Tata Steel, India’s leading steel company and one of the world’s largest, had committed to achieve net zero emissions in India by 2045. The key initiative toward this goal was to invest in and grow the steel recycling business, as recycling steel reduced intensity of carbon emissions when compared to making new steel from iron ore. The project’s biggest challenge was the absence of a systematic and reliable supply chain in India for steel scrap.
From among the possible solutions to the challenge, Tata Steel chose one that was not simply nontraditional but also contrary to long-standing practices in both business and society in India. It decided to depend on both business-to-business (B2B) and consumer-to-business (C2B) channels to procure the steel scrap. The C2B channel involved workers at the lowest level—waste-pickers and their aggregators—as a valued essential to the company’s supply chain for collecting steel scraps.
Hurdles this plan would have to overcome included social stigma, embedded exploitation practices, fragmented and unstable market structures, and safety, health, and environmental hazards. Was this a wise business choice?