Often regulations are the reason why we are compelled to act, we follow the rule because the rule was codified. Often we don’t understand why it was important enough to codify, we just know that now we have to do it.
Some might argue that this is where sustainability really starts, with compliance, but keep in mind compliance means you are doing the bare minimum. You are not adding value, you are only doing what you have to do to avoid fines or other legal consequences. Hardly a hill worth planting your flag as the pride of your organization. Investors and employees tend to look at the value proposition and look for a return on their investment. Be that investments of time, careers or money - they are looking for a return. They are looking for the ability to proudly display the company logo and tell others how they are doing contributing to the greater good.
But that journey still starts with compliance, and when it comes to waste management and recycling, a lot of compliance started with the California Integrated Waste Management Act of 1989, or AB 939.
AB 939 set in place the concept of meeting diversion goals and provided the the oversight board now known as CalRecycle. With oversight comes the concept of planning documents and diversion goals, each require the ability to associate metrics to waste and recycling. After all, how can you set a diversion goal of 25% by 1995 and 50% by 2000, if you aren’t measuring your diversion rate.
Under the umbrella of local government, several municipalities set up ordinances to satisfy those planning document requirements and mechanisms to reach or exceed the diversion goals within each jurisdiction.
It’s probably timely to point out, while I am picking on California at the moment, this isn’t only a California thing. Similarly scripted legislation has surfaced from Alabama to Washington, from New York to New Mexico.
It is the burden of any real estate operation to understand the local laws that regulate their particular parcel, and recycling and waste regulations are no different. Failure to comply can result in risk and potentially place the property in legal jeopardy. The larger the organization, the more complicated this becomes as the legislation can differ greatly from jurisdiction to jurisdiction.
Partnering with a trusted advisor who has exposure to each local jurisdictional regulations can become an important step for those operations that expand into multiple jurisdictions.
How big of a deal are these ordinances? Let’s take a look at San Francisco’s Mandatory Recycling and Composting Ordinance (Environmental Code Chapter 19). Effective July 1, 2019, large waste generators are required to have their refuse streams audited every three years. Each stream has a set contamination rate. If a property fails an audit due to higher contamination in any covered stream, the Refuse Separation Ordinance (No. 180646) requires them to engage (contract) the services of a Zero Waste Facilitator (approved third party sorting company basically) for a period of 24 months. Failure to engage a Zero Waste Facilitator within 60 days of the city order can expose the property to fines of up to $1000 per day, for each day of non-compliance.
That is a pretty serious consequence for a utility that often gets little or no attention.
The warning shot has been fired across the bow, pay attention or we will get your attention through regulation.
Other communities in California have taken notice and if benchmarking ordinances are any guide, you can expect similar measures to be considered in cities facing increased pressures around waste management.
Have you faced similar regulations in your real estate operations? Have you taken steps to mitigate this risk? Is there a technology play that might be able to assist? Do you know if your properties are in compliance?