This week’s Green Scene column in Crain’s Chicago Business: Incentive plans reward consumers who recycle, cut energy use

Two pilot programs launched in Chicago over the last two years are encouraging city dwellers to improve their green-lifestyle behavior by awarding them points redeemable for discounted coupons at local retailers, restaurants and cultural institutions.

Recyclebank hit the Chicago market in August 2009 with a partnership program with the city of Chicago that gave residents of three wards the opportunity to win reward points for recycling. The pilot ended last month, but Recyclebank hopes to initiate a permanent recycling incentive program after Rahm Emanuel takes over as mayor of Chicago later this month, says Atul Nanda, Midwest region vice-president and president of Recyclebank’s Canadian division. The New York-based incentive company has similar programs in 300 municipalities across 29 states in the U.S., with recent expansions into the U.K. and Canada.

A second pilot program, in partnership with the non-profit Citizens Utility Board in Chicago, was rolled out last June to encourage Commonwealth Edison Co. residential customers to cut back on their energy use. It’s modeled after its already-established recycling incentive program, and Recylebank executives hope to expand their concept into the energy-conservation arena.

So far, about 11,000 local Chicago residents are signed up. They get one reward point for every kilowatt hour they save. Recyclebank has the same three dozen or so Chicago businesses and organizations offering discount coupons to these participants as the ones on board for the recycling program. The pilot is expected to wrap up next month.

Crain’s caught up with Mr. Nanda to talk about the programs’ objectives and how local businesses are benefiting.

Crain’s: Can you describe how the recycling rewards program works?

Mr. Nanda: The pilot program targeted 7,200 homes in the 5th, 8th and 19th wards in Chicago. We had all the blue carts on the street retrofitted with radio frequency ID tags. When trucks go by and pick up the recycling, they weigh the carts and read the ID tags to let us know which households are participating in the program so we could record the weight of those carts. We measure that against a baseline that’s collected on those tagged carts before the program starts. We picked a mix of recycling habits among the wards that participated. Generally, there were higher recycling rates in the 19th ward (before the program was launched) and lower recycling rates in the 5th and 8th wards.

Atul Nanda

The program encourages people to take a look at their daily actions and we try to incentivize them to recycle more. Overall, during the course of the pilot, we were successful in doing that. For every pound of recycling, people were rewarded with 2.5 points, which they could redeem for coupons with Chicago businesses and cultural institutions that signed up as partners in the program.

Is it a challenge to get businesses to sign up and offer discounts to consumers through Recyclebank’s program?

It’s been a very easy sell. Businesses realize the value of partnering with us. They understand people will be happy to redeem their rewards because they got them by taking green actions. Of course these businesses want to increase traffic, but they also want to align themselves with green initiatives. We see that with small businesses and large Fortune 500 companies too.

So did you get a lot of businesses and organizations to participate?

We got between 30 and 40 local businesses and organizations to join and offer gift cards. Ideally, businesses within those wards were the best candidates, but then we looked at others with regional flavor. There was no fee to join and they were allowed to promote their business on our website. In exchange, we asked them to honor the rewards they post in our system.

Some of the participants include Treasure Island Foods, Aldi Foods, Leona’s Restaurant, Carson Pirie Scott, the Chicago Children’s Museum, the Shedd Aquarium, Lookingglass Theatre Company and more. Some of the rewards included $10 off a $50 purchase at Carson’s or $5 off $50 worth of groceries at Treasure Island.

We have a lot of national partners that consumers in Chicago could get rewards points towards as well. Some of those include Ziploc, Coca-Cola, and Proctor & Gamble products. Even though the pilot just ended, people that signed up can still use their points they accumulated for 12 more months at all participating businesses.

How did Chicago participants do in increasing their recycling rates during the program compared to other municipalities?

Overall, we realized a 35% increase in recycling rates in those pilot areas from the baseline. We generally always see an increase in recycling. In Chicago, there was a well-established recycling program in those wards so we layered it with an incentive program. In other cities, they may not have had curbside recycling before we started, so their baseline tends to be lower and we may have a higher impact when we come in.

There aren’t a lot of communities in the Midwest with recycling carts already in place, but they may have big bins or boxes. In areas where there were carts already on the street, we’ve generally seen about a 20% to 30% increase in those cities, so Chicago did better than its peers.

How does the energy conservation program work?

We partnered with the Citizens Utility Board and had Efficiency 2.0 measure the energy usage of people who are participating. Efficiency 2.0 is a New York firm that tracks and measures results for energy efficiency opportunities. People have to sign up through CUB’s website.

It’s been going quite well so far. Our 11,000 participants have their monthly bills evaluated and they get a point for every kilowatt hour saved. Our data shows that so far over 1 million kilowatt hours have been saved among those signed up compared to their (energy) usage in previous years. We may even extend the program if the trending continues to look this good.

CUB also last month launched a campaign in Evanston with seven of the larger employers in the area competing to see who can save the most energy. There’s a tie-in to Recyclebank because employees who can save the most energy among those businesses by the end of the campaign will get points that can be redeemed at businesses on our website. Those employers include St. Francis Hospital, Rotary International, Northwestern University and North Shore University Health System.

Do you think Recyclebank’s incentives can really change individual behavior patterns?

Yes. We’re trying to create a sustainable future by rewarding people to take green actions. We’re trying to encourage the world that by taking small steps like recycling and conserving energy, our Recyclebank members can earn rewards from businesses and also make a difference in the environment. That’s the core of our business.

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