New York City’s initiatives to improve residential recycling have made plenty of headlines of late, but a recent report is urging Big Apple leaders to focus more on the commercial sector.

“Transform Don’t Trash NYC,” created by community organizing group Alliance for a Greater New York, states that 90 percent of discarded material from restaurants and other businesses in the city could be composted or recycled. However, according to the group, only 40 percent of the material is actually diverted.

The report’s authors go on to argue that “a highly dysfunctional and outsized private system” for collection has added to local pollution, stymied waste reduction/diversion efforts and negatively affected some of New York’s lowest income areas due to the placement of facilities that handle discarded material.

“Unfortunately, the city has largely overlooked the commercial waste sector, to the detriment of local communities and workers,” according to the report, “and to the detriment of the local environment, economy, and the city’s long-term sustainability.”

The report cites data compiled by the City. According to those numbers, 3.2 million tons of discarded material was generated by offices, restaurants and other businesses in the Big Apple in 2011 and 2 million tons went to landfills or incinerators.

What could help increase commercial recycling and composting? Alliance for a Greater New York recommends more regulatory oversight and a franchise system of collection in which hauling companies bid for the right to be the exclusive providers within defined geographic areas of the city. That arrangement, the report says, would require each winning bidder to adhere to higher environmental standards.

In his final year in office, New York City mayor Michael Bloomberg has made residential recycling improvements a major priority, pushing through legislation to expand city collection of compost, electronic scrap and other materials. The city has a goal of achieving 75 percent waste diversion by 2017.