In a digital economy where almost anything can be traded, a modern-day visionary had the insight to promote scrap plastic as a transactable commodity, helping uplift the lives of the poor who depend on waste collection.
A fintech startup, Plastic Bank is a profit-first social enterprise founded by David Katz. It is a banking application that monetizes good plastic ethically collected by partner communities.
“We are a business-first platform built on a social paradigm. We create the space for a financial transaction to digitally occur by harnessing the unique capability of plastic as a clean and reliable source of income,” Katz said. The company operates in countries where poverty incidence and plastic pollution are high.
Plastic Bank has been touring the world to gather ocean-bound plastics that have strayed far into the international waters. Starting from Haiti, Plastic Bank headed to other plastics-heavy countries like the Philippines, Brazil, Cameroon, Egypt, Indonesia and Thailand.
Plastic Bank created a plastic-offset ecosystem that supports communities, protects the ocean from further degradation and provides sustainable corporate solutions for companies and brands.
The Philippines has the biggest number of participants among the seven economies where Plastic Bank has presence. Plastic Bank’s ethical collection system has resonated among 8,000 registered members in the Philippines, representing nearly a fourth of the 37,000 members globally. Plastic Bank started operating in the Philippines in 2016.
Plastic Bank teams up with plastic collectors and aggregators like junk shops and institutional partners who recycle the resource material, allowing the reprocessed plastics to reenter the supply chain as high-value products used by mostly by retail and manufacturing sectors.
“Our collection members are making a profound impact on our planet and our communities with each day they spend on preventing plastic from entering the ocean. We aim to give back by providing our most inspiring members with a transformative experience that fosters moments of joy, whether that means helping them reunite with their families or offering financial assistance to fulfill their aspirations,” Katz said.
With collection points in Cavite, Laguna, Metro Manila, Naga and Palawan, the enterprise has helped thousands of families and individuals rise from a state of abject poverty to become financially-abled individuals and entrepreneurs.
Plastic Bank redefined the material not as waste, but a resource commodity and reinvented the identity of waste pickers as plastic collectors, in an attempt to dignify the practice which is Katz say, is a decent form of livelihood.
Katz said that for the longest time, waste collectors were stigmatized in their profession, but the platform that Plastic Bank offers elevates waste pickers to resource material collectors.
Tens of thousand of Filipino families are benefitting from collecting plastics and selling them to Plastic Bank though the collection centers. Collection community members are paid in cash, which is the preferred currency for most Filipinos who are still digitally-challenged. The bank also offers to pay members through bank account if they have one.
Plastic Bank makes it possible for reprocessed plastic, known as Social Plastic, to be reintegrated into products and packaging as part of a closed-loop supply chain. The enterprise is providing means to prevent ocean-bound plastic from reaching the waters and collect plastics that have found their way into the water system.
Caring for members
In mid-August 2023, Katz and his crew visited the Philippines to honor outstanding members. Plastic Bank distributed monetary incentives, health assistance and, to some, small livelihood business that will add to the member’s income.
Katz said the bank is quite generous to members who are accorded an accident insurance, a well-thought of incentive to safeguard their well-being from untoward events as resource collection has its risks and perils.
“Picking up waste is quite risky and could result to different circumstances. So what Plastic Bank here in the Philippines can do is to also provide them accident insurance in case there are emergencies. That is on top of the market price that they receive from the junk shop that they deliver the scrap. We actually give extra, so many of our collectors receive national healthcare. We facilitate that and often, we give extended health benefits as well,” he said.
Similar to a real bank, members are allowed to borrow money by simply pressing a button on the Plastic Bank app. Loans taken can be paid using plastic as currency, a value proposition unique to Plastic Bank.
The bank gives value to plastic by buying the materials and allowing third-party entrepreneurs to up-cycle the scraps collected from partner communities. Plastic Bank gives premium to ethically-sourced plastic. While other aggregators buy at P8 to P15 per kilogram of the material, Plastic Bank buys at twice the market price.
Lasting partnerships
By partnering with hundreds of local junk shops, aggregators and processors, Plastic Bank empowers its network, giving them access to a digital technology that allows them to manage their supply chain.
“We also work with recycling partners to build and process the material which are bought by our brand companies and there also recyclers who can export the recycled units for US dollars instead of selling them locally,” Katz said.
In more than eight years that Plastic Bank is operating in the Philippines, it teamed up with big manufacturing brands such as Coca-Cola Philippines, Watsons, Philusa Corp. and Ever Bilena Cosmetics Inc. that are buying back the scrap plastic collected through the bank’s system that they recycle to be reused in the sustainable circular packaging ecosystem.
Plastic Bank is building a profit solution for partner brands and simultaneously creating a space where companies are given a most convenient way to comply with their environmental, social and governance commitments, especially now that the Extended Producers Responsibility Law is enacted.
Katz is proud that Plastic Bank gives corporations the option to make the right decisions for humanity.
“Everything is traceable. We are a blockchain-enabled company where every single transaction including the fine details of where, who, how much, the volume and time of transaction is recorded. In a sense, we are a third-party verifier for our partners’ ESG compliance. We take away all encumbrances and provide them a good marketing story,” he said.
Exchanges are recorded through its proprietary blockchain-secured platform that enables traceable collection, secures income and verifies reporting.
Plastic Bank aims to make the platform a household buzzword. It is building a strong social media presence to encourage people to come together to create a “wasteless world.”