Curling linearity into circularity: The benefits of formal scavenging in closed-loop settings

Scavengers – actors who collect and redistribute waste into circular ecosystems to reuse or recycle it – may improve resource availability and sustainability in the firms' procurement business process. In Closed-Loop Supply Chains, their role is crucial to the business stability. Indeed, governments and the private sectors are encouraged to formalize them, that is, to institutionalize and regulate them and to provide them with the appropriate organization, training, and infrastructures. Yet, to our best knowledge, the scientific literature has not empirically investigated how formal scavengers may advantage those firms that decide to involve them in their procurement process. To do so, a case study was developed in an Italian Pulp & Paper firm that operates in closed-loop settings and that integrated one formal scavenger into its own business to feed its paper mill – one of the biggest in Europe. The findings show that the introduction of the scavenger entailed four benefits: procurement risk mitigation, lower environmental impact, lower procurement costs, and better quality assurance. By considering conservative estimates related to purchasing the waste paper from the secondary raw materials market on a one-year time window, the scavenger has led to a 7.2 % reduction in the procurement costs and a 21 % improvement in the CO2 emissions. Finally, implications for Supply Chain Management and policymaking were outlined.