Waste Not, Want Not
According to the Environmental Protection Agency, three million tons of usable office furniture end up in landfills every year. In this glut of others' trash, Globechain Founder May Al-Karooni saw a trove of hidden treasure.
While working for an investment banking firm in 2014, she discovered that it was costing the U.K.-based company around $65,000 to, in effect, relocate people and move them to the building across the road — including the office furniture and other items disposed of and replaced in the process.
“It just got me thinking, that's commercial madness,” says Al-Karooni. “Why is no one connecting these corporate companies to charities and small businesses to redistribute all these unneeded items and provide a real social impact at the same time?”
Looking deeper at the supply chain, she figured out a way to digitize waste that made financial and business sense to all parties involved, and thus Globechain was born. Officially launched in 2015, Globechain is a fast-growing marketplace that connects businesses, charities, and people that want to reuse unwanted items, the majority of which are typically disposed of or recycled by businesses. To date, over 11.2 million pounds of items have been kept out of landfills and put back to use. Moreover, Globechain has aided 14,000 communities in the U.K., Africa, Ukraine, and Libya, and saved charities more than $2.6 million.
Companies pay a fee to use the service, which allows them to list everything from furniture and fixtures to concrete blocks and even soil. Al-Karooni notes that listings are typically claimed or reserved within 24 hours.
The list of 10,000 members currently utilizing the Globechain platform includes heavyweights from all property sectors and industries: ISG, Skanska, Google Campus, Invesco Perpetual, Bank of America Merrill Lynch, CBRE, Marriott, IHG, H&M, and Chanel.
While Al-Karooni estimates that 40 percent of her business comes from retail and 40 percent from construction, this sustainable circular economy model affords everyone the same savings and benefits. For one, the approach is actually cheaper and faster than disposing of or recycling unneeded items.
“REITs and private equity [firms] have found some real value,” shares Al-Karooni. “Their portfolios involve a lot of store closures, openings, construction, and other real estate projects where it has a lot to do with cost cutting or budgeting to keep them lean.”
In addition, distinct tax and environmental-social-governance perks are attached. “You can in the U.K., in some cases, offset VAT on the cost of goods because of the charitable component of the program,” she says. Al-Karooni also provides ESG reports on the impact of every member's listings. Some companies have even leveraged the program to help earn LEED certification or a Green Key Point Eco-Rating.
But the reports were something she had to create from scratch. “When I went for investments at the beginning, the investors were asking what my market cap was. And there wasn't one,” she recalls. “I was so convinced there was a market for this type of business and supply chain sustainability and circular economy, whatever you want to call it. So, I started presenting the data from all the transactions on the site — where it was going and how it helped them. And just over the period of a year, I broke it down to social, economic, and environmental impact data. It was raw data at the beginning, then we created reports and infographics based on that data for the corporate companies to download. Now it's real time, so they can see it whenever they like.”
While Globechain is leading the charge, she recognizes infinite possibilities for the future of this growing industry.
“It's a commercial decision because it's money saved on waste disposal incineration, predominately,” Al-Karooni states. “It's a speed benefit because it's a virtual platform where items are taken within 24 hours. Plus, the ESG data is very valuable from a social impact perspective to show how they're helping communities.
“For instance, Heathrow Airport listed concrete pallets that were stuck in a warehouse for a year costing them money. The only option really was to pay a haulage firm to take them away. And then a charity from Sierra Leone in Africa requested them, and they're building an orphanage and a school with these concrete blocks. It's one of my personal favorite stories to share.”
Globechain recently expanded into Spain and United Arab Emirates last year along with three very quiet trials in Atlanta, Houston, and Milwaukee. A New York launch is set for February with Intercontinental Hotel in Asia planned for late 2020 or early 2021.