Plastic Bank: Turning Plastic Waste into Currency in the Philippines
Amid the growing urgency to protect the environment, a number of companies are finding innovative ways to combine social advocacy with profit-generation. Leading the charge is Canadian fintech company, Plastic Bank.
Plastic Bank has identified the Philippines as a strategic hub for its business model, which aims to empower impoverished Filipinos to be part of a global revolution against plastic pollution. Their approach involves collecting plastic waste for recycling purposes and providing opportunities for individuals to earn through an online platform. The company believes that there is money to be made from waste plastic packaging materials.
According to data from earth.org, the Philippines accounted for the largest share of global plastic waste dumped in the ocean in 2019, responsible for 36.38 percent of the total. Plastic Bank CEO David Katz stated that his business model aligns with the United Nations Sustainable Development Goals (SDGs) by addressing poverty, hunger, and the environment. He emphasized the interconnectedness of these goals, stating that they cannot be solved in isolation from one another.
Although Plastic Bank may sound like a traditional corporate social responsibility concept, it is important to note that the company operates for profit. Katz’s decision to enter this advocacy was driven by the potential financial opportunities it presents, referring to it as a “regenerative model” with an abundance mindset.
The mechanics of Plastic Bank’s operation are straightforward. Individuals interested in becoming collectors of plastic waste, referred to as resource material, can download the Plastic Bank app for free and become members. They can then bring their collected plastic materials to any Plastic Bank branch to be weighed and recorded. The accumulated materials can be exchanged for hard currency, deposited into Plastic Bank accounts, or transferred to e-wallets. The company has also established partnerships with local government units, junk shops, aggregators, and recyclers to create an entire ecosystem of plastic entrepreneurs.
Plastic Bank’s long-term goal is to “gamify” the collection process by providing incentives. By collecting and transacting plastic materials through the platform, individuals can build a reliable track record and eventually access interest-free loans using plastic as a currency.
Plastic Bank has expanded its operations globally, starting in Haiti, Indonesia, Brazil, Egypt, Cameroon, Thailand, and other countries with high poverty rates. In the Philippines alone, Plastic Bank has established over 200 collection branches and gained more than 36,000 members since its introduction in 2016.
Currently, Plastic Bank only accepts recyclable plastics, but they plan to include sachets, which are the most problematic plastic packaging in the country, once the technology for recycling them becomes available.
David Katz argued that if every piece of packaging, sachet, or bottle were immediately exchangeable for a certain amount, such as 50 pesos, it would greatly reduce the amount of plastic waste ending up in the ocean. He lamented that society’s disposal mindset has made it challenging to change people’s behavior towards waste management.
Plastic Bank’s efforts to give value to waste materials have faced stigma. Recycling is often associated with poverty and people are conditioned to believe that throwing stuff away signifies social status. However, according to a study conducted by Plastic Bank in May 2022, collection members in the Philippines can earn a decent income of $100 to $180 per month.
The business model of Plastic Bank has gained traction with multinational corporations partnering with the company as part of their commitment to corporate social responsibility and environmental sustainability. Plastic Bank also serves as a third-party verifier for companies seeking plastic credits. The company provides blockchain-based data, allowing companies to see the impact of their engagement with Plastic Bank.
To date, Plastic Bank has been self-funded by its CEO, David Katz, who emphasized the need to create self-perpetuating business models to address poverty and drive sustainable growth. The company currently has a team of 16 people in the Philippines.
Katz envisions a win-win solution through his global movement. He believes that by giving value to waste materials, everyone benefits, including the environment, consumers, collectors, and the country as a whole. Plastic Bank represents a shift towards a regenerative business model that creates abundance and shared value, diverging from traditional models where conglomerates benefit at the expense of others.
By empowering the poor, of which there are over two billion globally, Plastic Bank aims to instill a culture of giving among its beneficiaries. Katz firmly believes in this vision and stated, “I’m going to die trying” to achieve it.
In conclusion, Plastic Bank’s business model in the Philippines focuses on turning plastic waste into a valuable currency, benefiting both the environment and impoverished communities. Through its innovative approach, the company aims to tackle plastic pollution while creating sustainable income opportunities for individuals.
