What will it take to create a circular economy for plastic?

Plastic waste is becoming an increasingly insurmountable problem for our world, our oceans, for our landfills and for climate change overall. The visible recycling bins in many countries help to create a perception that generally we do a decent job of recycling plastic and reusing it. In fact, only 9% of plastic waste is recycled. That said, this is surely less in my community based on anecdotal evidence.

For me, the pandemic was a great magnifier of how much household waste my family can generate. In lockdown, all our trash was visible at home, and not out of sight and out of mind and distributed across the office, school, the subway, the gym and so on.  It all quickly piled up in one place. It made me uneasy and truly think about where it was all going. My family’s ability (or inability) to segregate all the different types of recyclable materials correctly for our local recycling stream was clearly weak.

A proliferation of plastic products

As humans, we produce more than 380 million tons of plastic every year. Some reports say up to 50% of that is single-use plastic – used for just seconds, but on the planet for several centuries.

These shocking statistics make it clear that we must change how we work with plastics. We cannot simply recycle or reduce our way out of the plastic pollution crisis. We must ensure that we invest in creating sustainable alternatives and that any plastic we produce stays in the economy (not our oceans) and is continually repurposed – never becoming waste or pollution.

Solving for the first mile

During the Innovate for Impact campaign that was organized for people around the globe to celebrate the stories of impact ventures solving the world’s biggest problems, I was invited to speak to Nalini Shekar, co-founder of Hasiru Dala. This company was set-up to give waste pickers in India what Nalini calls a ‘just transition’ to a better life. The goal is to empower waste pickers to do the work they’ve always done in a newer, better compensated, and safer way using their recycling skill and knowledge. When I lived in Istanbul, I used to save up specific metals and plastics for these same sorts of people who came looking for ‘profitable waste’. Nalini’s efforts hit home for me.  

A different kind of relationship

But better lives and social justice was just the first step for Nalini and her co-founders. They wanted to provide brand owners with Extended Producer Responsibility (EPR) compliance and exporting high quality plastic waste to be ‘same-cycled’ (e.g. PET to PET rather than downcycling to polyester yarn) abroad.

The vision is to integrate the current generation of waste pickers in India into the mainstream circular economy and enable its accelerated adoption by consumers and producers.

Nalini recognizes that the nature of the circular economy requires collaboration across a wide variety of stakeholders, from social enterprises with scalable models to global brands. And she’s not afraid to tell global corporates the truth about their role in the circular economy.

“If you want to achieve EPR compliance, which measures the environmental and social cost of consumption, those costs must be embedded in the process of production itself. Inevitably, that involves partnering with someone else. And, yes, there is a cost involved in doing it ethically. But it is worth it if you look at the long-term benefits. When the large manufacturers and brands come to work with us and understand the work we do, it’s always a win:win situation.”

She recalls a European company who approached them to make garbage bags from PET recycling. But Nalini pointed them to a more pressing problem. No one had worked out how to recycle the flexible plastic milk sachet packaging that are used extensively across India. A year later, the company came back with investment and the technology to do it.

“They also decided to give any profits from the line back to Hasiru Dala. It’s a different kind of relationship,” she says smiling.

Putting a price on virgin plastic

Nalini believes consumer products companies should behave as though there’s a virgin plastic tax. “Just as we now have a carbon tax, we should have a small tax on virgin plastic, then naturally everything will fall into place. When new technologies or economies of scale kick in, then operating within the circular economy will be a comparable cost.”

I’m struck by the very different way of thinking required to succeed in the circular economy. Often, my consumer products clients are working on outcomes like better waste collection or improved recycling. However, they actually need to think bigger. They need to be aware of how they impact the wider system of collection and recycling and understand the possibilities of doing far-reaching good. Fortunately, many are investigating just this.

Becoming part of the circular economy is bigger than solving the world’s plastic pollution crisis. It’s also about addressing inequity. It’s about conferring dignity, creating jobs, and pursuing economic freedom. It’s about improving the lot of everyone in the circular value chain.

Nalini asked me to inspire my clients to take the next step towards circularity. I hope this article sparks some useful conversations along that path. It is a journey where collaboration with new partners and even competitors will be needed.

Learn more about how EY supports impact entrepreneurs through EY Ripples here.

About EY Ripples 

The global EY Ripples program aims to positively impact one billion lives by 2030. EY people, together with clients and other like-minded organizations, use their skills, knowledge and experience to bring positive change across three focus areas: supporting the next generation workforce, working with impact entrepreneurs and accelerating environmental sustainability. Learn more at ey.com/eyripples.