Small Business Role in Sustainability is Largely Untapped
WAFA DINARO, EXECUTIVE DIRECTOR, OF THE NEW ECONOMY INITIATIVE, AND A LEADERSHIP COMMITTEE MEMBER FOR SUSTAINABLE BUSINESS NETWORK DETROIT During an internship with a recycler in New York in 2020, entrepreneur and environmental scientist Madeline Miller watched as the waste materials from textile companies were being processed in the facility, and something entrepreneurial clicked. In the “waste,” she saw home-building insulation that could be reused back home in Michigan while increasing energy efficiency in Detroit homes. From there, NexTiles was born, a Detroit-based textile recycling company that produces EcoBlow – a nontoxic, eco-friendly building insulation made entirely of recycled pre-consumer fabric from manufacturers, particularly automotive interior suppliers, and fashion designers. While her experience reflects the role small businesses can play directly in terms of creating eco-conscious products, every small business, no matter their product or service, can implement eco-friendly business practices. Unfortunately, many of the same challenges that prevent small businesses from thriving in general – limited access to capital and lending; a lack of technical assistance in finances, marketing, and business planning; and the inability to tap into a business support network for grants and resources – will prevent them from reaching their full potential in sustainability. Yet, nearly all the factors that help small businesses drive economic resilience position them to be a transformative force in sustainability. SMALL BUSINESS DRIVES SUSTAINABLE ECONOMIC RESILIENCE First, there are the sheer numbers. There are 33.2 million small businesses in the U.S. accounting for 99.9% of all businesses. They make up our largest employer group and accounted for almost two-thirds – or 17.3 million – of all jobs created from 1995 to 2021, according to the Small Business Administration. And they continue to grow, in 2022, there were more than 5.1 million new business applications filed. Second, small businesses are nimble and can move quickly to drive innovation. They are fueled by their founders’ ideas and life experiences and are often created to provide solutions to real-world problems impacting friends, families, or communities. Third, small businesses are invested in the social fabric of their communities and exist all around us, giving them nearly universal reach. They have a vested interest in their neighborhoods thriving that stretches well beyond business and adds further incentive for them to succeed. At the New Economy Initiative, we’ve spent the past two decades building a support ecosystem that helps entrepreneurs, startups, and small businesses build a more resilient economy within their own communities and Southeast Michigan. In the case of NexTiles, we provide funding to the Centrepolis Accelerator at Lawrence Tech University, which has played an integral role in NexTiles’ product development and growth. It is why we support similar nonprofit and locally grounded organizations that provide technical assistance, lending, and connections to small businesses throughout Southeast Michigan. Sustainability is the next logical step in expanding our mission. That is why the New Economy Initiative is pursuing a sustainability program to integrate with our traditional business support activities. NEI SUSTAINABILITY PROGRAM GOALS That program can accomplish a few major goals that will help small business play its role in sustainability by mirroring much of what we already do. It would include raising awareness about the bottom-line business benefits of sustainability that can be achieved through energy efficiency. It can help businesses identify how to integrate sustainable practices into their business plans that reduce waste while increasing efficiency and profits. It can help them access resources and grants available to increase sustainability. Chief sustainability officer is one more a hat small business owners are asked to wear – we need to provide a small business ecosystem that empowers them to fulfill it. Until we do, the collective power of our largest employer group to create a world that lasts for future generations is largely going untapped. Source for data: https://www.uschamber.com/small-business/state-of-small-business-now Be sure to subscribe to our newsletter for regular updates on sustainable business practices in and around Detroit.
Creating a Closed-Loop Supply Chain for Recycling in Michigan
The Department of Environment, Great Lakes and Energy (EGLE) is working to grow a Michigan circular economy through recycling. Matt Flechter, recycling market development specialist at EGLE, says recycling programs in Michigan involve building a strong supply chain so the valuable commodities that businesses need make their way from the curb to new products. SBN Detroit spoke to Flechter to find out more. Q: Tell me about your role when it comes to recycling. A: For the past 22 years, I’ve been working toward the goal of helping Michigan regain a leadership position in recycling. I work for the Department of Environment, Great Lakes and Energy (EGLE), and my role is focused on recycling market development. This essentially means making sure there is a process in place for the materials that are put into dumpsters by manufacturers and businesses to make their way into sorted waste materials and then into reproduction, ultimately to make new products that are developed in Michigan. This sounds straightforward in its most basic terms, but recycling is a complex system. It takes motivated individuals to know that there is a better use for the materials that are being disposed of. It takes investing in the collection and hauling of materials. It takes reproduction and remanufacturing, and it takes having a market: end users that then purchase and/or use those materials. The last piece of this complex puzzle is ensuring that there are entities in place for each part of the cycle – and that they are connected – creating a fully functional closed-loop supply chain. Q: What are the biggest challenges? A: Recycling markets are diverse. Materials consist of plastic, paper, organics, and glass, and each has its own supply chain. Some have ready-made markets. Corrugated cardboard is an example here, as it can be bailed and sent to paper manufacturers for reuse. Finding markets to create a demand pull for a material like glass is more challenging. Another challenge is the geographic location of the manufacturers involved in the reproduction because transportation of materials can get costly. Also, many of these end markets are startups, and they need support and innovation, and new uses to create demand-pull. Good examples of these are Pivot Materials and NexTiles. For all of this to work, and for manufacturers and businesses to move from the use of non-recycled materials to recycled materials, there must be a consistent supply of these materials. So, the supply chains we are building need to be closed-loop, local, and robust. Q: How do EGLE and NextCycle Help? A: To address each part of the cycle I described, EGLE created NextCycle, and we collaborate with partners such as Centrepolis, Michigan Recycling Coalition, and Resource Recycling Systems, a global consultancy. We have made amazing strides in the last couple of years – with momentum coming from our NextCycle initiative. NextCycle is an incubator and accelerator and is designed to connect entrepreneurs, companies, organizations, and communities to technical support, financial resources, and capacity building for recycling, recovery, and reuse initiatives. If someone comes to us with a new idea, that company first applies to one of the NextCycle challenge tracks. There are five challenge tracks: Roads, Public Sector, Recycling Supply Chain Solutions, Organics Solutions, New Innovations, and Technology. They are then selected into a cohort or a team and we provide several areas of support, including technical assistance, research data, business development, funding opportunities, an extensive network, customized mentorship, and more to help get the idea to the next level. We have worked with over 60 teams, and it’s an exciting time when it comes to recycling. Q: How so? A: We are seeing a resurgence and interest in making sure Michigan has a strong circular economy, primarily because there are new people at the table focused on climate goals and deciding how they are going to tell their businesses’ sustainability story. Historically waste and recycling have been seen as an afterthought – we have a problem and now need to fix it. Businesses today are starting to look at fixing the problem before it’s created, which is a big paradigm shift that’s exciting. There is a lot of growth in this sector and there are threads of it in every business in Southeast Michigan. Every business is faced with choices and options to address the triple bottom line. This is also creating new business opportunities. There are broader-based coalitions working to expand recycling access, such as the Polypropylene Coalition and the Food Service Packaging Institute. There are also new people looking to fund. No longer is it just the government growing the recycling system. This increased participation and the growth of the end markets are exactly what is needed for success. Q: What Southeast Michigan businesses are you working with? A: I can give a few examples here. On the collection side, Pink Elephant Events provides zero-waste event services and waste diversion to the events industry, businesses, and nonprofits in Southeastern Michigan. They collect products for reuse, then calculate the impact, so that the business having the event can show a tangible “win’ toward their sustainability goals. An example on the processing side is Glacier. This California-based company identified Michigan as the best place to invest in deploying its innovative robotics technology. We connected them to two materials recycling facilities (MRF)s in Michigan to do so – SOCRRA in Troy and RRRASOC in Southfield – and provided grant funding. An example of end-use is Industrial Sewing and Innovation Center (ISAIC). We helped them to secure funding for equipment to more efficiently turn waste textiles into new products. We are starting to see a truly circular economy forming. The new businesses are feeding off of each other and multiplying. Q: Where does your passion come from? A: There is a huge amount of work to be done in recycling, but it’s a labor of love. I can see the growth potential now. There is funding to grow markets and that has created a clear process and
Smart and Unique Sustainability Start-Ups are Making an Impact in Southeast Michigan
A hardworking number of Southeast Michigan manufacturing companies and hardware entrepreneurs are getting their start at the Centrepolis Accelerator, a nonprofit business facilitator providing access to key resources, a collaborative community, product development, and manufacturing experts with an impetus to keep manufacturing in Michigan. Launched in 2017 by Lawrence Tech, the City of Southfield, and the Michigan Economic Development Corp. (MEDC), the accelerator focuses largely on the areas of climatech, cleantech, and the circular economy. SBN Detroit spoke with two woman-owned sustainability businesses working with Centrepolis to gain insights on the whys and the hows regarding their industry choice, go-to-market objective, and their start-up paths and challenges. NexTiles, a Black-, woman-owned Detroit-based textile recycling, and secondary use company uses textile waste from Detroit’s automotive and apparel manufacturing industries to make eco-friendly building insulation that can reenter the circular economy at the end of its life. The founder and CEO is Madeline Miller. Pivot Materials is a millennial-woman-owned Detroit-based social impact business that specializes in providing sustainable biomaterials by upcycling agricultural waste, including bamboo fibers and rice and coffee hulls. The co-founder and CEO is Kylee Guenther. Q: How did the concept of your business come about? Miller: I was at the University of Miami doing my graduate studies in marine and atmospheric science. My undergrad was in environmental science, and I didn’t know exactly what I wanted to do with my education, but I started studying ocean plastics and then landfill waste and developed an understanding of manufacturing overconsumption and the waste it creates. I then started an internship with a New York-based textile recycling company and began brainstorming secondary uses for this textile waste. I came up with the insulation concept and it stuck. I’ve now been able to combine my Ph.D. research at the University of Michigan School for Environment and Sustainability around the energy burden with the corresponding demand for insulation. It’s been an awesome fit and direction for me. Guenther: My co-founder Raju Patil and I combined our childhood experiences into the mission of our business, Pivot Materials. I’m the second generation in my family to work in Michigan’s plastics industry. I grew up on the shop floor learning about plastics from the bottom up. I’m so proud of my dad and his career, which spanned about four decades in the plastics industry, but even as a kid I was mortified by the amount of waste he helped create. Raju grew up the son of a rice farmer in rural India and had similar feelings about the waste created by the agricultural industry. One-third of all black carbon emissions globally are created by crop burning. We thought we could work on both issues together so we started using agricultural waste to reduce plastic usage while also reducing the amount of agricultural waste that gets burned or sent to landfill. Q: Why sustainability? Miller: Textile waste consumption needs to be slowed drastically and the overwhelming amount of manufacturing waste in the atmosphere needs to be addressed. Our natural resources are being impacted and people are being impacted. They will continue to suffer if we don’t slow down. I want to change lives for Detroiters by using locally manufactured building insulation to create clean jobs, decrease the utility burden on families, increase diversity in the energy industry, divert textile waste from landfills, and contribute to the growth of the circular economy. Guenther: I often repeat in my head “be the change you want to see in this world,” and that’s driven my passion for sustainability. I think it’s absurd that only about 9% of all plastics created get recycled. I also know that plastics aren’t going anywhere. They’re too embedded in our lifestyles and plastic makes a lot of money for a lot of people. So, my passion is to transition away from as much plastic usage as well as other non-sustainable materials while also helping reduce the environmental impact of agricultural waste. Q: Please walk us through your start-up process and your work with Centrepolis. Miller: When I transitioned from Miami to Detroit and had the idea to start the business, I began working with TechTown Detroit. They familiarized me with customer discovery process and helped me to identify challenges and opportunities for my business. Centrepolis has been extremely helpful in the product development process. After we got over the hump of exactly what we wanted to make, Centrepolis came in and helped me identify a plethora of resources, including warehouse space, equipment, product treatment packaging, and marketing. Guenther: I’m really happy to see that Dan Radomski, executive director of Centrepolis started an accelerator specifically for product-based companies. This has been missing in the ecosystem. For us, I think the biggest benefit from Centrepolis has been working with our mentor and Expert-in-Residence, Richard Broo. Richard is a plastics industry veteran with about 40 years of experience in material sciences and project management. Sometimes we have an issue that we think is huge, and he can solve our problem in about two seconds and reassure us that it’s no big deal. This helps us save a lot of time as we grow our business, and it gives us someone to learn on. Q: Are you focused on business-to-business or business-to-consumer? Miller: I work with both. The first part of my business is waste collection and recycling. Here I focus on the automotive and textile industries, so this is B2B. A portion of that waste is then upcycled into eco-friendly insulation, a product I ultimately plan to sell to consumers. Guenther: We’re B2B. We sell our materials to brand owners and manufacturers who already use plastics or are looking to create a greener new product. Q: What are your biggest challenges? Miller: Communicating the value of our business to manufacturers is one of our biggest challenges. There is so much volume when it comes to waste, and it’s cheaper to take it to a landfill than to collect and process it into a new product. Some companies are at the
