At Covanta, we work every day to protect tomorrow.

Our operations help communities, clients and customers find practical solutions to waste and materials management while generating clean energy. By running our business responsibly, efficiently and profitably, we are addressing the three pillars of sustainability: people, planet and prosperity.

We have set sustainability goals that guide us not only with regard to our work in materials management, but also in ensuring a safe and diverse workplace, developing and maintaining strong ties with our communities and delivering “beyond compliance” environmental performance. We’ve made considerable strides toward achieving our targets in each of these areas.

Since our last report, we’ve had an exciting period of new growth and opportunities for our company. The rapid expansion of our waste management capabilities, which followed several acquisitions, provided us with a network of material-processing facilities to support our Energy-from-Waste (EfW) profiled waste business. From wastewater treatment to reverse distribution to depackaging to tailored commercial waste services, Covanta now offers comprehensive environmental services to help an expanding base of customers reach their sustainability goals.

We are also excited by the growth of our metals management and recycling business. We recovered record volumes of ferrous and non-ferrous metals in 2016 through investments and upgrades to our metal collection equipment and technology. We opened a new facility in Fairless Hills, Pennsylvania, to clean and sort metal by type and size, allowing us to sell higher-quality metals directly to end users for a premium price. We are also investing in the development of new beneficial uses for the ash by-product of our energy recovery process.

The backbone of our business continues to be our world-class operation of modern EfW facilities. These facilities responsibly process the waste that remains after recycling by converting it to baseload renewable energy that is an important complement to intermittent renewables like wind and solar. EfW is a widely recognized tool in mitigating greenhouse gas emissions by enabling the diversion of waste from landfills and, in turn, avoiding the potent methane emissions associated with landfills.

Our newest EfW facility in Dublin, Ireland, is complete and began full-scale operation earlier this year. The facility has exceeded our expectations on all counts and will deliver more sustainable waste management for the Dublin area for many years. The environmental performance has been outstanding–our first stack test results were 71.1–99.97 percent below license limits.

Ambitious Continuous Improvement projects continue across our operations to enhance the efficiency of the processes we utilize for providing sustainable waste management to our communities and customers. And in 2016, we completed a major retrofit of the air pollution control systems at our Essex Resource Recovery Facility in Newark, New Jersey. Already operating well below its permit limits, the retrofit further lowered particulate and metals emissions by up to 98 percent.

I am disappointed by our recent safety performance, and we are taking action on this front. While we have notable successes and continue to outperform our peers on injury rates, with more than half of our fleet injury free in 2016, we were devastated by two employee fatalities: a motor vehicle accident in 2016 and a heavy equipment accident in 2017. In response, we have hired third-party experts to review our safety programs and culture top to bottom across the company. As they complete their work, we have already initiated key changes with both our truck fleets and mobile equipment operations to address the specific root causes that led to these two accidents. Ensuring our employees and our contractors go home at the end of every day without injury is our number one priority.

On an environmental front, our facilities continue to operate well below their permitted limits, and we have successfully maintained the performance gains we’ve made over the past decade. However, after four exemplary years of no stack test failures, we had three exceedances of air emission standards during stack tests in 2015-16. In every case, we took immediate action to investigate and correct any issues, and multiple retests show that each facility is back in compliance. We remain committed to 100 percent compliance with all discharge limits.

Our partnership with communities remains strong, in part due to enhanced efforts to engage on multiple levels. We are particularly pleased with the outcomes of the work we’re doing to enhance recycling and environmental awareness among elementary, middle and high school students. For example, in the New Jersey communities of Newark and Camden, we worked with local school districts to support teacher trainings, site visits and the provision of bins and other resources to promote recycling efforts. Following these efforts, we received an Environmental Hero Award from the Camden Collaborative Initiative.

I now invite you to explore our latest sustainability report. As a society, we face significant environmental challenges related to waste, energy and climate change. I hope you will share in our excitement about the many ways Covanta is committed to working with our partners and stakeholders to find effective solutions that help all of us to Protect Tomorrow.

 

Sincerely,

 

Stephen J. Jones,
President and Chief Executive Officer