More than half the world’s population—4.4 billion people—live in cities today. That number is expected to rise to 80% by 2050. Our guest, Nadina Galle, is a trailblazing ecological engineer and author of The Nature of Our Cities. She is an ecological engineer who studies the intersection of nature and technology in urban environments. Nadina developed the concept of an Internet of Nature (IoN) that uses tools like artificial intelligence, automation, and sensors to support and enhance ecosystems within cities. Nadina’s book offers a transformative perspective on how urban spaces can be reimagined in the face of climate change and sprawling development. She shares the inspiring story of the Groene Loper project in Maastricht, Netherlands, where soil sensors were deployed to monitor tree health. The results were remarkable, with trees supported by this technology growing up to three times larger than those without it. This is a powerful example of how technology can not only protect trees but also transform urban spaces into healthier, greener environments.

From fire and the wheel to the reinforced concrete frames that define modern buildings, we are surrounded by technology. We tend to forget that technology emerged in response to nature — too often, we treated nature as the enemy, the chaos to be contained instead of recognizing that nature’s cycles and changes are the harmony we need to join to sustain society. The loss of any semblance of natural patterns, which ultimately leads to the depletion of the resources necessary for life, has inevitably led to the collapse of previous major civilizations. Modern society has more runway than previous societies because we have created a global economy, but that risks an even greater fall for our species when the ecological underpinnings of our prosperity collapse. The Nature of Our Cities, is a powerful, straightforward, and emotionally resonant book to help you think through your role and choices in the restoration of nature. You can find it on Amazon or Powell’s Books.

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Editor’s Note: This episode originally aired in December 2024.

The post Best of Sustainability In Your Ear: Author Nadina Galle on The Nature of Our Cities appeared first on Earth911.

https://earth911.com/podcast/earth911-podcast-nadina-galle-on-the-nature-of-our-cities/

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Interview Transcript

Mitch Ratcliffe  0:09

Hello, good morning, good afternoon, or good evening, wherever you are on this beautiful planet of ours. Welcome to Sustainability In Your Ear. This is the podcast conversation about accelerating the transition to a sustainable, carbon-neutral society. And I’m your host, Mitch Ratcliffe. Thanks for joining the conversation today.

Americans throw away roughly 100 billion plastic bags a year, and most curbside programs won’t take a single one of them. Plastic film, those bags, the pallet wrap in the back of the stores, the bubble mailers, the dry cleaner sleeves, the overwrap on a case of bottled water — all of this has been the recycling industry’s white whale for decades. It jams machinery at materials recovery facilities, contaminates other waste streams, and ends up in landfills and oceans, and increasingly that plastic, especially microplastic, ends up in human tissue.

Meanwhile, the lumber industry sends sawdust to landfills by the truckload, and old orchards full of dying trees become a disposal problem for farmers. Two waste streams nobody wants, generated at industrial scale with very few takers. But more than 30 years ago, a small company in the Shenandoah Valley of Virginia looked at both of those streams and saw raw material. Today, that company has upcycled more than 5.5 billion pounds of waste plastic film and sourced over a billion pounds of waste wood in 2024 alone, and as a consequence, they’ve built one of the largest plastic film recycling operations in North America, all in service of making something as ordinary as backyard decking.

The deck happens to last about 25 to 50 years, requiring no staining, no sealing, and competes head to head with pressure-treated lumber on a price and performance basis. The sustainability story isn’t a marketing layer on top of the product, it is the product. And we’re talking about Trex, Trex decking.

Our guests today run two of the most consequential functions inside Trex. Amy Fernandez is Senior Vice President, Chief Legal Officer and Secretary, and Chief Sustainability Officer at Trex Company Incorporated, the world’s largest manufacturer of wood-alternative composite decking and railing. She holds the unusual combination of legal and sustainability oversight at a moment when these two domains are converging fast, with the IFRS Sustainability Disclosure Standards, California’s climate disclosure laws, and the SEC’s evolving stance all reshaping what public companies must say about their environmental performance. In 2024, Trex indexed its sustainability report to the IFRS standards before being required to, which tells you something about how Amy thinks about the relationship between disclosure, governance, and competitive position.

She’ll be joined today by Zachary Lauer, who is Senior Vice President and Chief Operations Officer at Trex, where he oversees manufacturing, supply chain, engineering, and research and development. His teams run plants in Virginia and Nevada, and they’re bringing a major new facility online in Little Rock, Arkansas, having built the operational machinery that turns approximately 95% recycled and reclaimed content into a product that has to perform outdoors for half a century. The R&D side of his portfolio is where Trex has cracked feedstock streams that other recyclers can’t process, including industrial film trimmings, end-of-life packaging from food and chemical manufacturers, and dunnage returns from distribution partners. All this work happens at the intersection of material science, logistics, and the unglamorous reality that recycled inputs don’t behave like virgin ones. It’s more expensive sometimes to recycle this stuff.

We’ll talk with Amy and Zach about how Trex actually makes its products, where the materials come from, and what it has taken to build a national feedstock network through the NexTrex program, a collection program spanning more than 10,000 retail drop-off locations and nearly 1,000 schools and community organizations. We’ll dig into a harder question, too: why Trex’s absolute emissions rose alongside production growth in 2024, and what the company is doing about end-of-life recycling of Trex boards now that the first generation is reaching replacement age, and what other manufacturers can learn from a company that is building a recycling infrastructure before there’s a market to feed it.

To learn more about Trex and its sustainability work, visit trex.com. So, circularity is a word that gets thrown around a lot these days. Trex was practicing it before the word existed. Let’s find out what three decades of doing that work has taught Amy Fernandez and Zach Lauer, right after this.

Welcome to the show, Amy Fernandez and Zachary Lauer. How are you doing today?

Zachary Lauer  4:54

Doing great.

Amy Fernandez  4:55

Great, great. Thank you, Mitch.

Mitch Ratcliffe  4:57

Well, thank you for joining me. And Trex does such interesting work. I mean, you were demonstrating what circularity means before the word had any cultural traction. I know you weren’t there at the beginning, but was this framed internally as an environmental project or as a sourcing strategy? Just the recognition that there was this massive volume of feedstock there that could be used.

Zachary Lauer  5:16

It was initially an environmental initiative by our founder, Roger Wittenberg. You know, he was bothered by the fact that there was no way to recycle or reuse his bread bags, and he wanted to formulate a product of value from that. He went through a couple of iterations and partnered with some other people, and they decided to turn it into composite decking and market it that way. Ever since that, it’s been part of our DNA, and we were always looking to extract value out of waste streams, you know, that aren’t currently used, and we continue to develop the next generation of materials out there that we can extract value from and create a great product from.

Mitch Ratcliffe  6:09

These days — just last week, a couple of weeks ago, we talked with the CEO of Emerald Packaging, who’s also looking for recycled PE to use in their products. There’s competition for this feedstock now. How has that changed the way that Trex organizes its efforts to collect and bring this to the three different locations you manufacture the decking?

Zachary Lauer  6:30

So, you know, with opportunities and growth in this space, one of the things that has developed over time, over the last 10 to 15 years, is the growth in the availability of recycled polyethylene films from distributors. Right, as Amazon grows and direct shipments to homes grow, the materials that are used continue to expand. So that’s opened up markets for increased stretch film and those types of materials. But as those markets grow, we often go deeper and deeper into the stream, more contaminated into the stream, to go after material streams that most people can’t deal with or process.

Mitch Ratcliffe  7:17

Well, one of the benefits of this kind of recycling is that you don’t have a lot of health-quality, you know, food-contact kinds of restrictions, and so forth with the plastic. You mentioned contamination. Just how contaminated can the loads be for Trex in order to make a viable product?

Zachary Lauer  7:36

We grade our materials on a scale of 5 to 15% contamination. We can go deeper than that. The contamination that we typically find in our streams are metals, non-ferrous metals, other forms of plastic, polypropylene, polystyrene, and those types of material, paper, cardboard. And so we’re able to design processes that can accommodate those and process those materials. Out-sorting is still critical to the long-term viability.

Amy Fernandez  8:10

Oh, yes. And we can go more contaminated depending on what that contamination is. So if it’s paper, we can handle more of that. If it’s metal, it’s a bit harder to handle. So the type of contamination also matters in terms of, you know, at what level we can accept that contaminated poly.

Mitch Ratcliffe  8:31

Amy, the 2024 sustainability report describes the program as a win-win for both business and society at large. As we all know, we live in a time where that’s a contested idea — that sustainability is a good thing for the economy. What’s the most concrete way that you explain or demonstrate that the business case and the environmental case are genuinely the same for Trex, that this is an inseparable configuration?

Amy Fernandez  8:58

Yeah, you know, a really good example was our last earnings call. And during that call, you might have heard our CFO started talking about the price of PVC and virgin materials and the volatility associated because of their connection to oil. So that’s one very recent concrete example of the fact that, because our material is this poly that we recycle, we’re not as exposed to that volatility that you might get from those virgin streams. And so that is truly one of those competitive advantages that we have — that we recycle this material, and we can make a beautiful, well-performing product out of it. That is the business case. So you see it through these little examples.

Mitch Ratcliffe  9:51

So in an era of reshoring, you’re actually in a position to be even more competitively advantaged.

Amy Fernandez  9:56

Yes.

Mitch Ratcliffe  9:58

Amy, you stepped into the CSO role while also serving as Chief Legal Officer, and that’s a combination that’s becoming more common as sustainability disclosure is shifting from voluntary to regulated. How has all of the upheaval in the regulatory environment that we live in changed Trex’s approach over the past year or two in terms of what you report and what you tell customers?

Amy Fernandez  10:19

Trex has always been a highly ethical company, and so we do what’s right. And if you’re founded in doing the right thing, you’re not as subject to these whims of, you know, what’s happening either politically or, you know, with changes with government regulations, things like that. And so because we’re grounded in this reality of, we’re not going to go out there and start talking about targets that we don’t think are achievable — so when it was, you know, common to start saying “by 2030” or “by 2050” or whatever dates companies were out there saying “we’re going to get to this target” without actually having a plan to get there, Trex would never do that.

And so one of the things that you would see is that we get asked questions: “Why don’t you have targets?” And it’s because our target is to continuously keep improving from a very solid base that we have, but we’re not going to put an unrealistic number out there just to try to get points. So the regulatory changes don’t affect us as much when we start from that just basic ethical “do the right thing, disclose important information that we think our investors, our communities, others want to see, want to know that is true and not misleading in any way.”

Mitch Ratcliffe  11:39

From a marketing perspective, saying that you live by a higher standard is pretty effective. Do you think it’s necessary to be a lawyer to be a chief sustainability officer these days?

Amy Fernandez  11:49

No, not at all. And actually, I think the only reason that we did decide to put it this way — yes, of course, I do have the regulatory mindset, but I also have a passion for this, right? I mean, I joined this company because it is something that is important for me personally. And so the chief sustainability officer could have lived in other places and just been informed by legal the way that I inform other functions in this company. But I basically raised my hand for it and said, I think it lives well here, and I have a passion for it.

Zachary Lauer  12:22

It resided in other areas in our business as well, right, under other people that have that same passion.

Mitch Ratcliffe  12:29

So, Zach, what happens between the time when a plastic bag is dropped at one of the 10,000 grocery stores that collect bags and a finished Trex board leaving the factory? Can you walk us through that process?

Zachary Lauer  12:40

Yeah, you’ve kind of highlighted the ends of that value chain, right? From the pickup to the actual product that goes to the customer. We actually have over 15,000 collection points across this country that come back to centralized collection points, and then actually make their way to our recycling facilities, where the cleaner films are put directly into our production lines, and the more contaminated films go into a reprocessing operation that turns it back into a pellet.

But the most challenging engineering point for us in this entire value chain is actually at the extrusion production line, and managing variation in the streams. We call it recipes, and we have a rolodex of thousands of recipes that can be used in the production process. I liken it to a cooking analogy. Today we’re baking with wheat flour, and tomorrow we might be baking with almond flour.

And so we’ve used a lot of technology to help us — machine intelligence, artificial intelligence — to help us manage those recipes. And not only does it help us manage the streams coming into the production lines, those raw materials, but then it modifies the process parameters, the cooking temperatures, and the speeds in order to process those streams. So that’s where the complexity is for us.

Amy Fernandez  14:14

We design our own equipment. And I mean, we don’t — you can’t just buy this equipment from equipment manufacturers. So being able to design and set up this equipment to be able to process this changing raw material stream continues to be one of our areas of excellence.

Mitch Ratcliffe  14:35

That’s fascinating. The idea that if you had a different kind of fiber, for instance, coming in — you brought in a chipped orchard as a source — that you’d have a different recipe, but you’re producing a product that is consistent in its standards and specifications. That’s, I mean, Zach, that’s got to be very complicated. You mentioned AI. Was this possible before AI, or slower before AI?

Zachary Lauer  14:57

No, we still did it, but we had to program a lot more, right, and program the intelligence on the line a lot more. It’s just becoming more rapid as we can read those streams and read the variation in line. It just makes that reaction quicker and faster for us on those production lines to do that. But no matter what our recipe is for the day, to your point, Mitch, it comes out a consistent product at the end.

And it just shows that we design our product around variability. Whereas most people focus on reducing variation in their raw material streams, we’ve designed our whole manufacturing process around being flexible and adapting to material streams — not only the ones we use today, but the ones we’ll use in the future.

Mitch Ratcliffe  15:51

The other area where you’ve got that kind of volatility is in the volume of recycled polyethylene that you’re bringing in. You had a big year in 2022; it went down by almost 100 million — excuse me, 100 million pounds — the next year, and then recovered, not quite back to the 2022 range, in ’24. What’s behind that volatility? Is it competition for feedstock? The fact that retailer collection participation changes? The contamination rates?

Zachary Lauer  16:20

A lot of things go into it. But what I tell people is, don’t equate our collection volume to our consumption volume. You know, one of the unique challenges about being a recycler is the fact that it’s a winner-take-all market. When you pick up an account, maybe a large grocery store, it’s like picking up the trash — you have to be there and you have to collect it regularly. Service is key. So there could be times when there is more availability or more collection in a period, and you have to accept it.

So how we manage that volatility, or, you know, the changes that can occur from year to year or season to season, is we do a very good job of long-term demand and supply planning in this space, and combining that with our space planning, and then we kind of layer in anticipated regulatory, market, and consumer preference changes into that. And so there could be a period where we see maybe a deficit or a surplus, and we will go in and consume that and store it for a future period, or there just could be a surge in a particular market where there’s the availability and you just have to be willing to take it. And that’s difficult to absorb — those huge swings like you mentioned — into your supply chain without having a plan.

Mitch Ratcliffe  17:55

You just said “as a recycler,” but should we be thinking about this in general as simply part of the manufacturing process — going back to onshoring and keeping more materials in country and reusing them across a wider variety of production streams? How does Trex think about organizing the wider material flow rather than recycling programs in the United States? What have you learned that we should be applying as a nation?

Zachary Lauer  18:23

You know, I think you have to be intentional if you’re going to enter into a stream where you’re going to recycle or pull materials out there. We’ve focused our effort on North America, right? And we do take collection from other areas, but it’s rare. And we adapt our collection based on changing preferences. So, Mitch, what I mean by that is, you know, one year we could be doing a lot of store collection or distribution collection, but then all of a sudden in a region of the country, regulation changes, or things change, and we go more to the recyclers for our material.

We continuously monitor and adapt to the changes that we see there, because our desire is to keep our supply chains as close to our factories as possible. We bear the cost of the freight, right? And we bear the entire cost of the supply chain. We develop the supply chain, and so we’re continuously looking at ways to optimize that and keep our costs manageable.

Mitch Ratcliffe  19:34

As you say, you’ve built this vast alternative collection system — 10,000 retail drop-off locations, you’ve got 84 grassroots community partners, there’s 936 schools that were involved as of 2024. What strategies did you have to develop in terms of communicating to the public what they should put in those bins at stores so that you get a clean load? And does that actually impact the quality of the materials you receive?

Zachary Lauer  20:02

It does. From our foundation, education has been key, right? So this has been a marketing and supply chain integrated strategy from the very beginning. And so we utilize things like our NexTrex program to educate students, to educate communities, and motivate them to recycle and incentivize them to recycle. But we’ve also at the same time incentivized our value chain or our supply chain to collect and be a part of it.

And some of that education is based on teaching people what can be used and how it can be used, and to let them know it’s actually being turned into a product that they can later consume and use. But we also come alongside other businesses to support their environmental sustainability goals as well. Most of our partners want to do the right thing too, and sometimes it only takes a little bit of incentive to get them to participate in this program that we have.

Amy Fernandez  21:09

And Zach, why don’t you add also a little bit about the logistics piece of this, because — so you talked about marketing and supply chain, but part of the supply chain was the logistics with the trailers and how we track them, and time them, and send them out at appropriate, you know, to basically maximize our efficiency in getting the materials.

Zachary Lauer  21:30

Yeah. So we also help our supply chain collect this material. We provide those that are willing to collect with balers to bale this, so that we’re efficient in hauling materials back. We also are very good at calculating what collection will be like in certain areas, and where to leave trailers, and where to incentivize them to backhaul to certain locations.

Right, the grocery stores, for example, they’re backhauling anyway to their warehouses — corrugate, all these other materials — so we take advantage of that backhaul to get to their distribution centers, and then collect from those points where they can fill a trailer within a couple of days. And we manage that entire network of trailers and supply chain, and we ensure that they’re weighed out before they hit the road, so that we’re optimizing the cost of bringing those materials in as well.

Mitch Ratcliffe  22:36

Does that mean that you generally collect this material at a lower rate than most of the industry could possibly achieve at this point?

Zachary Lauer  22:43

That’s correct. Because we’re getting it directly from the source versus maybe through a waste collector or a municipal recycling facility where it’s already been handled a couple of times, and the cost could be higher.

Mitch Ratcliffe  22:59

Amy, it doesn’t sound like it, but I want to ask about this — do the partners also come to you asking about getting credit for this, ESG credit, carbon credits, and so forth? Are you starting to hear that kind of conversation about how we can create further incentives within the collection economy?

Amy Fernandez  23:17

So we’re not starting to hear that yet, unless it’s come through Zach’s team. But as far as I know, we’re not hearing that. We are, though, starting to explore, for example, those companies that do want to say that their plastic is recyclable, because, as you know, all these regulations are coming out around that. If they want to put, for example, the NexTrex logo on there, and can assure that we’re picking it up. If we pick it up, it gets to our manufacturing site. So people that have put those trackers and things like, “Is my bag actually going to get where it’s supposed to go?” — we find them, they get to us. And so that’s part of it, is to support their recycling claims. We’re starting to get some questions and conversations about that.

Zachary Lauer  24:04

The other incentive too, Mitch, is for a lot of these individuals: they have their own goals, and one of those is to minimize what goes to the landfill. And so they’re also incentivized to not throw it away, and so we can help in that process too — we can help meet that need.

Mitch Ratcliffe  24:25

I know neither of you is in the marketing organization, but when people encounter a Trex deck, do you want them to think about the fact that it’s recycled? Do you want them to identify with the circular process?

Zachary Lauer  24:36

We do, and it is meaningful to the consumer. You know, if you were to have asked that question when I just joined Trex — and I’ve only been here 10 years — that, you know, that may have been, you know, it was still in the top 10 of the consumer preference, but it was around eight or nine. That continued to climb up the ladder, and it is in the top five of what the consumer is looking for when they’re looking for a product.

It’s a luxury product that lasts an extremely long time, and they can feel good about the product that they’re purchasing when they do it. And Trex obviously leads in this space with our recycled content on our decking products.

Amy Fernandez  25:27

We still start with performance and aesthetics, but sustainability is right there, right along with it.

Mitch Ratcliffe  25:35

I have to admit, I do stand on my deck and think about the fact it’s recycled. This is a great place to take a quick commercial break, folks. We’re going to be right back to continue this conversation. Stay tuned.

Welcome back to Sustainability In Your Ear. We’re talking with two of Trex Company’s leadership team: Amy Fernandez, she’s Chief Sustainability Officer, Chief Legal Officer, and I’m forgetting one other at Trex, and Zachary Lauer, who’s Senior Vice President and Chief Operations Officer. We’re talking about how Trex has built one of the largest recycling systems in the United States to source materials for its composite decking products.

Amy, Trex in 2024 decided to embrace the IFRS Sustainability Disclosure Standards, which were not mandated by the federal government as a requirement. What drove that choice? Why are you getting ahead of the game?

Amy Fernandez  26:30

There’s a big difference between complying when you’re required to comply and adopting best practices proactively. And in looking at the IFRS disclosure standards, it is a best practice. It’s benchmarking using globally consistent frameworks. It’s, you know, well recognized. It is a good-faith process that shows rigor. And so we’re not going to wait for a US regulation to force us to do something when, again, like I mentioned before, it’s just the right thing to do, and it’s a good framework, because it’s recognized globally. So although we are a US company, we do still have, you know, investors, customers, and others globally that are connected with Trex, so we want to be able to reach them.

Mitch Ratcliffe  27:23

Did taking that higher road require more work? Were there things about your business that the IFRS framework forced you to confront and address that you wouldn’t have otherwise? And this obviously would be of interest to other companies that are thinking about whether or not to pursue them.

Amy Fernandez  27:42

Well, we are looking at some of the gaps in there, right? So our scope three, for example, we’re working on that now, and we’re going to get limited assurance from some auditors just to start. That’s something that isn’t required yet in the US, but under IFRS it is a best practice. So we’re starting to work on that now, because that is one of our gaps with alignment to that framework.

And then the other piece of this too is the rigor around any financial planning related to sustainability risk. So by doing that benchmarking, we were able to identify where we have maybe some best-practices gaps — not regulatory gaps, of course, because we’ve already talked about, this isn’t required — but best practices. And what do we want to start doing, and what might be helpful for everybody that’s looking at Trex, right? Our employees, our prospective applicants, our investors and our communities. So that is part of what we’re finding from this exercise.

Mitch Ratcliffe  28:43

I also noted that Trex’s scope one and two emissions — you mentioned scope three a moment ago — have risen about 17%, partly due to greater volume and partly due to greater energy use. As you grow as a business — and this is one of those challenges that I think the sustainably-minded confront, which is, these companies are going to produce more carbon but less carbon relative to other alternatives — how do you talk to investors and within the organization itself about that rising net impact, and how do you rationalize that given your desire to reduce environmental impact?

Amy Fernandez  29:25

Yeah. You hit the nail on the head, right? When we bring on more production lines — so we did bring more on in ’24 than what we had in ’23, which accounted for a big portion of that increase that you saw in ’24. And then we also, by adding Little Rock, the Little Rock plant into the network — although we don’t have production there, we’re still using energy while we’re, you know, bringing it up. And so you’re absolutely right that because we are running more, that is going to require more energy.

But we’re trying to improve our efficiency of what we’re using. We’re also looking at our network and the grids and the energy available across Nevada, Arkansas, and Virginia, because they’re not all the same. So we’re going to start looking at where we can optimize that as an entire network. And, you know, just be working on that equipment that we talked about earlier that we design ourselves — what else can we put in there in order to reduce the energy use there?

Mitch Ratcliffe  30:28

Zach, what are the carbon intensity goals? I know you don’t necessarily state public goals, but how do you work toward reducing carbon intensity as a continuous improvement operation?

Zachary Lauer  30:39

So we’re always looking at how we’re manufacturing, and throughout the entire supply chain how we’re — I mentioned before, are we getting the maximum weight per load that we’re hauling? And on a per-pound basis of raw materials, we will actually, Mitch, fine or reduce the cost of what we’ll pay if the loads aren’t maximized and optimized.

But when we look at our manufacturing, we want it to be the lowest possible consumption of energy, because energy is expensive, right? And we want to be as efficient with that equipment as possible. Technology is going to continue to help us get there with that. But also, we drive our facilities off of manufacturing efficiencies, and our goal every year is to keep on getting faster, better, and higher, so that content per pound, that content per linear foot — because it is better and better every year. And that’s a focus for us.

Mitch Ratcliffe  31:41

When you enter a new location like the Little Rock plant that you’ve launched, which is purportedly — I haven’t seen the results yet, but supposed to drive 7.4 million kilowatt-hours in annual energy savings and reduce the use of water through a closed-loop recycling system — how do you decide what efficiency investments are going to pay back fast enough to justify the initial investment?

Zachary Lauer  32:05

Well, you know, not everything we do has a great — you know, our goal is for everything we do to have a great return on invested capital, but there are some things that you do just because it’s the right thing to do. One of those areas that’s difficult to get tremendous payback on is water, right? Water is generally still relatively inexpensive in this country. Now, we all know that water is becoming more and more of a challenge.

But a lot of what we do is not just motivated by the return on invested capital, it’s that we’re motivated by doing the right thing. Our employees live in the communities that we operate in. They take a lot of pride. A lot of people come to work for Trex for what we’re doing. Our brand equity is enhanced by what we do and how we go about doing it — not just what, but how we go about doing it.

And our employee brand matters in the communities that we’re in, because labor is extremely competitive in this nation. And somebody that goes to work and feels the impact of what they’re doing is valuable to the community as well — is important to us, and helps us recruit. We have a lot of people that apply to Trex merely because we do things responsibly, we do recycle. So it doesn’t only matter to our consumers, it matters to our employees as well.

Mitch Ratcliffe  33:35

Does the board have a set of “we do the right things” heuristics that they apply to some of these decisions, when you come and say, “Well, we need to do this, and it’s going to be more expensive”? How do they, as a group, create a systematic approach to making the right decision?

Zachary Lauer  33:50

We’re looking at it on an enterprise level, Mitch, where we’re looking at that return on invested capital at an enterprise level. And we will more than offset with our efficiency projects and our cost savings projects and those items on capital that allow us to do these types of things. And so we, for lack of a better term, try to overachieve in some areas to make sure that we can cover our bases in other areas.

Amy Fernandez  34:22

And our nominating and corporate governance committee is the one that gets a sustainability report every quarter. So every meeting we’re reporting on these metrics. Some of these metrics being very important — like our 95% recycled and reclaimed content in our composite decking — maintaining that is something that we report to them every quarter. We also report to them what we just talked about, our energy use, so there’s various metrics that we’re reporting to them.

And so it’s not only just that board-level oversight of our capital, it’s also the nominating and corporate governance committee oversight of our sustainability targets. So you’ve got two lenses looking at it.

Mitch Ratcliffe  35:04

Do you tie executive compensation to success on those metrics as well?

Amy Fernandez  35:08

We do not. We do not. Our executive compensation — it’s in our proxy statement, but no, there is not a modifier or a target for that. No, it’s overall company performance.

Mitch Ratcliffe  35:22

One of the changes that I noticed recently is that between 2022 and 2024, the NexTrex program recovered six times as much material as it did just two years before. What drove that growth, and where do you see a ceiling, potentially, in what NexTrex can deliver?

Zachary Lauer  35:42

Yeah. So when it comes to the NexTrex program, in 2025 we collected over 4 million. In 2026 we’re on trend to get pretty close to 6 million. You know, as we continue to expand the opportunity to rural communities and other avenues to capture this material, it’s just part of our supply chain. As you mentioned before, as competition enters in the space, we’re already moving into the future on different collection points and then different materials.

And where we see — just this grassroots reference that you’re talking to — non-grocery, non-distribution, non-traditional space, this could get to 20 million pounds or greater for us over the next 10 years.

Mitch Ratcliffe  36:33

As extended producer responsibility laws come into effect in various states, does that represent competition for the material, or could Trex even become part of the producer responsibility organization solution to collection and processing of materials within the state?

Amy Fernandez  36:49

Yeah, I mean, we’re in conversations with some of those folks about what they think they might be doing in the states that are starting to implement some of these, or, you know, discussing implementing some of this legislation. But we haven’t really seen that we’re going to have significant impact at all to Trex. There’s just, you know, given where we source our materials from, we’re not really seeing competition resulting from that legislation.

Mitch Ratcliffe  37:18

How do you see the NexTrex model continuing to evolve? Do you want to expand geographically, or is there potential for collecting other materials?

Zachary Lauer  37:18

Yes, I mean, we’re continuously working on the next-gen and the gen-after-that materials. We have a very extensive materials program here to evolve that. But we will continue to reach out to rural communities and those communities that aren’t served as strongly with collection points, and continue to expand those collection efforts nationally.

There’s probably only five to six states that we don’t even have a grassroots collection point in — we’re almost nationally covered in every state with these. And we set targets every year for this team to grow those programs. We have specific people that are dedicated to establishing these programs in underserved collection areas, and they have aggressive targets, and they’re passionate people.

Mitch Ratcliffe  38:25

Let me ask about the other side of the recycling equation here, which is, with many of the earliest Trex decks coming to the end of their expected life, reaching replacement age, what do you have to do in terms of policy partnerships and pricing to create a closed-loop solution to recycle those materials as well, so that old Trex decks become new Trex decks?

Amy Fernandez  38:49

So we have the manufacturing capability to reuse our material, so that isn’t the hurdle. The hurdle is at that collection stage. And when you have a contractor that is replacing a deck, they don’t want to sort, so they want to just have everything in there. And right now that is the hurdle — it’s the sorting piece of it, because we can recycle our own decking, but we can’t take — we talked about metal earlier, right? That’s something that we’re not going to be able to use. So that’s where the challenge is.

And what we’ve done is we’ve partnered with, for example, one of our distributors. We partnered with them to bring back truckloads of material back for recycling. So we’re trying to work with our distribution network. We do merchandising, and so for those, we’re able to get that back from our merchandising vendor to send scrap back to us. And then we’re also able to implement some communication around — if there is a big job, let’s start trying to get that product back to Trex so that we can recycle it.

That being said, anecdotally, I hear from friends that have had their first-gen Trex deck, and it is still looking beautiful. So although the warranties are 25 to 50 years, you know, we don’t —

Mitch Ratcliffe  40:15

It could go longer.

Amy Fernandez  40:16

It could go much longer. And so it’s a matter of, you know, starting to see, well, how can we start to put in place a program for when these do start to get replaced or age out?

Zachary Lauer  40:28

But we would use our network to do that reverse collection, right? The network that distributed would be the means to recollect it back.

Mitch Ratcliffe  40:39

That makes complete sense. For years, Earth911 has worked with Owens Corning on driving collection of shingles, but it’s interesting because shingle collection has spikes — extreme weather events, hurricanes, and so forth. And so they focus on communities and regions that are subject to disaster. It gives them the opportunity to get people to sort at a time when there’s a vast volume of material. Have you analyzed opportunities for that kind of optimized, focused geographic collection? Maybe a little ticky-tacky question, but I’d be curious.

Amy Fernandez  41:17

I hadn’t thought of it, and now that you mention it, I will.

Zachary Lauer  41:20

We’ve typically looked at our partners in the value chain for that versus external, you know, for those opportunities. So, and taking advantage of those backhauls and those types of situations, we already have trucks delivering. Can we have trucks collecting? The other thing — as we talked about the rural communities too, we’ve looked at offering the opportunity at those rural collection sites to take back product as well, because we already have trucks and trailers there.

Mitch Ratcliffe  41:49

If you were speaking with a manufacturer in another category, say textiles or electronics or other kinds of building materials, and they asked you what the single most important thing Trex got right early on, what would you tell them?

Zachary Lauer  42:04

We designed the manufacturing process, and we designed the supply chain to support it, from the very onset. And we had the mindset from the very onset that the variation was going to be there — figure it out. And through the decades we have refined the ability to do that. So we always had that end in mind: no matter what, we were going to figure out a way to do this. And we specifically designed our manufacturing processes and our collection processes to support that end-to-end supply chain to do that.

And the other thing that’s unique, and what I would recommend, is we’ve never depended on a middle partner or middle player in this chain. So as our collection may change over time, as our material streams change, I don’t have to go find somebody that can do that for me, right? I’m just modifying what I do today to a different material stream.

Mitch Ratcliffe  43:08

Are there moves you made that you wouldn’t recommend that others copy, because maybe it worked only because of where Trex was at the time? Are there ways to get into a blind alley and get stuck there?

Zachary Lauer  43:19

I really can’t think of any. You know, regardless, we’ve always tried to locate our facilities close to our raw material streams that allow us to maintain our 95% recycled content of materials in our decking. And so we specifically saw where we locate our plants to optimize that feed of material.

Mitch Ratcliffe  43:50

Well, Amy and Zach, this has been a fascinating conversation. How can folks keep up with what Trex is doing?

Amy Fernandez  43:57

We’ll be publishing our sustainability report as usual, probably sometime in that July timeframe, so be on the lookout for that next one. Our website — NexTrex is on our website as well, so those are probably the best places.

Zachary Lauer  44:10

Yeah. I mean, our website, and especially the NexTrex link there, has, you know, great videos and just great learning for people, and social media, right, is powerful too, for our NexTrex and our branding. So those are all platforms that we utilize to inform and educate, so that people can participate in the value chain and participate in this endeavor.

Amy Fernandez  44:36

Yep. So trex.com, Why Trex? The first link under that is sustainability.

Mitch Ratcliffe  44:41

Well, we will point folks to that. This has been a fascinating conversation, and really so impressive — what Trex has accomplished. Thanks so much for your time today.

Amy Fernandez  44:50

Thank you, Mitch. It’s our pleasure.

Zachary Lauer  44:52

Thank you.

Mitch Ratcliffe  44:53

Welcome back to Sustainability In Your Ear. You’ve been listening to my conversation with Amy Fernandez, Chief Legal Officer and Chief Sustainability Officer, and Zach Lauer, Chief Operations Officer at Trex Company, the largest manufacturer of wood-alternative composite decking in the world. And you can learn more about Trex and NexTrex collection programs at trex.com — that’s T-R-E-X, folks, trex.com.

You know, for the second time in less than a month, we’ve spoken with a company whose leaders chose to do the right thing regarding their environmental impact, and as a result, built a successful business from it. Kevin Kelly, CEO of Emerald Packaging, explained how they use recycled polyethylene in food packaging just a couple of weeks ago. But Trex got there in 1996, before “circular economy” was a phrase that anyone used in a boardroom, or, well, almost anywhere outside of a small cadre of design and architectural thinkers. Three decades later, it’s upcycled more than 5.5 billion pounds of plastic film and runs roughly 95% recycled and reclaimed content into its products. And I think, most impressively, operates one of the largest plastic film recycling operations in North America.

The sustainability work and the business are the same thing. It’s not a different choice to become sustainable — it’s part of the underlying philosophy of the company, and that’s the headline here. The structural insight is that Trex designed its manufacturing processes around variations in feedstocks, instead of trying to standardize and therefore eliminate the use of most of the material that they would receive. Zach described a rolodex of thousands of recipes that the production lines run through, swapping feedstocks the way that a baker swaps wheat flour for almond flour, for instance. And machine intelligence is making it easier to read the stream in real time and adjust temperatures and speeds on the line.

Most manufacturers spend their time narrowing input tolerances, but Trex developed tolerance for inputs that nobody else wanted and made it profitable. That’s a different theory of operations, and it explains why the company can go deeper into contaminated film streams — the dunnage returns that we heard about, the industrial trimmings, the bubble mailers that went to landfill before. Other recyclers walk away from this stuff, but Trex embraces and uses it. The lesson for any building products, textile, maybe electronics manufacturer thinking about recycled content is that variability is the design constraint. Solve for that first, or the supply chain will keep breaking on you.

Trex’s poly feedstock isn’t priced off a barrel of crude, which means in a period of reshoring, tariff uncertainty, and due to the war in Iran, oil-price swings, the recycled-content company holds a competitive advantage the virgin-material companies cannot match. And this is the version of the climate story that doesn’t get told often enough: recycled supply chains can be more stable than virgin ones in a volatile economy, not less.

So it’s refreshing to hear Trex acknowledge that the loop isn’t closed yet. The first generation of Trex decks is reaching replacement age — though I have to admit that my deck is looking pretty good at almost 20 years old — and the manufacturing side can reabsorb this material, but the recycling bottleneck is contractors pulling up those old decks who don’t want to sort the screws from the boards. And Amy named this directly. That’s the kind of candor that builds trust with the audience, and it points to the next phase in the circular economy work that requires leaping into the messy human logistics of deconstruction, sorting incentives, and reverse-haul economics.

Trex’s instinct to use its existing distribution backhauls is the right one, and it’s the model that other durable-goods manufacturers will need to copy if extended producer responsibility laws keep expanding state by state.

Two interviews this month with companies that chose the harder path early and now hold more defensible market positions. That isn’t a coincidence. It’s a leading indicator of which businesses get to keep operating in the climate economy that’s arriving right now. We’ll keep tracking the manufacturers building the infrastructure before the regulations force them to, because they’re the ones writing the playbook that everyone else will be reading in five years.

So stay tuned, folks. And hey, if today’s conversation gave you something to think about, share this episode with someone in your life who’s wondering whether sustainability and business strategy can actually be the same thing. And it turns out, in some companies, they already are. Folks, you’re the amplifiers — to spread more ideas to create less waste. And there are more than 550 episodes in our archive waiting for you on Apple Podcasts, Spotify, iHeartRadio, Audible, and other purveyors of podcast goodness, whatever you prefer.

Thanks for your support. I’m Mitch Ratcliffe. This is Sustainability In Your Ear, and we will be back with another innovator interview soon. In the meantime, folks, take care of yourself, take care of one another, and of course, let’s all take care of this beautiful planet of ours. Have a green day.

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This week’s quote is from American novelist and pioneering environmentalist Edward Abbey: “I am not an atheist but an earthiest. Be true to the earth.”

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