High-tech garbage — broken computers, mobile phones, fax machines and so on — is a serious hazard. Much of it ends up in landfills and its components, which contain toxic chemicals, often contaminate groundwater and harm the environment. In Chile, a social enterprise named Recycla seems to have found a solution to this problem. Led by CEO Fernando Nilo Nunez, Recycla employs former prisoners to recycle components of high-tech waste and deliver them to potential buyers. Nilo Nunez told Universia Knowledge at Wharton in an interview that Recycla’s business serves a triple bottom line: the company, society and the environment.
An edited transcript of the conversation follows:
Universia Knowledge at Wharton:Recycla has been described as the first and only waste recycling social enterprise in Latin America. What inspired you to launch it?
Fernando Nilo Nunez:I strongly believe that we should follow our dreams. My dream was to solve the problem of [electronic] waste — [such as discarded] faxes, DVDs, cell phones, computers. They go to landfills and contaminate the water and land. For me, one of the beautiful parts of being young is [to think in terms of a] revolution. So I wanted to make it my own real revolution. That was my dream. This was why I founded Recycla.
UKnowledge at Wharton:How serious is the problem of electronic waste in Chile? Can you give a sense of the dimension of the problem?
Nilo Nunez:In Chile, Latin America and the world this is a huge problem. It’s unsolved as of yet. In Chile, just to give you one figure, we have 19 million people, but we have 20.5 million cell phones — [so there are] more cell phones than humans. And they all go to a landfill at the end of their life. In Chile, we use and buy on a yearly basis two million computers. So it’s a huge problem. Only 5% of the e-waste is properly recycled by us, and the rest is a pending challenge.
The same thing happens in Latin America. The same thing happens in Europe and the United States. This is a real problem, unsolved, and this is the challenge: How can we solve this market failure, using a solution that benefits society?
UKnowledge at Wharton:Can you explain the solution that you’ve found? And what was your innovation in this sense?
Nilo Nunez:We talk about social innovation. What is the meaning of that? There are people in jail for different reasons — they are there for 10 or 20 years, and then they get freedom. After that, they are out in society and they need a decent job, but nobody is offering them a decent job…. So, our social impact is to offer green jobs for ex-inmates; people who were in jail are given a second chance in their life. I strongly believe that everyone in society deserves a second chance in life, just like you or me. So this is why we’re offering a second chance to people: We are recycling behaviors. At the same time, we are recycling technology. By doing both, [we have a big impact], and this is our dream.
UKnowledge at Wharton:Can you explain a little about the logistics? How does it work?
Nilo Nunez:We started with a business-to-business model. My customers [include] IBM, H-P and Canon — I would say original equipment manufacturers. We create a contract, we send a truck, and they pay us a fee for the service. We take [their waste to] our facilities, and our laborers start dismantling all the pieces. We export [those pieces] to Europe to recover the raw materials. So it’s a service. It’s in a recycling facility for e-waste — the new trash of the century.
UKnowledge at Wharton:You referred to the fact that you operate this as a social enterprise. Could you explain the difference between the way a conventional recycling business might operate and your experience in running it as a social enterprise?
Nilo Nunez:The main difference is that a social entrepreneur like me [wants] to change the world, and to change the world means [having] a different way of thinking…. [We visit] schools and universities in Chile [and other countries] worldwide. We want to spread the message. We want to provoke students to change their behaviors and to [help create] a new, different world.
Some businessmen think, “Why are you going to business schools? You are wasting your time. You should just be worrying about [your] business….” [But] for us, it’s very important to have a social impact [on] the new generation, to have a long-term relationship with academia, because this is the way to change the world [in terms of] social justice and government [policy].
UKnowledge at Wharton:What are some of the main challenges you’ve faced in building Recycla? Can you take us through some of the challenges and how you solved those challenges?
Nilo Nunez:At the beginning, nobody believed in us, in our product — not even the customer. It took two years of knocking on doors to get a customer, because there was no awareness. And then we created a book for business people [that addressed the issue]: What is the problem? Why do we need to recycle this material properly?
[To many, it seemed] weird to [suggest having] five or 10 people from jail working in the same place. It sounded very strange. I ran into some problems. I almost went to jail because I was [seen as] the leader of [a gang]. When you undertake a social innovation, you always have problems. But the best thing to do is to swim against the current. Beautiful kites should go up against the winds, and this is the challenge.
UKnowledge at Wharton:What did swimming against the current teach you that other social entrepreneurs can learn from your experience?
Nilo Nunez:That we should be prepared to [confront] “no” as an answer. Social entrepreneurs should be prepared to work against challenges. It’s not easy to be a social entrepreneur, but [with] passion, tenacity, sharing the dream, networking. … you can see change [happen].
UKnowledge at Wharton:How much of your dream have you achieved so far, and how much remains to be done?
Nilo Nunez:First of all, my dream was to change behavior in Chile, and I am proud to say that I am doing it…. The next dream is to scale up. I think we can solve the same problem in Latin America in rural Colombia, Bolivia, Mexico, Brazil. What about India? What about China? So the dream is big.
UKnowledge at Wharton:To what extent does Recycla operate in other countries? Are you just in Chile?
Nilo Nunez:At this stage, just Chile, with nationwide coverage.
UKnowledge at Wharton:And do you have plans to expand into the rest of Latin America? And India? China?
Nilo Nunez:Yes, that is a big dream. We have to do that.
UKnowledge at Wharton:Because as you know, India alone is adding something like six million new cell phones every month, totaling about 600 million cell phones in India.
Nilo Nunez:Well, we can figure something out in India, and this is why I would like to invite students to contact us, to visit our website. We need time. And maybe the talent. This is why we’re visiting schools, too — looking for talent for the challenge….
UKnowledge at Wharton:Whenever we talk about social enterprises, very often we talk about the “triple bottom line”: Is it a sustainable business? Does it have social impact? Does it support environmental sustainability? Can you explain how Recycla functions along these three metrics?
Nilo Nunez:Yes, I will say that our future activities need to create three pillars. In our case, “social impact” means including poor people, [but also] including young students from the top business schools to help us make a social change. This is the social impact.
In terms of the environment, we are recycling [the equivalent of] almost six stadiums [worth of waste] per year….
The other side is the economic side. We are creating our own sustainability. Nonprofit organizations always need donations, always need some support and always are suffering because there are too many problems [that need attention]. So it’s better that each initiative creates its own earnings, so it can survive.
UKnowledge at Wharton: If you were to look back on your career, not just with Recycla, but even before that, what would you consider to be the biggest leadership challenge you have faced? How did you overcome that challenge, and what did you learn from it?
Nilo Nunez: I would say that having the chance to [present our ideas to] the leaders of the world has been very [remarkable]. And to call the attention of a new generation to what we are doing is an amazing opportunity, too. We solved the problem [in Chile] with passion, tenacity and not accepting “no” as an answer. This is the main formula, and the new challenge is to scale [the program]….
UKnowledge at Wharton:What kind of new challenges do you anticipate as you scale up? Let’s say you expand to other parts of Latin America or to other parts of the world, what sort of new challenges will that create for you?
Nilo Nunez:First, we need to find in each country anchors that love the triple bottom line. In other countries, people [will likely] see Recycla as a business opportunity. Okay, it could be, but that’s one pillar. We are looking for a local partner that loves the social change and environmental protections [that come with the business].
UKnowledge at Wharton:Do you have any advice for social entrepreneurs, based on what you have learned so far?
Nilo Nunez:I would say to keep dreaming, keep working hard, keep networking and keep learning and recycling your ideas every day. That’s the main thing that I can say at this stage.
UKnowledge at Wharton:One last question. How do you define success?
Nilo Nunez: I don’t like that word…. I feel I have a lot to learn, and I think we’re doing part of the job [well]. So for me, it’s more important to work with a sense of why we care about this life — [that is,] to do something different, not what everyone else is doing.
