Over the past decade, companies have increasingly committed to incorporating recycled plastic into their products. The objective is clear: reduce dependence on virgin fossil-based materials, support circular economy initiatives, and limit plastic pollution.
These commitments have undoubtedly accelerated progress. They have helped raise awareness among consumers, mobilized entire industries, and created incentives to develop recycling infrastructure.
But one question remains largely overlooked: What do we really know about the conditions under which recycled plastic is collected?
Because behind a significant share of the world's recycled plastic supply lies a complex and often informal collection system that depends on millions of workers operating outside traditional industrial value chains.
The Social Blind Spot of the Circular Economy
When discussing recycled plastic, companies typically focus on recycling rates, recycled content, and waste reduction targets. Far less attention is paid to the people who collect that material.
Across many regions of Asia, Africa, and Latin America, waste collection relies heavily on informal waste pickers. These workers recover, sort, and sell recyclable materials under conditions that often fall far below the social standards expected within formal supply chains.
Yet their contribution is essential. Without them, large volumes of plastic waste would likely end up in landfills, be openly burned, or find their way into rivers and oceans.
This creates a fundamental paradox: part of the global circular economy depends on workers whose contribution is critical, but whose working conditions remain largely invisible.
Growing Demand Is Creating New Pressures
At the same time, companies have not abandoned their growth ambitions. Demand for recycled content continues to increase. Regulatory requirements are becoming more stringent. Corporate commitments are expanding.
As a result, competition for access to recycled materials is intensifying. Certain recycled polymers, particularly recycled PET, have already become highly constrained markets.
This growing demand raises an important question: How can companies improve environmental performance without overlooking social performance?
The challenge is not theoretical. In some geographies, risks related to child labor, lack of social protection, unsafe working conditions, and economic vulnerability remain present throughout parts of the collection and sorting process. As demand for recycled materials grows, these issues become increasingly strategic.
Why Companies Can No Longer Ignore This Issue
Historically, many consumer goods companies had limited direct exposure to informal collection systems. Today, that is changing. Circular economy commitments are creating stronger links between global brands and the upstream collection networks that supply recycled materials.
The question is therefore no longer simply "How much recycled plastic do we use?" It is increasingly "Under what social conditions was this material collected?"
As supply chain due diligence requirements expand across jurisdictions, this becomes a matter of governance, compliance, risk management, and reputation.
Should Informal Systems Be Replaced?
Probably not. Informal collection systems play an important economic and social role in many countries. They provide income to millions of families while helping recover significant quantities of waste that public infrastructure often lacks the resources to manage effectively.
Attempting to replace these systems outright would be both unrealistic and potentially counterproductive. The challenge is not to eliminate the informal economy. The challenge is to help improve it.
Procurement Has a Critical Role to Play
This is where procurement becomes central. Improving social conditions within recycled plastic supply chains cannot be achieved through declarations alone. It requires transforming the economic mechanisms that shape the value chain.
Before acting, companies must first understand how local ecosystems function: Who collects the material? Who buys it? Who aggregates and processes it? Which intermediaries are involved? How is value distributed across the chain?
Only then can meaningful interventions be designed.
Two priorities typically emerge. The first is improving the efficiency and traceability of existing collection systems. The second is strengthening social standards throughout the value chain. These objectives are closely connected. Improving working conditions generates additional costs. Sustainable solutions therefore require business models capable of creating sufficient value to support those improvements.
Making Social Performance a Commercial Criterion
One of the most powerful levers available to companies is to progressively integrate social performance into sourcing and supplier management decisions. In practice, this means defining social expectations that reflect local realities, focusing on continuous improvement rather than purely punitive approaches, implementing realistic monitoring and auditing mechanisms, and collaborating closely with NGOs, local organizations, and community stakeholders.
The objective is not to impose Western standards overnight. The objective is to create credible and measurable pathways toward better outcomes.
The Next Stage of the Circular Economy
The circular economy has successfully brought waste management and resource efficiency to the center of corporate sustainability strategies. That is an important achievement.
But as circular supply chains mature, a new expectation is emerging. It is no longer enough to trace the material. Companies must also understand the conditions under which that material is collected.
The next stage of maturity in the circular economy will not be driven solely by technology, recycling rates, or material innovation. It will also be shaped by social performance.
And procurement will play a decisive role in ensuring that environmental progress and social progress advance together throughout the value chain.
Philippe Beaud
Senior Procurement & Sustainability Consultant