By monetising the recycling of plastic in poorer countries, Plastic Bank is helping people get out of poverty, reducing plastic waste in the oceans, and changing mindsets. Founder and CEO David Katz tells Phil Lattimore how the business’s circular vision is working
Plastic Bank was established by Canadian entrepreneur David Katz in 2013 to create an ethical recycling ecosystem to help tackle plastic pollution in the oceans and poverty in coastal communities from where some of that pollution came.
Currently operating in Haiti, Indonesia, the Philippines, Brazil and Egypt, Plastic Bank employs a circular business model to reduce waste in the sea by incentivising people to collect and trade plastic waste as a kind of currency.
Working with local recycling/reprocessing partners in the areas in which it operates, Plastic Bank encourages recycling among local communities, establishing collection hubs – from standalone kiosks to collection points in schools and churches – and paying those who collect the material by weight and quality.
Plastic Bank currently has more than 19,000 active member accounts in four countries and collects around two million kilograms of plastic per month, the equivalent of 112,000 bottles an hour.
Digital tokens for the value of plastic are paid into members’ electronic accounts (denominated in US dollars), which are accessible on a mobile phone. It offers incentives to ensure high-grade materials alongside low-quality plastic – that may previously have been dumped – are collected, paying a premium for the higher-grade items.
Plastic Bank uses proprietary blockchain technology to track, trace and substantiate the source of the materials and its journey through local reprocessors to the end customers, who buy the recycled plastic for making new products. Branding its recycled material ‘Social Plastic’, Plastic Bank sells it at a premium to manufacturers – such as SC Johnson in the US and Henkel in Europe – which can use the trademark on their packaging and products, indicating their support for reducing ocean pollution while improving the lives of people in poorer countries.
Plastic Bank currently has more than 19,000 active member accounts in four countries and collects around two million kilograms of plastic per month, the equivalent of 112,000 bottles an hour. It had planned to begin operations in Cameroon, Ethiopia, Vietnam and Thailand this year, before the Covid-19 crisis unfolded. Here, we ask David Katz about his innovative circular investment.
Circular (C): What motivated you to set up Plastic Bank?
David Katz (DK): It was in my soul for a long time. I grew up on the west coast of Canada, in Victoria, on Vancouver Island. I walked the beach to school every day and began witnessing the degradation of the ocean 35 years ago. Maybe the reason I feel a little bit ahead of everyone else is because I witnessed this degradation, and it became part of my realm.
I’ve always been an entrepreneur, and I’ve always been a problem solver. I like to fight injustice. My previous business, Nero Global Tracking, developed a GPS-based telematics solution for a vehicle-tracking service. That was acquired by a Canadian tech company, and that’s what, ultimately, helped fund the start of Plastic Bank.
In terms of eliminating plastic from our oceans, I realised that paradigm of ‘doing what we had always been doing’ was going to change, and I knew that I had to meet the problem where it originated – which was through business.
C: Why did you decide to set up a recycling-based circular business?
DK: I was inspired by the work of the photographer Chris Jordan. Around 2009, he went to Midway Atoll, in the middle of the Pacific Ocean, and began photographing the decomposing corpses of albatross chicks filled with plastic debris.
He began to expose, on this most remote piece of land on the planet, the sheer degradation of the environment from what we’ve been doing. It moved me in such a way that I knew that something had to be done.
I attended an event in Silicon Valley called Singularity University, which brought some of the greatest minds together. The emphasis was on looking for ways to facilitate the global grand challenges for humanity – such as justice and equality, access to medical care and education, and safeguarding the environment – and it was there that it all came together for me.
I’m an incredible plastics advocate. I love the material; I think it’s remarkable. But we’re at a precipice – there is more than nine trillion kilos of plastic on Earth; it’s all in the environment.
Someone was demonstrating 3D printing, showing this belt that they had printed from a solid, single strand of plastic. There was a $70 price difference between the price of the product and the raw plastic, and what stuck with me was that the only thing that determined the value was the shape of the plastic. Society has become habituated to know that the shape of the bottle, the shape of the packaging, was worthless.
The same volume of plastic that, in a bottle, was worthless, could be worth $200 transformed into a car part. It was not the material; it was inside of us – our internal paradigm. It has zero to do with the material itself; it’s about us. I often ask, if every piece of packaging or every bottle was $5, how many would you see in the bin, on the beach or polluting the environment? We all know the answer is none.
I’m an incredible plastics advocate. I love the material; I think it’s remarkable. But we’re at a precipice – there is more than nine trillion kilos of plastic on Earth; it’s all in the environment. If we remove all economic value in the material that’s already out there, and there’s no economic stimulus to collect it, we’re screwed.
The only answer is to increase the economic value of the material. That’s the key. Make it valuable and everyone will go get it.
C: How did you choose the locations for your operations?
DK: The majority of plastic entering the ocean comes from ocean-bound communities in the most impoverished areas of the planet. Everywhere there’s poverty – where there’s no infrastructure to collect the waste. Poverty is the issue.
The first place we established [after an abortive trial project in Peru], for example, was in Haiti – we were invited in, post-earthquake. There’s no way the nation had the capacity to establish infrastructure for recycling or a waste management ecosystem when it was struggling with providing the basics in an impoverished country facing incredible challenges.
So, Plastic Bank introduced a business-for-profit solution that can monetise plastic material. That’s why we don’t collect recycled plastic or virgin plastic – we collect ‘Social Plastic’. That’s our trademark – it’s a different category of material, the value of which is transferred to the lives of the people who encounter it. They touch it and their life changes. That’s a profound story, which is inside every bottle we sell.
C: How do you ensure the integrity of the Social Plastic concept?
DK: We substantiate the social nature of the material. That includes the blockchain technology, the banking application, the authenticity and transparency of what we do. Everyone has access to the data – who collected it and where it came from, how it was processed and where it ended up. Plus, which communities benefited – what schools became collection locations that put more children in school, for example. So, when it makes its way onto a bottle, such as Windex in the US, every consumer that buys a bottle is changing the world. As a consumer, you are working with the world’s poor to extract the plastic from the ocean, and helping end their poverty.
C: What does Plastic Bank offer that other collection schemes don’t?
DK: The Plastic Bank concept enables its members to leverage the value of what they’re collecting. Some of these people have never had bank accounts before. Ours are fiat-backed, with money in our central account that’s distributed via a digital signature to digital accounts accessible by mobile users, denominated in US dollars. The higher the quality of materials collected, the more they get in their accounts and the higher they are rated on our system.
We can easily substantiate repeatability and reliability, which, ultimately, can be transformed into a credit rating. They now have access to low-interest rate loans to receive funding that could change their life. The incentive is not the material – it’s how your life changes through your interaction with it.
C: Is the model the same in all the countries in which you operate?
DK: It’s executed differently, but the model is always the same. How do you reveal the value in the materials? Schools are powerful and, to be an exponential organisation in the world, we recognise that every village – no matter how small it is – has a school and a place of worship.
We have also created a powerful programme around Catholic churches that engages the parish; parishioners are encouraged to bring the recycling to church with them. Then the church benefits; it makes a bit of money and, of course, it is engaging the entire community as a collection location within the tenets of Christianity, as part of an effort to help steward the Earth. As a result of that, we steward the poor.
The analogy that I use is that it’s like a ‘field of diamonds’. if you’re walking over a field of diamonds, but you realise that there’s nowhere you can deposit the diamonds or get any money for them, they will sit on the ground, worthless.
Schools as Plastic Bank collection locations can also help spread the message about recycling and protecting the environment. We incentivise the high-quality material, but you get that when you bring in low-quality, low-value material, too, at a minimum level – that’s when you get the high price on the high-value material. You’ve got to do both to unlock it; it’s all gamified and incentivised.
We buy the material and then transact it from them. Our local reprocessor partners – who have to adhere to our required labour standards – get the best price through us brokering the Social Plastic. Everyone is rewarded and it creates more value in the community. It’s win, win, win.
The analogy that I use is that it’s like a ‘field of diamonds’. if you’re walking over a field of diamonds, but you realise that there’s nowhere you can deposit the diamonds or get any money for them, they will sit on the ground, worthless.
Similarly, if you’ve got to walk 20km to return plastic material, it’s worthless – you’re not going to do it. It’s vital that collection points are based in the right location. Because, if you walked over a field of diamonds and, all of a sudden, right in the middle, was a kiosk where you could cash in the diamonds, you wouldn’t ever stop picking up the diamonds. You would carry on until there were none left.
C: Do you think producers should have more responsibility for paying to clear up plastic?
DK: They have to. It’s ridiculous that they don’t create the kiosk in the middle of this field of diamonds. How dare they push it out knowing that there is no ability for it to be returned? Yet they continue to produce and continue to pollute, and then want to blame the consumer. Tell me [how someone struggling to survive in an impoverished community] is supposed to go and recycle and steward this plastic?
C: What motivates you now?
DK: The world, the ocean, life, stewardship, the mission – we’ve probably influenced more than 100,000 people in the collector community. There’s probably 100,000 people who rely on my thinking and action to feed their family, and who benefit from what I’ve created.
Also, the idea that I’ve created a self-perpetuating business entity that, because of its existence, prohibits the flow of plastic from entering the ocean and ends poverty. We’re profitable, growing and have some of the world’s largest brands testing and using our materials, plus some of the biggest clothing manufacturers chasing us to do business with us now. We have created a category of material.
Our customers can say: ‘This is Social Plastic; this plastic changes the world.’ This was otherwise entering the ocean and, by not going into the ocean, it has also changed people’s lives. We’re repairing Earth; we’re the regeneration economy. When you do business with us, repair will be done.
This interview first featured in the July/August issue of Circular.
