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By Michael Blanding

Outside of Brazil’s cities sprawl huge open-air waste dumps where thousands of trash pickers (catadores) collect plastics, cardboard and other recyclables to sell. Often single mothers trying to support their families, the trash pickers live in squalid conditions as they eke out a living. “There is no financial value given to their services,” says Thiago Carvalho Pinto ’15 MBA. “So they have to invest their social value in order to compensate for it.” 

Carvalho Pinto’s company, New Hope Ecotech, is tackling that problem by taking advantage of a recently passed law in Brazil that puts the responsibility for recycling waste on the companies that produced it. His venture has created digital recycling credits, similar to the carbon credits traded to offset emissions. Manufacturers buy credits from New Hope to offset their impact on the environment, and then the company uses the proceeds to pay the trash pickers, offering them a fairer price for their labor. “I’m what you call a validator or certifier,” says Carvalho Pinto, “a recycling exchange.”

Carvalho Pinto was trained as an industrial engineer in his native Brazil but experienced an environmental awakening after he went to France for an engineering project and discovered yoga. “I really got obsessed and traveled to India to become a yoga master,” he says. Hiking in the Himalayas, he discovered a love for nature and sustainability, returning to Brazil in his 20s to help launch a bike-sharing business that is now the largest in the country. But he struggled to make ends meet as an entrepreneur, so he came to Kellogg to develop an idea for a sustainable business that would have more impact in his country.

At Kellogg, Carvalho Pinto took a course in innovation for impact, which uses design thinking to tackle sustainability challenges. As part of the class, he and classmate Luciana Oliveira ’15 MBA explored clean-tech opportunities in Brazil, where they learned about the new law, modeled after similar laws in Europe, as well as the plight of the trash pickers. “Design thinking is a kind of anthropology where you must live the lives of your end users,” Carvalho Pinto says. “We were living like waste pickers, going to the landfills to pull up trash and visiting where they live.” The experience sparked their idea for the company: creating digital credits that could be traded as SMS messages since many of the catadores don’t have the smartphones required for apps.

After winning the Kellogg Social Entrepreneur of the Year Award, Carvalho Pinto further incubated the company through Google and is now in a Series B funding round. Recently he went back to Kellogg for help with a marketing challenge. Despite the law mandating that brands pay for recycling their waste, poor enforcement in Brazil disincentivizes companies from following through. Working with a class of MBA students at Kellogg, Carvalho Pinto developed a seal that brands could apply to their packaging to certify that they had met their recycling requirements, adding extra appeal to consumers. “This seal has become famous in Brazil,” he says. “Now manufacturers come to us and say, ‘I saw my competitor has this seal, and I don’t know what it is, but I want it too.’” 

As successful as New Hope Ecotech has been so far, Carvalho Pinto estimates that it has only achieved 1% market penetration in Brazil, leaving huge potential for further growth. He has already expanded into Chile, which recently passed a similar law, and is exploring opportunities in Latin America and even the United States, where Maine and Oregon have passed their own laws. “Working with purpose, sometimes it doesn’t feel like working at all,” Carvalho Pinto says. “Selling recycling credits is much easier than selling traditional products — you’re not selling; you’re saving the world.”

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