BP&R Editor Giulia Daniele speaks with Emily Amann, Director of Climate KIC's Entrepreneurship team, about how upstream innovation offers untapped economic potential and the lessons from the innovation clusters in Bengaluru and Nairobi.
Climate KIC
[GD] What is upstream innovation, and what role does it play in the circular economy?
[EA] Upstream innovation refers to designing products and systems in a way that prevents waste from being created in the first place, rather than managing or treating waste after its generation. It focuses on minimising environmental impact early in the product lifecycle, starting from the design phase, so that products and processes are inherently more sustainable before they even reach consumers.
The circular economy offers a powerful framework to combat climate change and reduce emissions by shifting away from the traditional linear “take-make-dispose” model toward a regenerative, circular system. This is grounded in three key principles: designing out waste, keeping products and materials in circulation at the highest value for as long as possible and regenerating natural systems.
Upstream innovation is central to this approach. According to a European Parliamentary report, approximatively 80% of a product’s environmental impact is determined at the design stage. This means that by rethinking and innovating early, or at the “upstream” point, we can significantly reduce waste and environmental harm, rather than trying to fix these problems after the product’s use phase.
There has been some progress in the past few years, but the challenges remain. The Global Circularity Gap Report 2025 highlights a concerning decline in circularity, with only 6.9% of the 106 billion tonnes of materials used annually coming from recycled sources. This shows that while recycling is important, it cannot alone solve the problem. The real breakthrough lies in a systematic, upstream approach, rethinking how materials and products are designed, produced and consumed from the very beginning.
Many people assume that sustainability is costly, but they don’t realise that waste also has a cost. By designing out waste early, businesses can save money downstream: reducing disposal costs, raw material needs, and environmental risks. It is radical and ambitious, but also essential for creating a sustainable and circular economy.
[GD] Can you explain how you implemented the circular economy innovation clusters in Bengaluru and Nairobi based on upstream innovation?
[EA] We launched a programme three years ago to bring together businesses, start-ups, academia, citizens and governments to start collaborating around circular economy principles. Our innovation clusters strengthen climate innovation ecosystems by connecting different actors who typically work in isolation. These serve as a platform for collaboration, shared learning and joint innovation to build more circular and climate resilient economies.
During the first six months, we conducted a comprehensive baseline study to understand the existing local circular economy landscape and stakeholder activities related to waste management and prevention. We wanted to understand the state of local circularity and what the stakeholders were doing in terms of waste management and prevention. By mapping the ecosystem and identifying key players, we developed a tailored capacity-building approach, implemented in partnership with local organisations.
We discovered significant untapped potential and asked: how can we bring upstream circularity to Nairobi and Bengaluru to drive long-term, sustainable impact? We trained young professionals, leaders and start-up founders through incubators and accelerator programmes. These initiatives created opportunities for them to engage directly with public sector representatives, community based organisations and other key stakeholders such as waste picker organisations at stakeholder forum events. We believe fostering a mindset shift towards circularity is a form of innovation itself.
Additionally, we equipped participants with impact measurement tools to help track their environmental, social, and circular economy outcomes, reinforcing the importance of data-driven progress. In Nairobi and Bengaluru, waste pickers, who often operate as informal start-ups, play a vital role in the circular economy, due to the lack of public infrastructure and waste management from the public sector. But they’re often marginalised, lacking visibility, protections, and formal recognition. These ecosystems also suffer from limited access to capital and investments, primarily due to a lack of understanding and trust in circular economy business models. Investors often think circular start-ups are more risky than traditional linear ones.
This is why our approach starts with capacity-building, providing impact measurement tools, and supporting innovative circular solutions. But beyond that, we focus on changing mindsets and fostering trust by bridging gaps between all stakeholders, such as businesses, governments, communities, and investors, to create collaborative, resilient, and inclusive circular economies.
[GD] Why were these two locations chosen for the project?
[EA] Nairobi and Bengaluru were selected because both are experiencing rapid urbanisation, placing immense pressure on public services and waste management systems.
Bengaluru’s systems are stretched thin under the 5,000 metric tonnes of daily waste, yet only 30% is directly managed by the municipality. Nairobi generates approximately 3,207 tonnes of waste daily — around 20% of which is plastic and 50% is organic waste. These conditions present a significant opportunity: waste is a valuable resource, and by transforming how cities manage waste, we can drive economic change and sustainability.
Additionally, the project’s funder, the IKEA Foundation was already active in both locations, which helped us accelerate the project launch.
In 2024 we worked with 17 start-ups (ten in Nairobi, seven in Bengaluru), supporting 792 informal workers in Nairobi and 135 in Bengaluru. Together, these initiatives have the potential to reduce CO₂ emissions by approximately 21,000 tonnes per year, equivalent to the output of six large wind turbines.
[GD] What were some of the challenges you’ve encountered?
[EA] One major challenge for start-ups and companies is balancing profitability with their social and environmental goals. They need to build sustainable business models that generate financial returns while driving positive circular impact. As they grow and refine their approaches with our support, they increasingly identify and capitalise on new circular opportunities by better measuring their environmental and social impact.
Another significant challenge lies in the policy and regulatory environment. From my conversations with stakeholders across cities, it’s clear that many governments systems and structures remain rooted in linear models, which limits support for upstream innovations. There is an urgent need for clear, supportive frameworks and guidelines around what materials can be recycles or reused. It’s not only about having bigger investments and funds; it’s also about having the right frameworks and policies in place to enable systemic change and scale circular economy solutions.
[GD] Can you share some takeaways from the project in Bengaluru and Nairobi?
[EA] One of the key lessons we learnt is that nobody can drive this transformation alone. Collaboration is essential. Without a solid starting point, every effort will come short.
We need a mindset shift and the right conditions – frameworks and policies – for these solutions to scale up. Scaling impact means unlearning traditional ways of working and embracing radical collaboration by bringing together all key stakeholders to co-create solutions that truly move the needle.
[GD] What did you hope to achieve at the beginning of this project, and has it changed since you started it?
[EA] At Climate KIC, our approach is grounded in learning by doing. We don't claim to have all the answers upfront and we remain transparent about the need to continuously adapt our goals based on evolving circumstances and local contexts. By comparing the unique dynamics of Bengaluru and Nairobi, we identify best practices from each city, which helps us design better more effective activities and uncover new opportunities for impact.
Our ambition is to build innovation clusters that are self-sustaining. We are now planting the seeds with the hope that the initiative will become locally driven without the need for external funding or players. Looking ahead, we want to expand this model to more cities across Europe and beyond. We are actively seeking partners who are ready to rethink existing production and consumption systems, redesign value chains, and drive systemic change but need support to do so. We’re committed to scaling what we’ve achieved because we believe in its transformative potential.