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Sustainability that Boosts Profits · C-Suite Perspectives

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Alex Heil: Welcome to C-Suite Perspectives, a signature podcast
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series by The Conference Board.
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I'm Alex Heil, senior economist at The Conference Board and the
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guest host of this podcast episode.
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Today, we'll discuss sustainability and its impact on corporations' bottom lines.
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Joining me is John Galt, chairman of Husky Technologies.
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Welcome, John.
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John Galt: Alex, a pleasure to be here.
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Alex Heil: So John, could you give us a sense for members of the audience,
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our listening audience, that don't have a good idea of Husky Technologies,
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what is the company's main focus?
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What's the market you're operating in?
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Just flesh that out a little bit for us to give us a sense.
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John Galt: Sure.
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A brief history is the company was founded by a German that immigrated
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to Canada after the Second World War, and he started a small machine shop.
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And then somebody approached him very early on and asked him if
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he could develop something for solutioning, a plastic molding,
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which was very, very new at the time.
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And that business started to grow, and soon that was dominating what we were
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doing, and we became exclusively focused on technologies for plastics processing.
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I would say today, who are we?
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We're a company that serves the medical devices industry, the food and beverage
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packaging industry, communications, automotive, and, to some extent, a
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smaller extent, national defense industry.
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So if it's a difficult polymer and a difficult application, or it's produced
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in very high volumes, you would likely utilize our machinery, our services, in
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support of production of those articles.
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In terms of the scale of the business, we've been very successful
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in the target markets we're in.
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We're the number one supplier of processing technologies on a
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global basis to the PET industry.
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And another application that people are familiar with, about one-third
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of the plastic syringes that might be used in injecting something in you,
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for example, when you go to health care services in North America, are
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produced, utilizing our technology.
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Our primary customers are consumer brands and the converters that supply them.
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We have customers in over 140 countries.
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We have seven global monitoring centers and eight manufacturing facilities.
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So, very global company in a very narrow set of niches where we lead.
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Alex Heil: Right, but it's fascinating because it's such a global reach,
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and it's not necessarily, there's no billboard in Times Square, so it's not
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like, right, that's very fascinating.
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So I can imagine that, with plastics and plastic products-related services,
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the issue of how sustainable is this business always comes up.
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So how have you been able to really fold sustainability into your operations, and
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really, I mean, even personally, what role has this played in your own career?
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John Galt: Sure.
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Some of my earliest personal experiences on the subject of sustainability
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came from the passion our founder had for the subject, and that involved
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both the technological application.
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When I was head of engineering, I was challenged with doing some of
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our earlier PCR, or post-consumer regrind processing technologies.
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That was, heck, over three decades ago.
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But we also at the time embraced things like natural escaping of our landscapes
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to get away from using fertilizers.
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We launched in the early 2000s a program called Target Zero, which
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was really to have a zero impact, net impact on the environment, and it
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really focused on equipment design.
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And that was really around several key concepts: systematically eliminating
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waste and variability, enabling lightweighting, moving more towards
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mono-material packaging solutions, which are much easier to recycle and recover.
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And then finally, and continually, learning to master the processing
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of post-consumer regrind materials.
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And that's finally led me, personally, to this advocacy and education piece that
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I have, whether it's with the Canadian government being on the UNEP panels on
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the subject of plastics, or with the US delegations I've been brought in
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as somebody familiar with the history to educate and to learn myself about
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what's necessary to advance circularity.
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Alex Heil: Yeah, that's fascinating.
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So, just to educate me, cause I've read up a little bit about it, and I've
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taken a look at your sustainability report, but mono-material packaging,
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what does that actually mean?
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Is that just saying you have a plastic container, but then you
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don't have a different type of plastic, let's say, as the lid.
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So, as a result, the effort of recycling that piece is easier in the processing?
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John Galt: No, it's not just that, although that's part of it.
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It's actually using the exact same polymers.
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Alex Heil: Oh.
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John Galt: So if you think about the polymer industry, it was largely
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developed at a time when everybody was thinking linear economy.
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We extract from Mother Earth, we convert raw materials, we process
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them into articles we use, and then we toss them away back to Mother Earth.
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We don't assist Mother Earth in the cycle of life in breaking
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those materials back down.
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We just work on this concept of linear extraction and use.
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And I think as a result of that, polymers were developed for applications, and
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we didn't necessarily think about finding ways to use fewer polymers
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over a broader range of applications.
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So when you think about the challenge of recycling, with thousands of
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different polymers in use today, what you want to be able to do is extract
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and separate each polymer for processing to get as pure a material back.
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So when we worked on mono material, let's just take example of a water bottle.
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We have, historically, you might have had a base cup, but today you have
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a wall and bottle made out of PET.
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You have a cap that might be made out of polypropylene or high-density
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polyethylene, and you have a label that might be made out of a third material.
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What Husky pioneered is, people said, "Well, I need a different type of
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material for the cap that has to have some elastomeric properties to seal." We
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tackled that for several years and have actually come out with a closure that can
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use the same PET as the bottle and still provide all of the necessary function.
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As we move towards a material that has 100% PET, the issue of
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separation becomes less significant.
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The issue of cross-contamination becomes less significant, and the
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ultimate yield from the bales that are collected post-consumer can go up.
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And so we're big advocates of this idea that as we move to fewer
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biostable, highly recyclable polymers, we can increase the volume of yield
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post-consumer, get more into the system, it improves the economics, and it also
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lowers the environmental footprint.
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So that's the principle in a nutshell.
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Alex Heil: That's interesting.
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I can see that, from an economic point of view, that makes a lot of sense.
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Just a fewer number of those polymers is going to make the
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extraction post-consumer much easier.
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That makes a lot of sense.
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What was also impressive in your sustainability report was just the
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breadth of environmental impacts that the company is or has been targeting.
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You mentioned some of those, and maybe you can expand on that a little bit.
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And, in particular, I was wondering with COP30 going on right now, can
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you address some of the greenhouse gas emissions, different scopes?
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I think that was sort of prominent in the sustainability report, as well,
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and how that relates to your business.
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John Galt: Sure.
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I think the key thing for me is maybe my definition of what it means to be
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environmentally responsible versus others.
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And after spending four or five years involved with all these different
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government agencies and people, a lot of people have different definitions.
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Some look exclusively on mismanaged waste.
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Some look on carbon emissions exclusively.
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I have to say that, as an engineer and somebody who's studied this now for
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decades, I would say it's more the impact on the biosphere that defines how we
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think about an environmental impact.
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Mother Earth created this virtuous cycle of micronutrients, small organisms,
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larger organisms eating the smaller organisms, until finally at the end of
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life, those larger organisms, through bacteria and enzymes, return back to
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micronutrients and begin the cycle again.
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So when I think about impact, I think about two things: The
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impact on the air, but also the impact on the land and the water.
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So what we do is we examine, on a full LCA basis, the impact on all three.
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How many carbon emissions are involved?
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What's the benefit of recovery and reuse of that material, and the
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carbon emission for that processing?
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What does it mean in terms of things like blue water use?
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And alternatively, what does it mean in terms of changes to land deforestation?
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So I'd say that's how I think about it is creating that virtuous cycle
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for manmade materials to emulate the virtuous cycle that Mother
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Nature has already established.
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But if we jump all the way to carbon emissions, I think, as you
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know, one of the biggest focuses on carbon emissions is energy.
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It's not only the energy source, which we won't talk about here,
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but it's the actual quantity of energy used in processing materials.
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And so when we think about materials like polymers, they have a very low melting
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point, and so they have an inherent advantage that, let's say, versus aluminum
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or glass or other materials, of being able to be formed at significantly lower
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temperatures, and that means that they have significantly lower emissions.
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But the other benefit, when you do a full LCA is because of their lighter
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weight—like a half-liter water bottle today has about a 70-to-1
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packaging-material-to-contents weight assessment versus, let's say, if
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you look at something like aluminum at 40 to 1 or glass at 1.5 to 1.
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We also have the impacts in transportation.
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I don't know if that's too broad for you, but for us, all of our analysis is done
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on full LCA biosphere impact combined with the idea of looking at a full LCA for
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everything from point of creation, point of consumption, and point of reclamation.
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And that's how we look at the analysis and why we believe that we can support
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that PET, for example, is one of the most sustainable materials in the earth.
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It just requires responsible management.
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Alex Heil: Yeah.
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Circularity is critical.
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And just for, for listeners in the audience, LCA—lifecycle assessment—is
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a methodology that essentially assesses environmental impacts across
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a variety of different segments and axes, essentially, to get a sense of
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what the true cradle-to-grave impact of a product or service might be.
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So that's very interesting.
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If you look at your company's sort of performance on any or all of
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these metrics, what's the trajectory?
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What's a real success story, and maybe what is something that has been
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much harder to address when you look at the last few years, let's say.
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John Galt: Sure.
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Well, I think if I look over the period from when I was leading engineering
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till I moved into the role of CEO and then recently into chairman, and
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you look at our systems themselves.
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So, how have our systems helped enable a lower environmental footprint?
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Some of the examples might be that the systems themselves today are 45% lower
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in carbon footprint compared to the equipment that we produced in the '90s.
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But again, maybe to put that into context, which is helpful, is if you look with
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our partners, our customers, through the combination of lightweighting and
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design and innovation, we've reduced the weight of many of these packages
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by being able to position the material more effectively and utilize it.
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And I would say over the last 25 years, the bottles became about
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half the weight that it was.
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What that's done is it saved millions of tons of greenhouse gas emissions,
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roughly the equivalent of about 11 million passenger cars, and we're far from done.
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And so I think the package design itself has enabled a lower
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carbon footprint substantially.
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The processing technologies are producing with less energy, total energy inputs.
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Significantly, 45% less, and the combination has yielded a
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very significant impact in terms of greenhouse gas emissions.
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The big opportunity, of course, and why I'm such an advocate for circularity,
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it's so much more possible if we grab that material again and reuse it.
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We have customers that I've been working with for the last two decades that
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have been producing 100% recycled PET containers effectively and have had
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peak velocity of as little as six days at peak at key seasons, so they can get
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the package back in the blue box and have it back on the shelf in six days.
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And so I'd love, for example, to see that vision replicated around the world,
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get some of that recovery rates up, and that's really where the emphasis is today.
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In terms of, I think technology-wise, we have the solutions, we have
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the willingness of customers and the motivation to do so.
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Biggest challenge has been working with governments.
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Why is that?
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A great system is designed that needs to have convenient recovery, separation,
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reprocessing, and reuse, and that's where we have to get into the issue
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of partners, the brands themselves, the governments, and the role they
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can play of in enabling that solution.
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We know in places like Germany, 98% diversion rate on and recycling
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rate today on PET containers.
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That's an example of success through using a deposit-return system, an
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extended producer responsibility model, and mandates for recycled content.
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Lithuania followed very successfully and has taken its
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recovery rate already up to 84%.
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The rest of the world, we don't necessarily have that.
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And the last piece, and I'm sorry this is long, but I've
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spent a few years on this one.
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Alex Heil: Oh, no, go ahead.
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That's good.
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It's very interesting.
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John Galt: Well, the critical part in developing economies is funding that.
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So we worked with over 50 delegations directly on the UNEP, and one
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of the common voices I heard is we want to do the right thing.
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We don't want to pollute our environment with any materials, but we're not yet
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economically at the point where we can afford to invest in this infrastructure.
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So what we could really use is help financially to invest in the
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implementation of these infrastructures.
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And that's been the challenging part for me over the last few years as an
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industry is to come together to build the circular engine, to globalize it.
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Because the solution to the problem exists.
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Now we need to scale it.
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Alex Heil: Yeah, I'm glad you mentioned Germany because obviously having
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grown up, that's my home country.
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And my dad, I remember him getting a ticket when he put the yogurt
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container in the wrong recycling container there, in the wrong trash
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bin, which was always interesting.
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So that's clearly a whole other level of policy and support.
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But you mentioned something else, which I think is worth just circling back to, and
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that's extended producer responsibility.
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Not everybody in the audience might be familiar with that.
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And I know that, for instance, that's been a topic here in New York City, where
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The Conference Board is headquartered.
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Can you just provide a little more detail and just a little bit more narrative
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here to explain what that actually means and what some of the implications are.
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John Galt: OK, so extended producer responsibility is really an approach that
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shifts a greater level of responsibility for post-consumer packaging materials
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from municipalities to producers.
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Now we take a more responsible role in ensuring that we have the
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convenient collection systems, the sorting, the organization.
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In other words, we take greater ownership for the lifecycle of the product.
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The issue is that there's a lot of EPR structures out there.
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But there's some that are exceptionally good, and others that I would say
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get in the way of the process.
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The characteristics of a good EPR are, first of all, it has to have
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strong environmental outcomes and reasonable achievable recovery rate set.
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That's critically important, so that everybody buys in.
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The second thing is the convenience for consumers in recycling all packaging.
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Where I live, blue boxes are available on single-family dwellings, and voluntary
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participation rates, even without deposit-return systems, are over 70%.
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Multi-family dwellings where I live don't have any blue box, and therefore
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it all goes into the trash bin.
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So convenience collection matters a lot.
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People will do the right thing if you give them the opportunity to do so.
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The second thing is there has to be long-term financing focused on
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collection, sortation, reclamation, market development, and consumer education.
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It's not something that happens overnight, as you know from Germany.
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when I moved to Europe in the late '80s, there was lots
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of different recycled glass.
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Then they decided recycle PET, and then they moved to single-use
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PET with recycling over the years as being the better solution.
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It took a while to develop it.
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And I think the last one is probably shared financial responsibility
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among producers, municipalities, and consumers to fund it.
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So those are kind of the building blocks of great EPRs.
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Germany has a great EPR.
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There are some states in the US that have some really well-designed
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EPRs and others that simply put a tax on the package and then push
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that into the general tax coffers.
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And it doesn't go back into funding the circularity system.
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So those are examples I would say of good and bad ones.
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They also typically go together with things like good deposit-return systems.
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When you place value on the material, then most people are motivated to take
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it back and receive that value in kind.
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Even if they don't, and they get rid of the material irresponsibly, somebody
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else picks it up and takes it back.
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And so usually, great EPRs work in concert with DRSs, or deposit-return
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systems, to do the job well.
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Alex Heil: It's all about, from an economist point of view, you
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need to have the right incentives.
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Adding value across the entire chain makes a lot of sense, just for people
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to do, sort of to back up their good intentions also with behaviors.
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And I think that's a very good point.
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So that brings us to one of the big questions, and that's really how I started
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the podcast, and that's the two sides, and maybe they're not two sides, maybe
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they all work in tandem these days.
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What about sustainability and circularity on the one hand, and
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then profitability on the other?
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What is your view on how that works for your particular organization?
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What's your general approach to that—again, conflict is maybe too
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strong of a word, but how would you paraphrase and characterize that?
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John Galt: OK, so, passionate subject for me.
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It was part of my motivations when I was asked.
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Alex Heil: Oh, good.
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Well, we picked the right one.
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That's very good.
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John Galt: You did pick the right one.
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So, first 20 years of my career I was in engineering.
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My job was to solve problems.
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It was to drive technology.
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It was to find solutions to customers' unmet needs.
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And it was to institutionalize the concept of innovation.
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One of the definitions we use for innovation is the solution
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to an apparent contradiction.
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The right minds, the right processes, fundamentally deconstructing problems
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in the smaller pieces and building back those pieces to deliver the
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ultimate solution, is something we're very, very familiar with at Husky.
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When I looked at the issue of sustainability and circularity, you look
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at it not as a threat, but an opportunity.
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Some of the things that came to the surface during that analysis
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were systematically reducing waste and variability will save money.
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Because investments won't go into things that don't create
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direct value for my customers.
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The second thing that became apparent is when you critically examine material and
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product tourism, that's also a source of waste and environmental burden.
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If I buy parts from someplace in the world, I ship them all the way
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over to my factory, I assemble in my factory, then I ship them back
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to one of the 140 countries I have.
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Tourism is a big deal, and it has a huge environmental footprint.
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If I can make more direct point of creation to point of use, I
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can substantially reduce material tourism, the environmental burden,
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and save money, again, on our equipment and in our factories.
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It's about looking at every production input—energy, air, water, the feedstocks,
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the overheads, the labor—and finding ways to use less to produce more, again,
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reducing cost and environmental burden.
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But then it wasn't just about waste reduction and elimination by thinking
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fundamentally, if we have a lower burden on Mother Earth, we'll have
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lower expenses at the same time.
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But it was also the issue of the future of the organization.
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And a very bright man—since I'm not from a financial background, I had to
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rely on great people, working with great people—told me that a business is valued
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based upon three fundamental principles: Profits, predictability, and prospects.
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And so if I could develop greater profitability and help my customers
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develop greater profitability by eliminating sources of waste,
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non-value-added investment, then the second thing is prospects.
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I think, as 8 billion people and climbing—3 billion when I was a boy,
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8 billion and climbing today, each having more consumption per capita, the
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inevitability of circularity is there.
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And so the question is, if you don't perceive it as a threat, but an
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opportunity, as the population grows more aware of that pressure, they're
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going to seek out solutions and leaders who are providing those products.
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And so that will also deliver revenue growth and renewal.
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And so I think sustainability, there's a convergence, per se, depending on
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how you look at the problem, between sustainability and circularity,
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and extracting waste, delivering velocity and higher efficiencies.
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And I think that's probably the starting point of how we thought about it and what
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we've been pursuing for the last 20 years.
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Alex Heil: Yeah, great, John, appreciate the insights, and I really
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like the term "material tourism." I had not heard that before.
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That's very interesting.
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We're going to take a short break and be right back with more of
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my conversation with John Galt.
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Welcome back to C-Suite Perspectives.
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I'm your host, Alex Heil, senior economist at The Conference Board.
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I'm joined by John Galt, chairman of Husky Technologies.
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So John, we outlined some of these issues and some of these
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dimensions from the perspective of your company prior to the break.
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So let's talk a little bit broader.
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Let's talk PET plastics, and let's talk in particular about recycling.
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Let's talk some of these efforts that you've been involved in.
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ChatGPT yielded a couple statistics.
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I'm not sure.
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You can correct me and say that this is clearly not wrong.
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The US PET plastics recycling rate last year was 33%.
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That is slightly somewhat less than what we have for aluminum,
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which is in this sort of lower 50% range, something like that.
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What are some of the barriers to scaling PET recycling?
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And just give us a sense of how should we be thinking about that?
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John Galt: OK.
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Well, I think I mentioned a few of those already in terms of things
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like mono-material packaging, convenient collection systems,
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the role that a DRS plays in that.
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Again, if I think of my years of service, the first thing to think about in
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terms of plastic recycling is to remind ourselves why we use the material at all.
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And it's predominantly in packaging applications to preserve and protect.
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And so I just never want to get away from that, cause a lot of people go
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down the rabbit hole on circularity.
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The first thing we try to do is preserve and protect what matters.
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Eight percent of greenhouse gas emissions are tied to wasted food.
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The number one source of global deforestation today is land clearing
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for the purposes of agriculture.
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Wasting food, and finding ways to change things that increase waste,
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is a problem, a far, far greater problem than the package itself.
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So I'll start by always putting that front and center in my mind.
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And PET's an exceptional material in terms of those capabilities.
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So I think that that's important.
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The second thing is the implementation in North America of things like a global
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producer responsibility model, right?
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Let's push that initiative through.
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Let's push it through in concert with the deposit-return systems.
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Let's establish and stay committed to recycle content
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standards to create demand.
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The biggest challenge, for example, in North America is that we're
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many different states who have jurisdiction over this subject.
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We have many different municipalities inside of those states where
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jurisdictions have that responsibility has been downloaded to them.
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So when I go on a quarterly basis to Capitol Hill, I meet with the EPA, I meet
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with other agencies, the State Department and others, and I try to present this
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concept of "Together we can solve the problem. It's been solved elsewhere, let's
25:07
scale it." But I always come up with this concept of jurisdictional limitations.
25:11
We can establish standards, but at the end of the day, it's up to the states
25:16
to decide to embrace those standards.
25:18
And so I think that starts with what I'm trying to do today, which
25:21
is advocacy and education, right?
25:24
The world must move.
25:26
We've got to move.
25:27
We have proven ways of accomplishing the goals.
25:30
Let's adopt them, and let's work together to implement those solutions.
25:34
So I think that's really more than anything else.
25:37
It means the brands have to commit to recycle content
25:40
standards and stick with them.
25:41
It means we need to set for ourselves, collectively, recycle
25:45
content standards and stick to those.
25:48
And we also have to forge better links between waste management companies
25:52
to convert their thinking to resource management companies and to build
25:57
the infrastructure locally, largely around large municipalities, to
26:02
ensure the recovery, the reprocessing, and the reuse minimizes tourism.
26:07
So I don't know if that's what you were looking for, but those
26:09
are really the hurdles today.
26:10
The answers exist.
26:12
It's getting everybody on the same wavelength and to adopt
26:15
the same type of motivations, regulations to make it happen.
26:21
Alex Heil: I'm just trying to really think this through myself in terms
26:25
of, let's say, take a PET bottle.
26:27
Not everything is recycled.
26:30
So there are a couple different options of what could happen
26:33
within the container, right?
26:35
I mean, in the best case, it's being recycled.
26:38
And it can be reused, and it appears again as a bottle.
26:42
And that degree of circularity can be extended for years,
26:48
essentially, can be carried forward.
26:51
On the other hand, if there's no recycling, and the container just
26:55
ends up in a landfill, then new plastic material needs to be produced.
27:00
And that has essentially an unnecessary environmental burden that comes with it.
27:04
But then there's also the, well, what if there's a system in some part of the
27:09
world where the collection of trash is just not as sophisticated, comprehensive.
27:15
So the pathway into the landfill, while substandard, is just not there, and then
27:20
it ends up in the general environment.
27:24
And then people are concerned, and presumably rightly so, about breaking down
27:29
that material in the ocean somewhere else.
27:32
Microplastics.
27:33
What are those risks?
27:35
I think there's sort of a growing concern about, in particular microplastics, as
27:39
it appears from plastic waste that is not properly recollected and reused.
27:46
Is that a fair concern?
27:48
How would you address that?
27:50
John Galt: I'll offer my thoughts on the subject.
27:52
The first part of your question was, what are the outcomes potentially
27:56
for a container after use?
27:57
The first one is we recover it.
28:00
About 1.9 billion pounds, to use the US, PET was recovered in the US.
28:06
90% of it is PET bottles placed in bins were collected, and 70%
28:11
returned as rPET back into the system.
28:13
So that's the current number.
28:14
The second element of it is mixed polymers and polymers that have
28:19
experienced damage typically end up in things like carpet fibers.
28:23
And so that's the second large use of fibers because polyester is polyester,
28:28
whether it's used in a bottle, in a medical blood tube, or in a carpet
28:32
fiber, there's multiple outlets.
28:33
We call that downcycling, right?
28:35
It's not fully circular, but it goes into replacing the use of
28:38
virgin material in another article.
28:41
And that's not included when you talk about some of those recycling
28:44
figures, we tend to talk about bottle to bottle exclusively.
28:47
Alex Heil: OK.
28:47
John Galt: The second element, as you said, is it goes into a landfill.
28:51
The last and worst is it's irresponsibly managed.
28:53
It doesn't end up in a landfill.
28:55
It ends up in our environment, in our ocean, in our forests, somewhere else.
29:00
That's what the framework looks like today, which is why I'm so motivated
29:03
by incentivizing or placing value on the materials so that it comes back.
29:08
It's a proven solution.
29:09
If we look at the other side of things, the challenge in the term
29:13
"plastics," which a lot of people use, it encompasses a list of
29:16
materials over 10,000 lines long.
29:20
And I don't know if you're familiar with it, but when we talk plastics,
29:23
we're talking about everything from tires on automobiles to acrylic paints,
29:30
road markings, textiles, microbeads in makeup and things like that.
29:36
Actually, if you look at one of the documents from the UN, and I
29:38
have it here, and they did sources of primary microplastics in the
29:42
environment, 47% of it is tire abrasion.
29:48
Because in the early '50s, we move from natural rubbers to synthetic rubbers.
29:53
They're considered part of that body of plastic materials.
29:57
They get abrasion, obviously, our tires wear out, and that
30:00
gets washed into the ocean.
30:01
So roughly half of microplastics, if you are really serious about it, you have
30:06
to address the issue of capturing this abrasion that takes place from tires.
30:11
The second element of it, city dust, representing about 22%.
30:15
A variety of sources from cities in terms of city dust and it finding its
30:19
way into the sewers, ultimately into our water streams and out into the ocean.
30:24
The next is road markings.
30:25
Again, there's a lot of paints, synthetic paints, polymer-based
30:29
paints have been used a long time.
30:31
Then you get down to washing textiles, fibers, marine
30:35
coatings on boats, actually.
30:37
It's 2%.
30:38
The estimate of plastic pellets, which is the feedstock that goes into
30:42
those containers, is less than 1%.
30:44
So a lot of people don't appreciate when you talk about plastics or the
30:48
subject of microplastics, you have to start by knowing what's the source.
30:53
The second important consideration for us is materials like
30:58
PET are highly biostable.
31:00
In other words, they were invented because organic materials started to
31:05
degrade when in contact with food, with beverages, and with bodily fluids.
31:13
And so we needed something that was biostable, something that didn't
31:16
interact, that basically allowed it to retain its integrity and not break down.
31:23
If you look at PET, for example, and its very durable molecule,
31:29
PET doesn't break down into microplastics.
31:33
People talk about, "Oh, these forever chemicals, it's bad." Part of having such
31:37
a stable molecular structure is unless you apply abrasion to it, the process of
31:43
breaking down PET is an extremely slow one unless you put it back into recycling.
31:48
So the bottom line is we have a problem with microparticles coming from paints
31:52
and tire residue and other things.
31:55
But the recovery of the material before they get into the environment, where they
31:59
can get abraded against the rocks on the shore of a beach and things, is the key.
32:04
Hence my focus about placing value and convenient recovery.
32:07
So I hope that wasn't too much, but it's such a broad area of subject.
32:11
And people lump all plastics into one, and I think it's a mistake to do so.
32:16
Alex Heil: Yeah, that was very interesting.
32:17
And I think it's important, as you mentioned, to consider the source.
32:22
It is also true that because of the nature of the use of PET, it is
32:29
easier to be including it in, or have a recycling process, potentially,
32:36
that introduces circularity.
32:39
I could imagine clearly that road tires, paints, road markings, the
32:44
other items that you mentioned, the recycling is a much more
32:48
complicated process in that case.
32:51
John Galt: Precisely, as it is, there's 2 billion tons of solid waste produced.
32:54
About 6% is plastic packaging.
32:56
About 12% is plastics overall.
32:59
If you're really going to move from linear to circular economy, you really have to
33:03
look at each of those sources, ask the kind of questions we're asking today.
33:08
It's one of the reasons that when I was last at the US government, the
33:11
number one thing that we called for, let's develop a standardized measure
33:17
of how to identify microparticles.
33:20
Because we know there are particles.
33:21
Water is, in science, called the universal solvent.
33:24
Well, there are bromines, there are salts.
33:26
There's even naturally occurring arsenic in large quantities in water.
33:30
How do we find a standardized way of measuring so we can have trustworthy
33:34
information that'll allow us to identify sources and then input our
33:39
technology into controlling at source?
33:43
Alex Heil: Right.
33:44
I mean, standards are clearly important, similar to that you have to have a
33:49
system that actually allows you to better understand what the problem is
33:53
so that you can identify a solution.
33:55
That's certainly very true.
33:56
So if we look into the future, what's your outlook?
34:00
If you're saying, where are we on this pathway, on this trajectory
34:04
to, I don't know, at an end point of the goal of near-perfect recycling?
34:10
You already mentioned some of these obstacles, but I'm interested
34:14
where we are in this process.
34:15
There's a lot of talk this week about where we are with
34:19
greenhouse gas emissions.
34:20
It's a different topic altogether, but there's a lot of discussion where we
34:23
are compared to Paris 10 years ago.
34:25
So if you take the topic of plastics, what's the roadmap
34:29
going to be like going forward?
34:32
John Galt: Well, I think the one thing I can say is that industry has embraced it.
34:35
So with customers in 140 different countries, and the fact that we open
34:40
every presentation with a customer, with what we heard from you, and
34:44
what we're hearing from the market.
34:46
And that's the Husky standard.
34:47
We learned a long time ago: Don't walk in and try to sell
34:50
something that nobody wants to buy.
34:52
Ask them first what their key unmet needs are.
34:56
Find a way to provide solutions to those, and you'll have a home
34:58
for your products and services.
35:00
So if we think about that logic for a moment, I can tell you that for
35:04
over a decade now, the concept of circularity and sustainability has
35:08
been a top three request from every one of our customers worldwide.
35:14
So I think there's absolutely a willingness on the customer side.
35:18
I think any survey, and you would know this better than I, is that the
35:21
consumer, the public wants the solution.
35:24
Every few years, we do a survey.
35:26
I did a dream survey a few years ago: What's your dream for the world?
35:29
And then we did a survey a little after that on National Recycling Day.
35:33
Things like, to quote, "Total respect for each other on our Earth." "Responsible
35:37
use of resources while ensuring the health of all eco-environmental
35:40
systems." "Recycling is important to me because I want my daughter to grow
35:44
up in a clean, healthy environment.
35:46
It's my way of contributing to a better future for her
35:48
and for generations to come."
35:50
So I think most of us share that vision.
35:53
So if public wants it, if industry has accepted it—and I've spoken to waste
35:59
management companies, the biggest recyclers in the world, the converters,
36:03
I've spoken to the brands, I think there's clear motivation in there.
36:06
I think the biggest thing getting in the way today is the politics of division.
36:12
I hate to say that, but it really is.
36:15
There's two types of environmentalists.
36:16
There's the one that really wants to solve the problem, and there's
36:19
the one that wants to profit from appearing to solve the problem.
36:22
And I would say that that's really where the biggest challenge is today,
36:28
is through education and being enduring with that education, from listening to
36:35
critics' concerns and addressing them.
36:38
I think it's our own will collectively to implement the solution that
36:43
represents a far bigger challenge than anything else today, and that's
36:48
why I think education matters.
36:49
I think advocacy matters.
36:51
I think taking people and their concerns seriously matter.
36:56
I'm not worried about the innovation.
36:57
I'm not at all.
36:59
I can tell you we're working on things 10 years from now that are right at the level
37:03
of chemistry, to preserve the integrity of the molecule, that are going to
37:08
overcome any of the technical challenges.
37:09
So that's where I really see the biggest issue.
37:12
And that's where we'll just have to all keep asking for more better solutions
37:17
and being unsatisfied until our politicians realize it's not lip service,
37:23
but actually solutions we're after.
37:25
Alex Heil: Yeah, I mean that's right.
37:26
I think you mentioned some of the survey work that The Conference Board does, and
37:29
in some of these surveys, it depends on how it's asked, but certainly represent
37:32
this growing awareness of consumer purchasers and what they actually
37:37
represent in terms of resource use.
37:39
Very interesting.
37:40
I really appreciate all the insights.
37:42
So what have I missed?
37:43
Is there anything that you would've liked to cover and at least mention
37:47
before we sign off for the day.
37:49
John Galt: Well, as I said, it's a passionate subject for me, and
37:51
so I could go on all day, but then your listeners wouldn't enjoy that.
37:54
I'll try to narrow it down, I guess.
37:56
I'll just reiterate, one of the things I talked about in terms of circularity.
38:00
I think there's three primary stakeholders for a business, any
38:03
business: the customer, the investor, and the team member, yourself.
38:07
And we've done work where we've tried to say, "What are the objectives of each?
38:13
And how do we find the overlapping requirements in the center and make
38:17
our strategic goals the goals that bring benefits to all?" Goals like
38:22
innovation, goals like systematically eliminate waste and variability,
38:28
maintaining the position as a provider of competitive land products and services.
38:33
But the fourth element of that, and crucial, was to accomplish any of those
38:37
goals was to attract, retain, and inspire the best team of people to provide those
38:41
solutions and, through their networks, to communicate that solutions are available
38:45
and encourage others to do the same.
38:48
And then together with that is to ensure a bright future through
38:51
circularity and sustainability.
38:52
Prospects.
38:53
Back to my three Ps.
38:55
So I think the number one thing is that any business, I would encourage
39:01
them to embrace the concept of circularity as an opportunity to enhance
39:07
growth and an opportunity to enhance profitability, and, where necessary,
39:12
with partners to make it happen.
39:15
Because my experience in industry is there's leaders.
39:19
We have those: Germany, customers of ours in other parts of the
39:22
world that are already doing it.
39:24
And then there's a followership.
39:26
And the big impact is when the rest of the industry follows it.
39:29
So it's not necessarily about the technology, but it's about
39:33
just the more we all talk and commit to making it happen, the
39:37
more it's going to build momentum.
39:39
And I think that's more important at this point in time
39:41
than anything else we can do.
39:43
And in a very simple way, if you use a PET container,
39:48
responsibly deposit in a recycling solution, in a collection system.
39:53
If everybody does a little bit more of that every day, if you see one
39:56
on the ground like I do and you pick it up and you take it home so
39:59
you can put it in there, do that.
40:02
Eight billion people doing the right thing every day can make a huge difference.
40:06
Alex Heil: Right.
40:06
I think that's a very hopeful note to end on.
40:09
Thank you so much, John, for joining us today.
40:13
John Galt: It's my pleasure.
40:13
Thank you very much, Alex, for having me.
40:16
Alex Heil: And thanks to all of you for listening to C-Suite Perspectives.
40:19
I'm Alex Heil, and this series has been brought to you by The Conference Board.