Responsible Sourcing Initiative Implementation

Responsible Sourcing Initiative:
Making Responsible Sourcing a Reality

for Plastics Recycling Supply Chains
The Responsible Sourcing Initiative
The Circulate Initiative’s Responsible Sourcing
Initiative mobilizes all stakeholders across the
plastics waste value chain to ensure that plastic
waste supply chains not only support recycled
plastics, but also safeguard human rights.
The initiative addresses the

“how” for companies seeking to
improve human rights across
their plastic waste value chain
by taking measurable action
while committing to a
harmonized set of fair
principles and responsible
sourcing framework.
Responsible Sourcing Initiative: Making Responsible Sourcing a Reality for Plastics Recycling Supply Chains | 2
Opportunities of socially inclusive value chains
Economic, social and environmental
Global market
Value creation Reduced CO2 emissions
competitiveness
-
Improved livelihoods Inclusive job creation Reduced resource use Reduced ocean pollution
Responsible Sourcing Outcomes by 2025
OUTCOMES - STANDARDS OUTCOMES - VALUE CHAINS OUTCOMES - KNOWLEDGE
1. Unified Responsible Sourcing 1. >50.000* waste workers lives 1. Increased awareness on Responsible
framework adopted by 25+ have improved and wages have Sourcing; trainings and toolkits
brands, recyclers and aggregators. increased. publicly available.
2. Global standards and 2. >100.000* tons of plastic waste 2. Policy input into fair & inclusive EPR
certifications include responsible responsibly sourced.* regulations and principles.
sourcing criteria and metrics
3. Increased traceability and 3. Increased data and transparency
based on the RS framework.
transparency across the 3 plastic through regional assessments on the
waste value chains. informal waste sector.
* to be defined in detail based on baseline assessment in phase 1 implementation projects based on full program budget
Responsible Sourcing Core Partners
“What” — Guiding principles
Fair circularity principles Policy and advocacy Corporate commitments
“How” — Systems approach to responsible sourcing
Harmonizing & convening Value chain engagement Corporate engagement Insights & tools
Investing Portfolio management Sharing knowledge
Socially Responsible Technical

Sourcing framework working groups
Local assessments Value chain implementation Local stakeholder engagement Insights, tools & monitoring
Strategic delivery partners
Responsible Sourcing Initiative
Collective action addressing the “how” for companies (brands and recycling companies) seeking to improve human
rights across the recycled plastic value chain that can be measured, managed, and is compliant with regulations.
This action-oriented program aims to:
1. 2. 3. 4. 5.
Harmonize definitions Identify the most Implement in concrete Train recyclers, Measure and
and frameworks for promising tools and projects with local aggregators, and disseminate findings
responsible sourcing approaches for partners that will others to better assess so that the project can
of recycled plastics traceability and improve human rights and improve human be replicated in other
and align on an transparency across practices and measure rights practices in the markets.
evaluation tool. the plastics recycling progress in three recycling value chain.
value chain. locations.
Implement with local partners in three locations to identify and invest in concrete
3.
projects that will improve human rights practices, and measure progress.
GEOGRAPHICAL APPROACH
SELECTION CRITERIA
‣ Aligning parties toward common goals by building a shared
‣ Neutral/positive policy environment understanding of the local situation
(e.g., EPR)
‣ Building local buy-in through co-development of solutions with
‣ Strong local partners and willingness diverse local stakeholders
‣ Informal sector engagement ‣ Translating theory into action on the ground
‣ High impact potential ‣ Define a replicable value chain approach
‣ Available feedstock ‣ Making data easy to understand

through visualisation
‣ Sustain responsible sourcing practices

within the value chain
3. Implement with local partners in three
locations in concrete projects that will
improve human rights practices, and Replicable value chain approach with local solutions
measure progress.
The implementation projects will be designed based on a replicable five step methodology
2. Assess socio-economic
informal waste sector and
environmental conditions
of the implementation 4. Implement and invest in
partners’ operations and solutions in collaboration
wastesheds. Business case with the local consortium
scenarios for brands and beginning with a pilot
recyclers based on group to test and scale
proposed interventions. solutions.
1. Establish a local 3. Opportunity mapping to 5. Monitor and evaluate

stakeholder consortium prioritize interventions project progress based
representing stakeholders by identifying barriers on aligned Responsible
across the value chain; and root causes. Develop Sourcing framework.
informal waste workers, a project plan with Utilize data to facilitate
collectors, aggregators, resource and course adjustments and
recyclers and brands. responsibility matrix (18 - improve overall outcomes.
24 months).
3. Implement with local partners in three locations in concrete projects that
will improve human rights practices, and measure progress.
Overview
1. Socio-economic analysis 2. Opportunity mapping 3. Action plan
1. Socio-economic analysis of value chain and Fact-based approach to prioritize interventions Implementation plan with local partners
waste flow map 1. Present findings to stakeholders 1. Subcontract partners based on investment plan
2. Traceability assessment 2. Shortlist of interventions 2. Planning roadmap based on targets
3. Inventory key challenges 3. Business model of shortlisted interventions 3. Tailored support
4. Set initial targets 4. Actionable strategies including KPIs 4. Small business program - improve business
5. Capacity building to understand RS 5. Refine targets operations, collection yield and quality
framework and standards 5. MEL implementation
TCI / FM + LOCAL PARTNERS
TCI / FM + LOCAL PARTNER TCI / FM + LOCAL PARTNERS
LOCAL Kick-off Industry workshop Lighthouse projects

STAKEHOLDER Consortium kick-off combined with Presentation of phase 2, combined with industry Shared vision of local government and business
CONSORTIUM
results of phase 1 leaders workshop marks the start of lighthouse projects
OUTPUT OUTPUT OUTPUT
Assessment data and results of the value chain Prioritized set of interventions KPIs by Detailed implementation plan and roadmap.
including barriers, root causes, and opportunities. consortium and implementation partner coalition Pilot program ready for launch. MEL framework
Intervention targets set by consortium. formed. Business models and parameters are implementation.
understood.
4. Monitoring and evaluation
3. 1. Socio-economic value chain analysis
VALUE CHAIN ANALYSIS ROLES TIME SCOPE

1. Socio-economic analysis of local value chain TCI / FM 3 - 5 months
a. Wasteflow ‣ Interviews with key stakeholders.

b. Informal sector quantitative ‣ Data gathering and analysis.
c. Qualitative: Waste worker stories, ‣ Trace material to source and process
understanding social and cultural context identification, including visits to the wasteshed.
2. Traceability assessment ‣ Deliver waste flow map and economics, and
insights on key assets and challenges.
3. Inventory key challenges
‣ Workshop facilitation to train consortium
4. Set initial targets partners on RS framework and standards.
5. Capacity building to understanding local situation ‣ Set up initial targets.
and the Responsible Sourcing framework
Local partner
‣ Data collection and support.
‣ Multi-stakeholder coalition support.
‣ Workshop facilitation support.
‣ Co-design interventions and set initial targets.
Current waste flow: Simplified
Dump or leakage
in rivers, nature
Mixed waste collected

On street formal or by municipality
illegal dumping site Landfill
Waste collectors Waste pickers

All plastics (informal)
Plastic factory
Sorted and baled
dry recyclable waste
MLA
Other dry recyclable waste

Aggregators
Recyclers
Informal Value Chain Formal Value Chain

Currently, no direct contact with this level of the value chain Curren audits and verifications apply to PCR Supplier, Recycler, and Aggregator,
from our team, or Tiers 1, 2, or 3 of the value chain. but not the private balers, cooperatives, or collectors.
(informal) Waste Pickers Private Balers / Coops Aggregator Recycler (Flaking) Manufacturer / Converter
3. 2. Opportunity mapping
VALUE CHAIN ANALYSIS ROLES

Fact based approach to prioritize interventions TCI / FM
1. Present findings to stakeholders ‣ Workshop to address challenges uncovered in step 1, root causes, and to create interventions.
2. Shortlist of interventions ‣ Prioritize interventions, accounting for feedback from all participants of the value chain, from
informal waste workers to recycling facilities.
3. Business model of shortlisted
interventions ‣ Analyze waste economics and set recommendations to adjust business models across the
value chain that would support responsible sourcing. I.e. address business performance with
4. Actionable strategies including KPI’s
aggregators through the delivery of small business programming, mentorship, and
5. Refine targets investments.
‣ Finalize action items for the pilot, with an agreed upon plan and goals for subsequent phases.
‣ Refine targets from Step 1.
Local partner
‣ Support root cause analysis and interventions development, including aligning
on pilot strategy.
‣ Coordinate Multi-stakeholder coalition support.
‣ Workshop facilitation support.
‣ Confirmation of waste economics.
3. 3. Action plan (1 of 2)
VALUE CHAIN ANALYSIS INTERVENTIONS SCOPED

Implementation plan with local partners Examples to improve livelihoods of waste workers are:
1. Subcontract partners based on investment plan ‣ Access to capacity development and training to improve
productivity / volume yield
2. Planning roadmap based on targets
‣ Organise in associations
3. Tailored support
‣ Access to social security, including recognition of work
4. Small business program - improve business operations,
collection yield and quality ‣ Access to infrastructure, land and equipment, and
transportation
5. MEL implementation
‣ Access to personal and business financial tools
‣ Access to legal support and administration
‣ Access to technology
3. 3. Action plan (2 of 2)
SMALL BUSINESS PROGRAM ROLES

‣ Aggregators are more interested and capable of supporting their collectors TCI / FM
when their business is profitable. However, they generally lack business ‣ Action Plan development and coordination of
training and are usually interested skill sets that would improve business partnerships for execution
performance
‣ Training and development to build capacity and
‣ Our SBP measures baseline business performance at the aggregators level to infrastructure of partners to succeed
determine strategic investments required to improve performance
‣ Tailored programming for informal waste
‣ Performance is defined by the ability to turn a profit and meet responsible collectors that’s scalable
sourcing standards, without which livelihoods opportunities wouldn’t exist for
collectors ‣ Share cross learning opportunities to help
establish common best practices, metrics, and
‣ A commitment to joining SBP is to co-design strategies to support collectors to goals
livelihood, beginning with traceability and record keeping, and relationship
building with collectors. ‣ Design and execution of MEL with refined targets
‣ SBP involves learning the business concepts and applying them real time to the Local Partners
aggregators’ businesses to improve outcomes - this includes budgeting and ‣ Action Plan implementation lead or support
projections, money tracking and reinvestment, healthy business evaluation and
guidelines, business mentorship, and literacy support for those who need it ‣ data collection and support
‣ Key outcomes include profitability, living income for owners and staff, action ‣ Multi-stakeholder coalition support
plan to support full time informal waste workers to a living income and the ‣ Workshop facilitation support
resources to guide that forward, and consistent volume and quality of collected
recyclable materials
Productivity Program Center Growth Plan: Steps to Increasing Volume
Center Growth Plan sample
Baseline Volume Intervention Center Volume Goal
What support could be offered If this support was received, how

How much material is your center to your collectors to help them much material would your center
currently receiving each _month_? increase their volume? receive each _month_?
Money
12,000 lb 18,000 lb
PPE
Center Volume Goal Number of collectors in program Volume goal for each collector
If this support was received, how How much material would each of your
How many collectors are
much material would your center collectors need to collect in order to
participating in the program?
receive each _month_? reach your center’s volume goal?
18,000 lb 8 2,250 lb
Sample first step of an Tracking Method

intervention on traceability - To begin equipping you with the skills needed to manage your business numbers, and also track volume and income for the purposes of the program,
instructing aggregators to collect we’ve created a tracking sheet for you to use according to your weighing method.
information at point of sale (this
can also be used for Step 1) Weighing Method Tracking Instructions Notes for Team
Weighing with a Scale When a collector comes to sell their materials, you (or your employee) will: Richardson is in the process of taking
Tracking Sheet ‣ Write the date inventory of COs’ scales, and confirmed
‣ Write the name of the collector that everyone should have a working
‣ Complete quality control scale to use. However, please let us
‣ Weigh the material know if any of them foresee any issues
‣ Write the weight (lb or kg) with using their scale for tracking.
‣ Pay the collector according to the weight
‣ Write the amount paid to collector (ht$ or HTG)
Signing an investment agreement with one Distribution of a scale for an aggregator
of our aggregators in our SBP who participated in our SBP
Implement with local partners in three locations to identify and invest in concrete
3.
projects that will improve human rights practices, and measure progress.
Implementing full value chain Responsible Sourcing practices

Different entry points towards responsible sourcing value chains
VALUE CHAIN 1 VALUE CHAIN 2 VALUE CHAIN 3
Supplier development Recycler-led Sourcing

Brands are looking to improve Recycling companies aim to Brands are looking to
responsible sourcing practices in become certified alongside increase recycled plastics
existing value chains to be responsible sourcing regulations feedstock compliant with
compliant with regulations across the value chain regulations through entering
new value chains
VALUE CHAIN 2
Value chain example
Recycler-led: Indonesia
Recycler-led Structure Indonesia, a country with 277 million people and a high-growth market. It also tops the list
of volume of plastic waste entering the environment. As demand for consumer products
Recycling companies aim increases, brands who manufacturer in Indonesia are searching for a growing volume of
to become certified recycled feedstock. Recyclers who want to fulfill the demand need to build responsible
alongside responsible sourcing supply chains to be competitive in the market.
sourcing regulations across
the value chain
The Situation An entrepreneurial recycling company has been operating in a market for many years.
They have followed the norms of the industry – buying on feedstock on spot from a pool
of 100 local aggregators. Business decisions are made based on quality and price of
feedstock, and timeliness of delivery/payment – there are no expectations or
transparency around how that material was collected or aggregated.
The Challenge There’s an opportunity to scale the business because of high demand and higher prices for
their product, if they can prove that their products are responsibly sourced. The recycler
starts to see responsible sourcing as a competitive advantage and begins a process to
change practice.
Hypothesis If the recycler can build a system of responsible sourcing around them, they can not only
scale in volume to meet growing demand, but improve the lives and livelihoods for their
collection network and de-risk investments to their facility.
VALUE CHAIN 2
Value chain example
Recycler-led CRITERIA
Recycling companies aim

Neutral/positive
to become certified Strong local Informal Sector High Impact
policy environment Available Feedstock
alongside responsible partners and energy Engagement Potential
sourcing regulations across (e.g., EPR)
the value chain
EPR and PROs are in Collection and Engagement exists at High potential to Geography with a
place but not yet Aggregation: the aggregator level scale if a responsible high and growing
enforced. Recycler is Traceability has with some sourcing chain is in volume of feedstock
engaged and want to started but recycler knowledge of first place
get ahead of EPR lacks needs support collectors, but not Consolidations of T1
requirements with know-how and methods are not Pilot aggregation will help drive even
capacity consistently applied was a promising more feedstock to
start, with some the recycler
Facilitation and Vertical integration tweaks, it can be
Coordination: TCI beginning to take model to scale
and First Mile shape
Value chain example
Recycler-led: Indonesia The approach and MEL
A. Value Chain Assessment C. Interventions Action Plan

B. Local Stakeholder Consortium D. Implementation E. Monitoring and Evaluation
and Stakeholder Mapping Incl Business Modelling
‣ gather information from the recycler ‣ select a team of key decision makers ‣ present insights from the assessment ‣ set up a pilot to test strategies and ‣ develop monitoring and evaluation
to document their existing value chain and enablers on the Recycler team and stakeholder mapping to the assumptions structure and mechanisms for each
assessment and stakeholder mapping ‣ select leaders from each level of the Recycler for feedback and co-design of ‣ establish a culture of cross learning partner and for selected KPIs
information - what are the assets we’re value chain to engage in the action steps. and knowledge sharing and make ‣ support the recycler to integrate a
building on? This step includes consortium, including informal ‣ together, present findings and action space to do so during the data collection system to monitor
completing informational interviews workers and aggregators steps to local stakeholder consortium implementation progress, and collaborate with them to
‣ map the value chain according to ‣ engage local leaders and subject to confirm the information, ‣ ensure there’s time and space to for support their suppliers to do the same
information received. Begin to cross matter experts who support and assumptions, and address information suppliers (all tiers) to communicate ‣ gather and review weekly and monthly
reference existing information with advocate for workers in the value gaps feedback to the recycler for course data with the recycler to build their
Framework principles and identify the chain and for the recycling industry ‣ workshop solutions for key challenges adjustments capacity to utilize and understand the
gaps in the value chain system, then transition to a sustaining
‣ define the purpose and intended ‣ incorporate feedback and learnings
‣ complete site visits to address outcomes of the consortium in ‣ prioritize interventions and discuss from the pilot to finalize the action monitoring and evaluation timeline
information gaps, introduce our work supporting the Recycler to achieve a impact of interventions to structure plans ‣ when reviewing data, apply the
to leaders of the value chain including responsible sourcing chain that meets resources, action plan, and KPIs, and learning to make course adjustments
collectors, aggregators, and ‣ implement the final action plan,
RS principles and support all workers coordinate cross partnership prioritizing items that can have a where needed
community leaders, ensuring workers collaboration where necessary. For
are a part of the process from the start ‣ define roles and responsibilities and structural impact, such as internal ‣ utilize a value chain dashboard to note
rules of engagement example, working with aggregators to policies and procedures, business progress across the board and to
‣ understand the capacity and resource facilitate a formal partnership with model, operational structures, to connect the dots across the chain
capabilities and constraints of the mutually agreed upon responsibilities. simple interventions that addresses
recycler to better understand ‣ ensure all resources are in place before essential needs such as a scale for
identified risks and deficits and to implementation aggregators and transportation issues
inform future discussions around
action steps. ‣ support the recycler in executing ‣ align all parties throughout
interventions, which may include implementation
updating policies and procedures,
pricing models, building supplier
relationships, and more
VALUE CHAIN 2
Value Chain 2 Implementation
Intended outcomes:
Recycler-led
Recycling companies aim
to become certified
‣ Responsible Sourcing Framework is ‣ >2,000-5,000 waste workers lives ‣ Recycler and their suppliers have
alongside responsible adopted by the recycler. They’re also will be improved and wages will completed workshops on responsible
sourcing regulations across trained and adept to explain the RSF increase towards a living income sourcing, and agree to supporting the
the value chain to their suppliers. standard. Living income for ongoing efforts to meet responsible
informal waste workers is sourcing principles.
‣ Global standards and certifications calculated for the region.
are in place, the recycler is able to ‣ The recycler has engaged PRO Indonesia in
apply standards and practices to ‣ 10,000 tons of plastic waste their development of the value chain to set
uplift the supply chain responsibly sourced per year. an example for how to implement a
responsible sourcing chain.
‣ Value chain is traced to the first
mile of material collection. ‣ Data is collected and reviewed by the
Sustained data collection and recycler and with their suppliers regularly..
reporting efforts are keys to a They’re also updating research and data on
transparent value chain. the consumption and waste infrastructure
and management of their geographic
coverage and serving as the SME for
others..
VALUE CHAIN 3
Value chain example
New market, brand-led: Vietnam
Sourcing Structure A Value Chain that builds on the successes of existing cooperatives and independent junk
shops in aggregating materials to deliver to market. Focus is on the corridor between
Brands are looking to Hanoi and Hoi An.
increase recycled plastics
feedstock compliant with
The Situation As central Vietnam continues to develop and grow, increased tourism is resulting in a
regulations through
entering new value chains
higher consumption of single-used plastics. Collection infrastructure is trying to catch up
to the waste problem, but there are key gaps in the value chain that require addressing
before all stakeholders can operate to their potentials. These gaps exist at the bookends
of the value chain, coordination of informal waste workers and an operating recycling
facility.
The Challenge A lack of coordination at the informal waste collectors level to ensure that supply exists,
and a missing piece at the top of the value chain to process materials collected. As a result,
while aggregators are working hard to achieve results, the lack of complementary efforts
results in a low performing value chain with high volume of waste material left in the
environment.
Hypothesis If we can address the two ends of the supply chain, infuse responsible sourcing standards,
and bring a consistent demand, we can stand up a value chain that will not just service the
north to central corridors, but can be scaled to address the waste efforts in the region.
VALUE CHAIN 3
Value chain example
New market, brand-led: Vietnam
Sourcing CRITERIA
Brands are looking to

Neutral/positive
increase recycled plastics Strong local Informal Sector High Impact
policy environment Available Feedstock
feedstock compliant with partners and energy Engagement Potential
regulations through (e.g., EPR)
EPR and PROs are in Collection and Engagement exists at Key gaps to address There’s high impact
place, vocal and Aggregation: Green the aggregator level, are at informal in volume that can be
engaged public Hub, Women’s but not at the sector level and the recycled given the
waste management Union, independent collection level. recycler level. size and continuing
infrastructure. cooperatives and Unlocking both growth of
junk shops. Various junk shops would increase the manufacturing in the
and cooperatives are impact potential of country.
Recycling: Lavergne willing and all partners in
Vietnam interested in between both ends
engaging with us to of the value chain,
Facilitation and support the workers ensuring that
Coordination: First in their supply chain. informal workers are
Mile also benefiting from
the growing sector.
Value chain example
New market, brand-led: Vietnam The approach and MEL
A. Value Chain Assessment C. Interventions Action Plan

B. Local Stakeholder Consortium D. Implementation E. Monitoring and Evaluation
and Stakeholder Mapping Incl Business Modelling
‣ understand the various ways the local ‣ select leaders from each level of the ‣ present insights from the assessment ‣ set up a pilot to test strategies and ‣ develop monitoring and evaluation
plastic waste material flow is organize value chain to engage in the and stakeholder mapping to the local assumptions structure and mechanisms for each
‣ outreach to all key stakeholders consortium, including informal stakeholder consortium to confirm the ‣ establish a culture of cross learning partner and for selected KPIs
responsible for the local material flow workers and aggregators information, assumptions, and address and knowledge sharing and make ‣ support each partner to integrate a
and interview a set of workers at each ‣ engage local leaders and subject information gaps space to do so during the data collection system to monitor
level of the value chain, include the matter experts who support and ‣ workshop solutions for key challenges implementation progress
brand to understand material needs advocate for workers in the value in the value chain ‣ ensure there’s time and space to for ‣ gather and review weekly and monthly
and volume demand and projections chain and for the recycling industry ‣ prioritize interventions and discuss key stakeholders across the value data to onboard partners to the
‣ map the waste shed, from the point ‣ define the purpose and intended impact of interventions to structure chain to communicate updates and system, then transition to a sustaining
plastic waste hits the environment to it outcomes of the consortium - to resources, action plan, and KPIs, and make course adjustments monitoring and evaluation timeline
ending up at a recycling facility. note support the development of each level coordinate cross partnership ‣ incorporate feedback and learnings ‣ when reviewing data, apply the
business models and price of materials of the value chain to meet responsible collaboration where necessary. For from the pilot to finalize the action learning to make course adjustments
at each level of the value chain sourcing principles and support all example, working with recyclers to plans where needed
‣ assess baseline volume of supply and workers adjust pricing that will better support
volume, quality, and/or livelihoods. ‣ implement the final action plan, ‣ utilize a value chain dashboard to note
demand to support the business case ‣ define roles and responsibilities and prioritizing items that can have a progress across the board and to
development rules of engagement ‣ execute pre-launch training/workshop structural impact, such as internal connect the dots across the chain
‣ craft a profile of the workers at each to align purpose, plans, and outcomes, policies and procedures, business
level of the value chain, with a focus on including key stakeholders at each model, operational structures, to
informal workers level of the value chain. Review simple interventions that addresses
preliminary KPI dashboard essential needs such as a scale for
‣ conduct site visits to level of the value
chain, including landfills and open ‣ ensure all resources are in place before aggregators and transportation issues
space where informal workers collect, implementation ‣ align all parties throughout
to assess adherence to responsible ‣ Support the brand partner in implementation
sourcing principles communicating the assessment and
‣ outline key responsible sourcing planning word across relevant
challenges as well as assets to build on business lines to build a sustaining
partnership and commitment to
reaching responsible sourcing goals
VALUE CHAIN 3
New market, brand-led
Intended outcomes:
Sourcing
Brands are looking to
increase recycled plastics
‣ Responsible Sourcing Framework is ‣ >1,000 - 2,000 waste workers ‣ All consortium partners and key
feedstock compliant with adopted by all Vietnamese partners, lives will be improved and wages stakeholders have completed workshops on
regulations through from informal collectors to will increase towards a living responsible sourcing, and agree to
entering new value chains aggregators to recycler, and including income standard. Living income supporting the ongoing efforts to meet
key government partners such as for informal waste workers is responsible sourcing principles.
URENCO and CITENGO. calculated for the region.
‣ PRO Vietnam is engaged in the
‣ Global standards and certifications ‣ 10,000 tons of plastic waste development of the value chain and agrees
are in place, and consortium partners responsibly sourced per year. to and supports the adherence to
understand their purpose and ability responsible sourcing principles.
to lift up the responsible sourcing and ‣ Value chain is traced to the first
business performance of the value mile of material collection. ‣ Data is collected and reviewed with all
chain. Sustained data collection and consortium partners and brand partners.
reporting efforts are keys to a Research and data on the region’s
transparent value chain. consumption and waste infrastructure and
management is update. A partnership with
URENCO and CITENGO is fostered to
support all workers..
VALUE CHAIN 3
New market, brand-led
STRATEGY FUNDING SUPPORTS

Sourcing
Invest in key aggregators in the Da Nang value chain to implement responsible ‣ Setting up aggregators to trace their material to
Brands are looking to sourcing strategies to deliver recycled material that is traceable, responsible, and source
increase recycled plastics improves livelihoods of the collectors involved.
feedstock compliant with ‣ Assessment of human rights risks within the select
regulations through ‣ Select a 3-5 aggregators pilot aggregators’ value chains
‣ Trace their material to collectors - aggregators > junk shops > collectors ‣ Delivering of the improvement plan to mitigate
human rights risks. This will take place in the form of
‣ Assess the risks inherent in this value chain direct programming for collectors, business support
for junk shops, and investments for aggregators
‣ Deliver insights and recommendations for improvements, including the
OPPORTUNITIES resulting volume as improvements are made ‣ Coordination with recycler to support responsible
sourcing - including setting up relationships with
Setting up a responsible ‣ Set up the value chain to deliver material to local recycling partner, including aggregators with offload agreements predicated on
sourcing value chain for negotiation of offload agreements and commitment to responsible sourcing meeting responsible sourcing requirements, best
recycled plastics that builds on practices to support supplier network, and regular
standards
the existing infrastructure set
feedback meetings across the value chain
up by the Vietnamese
government and local ‣ Implement programs and services to support the development of the value
organizations, while addressing chain, including programming for informal collectors to address social ‣ Monitoring and reporting for the value chain to be
two key gaps that transforms challenges, business support for junk shops and investments for aggregators, delivered to brand partners, and utilizing the data to
central Vietnam as a major and last but not least, connecting brands with the recycler to ensure a address areas of improvement.
player for recycled materials. consistent demand, without which, improvements in the rest of the value chain
will be stalled.
For more information
Annerieke Douma, Director of Programs TCI

adouma@thecircualteinitiative.org
Madhu Narayan, Program Manager TCI

mnarayan@thecirculateinitiative.org
Local stakeholder
Consortium Waste worker advocates
and organisations
Recycling companies
and aggregators
Investors
Certifiers
and auditors
Government
Civil Society
Organisations
Brands
EXAMPLE Value chain 2 implementation
Recycler-led Recycler-led
Recycling companies aim to
become certified alongside Situation: An entrepreneurial recycling company has been operating in a market for many years. They have
followed the norms of the industry – buying on feedstock on spot from a pool of 20-30 local large aggregators.
responsible sourcing regulations
Business decisions are made based on quality and price of feedstock, and timeliness of delivery/payment –
across the value chain there are no expectations or transparency around how that material was collected or aggregated.
Challenge: However, customers are starting to ask questions, and they don’t currently have a lot of answers.
There’s an opportunity to scale the business because of high demand and higher prices for their product, if
they can prove that their products are responsibly sourced. The recycler starts to see responsible sourcing as
Structure a competitive advantage and begins a process to change practice.
The situation 1. Recycler starts to ask questions of their suppliers (or hires a 3rd party to do this so that it doesn’t
interfere with the business relationship): Who are your workers, and how are they treated? Do you
offer any benefits? Where does the material come from? Who are your suppliers? How are they paid?
The challenge
Have you seen any child labor? Etc.
2. The consultant maps the supply chain all the way back to the first picker/source of waste. They look
Hypothesis for any traceability (e.g., paper receipts) that already exists, and try to understand root causes of why
some practices are happening (e.g., there are children helping their parents with collection because
The approach there is no one else to watch them). They identify other actors that influence the supply chain (e.g.,
local government, CSOs, competing aggregators).
MEL 3. The consultant brings these findings back to the recycler, (and maybe customers and investors) and
they discuss what to do. They identify a few priority issues to tackle, including:
a. Improving policies and practices internally, like requiring that suppliers agree to a set of RS
terms and conditions, and sign an assurance statement
b. Creating a supplier development program with a subset of suppliers who are receptive to
improving their own practices, if it means more business for them. Included in the program
are trainings and incentives like small grants for equipment purchases.
c. Integrating a digital payments system that will create more traceability, which the recycler will
use, and over time, will require their suppliers to use as well.
d. Creating a waste worker support program out of a CSR budget that allows the recycler to
VALUE CHAIN 2
The Challenge
Recycler-led 1. However, customers are starting to ask questions, and they don’t currently have a lot of answers. There’s an opportunity to scale the business because of
high demand and higher prices for their product, if they can prove that their products are responsibly sourced. The recycler starts to see responsible
Recycling companies aim sourcing as a competitive advantage and begins a process to change practice.
to become certified 2. Recycler starts to ask questions of their suppliers (or hires a 3rd party to do this so that it doesn’t interfere with the business relationship): Who are your
alongside responsible workers, and how are they treated? Do you offer any benefits? Where does the material come from? Who are your suppliers? How are they paid? Have you
sourcing regulations across seen any child labor? Etc.
the value chain 3. The consultant maps the supply chain all the way back to the first picker/source of waste. They look for any traceability (e.g., paper receipts) that already
exists, and try to understand root causes of why some practices are happening (e.g., there are children helping their parents with collection because there
is no one else to watch them). They identify other actors that influence the supply chain (e.g., local government, CSOs, competing aggregators).
The Situation 4. The consultant brings these findings back to the recycler, (and maybe customers and investors) and they discuss what to do. They identify a few priority
issues to tackle, including:
An entrepreneurial recycling a. Improving policies and practices internally, like requiring that suppliers agree to a set of RS terms and conditions, and sign an assurance statement
company has been operating in
a market for many years. They b. Creating a supplier development program with a subset of suppliers who are receptive to improving their own practices, if it means more business for
have followed the norms of the them. Included in the program are trainings and incentives like small grants for equipment purchases.
industry – buying on feedstock c. Integrating a digital payments system that will create more traceability, which the recycler will use, and over time, will require their suppliers to use as
on spot from a pool of 20-30 well.
local large aggregators.
Business decisions are made d. Creating a waste worker support program out of a CSR budget that allows the recycler to build more direct relationships with Tier 3+ suppliers and
based on quality and price of waste pickers and provide further training and support, like PPE or childcare.
feedstock, and timeliness of 5. The recycler and consultant identifies the risks/mitigations and resource requirements, who they need to partner with, and plans for implementation. This
delivery/payment – there are plan will take time and resources. Fortunately, they are aware of an initiative of TCI that might be able to help, and they ask their customers and investors
no expectations or as well. They make a list of the suppliers they want to start with, and begin to introduce the idea to them: Do they want to be involved?
transparency around how that
6. TCI’s role: to facilitate this process of implementation for the benefit of the system.
material was collected or
aggregated.

Responsible Sourcing Initiative Implementation

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Responsible Sourcing Initiative:

Making Responsible Sourcing a Reality

The initiative addresses the

OUTCOMES - STANDARDS OUTCOMES - VALUE CHAINS OUTCOMES - KNOWLEDGE

Fair circularity principles Policy and advocacy Corporate commitments

“How” — Systems approach to responsible sourcing

Investing Portfolio management Sharing knowledge

Socially Responsible Technical

Strategic delivery partners

This action-oriented program aims to:

‣ Informal sector engagement ‣ Translating theory into action on the ground

‣ High impact potential ‣ Deﬁne a replicable value chain approach

‣ Available feedstock ‣ Making data easy to understand

‣ Sustain responsible sourcing practices

1. Establish a local 3. Opportunity mapping to 5. Monitor and evaluate

LOCAL Kick-off Industry workshop Lighthouse projects

OUTPUT OUTPUT OUTPUT

4. Monitoring and evaluation

VALUE CHAIN ANALYSIS ROLES TIME SCOPE

a. Wasteﬂow ‣ Interviews with key stakeholders.

Mixed waste collected

Waste collectors Waste pickers

Other dry recyclable waste

Informal Value Chain Formal Value Chain

VALUE CHAIN ANALYSIS ROLES

VALUE CHAIN ANALYSIS INTERVENTIONS SCOPED

SMALL BUSINESS PROGRAM ROLES

What support could be offered If this support was received, how

Sample ﬁrst step of an Tracking Method

Implementing full value chain Responsible Sourcing practices

VALUE CHAIN 1 VALUE CHAIN 2 VALUE CHAIN 3

Supplier development Recycler-led Sourcing

Recycling companies aim

A. Value Chain Assessment C. Interventions Action Plan

Brands are looking to

A. Value Chain Assessment C. Interventions Action Plan

STRATEGY FUNDING SUPPORTS

Annerieke Douma, Director of Programs TCI

Madhu Narayan, Program Manager TCI

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