A little over a year ago, a famous bottled water brand ventured with the Egyptian market introducing a new package for its product without the ‘sleeve’ that has long been known to surround the bottle cap to assure the end user that they are the first to open it. Instead, the clicking of the bottle cap delivered the same message. The company communicated the change with a campaign carrying the tagline ‘If it clicks, it’s safe’. Eventually accepted in the Egyptian market, the change was not about refreshing the look of the bottle, or using more economic packaging, it was about producing a bottle that is 100 per cent recyclable.
“The sleeve that was made from PVC prevented the bottle from being totally recyclable, and as our environmental commitment became clearer, Nestlé Waters team decided to pursue an innovative alternative: the click mechanism,” stated Nestlé North East Africa Chairman and CEO Moataz El Hout in the launch of the company’s initiative Dorna in collaboration with the Ministry of Environment, CID Consulting and the Fintech solutions company PayMob. Dorna, aiming to boost the recycling of post-consumer plastic, started in November 2019, and was officially launched on October 12, 2020 following 11 months of implementation.
El Hout explained that the giant food & beverage company has a global commitment to make all its packaging material completely reusable or recyclable by 2025. Dorna is an initiative by Nestlé Egypt to take its environmental commitment beyond the borders of its factories and offices, and into the society.
Greater Cairo has long suffered from challenges related to waste management. According to Laila Iskander, Co-Founder of CID Consulting and former Minister of Environment as well as former Minister of Urban Renewal & Informal Settlements, an average of 20,000 tons of solid waste are produced daily in the Greater Cairo region, 10-12 percent of which is plastic being the third most produced waste following paper (18 percent) and organic waste (60 percent). The informal sector collects 50 percent of the capital’s garbage to six informal settlements in Greater Cairo known for being garbage collection and recycling points, and they recycle 80 percent of what is collected; a rate quite high compared to a global average of 32 percent.
In Dorna’s launch event, Iskander highlighted that there is a government direction to organize this vital social and economic sector, including developing relevant laws as well as introducing an official occupational term to define informal waste collectors as “recycling workers”, extending social protection to this segment and formalizing their jobs.
The six garbage collection points in the city are home to value chains that start from collection, to sorting all the way up to the factory that turns this material into a reusable product. With the size of the Cairo population that doesn’t stop growing, the current collection mechanisms cannot keep up with the magnitude of waste, resulting in the waste ending up in dumpsites, landfills, and garbage burning sites, negatively affecting the environment. What is needed is boosting the magnitude of recycling and promoting investment in waste-recycling building on existing value chains.
“The discourse about the environment is changing in the world. Perhaps this historical year 2020 has again reminded us that the wellbeing of humans is linked to the wellbeing of the whole ecosystem,” Minister of Environment Yasmine Fouad had stated in her keynote speech in Dorna’s launch event. “Our role as Ministry of Environment or those working on the environmental agenda is not to increase the magnitude of environmental projects, but rather to integrate the environmental dimension in all plans and policies by the different stakeholders.”
Dorna came to contribute a solution to one of the most pressing environmental and social issues in the country’s busy capital. In the design and implementation of the project, Nestlé Egypt aligned with the Ministry of Environment objectives, and resorted to CID Consulting to leverage the consultancy firm’s rich technical and on-ground expertise in waste management led by its founder, its team and its partners.
Designed to boost the current level of recycling in Manshiet Nasser (one of the six collection and recycling areas in Cairo) by 10 percent, Dorna uses the ‘Reverse Credit System’.
The idea is to reward the players along the waste management value chain for their environmental role and incentivize them to collect and recycle more, focusing on plastic bottles as a main PET packaged product of Nestlé. Waste collectors would receive a monthly reward conditional upon selling an additional 10 percent of plastic for recycling, beyond the amount they would normally collect.
“The quantities have to exceed the Nestlé threshold which CID determined based on complex and extensive field research,” explains Iskander, elaborating that every time a value chain actor makes a sale of PET to the next value chain player, they have to record it on the digital platform Paymob designed collaboratively with CID and Nestlé, and is accessed via phone. Additional verification is done by a field team from Manshiet Nasser.
The incentive transferred to each actor is calculated based on the cost incurred at their part in the value chain.
“For example, the garbage collector/sorter incurs costs of operating a truck, license renewal, labor (truck driver, collector, and sorters), incidental fines, sacks, minor injuries, etc. Others in the value chain incur different costs,” clarifies Iskander to Business Forward in an interview following the event.
The project encouraged 1,050 participating waste collectors to open e-wallets via PayMob’s digital platform, thus creating a system for monitoring and documenting these recycling transactions, and creating a financial inclusion effect. Moreover, women from among the collectors (around 20 percent of total participants) were motivated to create their own e-wallets instead of relying on their male family members, hence benefiting from higher income and empowerment.
Besides the additional social effects, the key environmental result of the project was over 6000 tons of PET plastic getting recovered and recycled in over 12 factories over the last 11 months.
“That is how Nestlé meets its environmental Extended Producer Responsibility (EPR) by covering the cost of the city’s cleanliness in partnership with the government. The EPR concept is applied in European countries in various forms that may not be applicable in Egypt, so we have adapted a system that would work in our context,” says Iskander. EPR is a concept in which the producer assumes the economic and/or physical burden of disposal or treatment of their product post-consumption.
Dorna’s launch event was joined by UN Special Envoy for Financing the Sustainability Agenda and former Minister of Investment, Mahmoud Mohieldin (later that week elected as IMF Executive Director), whose speech highlighted the importance of public-private partnerships and how attracting investment in environmental protection whether by companies who do it as a social responsibility or by specialized ‘green’ companies, reduces the need for borrowing. Mohieldin also mentioned that public investment in a sector positively attracts private investment to it, especially in a time of economic slowdown as we are witnessing nowadays. “It is not enough that one company takes action, but change is about a general culture, public policy and role of institutions.”
Iskander shared with Business Forward her views on how such projects can be scaled up.
“Other Waste management projects relied on formal aspects of the system and focused on infrastructure and equipment features mainly.” The sustainability of such EPR schemes relies on how much they are “linked to both the legal and institutional as well as the social and economic realities of the people engaged in the system, be they government officials in municipalities, informal workers or large factories,” says Iskander, adding that “mainstreaming requires that more packaging companies come on board in partnership with the on-ground actors of the waste system, under the umbrella of the government and in close partnership with the formal recycling industry.”