of suppliers (large tail end of circa 1500 suppliers)
x2 S&P (including x1 diverse – Wasteology) - Regional variations in terms of strategy, customer requirements and legislation exist – therefore fragmented strategy currently but playbook initiative will help mitigate and bring together various stakeholder groups.
Positive driver is CBRE commitment for ESG and zero waste mantra as catalyst to revising global strategy
Category Spend
Total Spend
$198M
Objectives / Market Characteristics
Market Characteristics/
Cost Drivers
Potential
Saving Levers
Risks and Constraints
Objectives
and Targets
• Deliver World Class Waste Services solutions that utilize CBRE Preferred and Contracted suppliers providing for sustainable outcomes and long-term supplier relationships in line with CBRE ESG policies
• Ensure best-in-class financial operating models that leverage CBRE’s buying power
• Align global KPI’s and SLA’s to take into consideration mandatory regulations and requirements, in addition to Waste Services reporting including monthly recycling and recovery rates
• Demonstratable value to our clients on optimization of existing services, with a commitment to growing the Circular Economy commensurate with CBRE’s Zero Waste policies
• Global waste is expected to grow to over 3.50 billion tonnes by 2050, more than double population growth over the same period (The World Bank)
• The market is fragmented and regionally localized (CBRE has over 1500 global suppliers)
• Fastest growing regions are Sub-Saharan Africa, South Asia, and the Middle East and North Africa (The World Bank)
• New regulation in EMEA, AMS and APAC regions combined with labour shortages are increasing costs. Despite these constraints there is a growing trend to implement ESG initiatives
• Cost of transport – average fuel surcharge 12-15%
• Real estate - Nearly 40% of global carbon dioxide emissions come from the real estate sector. Of these emissions, approximately 70% are produced by building operations (Forbes)
• Adoption of technology (look for service providers who can adopt such innovations to reduce the final volume of waste disposed into landfills - $115 per tonne average)
• Supplier Competition (competitive bidding based on experience, expertise, value-adds, and transparency in pricing)
• Optimsation of Services strategies (engage with suppliers who can provide training and consultation on effective waste minimization techniques)
• Bundling of services (expert consulting, waste tracking and reporting along with traditional waste management services)
• Rebates (from specialist recycling suppliers)
• Inability to collect credible waste data from CBRE systems and suppliers will impact reporting requirements for clients and corporate reporting –need to agree new spend cube sub-categories to enable accurate service / spend reporting
• Regional goals and objectives differ depending upon legislation and maturity of ESG initiatives – no global solution which CBRE can cherry-pick – it will need to solution on a localized level
• As global waste increases so will the costs of traditional disposal due to labour shortages and increases in transportation costs etc
Key Suppliers
AMER
APAC
EMEA
- Waste Management
- New Market Waste / Waste Harmonics (S&P)
- Republic Services
- Heritage Interactive Services
- Capturis (miscoded)
- Veolia
- Remondis
- Cleanaway
- JJ’s Waste And Recycling
- KS Environmental
- Veolia
- Indaver (PSA)
- Biffa Waste Services (PSA)
- Sayvol (miscoded)
- C&M Waste Management Ltd (PSA)
Top 5 Global Suppliers by Region
Current Status
Not Started
In Progress
Completed
Current Plans
to Build 4x4
Coverage
Not Started
In Progress
Completed
Current
Suppliers
- Veolia
- Waste Management
- Indaver
- New Market Waste solutions (Preferred)
- Republic Services
- Heritage Interactive Services
- Biffa Waste Services
- Sayvol Environmental & Building Services
- Gfl Environmental inc
- Wasteology (Preferred)
Alternative
Suppliers
- Renewi
- CompuCycle
- Waste to Wonder
- Clean Harbors
- Recycling Lives
Non-Traditional
Suppliers
- Not applicable for this Category
Supply
Market
Trends
- With rapid population growth and urbanisation, annual waste generation is expected to increase from 2.24 billion tonnes today to 3.88 billion tonnes in 2050 (Source: www.worldbank.org)
- Countries that historically took the world’s recycling have stopped in a bid to reduce pollution locally, this means developed countries can no longer export waste and have a waste surplus unless plentiful supply of landfill
- The traditional ‘linear’ economy is suffering from scarcity of commodities, increases in price and supply chain issues post-pandemic. Goods are more expensive to produce, therefore recycling and re-use have a part to play in the future
- Increasing regulations and climate change targets are now focusing suppliers to offer a range of services in addition to traditional landfill. Coupled with new innovations and the ability to track waste, suppliers are now offering additional margin rich services as a result of acquiring this valuable data and can offer a range of solutions
- Therefore, suppliers and corporates are now starting to focus on shifting to a ‘circular economic model‘ which will stimulate the political, economic, and social recovery from the disruptions the pandemic has caused. There are opportunities for circular innovation to shape the contours of future business models; the management of global resources; and the priorities of societies. This is the focus of a new initiative by the World Economic Forum (WEF), entitled The Great Reset. A shift to an international circular economy is projected to generate global savings of $200 billion per year and create 700,000 net additional jobs in the EU alone, by 2030