For Circular Economy Innovation, Look to the Global South

Extreme heat in Japan and Australia. Flash floods in Texas and across Europe. Billion-dollar-damaging storms in the Caribbean and Southeast Asia. These are no longer rare events but signs of mounting ecological stress that threaten long-term business continuity. The way companies manage natural resources—how they produce, sell, and dispose of products—is not sustainable. Yet within this challenge lies a strategic opportunity: the circular economy. The circular economy offers a way for companies to strengthen resilience by minimizing waste, maximizing resource use, and innovating across product life cycles. Accenture estimates that the global circular economy could unlock $4.5 trillion in economic gains by 2030. But most corporate circular strategies today still focus on incremental improvements to products, packaging, or operations, often developed through their operations in Europe, East Asia, or North America. What they’re failing to see, adapt, and adopt for their own and society’s benefit are the compelling circular innovations emerging in underinvested and marginalized communities in the Global South (as well as the Global North). These projects are not just morally compelling; they also represent a new frontier for sustainable business growth and environmental, social, and governance (ESG) leadership. The Corporate Status Quo Today, most companies implement circularity in three ways: Materials and products: Replacing virgin materials with recycled or bio-based alternatives and redesigning products for reuse, repair, or biodegradability. Business models: Shifting from product sales to service models, leasing, sharing platforms, or repair-based value chains. Collaborative governance: Partnering across value chains and sectors to build closed-loop systems and reduce systemic waste. These are sound strategies. But they tend to be driven by internal research and development teams, supply-chain collaborations or academic-industry consortia. Taking a broader view on innovation to include overlooked entrepreneurs, informal networks, and local knowledge systems operating at the economic margins would yield much better results. Grassroots Circular Innovation Across the world, communities facing scarcity, pollution, and systemic disinvestment are building circular solutions out of not just environmental concern but necessity. Their models may look different, but they solve the same challenges businesses face: how to do more with less, reduce dependence on fragile global supply chains, and operate in resource-constrained environments. Consider the work of Dr. Legena Henry, renewable energy entrepreneur in Barbados, who noting the problem of US$15-per-gallon gas on the island, built Rum&Sargassum to convert three local waste materials—rotting sargassum seaweed, rum distillery waste, and sheep manure–into an affordable biofuel. Or Betty Lu, whose Singapore-founded company Confetti Snacks purchases surplus and imperfect fruits and vegetables that would otherwise be thrown away and then upcycles them into chips with healthy profit margins. Or Salubata, a shoe design and manufacturing firm, founded in Nigeria that uses plastic waste collected from waterways and oceans to make modular shoes and carbon removal technologies. These projects simultaneously address the environmental challenge of wasted resources and the human needs for energy security, healthy food and clothing, and are poised for significant economic growth. There are signs that large global companies are beginning to pay attention to these developing-world circular innovations. Fast-fashion brand H&M has, for example, funded collectives like Saamuhika Shakti in Bangalore, which has adopted digital tools and logistics platforms to boost the recovery rates and income of workers sorting through and picking used materials, as well as the Circular Apparel Innovation Factory, which has created a viable textile recycling market with what is collected. Advice for Business Leaders If innovation is about solving real problems in original ways and executives are still under pressure to deliver on sustainability and social responsibility goals, then grassroots circularity deserves serious strategic attention. But this will require a shift in how corporations measure return on investment, because not all projects will yield immediate profits. Non-financial indicators aligned with ESG frameworks and goals must be incorporated. Such metrics might include carbon savings, supply-chain risk reduction, reputational gains, or inclusive employment. Consider also the advantages of opening the business to new market segments and future-proofing business against regulatory, environmental, and social shocks. Here are four ways to seize these opportunities: 1. Broaden your innovation funnel. Look beyond labs and accelerators. Partner with community organizations, development banks, or local entrepreneurs working on resource challenges in emerging markets or marginalized regions. Consider how IKEA Social Enterprise’s collaboration with Ashoka and UNDP Accelerator Lab supports informal economy actors in growing circular enterprises, while driving fresh insights into its own circular aspirations. 2. Map waste streams as opportunities. Whether in your own operations or those of your suppliers, identify waste or nuisance materials that could be transformed into value. Think modular, low-cost, and regenerative. U.K.-based International Synergies Limited has helped small to large companies across Europe, Africa, and Asia map waste streams and establish local business partnerships to utilize those materials. 3. Invest for shared value. Collaborate with grassroots innovators not through corporate social responsibility initiatives but through co-investment or joint ventures that build durable circular ecosystems. Unilever Nigeria helped finance local social enterprise Wecyclers’ franchise expansion of community-based waste collectors, building an expansive local supply chain for post-consumer recycled plastic and enabling it to reach plastic neutrality. 4. Update your metrics. Adopt ESG-aligned indicators that reflect the full value of circular investments. Look for hybrid business models that combine financial returns with measurable environmental and social outcomes. The Unilever-Wecycler partnership, for example, measures KPIs related to mass of plastics recycled, jobs created, and living wages paid, in addition to financial ROI. With most of the world’s future population growth happening in the Global South, it’s smart business for international companies to cultivate indigenous solutions to local problems and create mutual benefits for themselves and local partners. Organizations that do so can benefit in three ways: learning innovative practices, securing resources through circular management, and building governance capabilities beyond traditional supply chains.

For Circular Economy Innovation, Look to the Global South

Summary.

Partner Center