March 2023

#InclusiveCircularity: What we mean by it, and how it can benefit the planet and people without affecting profitability

Left to right: Shekar Prabhakar, Sandya Narayanan, Smita Rakesh, Maria Bystedt and Akshay Soni, at the in-person event held in Bengaluru in March 2023.

Innovations in waste management are picking up, with many organizations working on more efficient ways to deal with our burgeoning plastic, textile and other kinds of waste. While mechanization and efficient processes are being put into pilots and tests, waste pickers who are critical to the success of the process are at risk of being left out of the waste management value chain.

Saamuhika Shakti hosted a conversation on #InclusiveCircularity: How philanthropic and commercial capital can work together in waste management for the planet, people and profitability in March 2023.

During the conversation, Maria Bystedt, H&M Foundation’s Strategy Lead for Inclusive Societies, Shekar Prabhakar, co-founder and CEO of Hasiru Dala Innovations, Smita Rakesh, Vice President of Social Alpha, and Sandya Narayanan, Founding Member of the Solid Waste Management Round Table (SWMRT) Bengaluru shared their views on circularity, inclusivity and redefining what we know of waste and its management. The in-person session was moderated by Akshay Soni, Executive Director, Saamuhika Shakti, The/Nudge Institute.

The speakers shared that circularity goals need not come at the expense of the livelihoods of people who already are at the margins of economic success and society and that it is possible to run profitable businesses which benefit the waste picker, waste entrepreneur, society and environment at large.

Some excerpts from the conversation:

Q) How did H&M Foundation choose inclusive societies as a focus area, and how do you as a funder look at which geographies and communities to work with?

Maria: H&M Foundation is focused on a socially inclusive and planet-positive world. As a philanthropic organization, we work with marginalized communities in geographic locations where we can leverage connections with the fashion industry. 

We believe in creating equity for those groups. Waste pickers are one such group. Another is women in the garment industry. H&M Foundation is funding two collective impact initiatives at the moment - one in Bengaluru, India, and another in Bangladesh. 

Q) What is inclusive circularity? Does H&M Foundation have any experience working on inclusive circularity projects? What have been the learnings and what can we do to encourage more of such projects? 

Maria:  Inclusive circularity is when both people & planet can thrive. Initiatives for the planet and people right now are being done in silos, but we have to bridge them. We have to consider both the social and planetary perspectives when talking of emerging circular economies. [If we don’t ] we risk creating solutions that are new monsters, having negative effects on people at the margins by not taking into account their needs and requirements

H&M Foundation believes in a holistic approach where we look at the actual implementation of programs, and the innovative models that are emerging. 

We won't solve the climate crisis unless we have a solid foundation of social equity. It is through this lens that we looked at Saamuhika Shakti, which works to enable waste pickers of Bengaluru gain agency to lead safe and secure lives for themselves and their families.  

For Inclusive Circularity, we also work with the private sector and look at building market-based solutions that will be able to live on after philanthropic funds run their course. 

Shekar: Inclusive Circularity is the deliberate and planned inclusion of waste pickers in the circular waste economic value chain. It’s easy to go over the waste picker's head. But there is an opportunity – a difficult path but possible. Hasiru Dala Innovations has demonstrated the possibility of doing this within the market system. 

Q) Hasiru Dala Innovations has been trying to work with integrating waste pickers for a while. What has been the biggest challenge? And what can the ecosystem do to support such work? 

Shekar: Moving from informal to formal is not a binary switch, but a process. The shift is actually from informal to professional and then to formal. But for this to happen, we have to build capacity for the waste picker to understand compliance and service expectations. And while this is being built, the economic value chain has to be a little patient and make some space to absorb the cost of this compliance. Waste pickers are not incapable of learning, that would be unfair. It's just that a little more time and effort are required to get them ready for the market economy.

 On the other hand, the informal sector also thrives on holding information back, as this is their secret. This is how they survive. While talk of transparency comes easy, the market is not transparent, brands don't share their pricing strategies. It needs to be a two-way street. 

Q) Hasiru Dala Innovations is World Fair Trade Organisation (WFTO) certified. It has made a commitment to pay fair wages and this is renewed every year – this is the base minimum the organisation starts with. Tell us, in your experience, is it hard to sustain a business paying what people are owed fairly? 

Shekar: We believe in providing economic opportunities to underserved populations. Fair wages should also be fair payment, which means paying at least a living wage and ensuring the predictability of payment every month. If you go purely by what the market is willing to pay, it is not possible to pay fair wages. 

What we do is talk to brands to get them to realize that the way to set the supply chain right is by paying fair prices and taking into account how waste gets value - only when it is picked up and sorted by the waste picker! This is the most important step, but waste pickers continue to get the least returns, with most of the value being realized by the recycler at the endpoint. 

Other things we discuss with brands and the ecosystem is the need to look at the social cost, and to radically change the way we look at the cost – we have to move away from the “cost of production”, which is always looking to minimize the cost of consumption. 

Q) Why is the "invisible cost" of not giving fair wages never accounted for in business planning and decision-making? Society will bear the burden of keeping underprivileged communities at the margins. What can we do to raise awareness of how just wages and access to opportunities are good for the economy and everyone in it? And, how do we showcase the "commercial benefits" so organizations actively adopt those approaches?

Smita: Venture capital and others are looking at returns on investment, and rarely from an impact-first mindset. If something does not give back 20x, the investment simply will not happen.

The waste sector is therefore ignored, as the ratio of the returns is low, it is opex- heavy and also not very glamorous. 

However, there are people who still invest and are doing good work. Every penny we spend encourages innovators to look at the waste management space. It is building this sector and it has started to create a ripple effect, attracting more innovators to the space. But it will take time unless we change the framework and the definitions we work with. 

We need to bring in more actors to do that, and we need to define the cost to society and the climate if we do not address the challenges faced. 

Sandya: I feel enough discovery has not happened, because not enough people are interested in solving this. Such a conversation on Inclusive Circularity – these events are only seen in Bengaluru. Since the sector on the whole is government-controlled, there is little scope for private players. I agree that there is a need to re-define many of the issues faced in the waste management sector..

Q) SWMRT has played a critical role in drafting the solid waste management rules of Bengaluru along with the civic body. Bengaluru is perhaps the only municipality in India where the role of waste pickers in solid waste management has been recognized, and DWCC operations have been given to them. What are your learnings and how do we continue to move forward on this path?

Sandya: It’s a tough route to take. Municipalities only know 2 things –  contractors and their own employees. Our path is different. The fact that we have a  system in Bengaluru did not come easy, and it is not easy as there is no other precedent we are following. We are learning on the go. 

The good thing is, there is staying power in this city because of groups that are working to ensure waste pickers are kept at the heart. In other cities, the experience is nowhere close, and we need a group of committed actors like we have in Bengaluru to make this happen. 

Q) Waste pickers operating dry waste collection centers (DWCC) is one way to ensure their roles are encoded within the solid waste management rules for the city. What are some other ways we can bring waste pickers into the mainstream or formal economy?

Sandya: The concept of DWCC is formalised. It’s here to stay. It’s in the policy. However, we are still not clear on who will run it. Should waste pickers run it, or someone else? I think the key word for today is redefinition. 

Is our goal formal economy or inclusion? We now have a better understanding - it is inclusion. It is alright to have waste pickers, as it is the easiest and lowest-level entry profession for so many migrants coming into the city. We have to allow that. 

Therefore, formalising is acknowledging and recognising that there is this segment, and the need to be more inclusive to allow it to happen.

Further, the cost of recovery also needs to fit in. Then, we can figure out how waste pickers are given their due. 

Shekar: I see it as cost of recovery + cost of production = cost of consumption. As municipalities get better at waste management, access to waste will get more difficult. So we need to make them green workers and create models that integrate them. 

Q) Technology seems to have been viewed as a catchall solution in the solid waste management sector, akin to several other sectors, with a lot of commercial capital and some philanthropic capital also being poured into it. Yet, whether it's the waste-to-energy plants in Delhi or the reverse vending machines, they have actually ended up worsening the problem. What role do you think technology can play in helping waste pickers and management and what should commercial and philanthropic capital be funding?

Shekar: Tech solutions fall into two groups, core & digitalisation. A lot of work is needed in core tech at different scales that focus on recovering material and resources. This aspect needs more capital and capex. As for digitalisation, most people depend on it for traceability and this tends to be a catch-all. However, it is trying to simplify a complex problem.  

DWCC’s segregate 76 categories of waste before it can be recycled. So technology needs to be an enabler to help with this at different scales. 

Sandya: Waste-to-Energy is still floating around even though it’s a failure because good recycling methods are not there.  The threat of waste-to-energy means we have not done enough to find out how we can re-use the waste we generate. 

Smita: Material recovery is hard in some areas, easy in others. What is lacking is research and innovation. Force-fitting technology to problems cannot be the solution. We must acknowledge that tech is not the be all, end all. 

Maria: Having an inclusivity lens for circularity is required. There needs to be a just transition. Upskilling needs to happen. And we need to realise technology is not just for boys as it mostly is tailored towards them. Women play a big role in the waste picking space.

Q) Is it not risky to mix philanthropic and commercial capital? 

Maria: I don’t see risk,  as everyone has to play their part. For-profits and nonprofits need to work together. 

Since H&M Foundation is privately funded, we have the opportunity to invest at an early stage, fund programs that are not yet validated – such as Saamuhika Shakti – and find those movers and shakers. Our role is to get that going, take that risk, factor in failures, and learn from them. 

Smita: Philanthropy will remain the most critical source of funding, as grants are needed for programs that address historically unsolved problems of marginalised communities. Commercial capital will not come in here. That said, philanthropists can be the right nudge, nudging commercial capital to meet them at least halfway. Philanthropic capital is catalytic capital. 

Q) What are the biggest challenges waste pickers face, with respect to access to markets & capital. What are some of the steps organisations and civil society can take to help support them in this journey?

Shekar: Social entrepreneurs think nonprofits are a get-out-of-jail profitability card. But they, too, need to create momentum like any other business and get the returns that commercial capital demands. The question that remains is, can you, in a short period of 5-7 years, prove and create a business model that does not drift from your core mission and still gives you returns? 

This is where both impact investors and commercial capital can play a role. 


Q) Marginalised communities lack access to capital. Is there any possibility to get them this? 

Smita: It is a broken link, there is a massive dearth of capital access. While micro entrepreneurship models are coming up and capital is moving in slowly, there is still a dearth of capital available for this sector.  

Shekar: There is a need to create conditions that get capital to marginalised communities. For instance, creating a financial instrument for waste pickers. 

Q) What about the National Urban Livelihoods Mission and other public schemes? 

Sandya: Most schemes are routed through municipal bodies that are too busy, it is not a priority for the government employees. While private organisations can offer solutions, they cannot achieve the scale that the government can. There is a need for the government to work with private organisations to ensure this last-mile connectivity. Currently, the trust is missing. 


Q) What is the biggest positive you have seen in your work? 

Shekar: Hasiru Dala Innovations only provided equitable access to opportunities, access to markets, capital and clean waste. The waste pickers are the ones who have worked hard and pulled themselves up. This is the biggest positive we have seen – and now we are seeing their aspirations moving from just daily survival to owning a home!

Q) As a funder and given the learnings, will inclusive circularity be a lens you focus on during program design and choosing projects to support?

Maria: Yes, we are very encouraged with our learnings from Saamuhika Shakti and that we have been able to reach 35,000 waste pickers and their family members in Bengaluru. We are also excited that we have been able to reach the fashion industry. It is a success story and it should inspire other actors too.


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