Eric Lombardi On Zero Waste & Scaling Up Your Vision As A Social Enterprise
Eric Lombardi has been working at the cutting-edge of the Zero Waste and Social Enterprise Movements across the world since the mid-90’s. His working mission has been to transform the waste management industry into a “resource management” industry.
Eric was a national spokesperson for the first Zero Waste organisation in the U.S.A. (1997), and was a co-founder of the Zero Waste International Alliance (2002). Lombardi was invited to the Clinton White House in 1998 as one of the Top 100 USA Recyclers and received a Lifetime Achievement Award from the Colorado Association For Recycling. From 1989-2014, he turned a small nonprofit into the largest zero waste social enterprise in the U.S.A. (www.Ecocycle.org) and is now the President of Zero Waste Strategies Inc. and the Senior Advisor to Eco-Cycle International.
Eric shares his experience in leading the globe’s zero waste movement, providing insights into government partnerships, financial survival and what social enterprise isn’t.
Highlights from the interview (listen to the podcast for full details)
[Tom Allen] - To start things off, could you please share a bit about your background and what led you down the path of social enterprise and a passion for zero-waste societies?
[Eric Lombardi] - Sure. I won't go too far back because I'm an older guy, but back in the 1970s when I got my first car, that's about the time that the Middle East did an oil embargo on America, and I couldn't fill my first car up with gas, and I said, “what's going on here?” So that opened me up politically to look around the world and go, ‘oh, geopolitics, I'm really interested in this.’
Long story short, I went on to graduate school, and got a degree in Science, Technology and Society where I was going to do solar energy in Africa, and all of that work was funded by a big oil company, Exxon. I got a full ride. The world was paying attention in the 70s and 80s to some of these issues, and I just jumped in there, and I created a profession in what I call resource conservation. I worked in alternative energy. I worked in water conservation, and then I got heavily into the recycling and the waste industry. I had a wonderful, wonderful 35 year run in all of those things. I always say society wastes resources the same, no matter what the resource is.
Really good point, so tell us more about Eco-Cycle then Eric and the impact that's being created each year, because you've turned this into a really large-scale social enterprise.
Eco-Cycle started in 1976. A friend of mine started a small nonprofit and that's how recycling started here, and then Australia, and around the world. But we ran into trouble in the late 80s. I was not there. I was somewhere else. The board asked me to join them, and they were talking about dissolving the corporation, and I said, “no, the 1990s are going to see a recycling revolution and you're positioned beautifully.” I said, “but we're going to run it like a business, not a nonprofit.” That was 1989, and no one had ever heard the term social enterprise before.
The board said, “hey, we're about to go down, so whatever you want to do, go for it.” So that's what I did. I took it over, and I basically went out to the community, and I said, “we will bring you good recycling services, but we need to make 10% on everything we do.” Everybody came back to me and said, “you know what? That's fair. You give us good service you can have 10% profit.” So that's how I built it from 1989 to 1999 which was a real, real rock and roll decade for recycling, and that's how we got so big.
About mid-90s I realised recycling was just the beginning of this bigger thing called zero waste, and Eco-Cycle then joined with a few others around the world, around the country, and we started this thing called the Zero Waste Movement about 1996, '97, and a foundation funded us. So we launched that in '96, '97, and everybody laughed at us for about 10 years, but then zero waste was embraced around 2008. That was the year that National Public Radio had me on… Smithsonian Magazine. I was on the cover of Newsweek Magazine. That was sort of the evolution.
Eco-Cycle as a community organisation just kept bringing more and more services to the community, and they loved us for that.
It's been a great 30 year journey and excellent to see the longevity of this enterprise. From your experience then, what do you believe are those fundamental ingredients for that long-term success when running a project of similar size and scale to yours Eric?
Well, it's funny because our social enterprise is a very big one, and it's unlike a small restaurant that creates jobs for hard to employ people, so what we need to do, is we created recycling, and recycling became successful, and the for profit world started to elbow in on us, and they said, “hey, there's money to be made there.”
As a nonprofit, mission-driven organisation, we didn't have the financial resources to scale up, so what we had to do, (and I give a lot of people this advice), we scaled up our vision, so we made sure our vision stayed one step ahead of the for-profit world, and we brought the community with us, and we brought the local councils and governments with us, and we just said let's keep going.
That's how we went from recycling to zero waste, and the for profit companies couldn't keep up with us.
We were an army of people with visions, and that's a hard thing to stop.
So what have been the greatest challenges then that you've found in running Eco-Cycle and how have you been worked around them?
You know, it's a boring but honest answer…
follow the money. Financial survival is so important because the more money you have, the more mission you can do, and if you run out of money, and you go away, you don't have any mission.
Recycling revenues are crazy because of the international market for recycling. Right now, the markets are in the dumps, and sometimes they're really high, so once we were successful, we talked with the community, and we talked with our local government and said, “Look, we need to stabilise the ship here.”
We created what I call a social enterprise contract with the local government where we shared risk, and we shared reward, and it was a negotiated profit situation where they would put a financial floor under us in exchange for them sharing on the upside when the markets got good. That relationship was transparent, it was workable, and that allowed us to stabilise in the bad times and grow in the good times.
It was that issue though where I realised that nonprofit social enterprise sort of has a glass ceiling.
Because in about 2004, the governments thought recycling was successful, and a done story, foundations were no longer funding it, so I went to my private bank, and the private bank wouldn't fund me, and I needed to build a compost facility next. I needed six million dollars. I couldn't get it anywhere and as a nonprofit I couldn't get a private investor. That was against the nonprofit law.
That's when I discovered social enterprise in the United Kingdom and Scotland where they operate social enterprises that are for-profit. I call them a for-profit nonprofit, because a lot of the enterprises in the UK have the same limitations as nonprofits in America, meaning the assets are locked, the financial transparency, and all that stuff, but those organisations in the UK, (which are called Community Interest Companies), they're allowed to pay out a third of their profits to an investor each year, and so that's the key difference.
That's what I needed to build my compost facility I was never able to get, and so that really woke me up and said I need to look into this for-profit social enterprise thing, and that's where I ran across the Social Enterprise World Forum, Gerry Higgins, the whole movement that's happening around the world and really not very much in the United States at this point.
So what then do you think needs to be done to help accelerate this social enterprise and zero waste movement to get mainstream society onboard and moving away from this linear economy to a circular economy? Within Australia, and I know within the UK as well, there is heightened awareness around the circular economy, and in many ways it also feels like, for some, it is becoming a bit of a buzzword, and certainly prone to a bit of social washing as well.
What are your thoughts here on how we can accelerate this movement?
Very good question. I really think that's the issue of the day, because as social enterprise gets successful more and more people are co-opting the term. There was a big consultants report the other day that said by the year 2040, everyone will be a social enterprise and that's just not true.
Number one, what we have to do is realise that a social enterprise is clearly defined by one thing, and that's its genesis story. Why did this business get created? If it was created to address a social or environmental mission first, and make money second, then it's a social enterprise. But if it's just a business that's doing good things, and shaving off a little profit for a certain society, that's not social enterprise.
And so, that's the first recognition we need to do, is we have to grant true social enterprise as that status, that they exist to fulfil a mission.
The second thing we need to do is understand we can scale up our vision of what that mission is. So many social enterprises are small; five, ten employees. I'm talking about redoing complete waste systems in communities, away from waste management and into resource management, zero waste systems.
That means multi-million dollar social enterprise, hundreds of employees, lots of equipment. I'm also talking about community solar systems that are owned by the community in partnership with a social enterprise, so public-private partnerships when we start getting to this kind of a scale, and to do that, the government needs to understand the risk-reward formula that I discussed a minute ago, and government's really lousy at that, because they're not very good at business.
And so, we have a big education challenge on our hands to help government understand what their supportive role is, without getting in the way of the risk-reward business side that the social enterprise can do. I think there's education for the government. There's visioning for the community that indeed mission-driven organisations can scale up big.
You don't have to just be the small old first door at the end of the block, they can actually be much bigger, and I think we can move forward with that combination.
There's some great insights there, Eric, and I'm sure you'll be sharing some of those at this year's Social Enterprise World Forum, which will be held in Ethiopia in October. What are you most looking forward to about the forum?
I'm really excited because you have a country whose economy is really growing rapidly. Ethiopia is very young and youthful, and hopeful, and they're excited, and they're seeing growth rates that are just unheard of in many parts of the world, so I think we're going to see a lot of new ideas, and they're not going to be grounded in the old Western economy ideas. I think we're going to see some real new ideas with men, and women, and youth, and government. That's what I'm hoping for.
These people are just so bright and excited. I'm looking forward to being with them as they all come together and talk about the future.
It'll be great to see you over there, Eric.
I'd love to hear a little bit about some other inspiring projects or initiatives that you've come across recently that you believe are creating some excellent positive social change.
I can name a few. One of them is in Australia that I'm very excited about. You have a social enterprise down there called Social Traders, and Social Traders is doing cutting edge work that the rest of the world is watching, and that is in the area of government procurement. How is the government in Australia, the national government, and the regional and local governments, how are they spending the tax money and are they getting the most bang for the buck by going with social enterprises?
And so, Social Traders has come up with a simplified way to certify a true social enterprise, so that the government recognises what they're good for, and giving them preferential treatment in the contracting process. I think that's absolutely the future to grow our sector. We're all watching the Social Traders right now.
I think that Zero Waste Scotland is a unique organisation because it is an organisation that is quasi-public and quasi-private. It fits between the Scottish Government and the private sector, the waste sector in Scotland, but it's full of professionals that the government trusts, and the waste industry trusts. This way, this entity, Iain Gulland and his crew, can talk business with the business sector and it's not BS. Everybody knows that it's real business, and they can talk government policy with the government, and the government trusts them. I think the Zero Waste Scotland model is something we all need to watch and learn from.
I also like, out of Sri Lanka we've got an online platform called Good Market that Amanda Kiessell is running, and she's gone global with this platform where we're going to be able to network with each other; not just our services and products, but our local networking and communications as we grow our local movements.
And then, finally the one I just discovered is a Greek island one called the Cyclades Preservation Fund, and they're looking at the islands, and Greek islands, and they're starting to come together and share information around social enterprise development, getting plastics out of the Mediterranean. Doing some good work that way.
In fact, after Ethiopia I'm going to be pulling through the Greek Islands and doing a workshop on social enterprise and zero waste with the island.
There's a lot of great work going on around the world.
There's some great projects there. To finish off then, what inspiring books or resources would you recommend to our listeners?
I don't read a lot of books anymore. I did a lot in the 70s and 80s, especially grad school, and there's two classics that the younger people, entrepreneurs, I highly recommend, the one I always talk about. First, is a book by Paul Hawken called The Ecology of Commerce. I remember Paul said, back in the 90s, he said,
“we don't have to save the Earth, it's fine. We have to save business, because it's business that's killing the Earth.”
And so, The Ecology of Commerce is important.
Another book is called Small is Beautiful by an economist, Schumacher, out of England, and that was one of my bibles when I was younger.
And then two resources I want to mention really quickly; I'm coauthor on two reports that are still really powerful and they're free online. The first one is called The Community Zero Waste Roadmap, and it's a booklet that I wrote and it's about 43 pages long. The other one is called Stop Trashing the Climate. It is still the best report on the link to climate change and zero waste issues. You can find that on the Institute for Local Self Reliance website.