Empowering Waste Pickers and Improving Working Conditions: How Danone Strengthens Recycling and Supports Base of the Pyramid Workers in Argentina Danone is a leading multinational food and beverage company. As part of its goal to accelerate the transition to a circular economy, Danone supports informal waste pickers who are crucial to waste management and recycling systems in many emerging economies.i This case study focuses on Danone’s work with waste pickers in Argentina, where its subsidiary, Aguas Danone de Argentina (ADA), launched the Recuperadores project to improve waste pickers’ working conditions and empower them, while strengthening local recycling systems. The Challenge Inclusive Employment Solutions ADA wanted to distinguish its premium mineral water brand, Danone’s Ecosystem Fund finances projects that strengthen Villavicencio, as a leader in sustainable packaging by using a inclusion and sustainability, including ADA’s Recuperadores project. percentage of recycled polyethylene terephthalate (R-PET) in its bottles. However, the Argentinean recycling sector could not provide enough R-PET to meet ADA’s goals, and poorly-equipped informal Participation waste pickers were not incentivized to collect PET bottles. ADA saw this challenge as an opportunity to increase recycling rates and to Provides equipment and training to cooperatives address social issues in its supply chain. to improve their operations. Training for waste pickers in health and safety, life skills, and financial Benefits for Business literacy. Resilience Increased PET recycling capability, with 100,000 tons of recyclables diverted from Enabled waste pickers to join a formally- landfills from 2016-2020. In 2022, ADA Supply Chain launched its first fully recycled bottles. registered cooperative and access government Resilience: social security benefits for the first time. Since launching Recuperadores, annual sales Empowerment increased 11%. The project is Access key to Villavicencio’s brand Strengthened cooperatives’ market access to markets identity. and negotiating power with recycling companies. Campaigns and uniforms raise public recognition. Aligns with Danone’s global Benefits for Workers sustainability commitments Demonstrating and ADA’s own sustainability goals. Through the Recuperadores project, waste pickers have been able to Corporate join a formal cooperative. Their earnings are now three to five times Values more than the earnings of informal waste pickers, and they have access to pensions, maternity leave, and other security benefits for the first time. 1 Empowering Waste Pickers and Improving Working Conditions: How Danone Strengthens Recycling and Supports Base of the Pyramid Workers in Argentina Industry: Multinational food and beverage company Size: Operations in over 50 countries with global sales of $26.7 billion in 2020. Base of the Pyramid Workforce: Waste pickers typically come from disadvantaged backgrounds and live in low-income neighborhoods or informal settlements. They have limited education and face significant financial and social challenges, including homelessness. How Danone Puts Inclusive Employment Solutions into Practice Danone is the lead funder for the Recuperadores project, launched in 2011. Its key delivery partner, Fundación Avina, is responsible for Empowerment: Support self-organization of day-to-day project implementation with 48 cooperatives across 38 informal workers cities.ii The Recuperadores project integrates informal waste pickers into cooperatives, offers administrative support to formally- Advancement: Build capacity for self-employment register cooperatives, and provides training and equipment to operate them efficiently. Since the project began, some 5000 waste pickers The Recuperadores project has invested in equipment have been formally integrated into 48 cooperatives. When waste to expand cooperatives’ collection and sorting capacity, and pickers join a formal cooperative, they can earn three to five times more technical assistance to improve their operations. The project also than informal waste pickers, and they become eligible for a monthly provides training for workers on health and safety, life skills, and income provided through the government’s social security system.iii financial literacy. These investments in cooperatives’ equipment The project also strengthened cooperatives’ market access and workers’ capacity have improved cooperatives’ productivity by facilitating their collaboration, which has improved their and the volume of recyclable material processed per worker. This negotiating power with recycling companies. This collaboration also enabled higher, more stable incomes for waste pickers. also created more opportunities to bypass intermediaries and sell recyclable waste directly to the recycling companies, enabling cooperatives to secure the best possible prices. Resilience: Improve access to benefits When waste pickers join a formally-registered “When we first began, all the waste pickers cooperative they are able to access government social security were selling to intermediaries and not directly to benefits such as pensions and maternity leave—often for the first time, as these benefits are not available to informal waste pickers. recycling companies … they were ultimately losing This access was particularly important when COVID-19 lockdowns money.” kept waste pickers at home. Through their participation in a formal cooperative, waste pickers were able to access financial support, María Ayanz, Senior Sustainability Analyst, ADA both from the government and from the Recuperadores project. 2 Empowering Waste Pickers and Improving Working Conditions: How Danone Strengthens Recycling and Supports Base of the Pyramid Workers in Argentina Empowerment: Recognize value of work Access to markets The project conducts awareness-raising campaigns The Recuperadores project has become a key feature that highlight the value of waste pickers’ work. It also provides of Villavicencio’s brand identity and marketing. Having a socially waste pickers with uniforms that give them a professional identity. responsible brand, which leads the market in the use of R-PET, has A recent ADA advertising campaign prominently featured the boosted Villavicencio’s sales performance. After launching its first Recuperadores logo on Villavicencio bottles, along with a QR public awareness campaign about recycling in 2015, Villavicencio’s code that consumers could use to learn more about the social year-on-year sales increased by 11 percent, compared to a impacts of the project and the importance of waste picking. ADA declining trend prior to the campaign. This success led ADA to also contributed to the development of an online platform that launch an advertising campaign that prominently features the supports the participation of local municipalities and companies Recuperadores logo on the Villavicencio bottles (see Figure 1). in recycling initiatives, raises awareness about urban waste management systems, and increases recognition of the value of waste pickers’ work. Demonstrates corporate values The Recuperadores project aligns closely with Danone’s global sustainability commitments, as well as ADA’s own sustainability goals. As noted, as a result of the company’s efforts over more than a decade to formalize and strengthen recycling systems in Argentina, ADA has been able to overcome obstacles to sourcing R-PET. Since 2015, Villavicencio has used a minimum of 50 percent of R-PET in its bottles, and in 2022, the brand launched its first fully recycled bottle. By 2023, the brand aims to collect 100 percent of the plastic it produces. Reputation and risk management The Recuperadores project has secured ADA’s Figure 1: Villavicencio bottles with branding linked to the Recuperadores project position as a leading private sector voice on recycling policy in Argentina. While no statutory recycling requirements were in place in mid-2022, ADA has gained valuable recycling experience ahead of legislation that is expected to require companies to take financial The Benefits for Business: and/or physical responsibility for the treatment or disposal of their Danone’s Experience products after consumers use them. It is also strategically positioned to participate in government consultations on any new regulations. Supply chain resilience The Recuperadores project has significantly increased PET recycling capacity and recycling rates in Argentina. Between 2016 and 2020, 100,000 tons of recyclable materials were diverted from landfill by the project. Importantly, ADA has secured preferential access to R-PET supply through its longstanding contract with Ecopek, a company that purchases PET from the cooperatives. ADA aims to further increase the volume of PET collected in Argentina by increasing the number of Recuperadores cooperatives from 36 to 40. 3 Empowering Waste Pickers and Improving Working Conditions: How Danone Strengthens Recycling and Supports Base of the Pyramid Workers in Argentina Endnotes & Sources i Danone. 2018. DANONE ECOSYSTEM: Handbook on Inclusive Economy. Recycling and Packing Cycles in Action. Paris: Danone. http://ecosysteme.danone.com/wp-content/ uploads/2018/01/Danone-Ecosystem-Fund-Handbook-on-inclusive-economy.pdf Technoserve. 2021. Danone Ecosystem Fund Evaluating the Business and Impact Case of ii Cartoneros. Internal report. Unpublished. iii Ibid IN PARTNERSHIP WITH 4 Empowering Waste Pickers and Improving Working Conditions: How Danone Strengthens Recycling and Supports Base of the Pyramid Workers in Argentina