Do you recycle? – Good. But do you know what happens to your waste when it has been collected?

Waste management is a hot topic around the world – but management practices vary a lot between countries. Although a variety of efforts are made to reduce, reuse and recycle in South Africa, 90% of the country’s waste is still being dumped in landfills, which are filling up quickly. This is a challenge, especially as overall waste is projected to increase in amount. At the same time, the proportion of recyclable materials in these landfills is unnecessarily high. In the bigger picture, waste not only contaminates surface water, groundwater, soil, and air and contributes to climate change, it also impacts human and environmental health. Managing this waste is energy-intensive. Single-use products and improper forms of disposal come at a price. Therefore, recycling is vital to assure future generations a healthy planet with sufficient resources.

While the share of recyclables in South African landfills is overlooked, as simply dumping everything into landfills is regarded as the most cost-effective solution, a large informal sector of waste pickers has evolved. Unskilled workers try to make their living in the hazardous environment of landfills by collecting and selling recyclable materials. A recent market report revealed that recyclables such as textiles, cardboard, containers, and pallets remain to be recovered. This waste presents untapped opportunities for small and growing enterprises.

Eco-inclusive enterprises shape a circular economy

Small business iThemba Phakama sees the challenge of overflowing landfills as an opportunity and recognises the work of informal pickers as essential for an inclusive approach to waste management. In the enterprise’s business model, informal waste pickers become a local supplier of sorted waste products and are thus included in the formal value chain. However, the activities of our SAG-SEED Award Winner focus on more than just waste elimination from landfills. The small enterprise encourages waste collection and recycling as a method of waste management while also improving the lives of informal waste pickers. By providing the pickers with locally manufactured tricycles and safety gear that improve their health and increase their income, the enterprise generates valuable social impacts for the local community. iThemba Phakama’s mission even goes further as the company also builds communal capacity and awareness during educational workshops.

Eco-inclusive enterprises like iThemba Phakama, which integrate strong social and environmental dimensions into their business models, have been identified as key catalysts for inclusive economic growth and environmental sustainability. The waste sector, in particular, has great potential to drive South Africa’s green growth.

The South African Government has committed to promote small and medium-sized enterprises (SMEs) and cooperatives as a vehicle of more decent and sustainable development. They tackle climate change via pollution control and support for natural resource conservation and increase community empowerment via the creation of new jobs in waste service delivery and recycling. Innovative solutions concerning resource efficiency or upcycling reduce the environmental impact of waste and help to steer the economy towards a circular economy.

Barriers for eco-inclusive enterprises to grow and scale

Although a more sustainable waste management sector is set to increase in reach and impact as the government’s focus moves towards associated practices, research reveals that fundamental barriers for eco-inclusive enterprises have remained unchanged for over a decade. Poor market access, for instance, creates financial vulnerability and ultimately results in the failure of businesses. This presents a clear challenge to make ideas like iThemba Phakama’s a scalable solution.

A new analysis of the sector and concrete policy proposals which aim to shape a more enabling framework for these enterprises have now been published in a SEED Sectoral Business Condition Brief on the waste management sector in South Africa.

To counteract these barriers and to support these SMEs to grow and scale, two SEED Policy Prototyping Labs were held, during which policy-makers, financial institutions, sector experts, researchers and eco-inclusive enterprises got together to not only identify the most fundamental barriers to eco-inclusive waste enterprises but to also prototype tailored, customised approaches to tackle these challenges. During a participatory and iterative process, action fields were identified and strategies were formulated which shall strengthen eco-inclusive waste enterprises in the sector. Instruments and underlying assumptions were tested through a comprehensive literature review and expert interviews.

Pathways and instruments to provide more enabling business conditions

The most fundamental barriers for eco-social enterprises include access to finance, markets and inputs, as well as a lack of sufficient business support. The SEED Sectoral Business Condition Brief summarises these challenges and provides solutions. To inform policymakers and sector experts, the efforts in the Labs were translated into the design of customised support tools and frameworks for policy instruments aiming at shaping a more enabling environment for eco-inclusive enterprises.

Results of this process show great potential for how the ecosystem for eco-inclusive enterprises in the waste management sector can be strengthened. The Brief serves as an introduction for all stakeholders interested in supporting eco-inclusive enterprises. In particular, it highlights challenges and barriers to eco-inclusive enterprise growth in the waste management sector in South Africa. It identifies action fields for multi-stakeholder efforts and supports the development of instruments that strengthen the eco-inclusive enterprise sector.

 Are you curious to learn more about unlocking the potential of eco-inclusive enterprises in the waste management sector? Read our Sectoral Business Condition Brief “From Waste to Resource: Policy Pathways for Eco-Inclusive Enterprises in South Africa”.

SEED Policy Prototyping Labs facilitate collaboration between poli­cy-makers, financial institutions, sector experts, researchers and eco-inclusive enterprises to prototype instruments that promote eco-in­clusive enterprises. The Policy Labs result in innovative, tailor-made in­struments and interventions that enable small and growing eco-inclu­sive enterprises to successfully start-up, scale-up, and maximise their environmental, social and economic impacts. During the Policy Labs, SEED provides participants with up-to-date, sector-specific insights into challenges and enablers of these enterpris­es, and facilitates a participatory and iterative process to design cus­tomised support tools and frameworks. SEED is committed to sharing lessons and replicating instruments and experiences that support SMEs to grow and scale.

Interested in a more in-depth understanding of how eco-inclusive enterprises work? Understanding the barriers and needs of eco-inclusive enterprises is only one of the main topics SEED’s Policy Advocacy Programme has focused on so far. To provide a more in-depth understanding of how eco-enterprises work, how they can help achieve sustainable development on the ground and how enabling frameworks can be created to help them scale up, SEED offers a range of detailed case studies. Check out our SEED Case Study Series to gain insights about how eco-inclusive enterprises contribute to sustainable development through their triple bottom line approaches.