The Plastic Credit Exchange

Nanette Medved-Po is an award winning film actress, TV host, model, philanthropist, and business person in the Philippines. She is the founder of GenerationHope Inc. and Friends of Hope Inc. which produces both company branded and co-branded consumer products. 100% of profits from the "Hope" product line are devoted to improving the public school education space as well as smallholder farmer productivity through its agriculture interventions. Nanette is also the founder of the Plastic Credit Exchange, Inc., a non-profit that offers businesses an easy way to be responsible for cleaning up their post-consumer plastic footprint.  In 2017, Nanette was honoured to be a part of the Forbes list of Heroes of Philanthropy. Nanette graduated with degrees in Finance and Entrepreneurship as Summa Cum Laude from Babson College in Massachusetts in 1998. She serves on the Boards of World Wildlife Fund in the Philippines and Winrock International.

The Plastic Credit Exchange wants to demonstrate that business as usual not only no longer works, but that the market prefers to support companies who try to do the right thing and contributes to social good. PCEx takes plastic offset pledges from private companies and aggregates an equivalent amount of post-consumer residual plastic waste from a wide community of aggregating partners, transports it to processors, and provides verification of offset with full transparency. In a “sachet economy” like the Philippines, PCEx helps companies take responsibility to offset their plastic footprint, and prevent waste from polluting our communities and winding up in nature.  Our mission is to make plastic neutrality a reality. Today we have already removed and destroyed over 3,000 tons of plastic from nature and we are looking to expand our network to scale this capability regionally to remove up to 100,000 tons per year by 2022.

The Philippines is the 3rd largest polluter of ocean plastic in the world. Its 106 million+ population produces over 2.7 million metric tons of plastic waste each year - 83% of this is mismanaged and 20% of which winds up entering the ocean through our over 18,000 km of coastline across 7,100 islands. Each Filipino produces anywhere from .1 to .8 kilos of waste each day, about 14% of which is residual plastic which 90% of the population uses. Although upward of 80% of garbage is officially collected, 74% is dumped illegally due to a combination of fragmented policy enforcement, lack of landfills, practice of open burning and corruption. The Philippines' lack of investment in collection, segregation and processing infrastructure impacts not only the food security and economic and physical health of the Filipino -  it also impacts the health of our waterways and oceans which are the common heritage of man. PCEx looks to help solve this problem of residual plastic waste leaking into nature. 

Globally this problem is 381 million metric tons each year with approximately 8 million tonnes entering the ocean.

The Plastic Credit Exchange is committed to building a community that seeks out the most environmentally sound solutions for the reduction, collection and removal of plastic waste while working together towards a common goal: No plastics in nature. We aim to complete our grassroots network of women store owners across all 42,000 districts in the Philippines to be catalysts for sustainability - providing not only an avenue for residents to monetize their plastic through our waste-to-cash program, but encourage discipline in the treatment of post-consumer plastics, reduce leakage into the environment and educate future generations about the benefits of higher-level waste management processes.  PCEx takes plastic from these communities and transports them to pre-vetted processors who have committed to disposal in compliance with the standards of the Department of Environment and Natural Resources. This process is paid for by a market based mechanism which takes pledges from private companies who wish to be responsible and offset their plastic footprints through our platform. We are currently working with the City of Manila that has made our program a priority and will hopefully use the outcomes of our pilot on their 897 districts as a basis for plastic policy moving forward. 

Beneficiaries start at the aggregator level where we utilize storefronts of women in each district to purchase plastic waste from the community. This activity could increase the revenue of store owners by US$3,360 per year.The community residents benefit not only from an increase in household income from plastic sold, but they will benefit from healthier environments which we anticipate to be cleaner by 18,000 tons per year for the City of Manila. Informal waste picking communities benefit by coming into a formal system which could allow them to increase their incomes by an estimated US$900 annually. The Local Government Units benefit as we will be providing storage vans which will help them comply with the Solid Waste Management Act that requires each district to have a Materials Recovery Facility. We will also provide manual balers to assist in the safe efficient storage and hauling of the plastic. Our market-based solution subsidizies the LGU’s collection, transfer and processing of waste. Private companies benefit by having a verified and transparent way to be responsible to the public for the recovery and removal of their plastic footprint. And ultimately, we hope that nature benefits from the reduced leakage of plastic into the environment. 

PCEx aims to elevate informal and formal members of the community to become part of a market based system which ensures better incomes, healthier environments and improved opportunities. We intend to build a strong network of catalysts for change and sustainability that will encourage discipline in the treatment of waste, reduce leakage into nature and educate future generations about the benefits of reducing, reusing and recycling through city and private sector communication campaigns. Finally, we aspire to use our learnings as a model for best practices to share with others who are navigating their own paths to environmental sustainability. 

The Plastic Credit Exchange’s story began in the Philippine bottled water space under the brand HOPE, the Phillipine’s first B-Corp. HOPE, in partnership with the Department of Education, commits 100% of profit to the building of public-school classrooms. To date we have built over 100 classrooms through the sale of over 34 million products and have impacted over 17,000 students. As HOPE embarked on helping solve the problem of classroom shortages, we recognized the impact our approach could have on the environment. This realization sparked HOPE’s commitment to finding a plastic neutral solution to our packaging. This was achieved in 2018 by taking our plastic footprint from post-consumer sources and having its resources recovered by environmentally compliant processors. Realizing that a small player in a low margin business could afford to be responsible for 100% of its plastic footprint, we decided to share it publicly in case we could help other companies find their own paths to neutrality. The interest was immediate and overwhelming prompting HOPE to establish the Exchange in 2019.  Today we have recovered over 3,000 tons of plastic. The Plastic Credit Exchange’s vision is to replicate the concept of a "carbon credit" for plastic. 

I sit on the Board of WWF. Before the Board, I was on the National Advisory Council. I have been a diver since I was 7 and I am passionate about the environment. I see the terrible damage that plastic waste has on nature and how this impacts food security, health and the future of generations. I am also a businessperson operating in a poor country so I understand that plastic cannot always be safely replaced. But, I try to be a problem solver and I am an optimist. So when we proved, at HOPE, that businesses can afford to pay to recover and safely remove their plastic footprints post-consumer, I felt the need to create a movement. There is an opportunity now with companies trying to respond to a global outcry for sustainability. We have a platform. I would like to use it to help companies explore their own paths to neutrality - show them that consumers care and will support products that try to do the right thing and invest in shared value.  I am hoping that the Elevate prize might help empower this movement and allow us to move beyond our borders to scale.  

Because we have already done it. We created the non-profit Plastic Credit Exchange to try and leverage our platform to convince other companies to make the choice to take responsibility for their impact on the environment. Today, we have cleaned up over 3,000 tons of post consumer plastic trash.  I also recreated myself from being an actress to launching the HOPE brand in 2012, with no skills in the business space and fulfilled all roles from salesman to delivery person. HOPE has sold over 34 million products in thousands of retail partners across the country, built over 100 public school classrooms and impacted over 17,000 students. We have an agriculture program which has more than 1,000 partners where we provide training, material inputs and market access. We aim for the highest of standards even as we are small , being the 1st to achieve plastic neutrality in the country, the 1st to devote 100% of our profits to social investments, and the 1st B Corporation in the Philippines. We work with the smallest of private sector partners all the way to the largest. We work with government in the Department of Education and Local Government Units - like the City of Manila. 

I am not afraid to fail. I am afraid to not try. 

One big adversity came at the beginning of HOPE. A brand that would promote the idea of devoting 100% of profits to social good was not only a novel idea back then but also came from an unlikely source - an actress? No one took me seriously - and probably just took meetings to see what I might do. Could I speak? Was I going to perform a song and dance? I used those opportunities to get my foot in the door and worked hard convincing businesses to give HOPE a try. I employed a strategy of casting the biggest brands first, making succeeding enlistments easier.  I struggled to overcome the gaps in my inexperience- which was literally everything- seeking out experts to guide me through a project that promised to give back to society. I approached mostly retired professionals who had time, didn’t need the money (since I had none) and was in a frame of mind to think about legacy. In the early days, I even volunteered to withdraw HOPE from any stores that weren’t performing well. I had nothing to lose. People expected me to fail - which gave me some license to be bold. 

As an actress, I played “Darna",our version of Wonder Woman. I could not imagine the impact that role would have when I accepted it. I was young, uninformed and sadly did not have a strong sense of obligation around any ability to influence. However, after seeing the faces of people filled with hope and admiration, I felt a mixture of guilt and a strong sense of responsibility. I wanted to model the kind of behavior that deserved this attention and hopefully inspire children to be their own kind of hero one day. I believe I found that opportunity when I launched HOPE. Yes, I was not a likely candidate to bring change to the business community. I was going up against the biggest FMCG's and I was trying to help solve a problem in education that was far beyond my paygrade. But I was bold-I surrounded myself with experts who had the country’s best interests at heart. The Philippines brought the world People Power. I wanted to call on that incredible force for good again. I mustered my strength, silenced my fears, and called in every favor to the press to launch our goal to democratize investment in social good. 

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The Philippines is the 3rd largest polluter of ocean plastic. We are a sachet economy. Getting out of plastic packaging completely would be impossible in the near term. On top of that, we have no Extended Producer Responsibility that makes sure that companies who deal in plastic are made responsible for their pollution. The public, even if they wanted to comply with segregation to help, would be feeding their waste into a handicapped system without the infrastructure to stop leakage, avoid unsanitary dumpsites,end open burning and stop pollution into nature. Our infrastructure and legislation needs to change. In the meantime, do we wait or do we innovate and act to do what we can- now. We chose the later and created the first non-profit plastic offset company to encourage businesses -especially large multinationals who have sustainability targets globally - to use our platform to voluntarily offset their plastic footprints. PCEx makes sure we provide a service that is affordable, does not penalize the consumer, provides transparency to the public, helps government, and invests in preserving nature. As the Philippines moves towards mandatory Extended Producer Responsibility(EPR), the Exchange will be positioned as a potential instrument for compliance. We are already working with next generation US companies who are, similar to carbon, geographically agnostic about the location of their plastic offsets. We aspire to eventually geolocate collection and processing by expanding into new markets providing a transparent, efficient, credible and convenient way for any business to be responsible for their plastic waste. 

We expect our work to have an impact because we have considered the challenges from all sides and worked to create an easy way for each group of stakeholders to win.

Business- We have considered that plastic is not going to be easy to remove in packaging in the near term, especially for developing countries. Therefore we have created a transparent, verifiable, independent and affordable service/cost to doing business which allows companies to be responsible for their footprint until such time that they can transition out of plastic. 

Consumers/Society- The model allows consumers who can afford to exit plastic to do so while not penalising the poor, or industries like pharmaceuticals, who can not safely afford to move out of plastic packaging. Our campaign badge makes it easy for consumers to spot and support with their purchase, products that commit to being responsible for their plastic waste post consumer. Our registry creates transparency that holds companies accountable for their sustainability claims. And the removal of plastic waste from our environment means cleaner and healthier living for society.

Government - Our private sector initiative helps to ease the heavy burden on governments to collect, sort, transport and safely process post consumer waste until such time as they can build up their own infrastructure, legislation and monitoring to better handle the plastic problem.  Our non-profit is also in a position to assist governments should policy move towards an ERP requiring Producer Responsibility Organizations to ensure compliance and guard against corruption. 

Environment-  Above all,  we seek to create a positive impact in cleaning up the planet.  Our polluted oceans and waterways, unsanitary dumping and burning urgently needs a solution. A solution that commits to a model that will iterate and improve - in order to remain relevant- as technology improves, as the private sector engages, and as country circumstances change.  

Currently, we estimate that our almost 3.5 million kilos of collected post-consumer plastic is the equivalent of cleaning up the waste of about 137,000 people for one full year. The operation has also injected approximately US$245,000 of income into the community economy. It is difficult to pinpoint how many of the residents contributed to the aggregation effort but the area has a population of about 57,000 people who at the very least benefited from cleaner environments. Moving forward, we aim to invest in Monitoring and Evaluation to be able to better quantify our impact on all stakeholders.  

By this time next year, we expect to have diverted and processed a total of up to 10 million kilos of post-consumer plastic trash, which is the equivalent 1 year of waste for 365,000 people from the environment of 1.9 million residents (897 barangays of Manila City). 

In five years, we hope to have been able to have fully utilized the capacity of our 13 current processing partners which is almost 150 million kilos or 150,000 tons annually which gets us close to removing 1 year of waste for 5.48 million people through both domestic and foreign company pledges. We also hope to have been able to expand our operations to scale cleanup efforts outside of the Philippines. 

Other than aiming to recover and remove 10 million kilos of post consumer plastic waste from the environment in the next year and 150 million in 5 years impacting at least 5.48 million people using our Aling Tindera platform, we would like to:

In the next year

• Publish a Standards for Plastic Offset compliance to help guide behavior, set expectations and provide uniformity as we aim to shape the industry. 

• Launch a campaign that allows consumers to easily identify through a “mark/badge” companies or products that are responsibly offsetting their plastic packaging waste.

• Expand our independent board to include a more diverse set of stakeholders who can provide objective oversight and guidance. Ideally this board is made up of academics, NGO’s and multilateral agency representatives from both developed and developing countries. 

• Continue to participate in policy discussions with legislators to craft Extended Producer Responsibility which will be achievable for business, have the confidence of the public, protects against corruption, is sensitive to the poor, invests in best infrastructure practices and seeks to restore and protect nature.

Within 5 years: 

• Engage our partners to increase their commitments and help us anchor operations in other markets to allow more companies to geolocate offsets and clean up the environment. 

• Provide opportunities for companies to use our network to seek to utilize cross border environmentally preferred offsetting technologies and share best practices. 

• Seek to influence policy on preferred waste processing infrastructure.

• Facilitate high value infrastructure investments through local partnerships and financing.

At the moment, we see 2 major barriers to being able to achieve our 1 and 5 year goals:

1. The ability to engage a non-Philippine network to expand our Board and include a more diverse set of credible stakeholders allowing us to leverage and spread our message to key decision makers globally who might consider cleaning up their plastic footprints through offsetting.

2. Funding to invest in a broad communication campaign, and to invest in expanding to new country offices outside of the Philippines. 

In order to help extend our network outside the Philippines we are looking to tap into partner relationships who have overseas offices to make introductions, attend international conferences and leverage any press opportunities available to HOPE to speak about our work at the Exchange. We also intend to reach out to the major environmental groups, members of the academe and consulting firms who work in the sustainability space to see if they might facilitate introductions to help us reach the audiences that will help us all make a difference together. 

On the finance front, we have the ability to grow organically and be sustainable under the current Philippine non-profit operations. However, growth would be slow. The ability to scale quickly and start new country offices to create the most impact will need additional funding.  We would look to either grant making organisations for this, or, we will need to consider pivoting the Exchange to being a for-profit where we could invite investors to fund expansion.

We are currently working with a number of partners from: 

• All of the Philippine HOPE accounts such as Starbucks, 7-11, Krispy Kreme, Dunkin Donuts, ShakeShack, etc. to help them neutralize their plastic footprints through offsets. 

• Non-HOPE accounts like Nestle, and in fact some competitors, to help them find their paths to sustainability. 

• We are working with local governments such as the City of Manila’s Mayor who will be hosting our Aling Tindera roll out and crafting policy to support our waste to cash program. 

• Pepsi Foundation has committed to resourcing the baler investments needed for the Aling Tindera program to be efficient in storing and hauling plastic waste. 

• Coca-cola has asked us to partner to provide feedstock waste into their soon to be built PET recycling facility. 

• WWF is a partner that we work with to engage policymakers as they think through legislation that will include Extended Producer Responsibility and a Producer Responsibility Organization.

The Plastic Credit Exchange is a platform where companies or individuals can go to purchase a plastic credit offset. PCEx provides the service of coordinating with aggregators in our network to collect and transfer post-consumer plastic trash and facilitate the processing of the waste in compliance with standards of the Department of Environment and Natural Resources. This service includes the vetting of all partners, providing verification of process and recording of the offset in our online public registry for transparency. In exchange for our services, offset buyers pay an administrative fee to PCEx plus the actual cost of offsetting. We also provide certification of Plastic Neutrality to companies who complete and pass all the requirements of the Plastic Neutral Pact without fee. 

Our model positively impacts the business sector who may not want to build out this capability internally and would rather outsource to an unrelated party their offsetting allowing them an easy mechanism to be responsible for their plastic footprint. It impacts aggregating communities who benefit financially from our waste-to-cash program as well as health benefits from cleaner environments. The government benefits from the ease on the waste collection and disposal infrastructure which is insufficient to deal with the problem. Consumers benefit from knowing which companies are complying with their promises to be sustainable which makes supporting purchases easier. And the environment benefits from the clean up which will hopefully allow nature an opportunity to recover and be plastic pollution-free. 

Our operations in the Philippines are currently financially stable purely with revenue from offsets. This should therefore provide some proof of concept for expansion into similarly structured markets. The comfortable decision would be to stay this course domestically, which we understand, and can expect organic growth. However, if the goal is to scale and create impact quickly, fundraising and commercial commitments to establish new offices will be needed. Any decision to open in a new market would require first securing the commitment of an "anchor or founding offset partner". This partner would need to guarantee a minimum volume of offset purchases to sustain the office in the first 3 years. It may be that the founding partner is a coalition rather than a single company. In addition to this commercial agreement, we would need to seek startup funding for the first 12 months as operations and volumes establish. We are exploring 3 paths to fund raising: 

1. Increasing fees- This allows us to increase revenue, however, it is our least desirable path as it decreases incentive for companies to offset in voluntary markets. 

2. Pivot to Hybrid For-Profit model - A pivot would allow us to raise capital through investors however we are still weighing how this might impact stakeholders. A hybrid would hopefully still allow us to receive grants for our community impact efforts. 

3. Grants- preserving the benefits of our non-profit status would mean that we would seek only grants for expansion support into new markets. 

Revenue: 

The Exchange was only able to book revenues from the second half of last year due to regulatory filings, so our early operations had partners pay offset costs directly to processors. Of the total USD245,000 in 2019 transactions- USD210,000 was paid directly to partners and USD35,000 was paid to the  Exchange and is reflected in our 2020 numbers. Purchase orders in 2020 booked for the next 12 months is so far at USD630,000.  

Grants: 

We recently received a grant approval through our facility at HOPE/Give2Asia from Pepsi Foundation to support our community waste to cash program. The grant is for USD110,000 and is meant to fund the purchase of manual balers which should create aggregation efficiencies for our women small store owners across districts in the City of Manila. 

We are not seeking funding for the Philippine operations which we feel can sustain itself organically.We would like to instead seek grants to establish new market offices as well as build an organization that could oversee and support multi-country operations.We estimate that each new country office would require, in addition to an anchor offset partner, approximately USD180,000 to get started for the first year and hopefully no additional funding thereafter.Ideally we are able to expand into 5 markets over the next 3 years. We envision expanding into 1 additional market in 2021 which would require us to receive USD180,000 in funding in 2020 so we can begin to search for suitable candidates to populate the new organization - as well as search for anchor/founding offset partners which should increase the likelihood of long term success. Each anchor offset partner should be able to commit to at least 10,000 tonnes of offsets annually at current rates for 3 years.After 1 additional market has been opened, we would look to open 3 more markets in 2022/2023 which means we would need approved funding in 2021 of USD540,000.We fully expect funding to be determined by our then longer track record in the Philippines and our ability to navigate challenges in the first additional market. Total funding sought: USD720,000. 

Community impact projects in new markets may require additional funding but, at the moment, we do not expect that these will be channeled through the Exchange and instead will be coursed through local partner NGO's.

Our projected 2020 budget for PCEx in the Philippines is USD127,200. This is funded through revenue and includes:

- Shared rent, utilities, comms and travel 

- 4 full-time staff (Upstream Campaign Manager, Downstream Campaign Manager, Field Coordinator, and Logistics & Admin.  

- Shared Services for Accounting, M&E, HR, Purchasing, and Marketing 

(This does not include any salary for current leadership which has volunteered.)

New market offices in 2020 would look more like USD258,800 in Year 1.  

This will include rent, utilities (power, water, internet and mobile), start up legal fees, travel, and salaries for 5 full-time staff (MD, Upstream Campaign Manager, Downstream Campaign Manager, Field Coordinator and Logistics & Admin) plus shared services from HQ (HR, Comms, Accounting/Finance, Monitoring & Evaluation). 

We are hoping the Elevate Prize will help broaden our network outside the Philippines, exposing us to a global, informed and progressive audience which may want to help us scale our efforts to create a positive impact on the environment and on communities that lack waste infrastructure. 

Ideally this more global network helps us to populate our organization with inspired problem solvers who will iterate our model over time to make sure we remain relevant and true to our mission to keep waste out of nature. It will hopefully help us connect with the decision makers of companies around the world who are willing to commit to investing in the offsetting of plastic footprints. And finally, we hope to connect environmentally favorable technology companies to our country networks to encourage the investment of infrastructure that will help both communities and planet. 

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We would like to seek global offset partners from the small inspired next generation brands- all the way to the large consumer brands like Nestle, Unilever, P&G, Coca-cola, Pepsi, Starbucks, Amazon, Apple, Nike, etc. Brands that could allow us to create impact across many- if not all- of their markets to help them not only achieve their sustainability goals but clean up plastic waste in a truly meaningful way. Modelling the kind of behaviour that the public is starting to expect from companies who want their support. 

We would like to partner with cutting edge resources in the academe who can guide our thinking and introduce us to the best environmental solutions/technologies. We would love to work with foundations and environmental NGO's around the world who can help anchor our initiative in different markets- bringing their unique experience to the table and making sure we are addressing important local issues.