CEO Corner: A Sustainable Future, Part I.

Part 1: Meeting and Exceeding environmental, social and economic goals within the tire industry.

Like many facets of the automotive industry, the tire sector also continues to witness significant change, with advances in materials, tire design, manufacturing, as well as sustainability practices and end-of-life disposal.

In the first of a two-part series, Autosphere talks with Carol Hochu, President & CEO of the Tire and Rubber Association of Canada about the topics of sustainability, growth, technology developments and legislation as it relates to the tire industry both in Canada and around the world.

The environmental pillar

Autosphere: Can you tell us a little about TRAC’s overall view on sustainability?

Carol Hochu: When it comes to the concept of sustainability I’ve been seized with a simple and powerful definition of sustainability that was put forward by Gro Harlem Brundtland, a Norwegian politician.

She said it was about meeting the needs of the present without compromising the ability of future generations. I believe she was also the one who coined [if not started] the discussion around the concept of interconnectedness and interdependence of the social, environmental and economic impacts, which are components of sustainability.

Whether we see sustainability as a three-legged stool or from a people, planet and profit concept, at TRAC and the tire industry globally, we focus on and continue to seek to improve and all of those three pillars. From a social pillar perspective, it’s about human mobility and the connection to tire safety and performance.

The environmental pillar is very broad but looks at how tires impact human health in the environment as well as the end of life management.

Finally, the economic pillar relates to metrics like employment and Gross Domestic Product and other economic factors.

At TRAC, we also have a desire for continued collaboration and continuous improvement, not only within the tire value chain and the tire sector but with other stakeholders like governments, NGOs and citizens at large.

We also want to ensure that sound environmental stewardship also includes sound economics.

Ultimately, sustainability is very important to the tire industry and TRAC’s members in terms of meeting [and exceeding] goals related to social, environmental and economic impact.

End of Life Tires (ELT)

End of Life Tires (ELT) is obviously a big concern for the industry, can you tell us about some of TRAC’s progress in this area and also about the ELT committee?

CH: Some readers might not be aware that in Canada, all 10 provinces and the Yukon Territory have in place highly effective scrap tire recycling programs.

We also have a staggeringly high diversion rate in this country which is currently sitting at almost 100%. If viewers and readers want to learn more about that, I highly recommend going to the website of the Canadian Association of Tire Recycling Agencies (CATRA—catraonline.ca).

They recently released a 2020 annual report which goes into a lot of detail on a province-by-province basis, including what’s taking place in tire recycling. With these provincial tire recycling programs having been established, this has really led to the TRAC board considering where we go from here and essentially asking, what is the next phase of ELT management.

We reached out to Dr. Barry Takallou of Crumb Rubber Manufacturers (CRM)—one of our TRAC member companies and he agreed to assist and become chair of the ELT Committee.

Barry is a recognized expert in the field with tremendous knowledge and insight. Since the inaugural meeting of the committee, in Q4 2020, TRAC members and staff have been collaborating with Barry and others on goals and objectives for the ELT Committee.

àWe spent the first couple of meetings level setting with everyone who was involved and our TRAC member volunteers who are serving on this committee, come from different backgrounds—not only companies within the value chain—but also tire manufacturing.

There was a lot required in bringing people up to speed but now, we’re working more closely to develop goals and objectives.

There is more coming, so I would urge viewers and readers to stay tuned. TRAC has also held a signature event called the Rubber Recycling Symposium but unfortunately, it was cancelled due to the COVID-19 pandemic.

We’re hoping to have it back on our agenda for 2022 which would be great as it truly is a signature event that attracts a global audience.

It also serves as a hub for industry leaders across the value chain to not only network and engage in dialogue, but also to collaborate and cooperate on matters related to end-of-life tires, so we’re very excited about that.

Ontario Tire Stewardship

What’s the latest news regarding OTS distribution and surplus tires?

CH: There’s been a lot of development on that front, and for those that might not be familiar, OTS is short for Ontario Tire Stewardship.

This was the industry funding organization that was responsible for operating the used tire program for many years that kept passenger, light truck and medium truck and other tires out of landfills and into recycling programs.

OTS ended on December 31, 2018, and then immediately following that, in January 2019, we moved to a new framework in Ontario called individual producer responsibility.

Some activity in 2020 facilitated the need to wind up OTS and so the Ontario courts appointed accounting firm Grant Thornton as the liquidator for OTS, meaning that they will act as the agent and will be responsible for implementing all the provisions related to the approved wind up plan.

Last year in April, this was followed by the Ontario Minister of Environment, Conservation and Parks issuing a directive to OTS regarding the surplus funds—specifically that the funds would be returned to the stewards—the brand owners and first importers—of tires brought into Ontario. More recently, in 2021, there was a real burst of activity at the start of the year.

Grant Thornton had to submit an addendum to the OTS wind-up plan in January.

They consulted on it with a broad number of stakeholders, and ultimately the revised plan was approved in March, so by the end of May/beginning of June, the eligible stewards were starting to receive their share of the OTS surplus funds.

It’s been a bit of a process—as some of the funds are tied up with the Canada Revenue Agency, which is trying to assess the HST implications of the fees that were collected.

The good news, however; is that the first transfers of funds have gone back to stewards and that the wind up of OTS is continuing.

Sustainability in the tire industry

Looking at the wider picture how do you see the global sustainability environment evolving?

CH: Currently a lot is going on globally concerning sustainability for the tire industry.

To really understand how extensive that is, you only need to access your favourite online search engine, type in the word “sustainability” and see what the tire industry is doing, including tire manufacturers and how they are meeting [and exceeding] sustainability goals.

If we look at it from the perspective of individual pillars, obviously there is the social pillar of sustainability.

And it’s not just endemic to the tire industry but the whole notion of diversity and inclusion and equity which is currently, very strong.

We have companies [including tire manufacturers and distributors] examining their governance, and how they want to improve upon that.

From the environmental pillar perspective, companies are evaluating their impacts on climate change and developing climate strategies.

In our industry, this not only includes developing tires that are 100% sustainable, but placing a stake in the ground, and making declarative statements that by a certain date, specific goals will have been achieved.

Many companies are looking to align themselves with UN Sustainable Development Goals.

All I can say is that the list goes on and on and viewers can look at sites like Autosphere.ca has a great resource in keeping tabs on what is happening globally.

Accessing the latest global sustainability reports from tire manufacturers is also time well spent.

Global Dialogue Initiative

Can you tell us a little about the Global Dialogue Initiative?

CH: The Global Dialogue Initiative or, as it’s often called internally the Gulf Global Dialogue framework is a quarterly forum for the global industry association and senior staff to come together and discuss the common issues of the day as well as share knowledge and understanding.

Not only does it provide a common occurrence to gather with global colleagues, but it also represents a fantastic opportunity to connect with like-minded individuals from around the world to understand what’s happening locally and globally on important tire issues like tire safety, performance and sustainability.

Since joining TRAC, for me, these meetings have, due to the COVID-19 pandemic, happened virtually.

Hopefully, at some future point (the group usually tries to meet once a year person) it would be delightful to meet some of these folks and have a chance to discuss these issues face-to-face.

*Originally published with Autosphere.ca