Company Profile
Name: Waste Management, Inc. (WM)
FLIT Investment Theme: Climate Solutions
Headquarters: Houston, TX, US
Year Founded: 1987
Employees: 48,500
Business Overview: Waste Management, Inc., provides waste management services to residential and commercial customers in North America. This includes recycling services, industrial waste disposal, and specialized services for construction sites. They offer various waste services, including collection, transportation, and material recovery.
Mission: Waste Management is on a mission to maximize resource value while minimizing – and even eliminating – environmental impact so that both our economy and our environment can thrive.
What is Waste Management's Impact Rating?
FLIT Invest Impact Rating: 5 (out of 5)
This rating refers to the positive impact that the company makes in the world through its products and services.
Assessed for impact metrics, including carbon emissions avoided, waste & materials saved, and lives improved.
Since 2010, Waste Management has reduced fleet emissions by 46% by transitioning to natural gas vehicles, using more renewable fuel, and capturing logistical efficiencies. That is 54,470,000.0 metric tonnes of CO2 emissions avoided! In 2021 alone, Waste Management’s services recycled over 15,300,000 tonnes of waste serving over 20,000,000 customers in the US.
Based on our analysis, we found that Waste Management’s work aligns with multiple United Nations Sustainable Development Goals, including:
- SDG 7 Affordable and Clean Energy as they utilize waste to provide alternative, reliable, affordable, and modern energy services.
- SDG 9 Industry, Innovation, & Infrastructure, because their core business contributes directly to the “adoption of clean and environmentally sound technologies and industrial processes.”
- SDG 11 Sustainable Cities & Communities enhance inclusive and sustainable urbanization through proper and sustainable waste management services.
- SDG 12 Responsible Consumption and Production as they provide recycling and waste management services across and aid sustainable consumption and production patterns.
- SDG 13 Climate Action by avoiding greenhouse gas emissions.
Waste Management highlighted multiple other SDGs in their sustainability disclosures to which they claim to contribute. However, FLIT analysts evaluated that these claims were not strong enough, not linked to the company’s core operation, or not intentional. Therefore, FLIT did not attribute company revenues to sustainable development targets and goals in our UN SDG mapping analysis.
What is Waste Management's ESG Score?
FLIT Invest also conducts ESG analysis on every company in our investment themes. ESG framework pertains to environmental, social, and governance risks posed to a company’s operations and how well they address these risks. This is about how well they operate as a business, not what their business does for society.
Operationally, Waste Management has room for improvement. While they provide environmentally positive solutions, they do not prioritize social and governance risks with the same regard. They have published sustainability reports for over a decade and have clear goals for the future. Their reporting referenced the Sustainability Accounting Standards Board (SASB) and the Global Reporting Initiative (GRI) standards to report on additional material sustainability issues. They also provided disclosures aligned with the four key themes of the Taskforce for Financial-Related Climate Disclosure (TCFD). However, based on our assessment of these disclosures, we found gaps in their reporting and risks that could be mitigated better. Read our findings below.
ESG Ratings: MSCI: A (as of May 2022) and Sustainalytics: 16.8 (as of Nov 2022)
- ENVIRONMENTAL: comprehensive data and disclosures around multiple environmental metrics, such as water, emissions, and the company’s energy usage but the reporting on waste is insufficient. Given that they are a waste management company providing recycling solutions, it is surprising that they have limited data available regarding their own waste management. They have done extremely well in their emission reductions, but in recent years these efforts have mainly been seen in purchasing offsets rather than emission reduction. They are Climate Disclosure Project (CDP) verified but not Science Based Targets initiative (SBTi) verified. They are not involved in deforestation.
- SOCIAL: female representation at the board level is significant (33%) but still under parity and underrepresented in the general workforce (19%). BIPOC representation within the workforce is significant (42%) and at the board level (29%). There is no information about the gender pay gap. In 2019, the company set a goal to pay a living wage to all employees, which in 2021, they achieved ahead of their 2025 commitment.
- GOVERNANCE: Waste Management is involved in politics or lobbying at interfering levels and scores –48 on the campaign finance reform scale with a high financial contribution. Less than 2% of shares are held by insiders (executives of the company), and the company is majority-owned by institutional investors (large asset managers, such as BlackRock or Vanguard), alleviating governance risk.
FLIT's Call To Action for Waste Management
Impact Rating: Waste Management is making a positive impact through its waste management services. They are a leading performer in FLIT Invest’s Climate Solutions portfolio with a 5/5 rating.
ESG Performance: It is unclear how they manage the company’s waste and their tolerance of social and governance risks within the business. In the future, FLIT Invest wants to see better waste management disclosures, improved representation and workplace ethics, and the removal of funds from politics from Waste Management.
Why Invest in Climate Solutions?
Our team of experts at FLIT Invest has researched hundreds of investment funds and companies and curated the Climate Solutions investment theme. The Climate Crisis is one of humanity’s biggest challenges today, and the companies in this theme are positioned to grow your money and accelerate the transition to a lower carbon future. These companies cover energy efficiency, water infrastructure, sustainable agriculture, waste management, and pollution control, among others. With an unquestionable demand for investment in climate solutions and structural growth drivers, we believe the selected sectors are well-positioned to deliver attractive financial returns besides the positive environmental impact.
We provide you with transparent data on each company’s sustainability practices to ensure that your investments align with your values. We strongly believe that this investment approach is essential for our future and profitable.
Impact investing is at your fingertips with FLIT Invest – the future is exciting and yours to shape!
Waste Management got you intrigued? To learn more about FLIT Invest’s Climate Solutions portfolio, visit the theme page or read the white paper.
This FLIT impact and ESG analysis summary has been prepared based on company disclosures and analyses as of August 2022.
Sources: FLIT analysis, company disclosures, Koyfin, United Nations, MSCI, Sustainalytics, CDP, SBTi, GoodsUniteUS, Violation Tracker
Footnote 1: Content is for informational and educational purposes only. Any views, strategies or products discussed may not be appropriate for all individuals and are subject to risks. Investors may get back less than they invested, and past performance is not a reliable indicator of future results. The information contained herein should not be construed as, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy or hold, an interest in any security or investment product. Investors should carefully consider the investment objectives and risks as well as charges and expenses of a mutual fund or ETF before investing.
