WEF: Scaling Innovation and Traceability for Circularity

The World Economic Forum (WEF) has teamed up with Accenture to release its latest research, Scaling Traceability Innovation to Unlock the Value of Informal Waste Management.

The paper explores insights from innovators and leading experts across the waste ecosystem, delving into how traceability can help contribute towards a circular economy and form a sustainable supply chain.

Unlocking the true value of waste management requires technological advancements, collaboration and an opportunity to scale.

ESG concerns

Rapid urbanisation, insufficient financing and limited infrastructure has meant that waste is piling up or being disposed of incorrectly, creating a wealth of health, environmental and economic consequences.

As emerging traceability innovations enter the landscape - including digital tools, blockchain platforms and AI analytics - informal waste workers become visible, providing a guideline for effective policy and strategic insights into waste management.

60% of businesses say that a lack of supply chain visibility is a significant risk management issue, particularly within waste management. The paper, therefore, explores examples of innovations which have started to transform the sector, an evaluation framework to help leaders assess solutions and a roadmap for implementing digital infrastructure to help with transformation.

Emerging countries are at greater risk of waste pile-ups - WEF estimates that low-income countries are dumping or burning 93% of their waste. It is estimated that developing comprehensive waste management systems in emerging markets will cost US$680bn. While this cost is high, the cost of not acting is higher - between 400,000 and one million people die every year from diseases caused by mismanaged waste. 

However, an informal waste management system has been able to recover more than 88 million tonnes of recyclables every year, but the gap in traceability means it has not been able to scale across global supply chains.

As they work independently, they seldom have access to safe working conditions, significant earnings or legal recognition. As a result, networks are beginning to bring these issues to global recognition, in order to implement traceability and introduce proper infrastructure to support workers.

"How we source, trace and manage waste responsibly is central to the future of circularity, climate action and corporate responsibility," says Wesley Spindler, Managing Director for  Sustainability at Accenture. 

"This is not just a question of how we track waste but also its accountability, human rights, environmental impact and return on investment. If we address these priorities through emerging technologies, such as digital product passports, blockchain and AI-driven analytics, we can gain access to new, transformative solutions."

Trends for change

Post-consumer recycled (PCR) feedstock is recycled plastic material which has been collected from post-consumer sources such as bottles, then is cleaned and re-moulded into new products.

PCR feedstock is becoming increasingly viable, as it gains a market value because manufacturers buy the material. Due to its circular nature, it helps corporates meet their sustainability goals and governments are incentivising the use of PCR, through mandates and taxation. 

Developments in traceability have been spearheaded by a number of trends, with innovation accelerating due to the convergence of these trends:

• Technology - digital payment systems, AI-driven analytics and blockchain platforms are being used within waste management
• Capacity - decades of NGO work has created foundations and models for the application of these technologies
• Policy - commitments to sustainability have become part of international and national law, with a growing demand for traceability
• Corporate accountability - businesses are now assessing the impact of their supply chains on the environment and surrounding communities, increasing their understanding of traceability
• Public-sector transparency - Governments are demonstrating where their funding for waste management is going, in order to display effective and fair operations
• Consumer expectations - consumers are becoming more conscious of sustainability, with 25% reporting zero tolerance for unethical practices

Steps to circularity

Traceability has helped drive sustainable waste collection and the creation of circular supply chains, but fragmentation of data remains a major barrier to scaling.

Unlocking the true value of waste management innovation requires more data, cross-industry collaboration, data-sharing enabling technologies and shared standards or regulations.

"An effective transition to more sustainable and resilient industries cannot leave anyone behind, even when the change needed is so significant that it requires the ‘leapfrogging’ of intermediate and outdated models," adds Pedro Gomez, Head of Industry Agenda at World Economic Forum.

"Early-stage innovations can support this transition, but they require collaboration, investment and trust. When society invests in ideas as a collective, economic models can surge forward, not only becoming more resilient but also positively impacting all who depend on them."

By implementing further traceability technologies and encouraging collaboration, reliable and resilient supply chains can be built, with real cost-saving and sustainable opportunities. This will allow these waste management systems to grow to scale, ensuring circularity can be implemented globally.