WEF: Why Traceability is Integral to the Circular Economy

The World Economic Forum (WEF) has partnered with Accenture to produce a new report, Scaling Traceability Innovation to Unlock the Value of Informal Waste Management.

The paper details how developing traceability within waste streams can support the growth of a circular economy and help build more sustainable supply chains.

The research draws on insights from innovators and experts to explore the value of waste management. For manufacturers, unlocking this value requires a combination of new technology, collaboration and opportunities to scale existing operations.

A lack of supply chain visibility is a major risk for many businesses. According to the report, 60% of businesses view this as a major issue, particularly in the context of waste management. Rapid urbanisation and insufficient infrastructure have led to waste being disposed of incorrectly, which creates health, environmental and economic problems.

Emerging innovations such as digital tools and AI analytics could help make informal waste workers more visible. This visibility provides a foundation for effective policy and strategic insights into waste management practices.

The role of traceability in waste management

Emerging countries face a greater risk from waste accumulation.

WEF estimates that low-income countries dump or burn 93% of their waste. While developing comprehensive waste management systems in these markets could cost US$680bn, the report notes the cost of inaction is higher.

It is estimated that between 400,000 and one million people die each year from diseases linked to mismanaged waste. An existing informal waste management system recovers over 88 million tonnes of recyclables annually but a traceability gap prevents it from scaling across global supply chains.

"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."

Creating change with PCR feedstock and technology

Post-consumer recycled (PCR) feedstock, which is recycled plastic material from sources like bottles, is becoming more viable as it gains market value from manufacturers. Its circular nature helps corporations meet sustainability goals and governments are using mandates and taxation to incentivise its use.

Several trends are accelerating developments in traceability. These include the application of digital payment systems and blockchain platforms in waste management, the foundational work of NGOs, new sustainability policies and a growing demand for corporate accountability.

Furthermore, governments are demonstrating greater transparency in funding for waste management and consumers are reporting less tolerance for unethical practices.

While traceability has supported sustainable waste collection, the fragmentation of data remains a barrier to scaling these efforts. Realising the full value of innovation in waste management depends on greater data sharing, cross-industry collaboration and the establishment of shared standards and regulations.

Building resilient supply chains through collaboration

"An effective transition to more sustainable and resilient industries cannot leave anyone behind, even when the change needed is so substantial that it requires the ‘leapfrogging’ of intermediate and outdated models," explains 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 advance, not only becoming more resilient but also positively impacting all who depend on them."

By implementing further traceability technologies and encouraging collaboration, businesses can build more reliable and resilient supply chains. This approach could present real cost-saving and sustainable opportunities.

It will also allow effective waste management systems to grow to the required scale, ensuring circularity can be achieved on a global level.