Not Just for Profit
By Gabriella Huerta
Evan Goldberg"Pickers" bring the paper they gather to be further sorted by "mayoristas" before it gets trucked away and sold to companies like Kimberly-Clark.
- Mayoristas run informal recycling businesses, working as the middle man between pickers and larger companies.
- Emory students Sherezad Rehman 15MBA and Brian Phelps 14MBA met with mayoristas to find ways to improve and expand the existing recycling structure.
- Once the paper is delivered to Kimberly-Clark, it's unloaded onto a scale and weighed.
From the outside, it looks like just another gated, working-class home. But behind the whitewashed walls and metal gate is the beginning of a paper-recycling business in Santa Cruz, Bolivia. Here Goizueta Business School MBA students are confronting the enormity of a task presented to them by Kimberly-Clark.
This past August, Social Enterprise @ Goizueta (SE@G) sent a team of seven students and one professor to Bolivia for 10 days to conduct an in-depth study on the feasibility of developing a recycling infrastructure in Santa Cruz.
Given its history of political and social conflict, Bolivia is one of the poorer and less-developed countries in Latin America. But during the past few years, the country has experienced modest economic growth after the discovery of its natural-gas reserves, leading to minor population booms in cities such as Santa Cruz. And with more people comes more waste.
“In Santa Cruz, like in most third-world countries, the waste-recycling infrastructure is not very robust,” says Tara Sconzo 14MBA, a marketing student who also works as the finance and operations manager for an Atlanta nonprofit serving inner-city youth. “People we spoke with guessed that about 2 to 3 percent of recyclables are currently being recycled.”
Figures such as these prompted the Kimberly-Clark operations in Bolivia to discover what it would take to develop a formal recycling model, and they invited a team from Goizueta to help them.
Part of the marketing strategy includes educational outreach to increase awareness of the value of recycling in Bolivia. With the help of local organizations, Sconzo says they hope to speak at schools and events.
A recycling business in Santa Cruz ideally would serve a two-fold purpose: sourcing discarded paper locally for Kimberly-Clark’s Bolivian production and increasing the amount of recycled materials from less than 5 percent to almost 60 percent.
Although Kimberly-Clark plans on using only paper to recycle into its products in Bolivia, its operations team asked the Emory students to create a comprehensive plan that would benefit the city and nation at large to recycle more than just paper.
Impact in Bolivia
The recycling infrastructure in Santa Cruz is small and informal, and rests on the backs of “pickers.” Sconzo says pickers are people in Santa Cruz earning an extra buck by picking through landfills in search of resources such as paper to sell to agents known locally as mayoristas. Mayoristas further sort the gathered paper and sell it to larger firms, such as Kimberly-Clark, to be recycled into products like egg cartons.
Sconzo says her team’s hope is to build on that existing infrastructure, not obliterate it.
“For me, the important thing about development is not coming in and telling people what to do and how to do it,” says Evan Goldberg 08C 14MBA, another student on the team. “It’s having the people there locally saying ‘This is what I think we can do, this is how I think we can do it,’ and sometimes all they need are the resources, knowledge, or help doing that.”
Kimberly-Clark Bolivia has agreed to buy any locally sourced paper, potentially up to a couple thousand tons at market price. This would replace the current model where the company imports paper to meet its production needs.
The academic director for SE@G, Peter Roberts, accompanied the students on the 10-day trip to Santa Cruz.
Roberts, also a professor of organization and management, says one of the project’s goals is creating better and higher-paying jobs for Bolivian pickers. (Pickers earn about 85 cents a day.) With firms like Kimberly-Clark paying market prices for paper, they could earn competitive wages instead.
But before a local business model like this can be developed, many questions still need to be answered. Is there enough paper waste to sustain this type of business model? Can recyclable waste be sorted before going into the landfill? How much government and community support needs to be gained before moving forward? Questions of this sort have Emory’s students working hard to create a solution.
Impact on students
As one of the founders of SE@G, Roberts says the program was started to encourage students to think differently about profit. The organization seeks to explore the nexus between traditional for-profit and nonprofit sectors, both overseas and here in the States. “We can create learning opportunities that create real impact,” Roberts says.
Once the program started, ideas for summer projects came flooding in. However, Roberts ran into problems when most students couldn’t take off several weeks during the summer to go overseas. Given that SE@G students are working summer internships and full-time jobs, Roberts says, a solution was needed to allow students to fulfill their other commitments.
So, instead, SE@G developed a program where students spend four to five hours a week meeting and working on the feasibility study in addition to their classes and jobs, then spend 10 days on the ground overseas.
SE@G formally launched a year ago and has sent groups of students to Ethiopia, Honduras, and now Bolivia. Because many of these developing countries have little existing infrastructure in place, students have the opportunity to meet with government ministers, heads of banks, and even a president—as well as consult with countless doctors, architects, and engineers.
For MBA students participating in SE@G’s Global Feasibility Studies program, the opportunities to use their degrees in a real-world setting are almost limitless. “For anyone who wants real-world experience,” Roberts says, “this is an incredible opportunity.”
Impact on the world
“One of the more important things the business school is doing, through SE@G, is encouraging business students to think a little bit differently about profit,” says Goldberg, who also serves as associate director of Emory’s Office of International Affairs. “And about how they can impact the world through the things they’re learning at the business school.”
Some view social business models such as the one SE@G is trying to establish in Bolivia as the future of international development. Together with Kimberly-Clark, Emory students are trying to develop a business model that generates just enough profit to be self-sustaining and benefit the community.
The students are now in the final phase of the global feasibility study. When they’re finished, they will present their proposal to Kimberly-Clark for review. If accepted, their proposal will enter implementation, where new challenges will arise.
Roberts says so far each of these projects has looked very good on paper, but when it comes to implementation, they struggle to find investors. Traditional business investors aren’t eager to invest in a socially oriented nonprofit in the developing world, and philanthropic organizations aren’t interested in supporting for-profit programs.
But Roberts isn’t discouraged by the challenge. He has long-term hopes for the impact the organization can have and is working to increase its capacity to invest. He believes that as social business models continue to rise in popularity, investors will turn up—investors who think differently about profit.
“I personally believe that ultimately if we’re going to be a capitalist society moving forward,” he says, “then we need to be comfortable with our capitalists doing more than just making money.”