In the amount of time it took you to read the title of this article, 1,500 plastic bottles were thrown into an ocean somewhere…and that’s just plastic bottles. 90% of plastic, even that brought to a recycler, is landfilled or lost to environmental leakage, creating a wasteful single use system and polluting a variety of environments.

This is a well known problem. There are a variety of stakeholders demanding better practices from the brands who put plastic into circulation, particularly governments and consumers - unfortunately, these brands have almost no levers to pull in this very complex system and we are setting out to change that.

The waste management industry operates through a complex value chain where waste and recyclables enter but what comes out is often indeterminate, lost, or mismanaged. Despite the majority of recyclables being brought to a recycling drop off, materials may end up in landfills, proceed to secondary processors, or even cross international borders, all brokered by well, brokers.

Each stakeholder focuses on maintaining profitability and ensuring the swift processing of incoming and outgoing materials, often at the expense of broader collaboration. The brands who have come to be branded as the source of the problem have no ability to see or control what the recycling industry does with their waste after it is collected. That is the way the system, and the market, have come to be.

We imagine a different version of the system - one where transparency, collaboration, and circularity are at its core. But in order to build that system, we need to succinctly diagnose the problem.

The problem we are facing is threefold:

1. The recycling industry is very fragmented, meaning transparency is almost impossible to achieve.

2. Incentives between those who handle the waste and those who produce it are not aligned.

3. The problem and the network has become so complex that regulators and producers seem to be unable to find effective solutions.

The Consequences of Fragmentation

A fragmented system leads to a significant issue: the lack of data. Due to operational silos, there is essentially no data resulting in minimal visibility into the ultimate destinations of waste materials. While individual players may track their immediate transactions, the journey of waste beyond their custody is largely unmonitored, meaning any connections in the value chain are hazy at best. This absence of end-to-end transparency hampers accountability across the entire value chain. When recycled materials pass from one party to the next, it becomes nearly impossible to verify where materials end up or how they are used. This lack of data poses reputational risks for brands, as it undermines sustainability claims and can erode consumer confidence (The Circulate Initiative). 

Standardization of Data Management

Without standardized methods across the value chain, the data that is gathered, if at all, is incomplete, limiting the ability of stakeholders to design coherent, data-driven strategies for waste reduction and resource optimization (World Economic Forum). Not only does this data hinder coherent strategic initiatives, but it also hinders building any kind of traceability picture. Without standardized and comprehensive data, nobody can make any decisions about how to improve or redesign this system. 

The Imperative for Transparency

To address these challenges, transparency across the waste management value chain is essential. Data transparency is crucial for setting and achieving meaningful sustainability goals, particularly with an emphasis on cross-party data. When companies have access to accurate, end-to-end information about their waste streams, they can benchmark progress, identify areas for improvement, and align their operations with broader environmental objectives (Keteres). Regulatory compliance also becomes increasingly critical as environmental legislation tightens. Companies with transparent practices are better positioned to meet compliance standards like EPR and avoid penalties (National Waste).

Transparency also plays a vital role in maintaining consumer trust. Today’s consumers want to understand the environmental impact of the products they use. If brands cannot provide clear, verifiable information about where their waste ends up, they risk alienating environmentally conscious buyers and making claims they cannot verify (The Circulate Initiative). 

Who’s paying for this?

Another major issue is the lack of aligned incentives and cost structures. As it stands, material recovery facilities (MRFS) bear the brunt of the cost and responsibility of choosing a particular end of life outcome for the waste they process. Given that they are already operating on very tight margins, they are practically forced to choose the most profitable option for end-of-life of the material they take on, even if that is to landfill or export waste that could easily be reused. There’s no way for brands to know where their waste is or to financially incentivize these MRFs to guarantee higher quality outcomes for the waste that they produce.

Strategies for Enhancing Data Integration and Transparency: The Ouro Solution

Solving these challenges requires a multi-pronged approach. First, the adoption of digital technologies—such as a multiparty waste tracking system—can offer real-time visibility into waste streams, enabling more responsive and efficient operations. Bringing the full and fragmented system under one technology platform is tantamount.

Second, aligning incentives appropriately across the value chain is the only way to shift market dynamics. We help brands incentivize their waste value chain through the use of smart incentive contracts in order to place their waste in better end of life outcomes.

Third, fostering collaboration across the value chain is essential. Waste management involves many players, and encouraging open communication and data sharing among them can help dismantle silos and improve overall system performance. We want to foster collaboration with both brands and regulators to build the right technological systems.

When standardization, digital technology, collaboration, and analytics work in harmony, the result is a powerful ecosystem capable of responding to environmental challenges at scale.

These suggestions, while straightforward, have the potential to dramatically improve the current state of waste management. By embracing transparency and investing in the right tools and partnerships, the industry can transform from a black box into a clear, accountable, and sustainable system.

At Ouro, this is exactly what we do.