With India generating nearly 26,000 kilograms of plastic waste every minute and recycling rates below 10%, the consumption side of the equation needs urgent attention. Can consumers, businesses, and policymakers form a cohesive partnership to integrate behavioural nudges and unlock the true potential of a circular economy?
As per the Global Circularity Gap Report 2024, the total amount of material resources consumed by the global economy continues to rise alarmingly: in the last six years alone, we have consumed over half a trillion tonnes of material resources—nearly as much as the entirety of the 20th century. Without bold, urgent action to shift to a ‘circular economy’, we risk not only depleting our natural resources but also the ability of future generations to meet their needs.
Understanding Circular Economy
As explained by Ellen Macarthur Foundation, in our current economy, we take material resources from the Earth, make products from them, and eventually throw them away as waste–the process is linear. In a circular economy, by contrast, we stop waste being produced in the first place.
While efforts on the production side—driven by businesses and government—are critical, achieving true circularity requires active participation from consumers, who are central to the consumption side of the equation. By exploring actionable strategies and successful case studies, this article deep dives into how behavioural nudges can play a transformative role in making sustainability a lifestyle for Indian consumers.
Sustainable Lifestyle: Key Objectives for Consumers
Circular consumption begins with making sustainability a core part of daily life. Small but impactful changes in habits—such as how we consume food, water, electricity, and clothing—can collectively make a significant difference. Integrating the following circular economy principles into individual behaviour is vital for reducing resource depletion and environmental harm.
Reducing consumption is the first step toward sustainability, involving mindful use of resources such as planning meals to minimise food waste. Instead of discarding items, reusing them can make a significant difference—simple choices like repurposing jars for storage or opting for cloth bags over plastic help reduce environmental impact. Recycling also plays a crucial role by ensuring that waste is properly sorted, allowing recyclable materials to re-enter production systems. Beyond these efforts, eliminating waste and pollution requires a shift toward durable, reusable products in place of single-use items. Extending the lifespan of products through repair or donation, whether fixing appliances or passing on old clothes, further reduces waste. Additionally, adopting renewable energy sources such as solar panels or biogas wherever feasible can contribute to a more sustainable future.
Behavioural Nudges to Drive Sustainability
Despite growing awareness around sustainability, India struggles with recycling rates as low as 10% and an alarming surge in disposable consumption. While we understand what needs to be done, translating awareness into action remains a challenge. This is where behavioural nudges become crucial. In India, where cultural norms like reusing items coexist with increasing disposable lifestyles, nudges can bridge this gap. However, a combination of nudges may be required to achieve the goal depending on the situation and type of change / habit. The following examples illustrate the effective use of nudges in adopting and promoting sustainable practices.
Sangti, the ‘Zero Waste Village’ in Arunachal Pradesh, faced an escalating waste crisis. Tourism and modern consumption habits led to an influx of single-use plastics and improper waste disposal, tarnishing its pristine environment and threatening local biodiversity. Recognising the urgent need for action, the Monpa tribe, with support from local NGOs, launched a zero-waste initiative.
They organised workshops to educate residents about waste segregation and the impact of plastics, introduced bamboo and cloth alternatives during community events, and implemented a barter system allowing recyclables to be exchanged for essential goods.
The village actively practices waste management by utilising organic waste as animal fodder and composting, while inorganic waste is recycled through a Material Recovery Facility (MRF) managed by the local community. These collective efforts drastically reduced plastic waste and restored Sangti’s natural beauty, establishing it as a model zero-waste village.
India’s first self-sustained bio-village in Daspara (Tripura), a small village in Tripura, faced significant challenges with unsustainable agricultural practices, reliance on non-renewable energy, and declining incomes. Recognising the need for a systemic shift, the village embraced the concept of a bio-village, spearheaded by local authorities and the Tripura Renewable Energy Development Agency (TREDA). The initiative introduced solar-powered irrigation, biogas plants for cooking, and organic farming techniques. Farmers received training on sustainable practices, and households were equipped with renewable energy solutions. These changes transformed Daspara into India’s first modified bio-village, reducing dependence on fossil fuels and boosting agricultural productivity, while also creating new income opportunities for the community.
By organising awareness campaigns and detailed plans communicated through SHGs (self-help groups), the initiative reduced cognitive barriers to action by clearly explaining how to segregate waste and offering practical, eco-friendly alternatives like bamboo products. Simplified processes made sustainable behaviour the path of least resistance. Prominent signs and posters served as effective reminders for waste segregation. According to Thaler, these cues acted as “prompts” to influence immediate behaviour, subtly steering residents toward the desired action without enforcing mandates. The barter system tapped into the principle of “reward substitution” by offering tangible benefits (essential goods) in exchange for recycling. This reframed sustainability as not just a moral choice but an economically beneficial one, motivating consistent participation.
Leveraging the concept of “herd behaviour,” local leaders and early adopters extensively publicised people who followed the recommended waste segregation practices, showing others that such behaviour was both feasible and valued by the community. This created a ripple effect, normalising sustainable habits and driving widespread adoption.
Reduce Consumption, Increase Recycling and Product Reuse
Other effective nudges that are also used for habit formation to boost circularity among individuals:
Gamification: Recognition systems, such as leaderboards for least electricity and water consumption, recycling or amount of waste generated by the community as part of competitions, encourage participation. Apps reward sustainable actions like recycling with points or discounts, making eco-friendly behaviours engaging. For instance, Stockholm’s gamified recycling bins encourage participation through interactive designs.
Green Defaults: Setting sustainable options as the default choice, such as automatically opting customers into sensor-based lighting, eco-friendly packaging or renewable energy plans, ensures that sustainability becomes the path of least resistance.
Evidence of Effectiveness: Providing feedback on individual or collective impact, such as reporting the amount of CO2 saved or resources conserved through actions, reinforces positive behaviours and motivates continued participation.
Technology-Enabled Nudges for a Circular Economy
AI-driven recommendations help users opt for eco-friendly alternatives, such as refurbished items or repair services, tailored to their preferences. Platforms like Olio leverage AI to connect people with surplus food, reducing waste through efficient redistribution. Smart waste systems further enhance sustainability by using IoT-enabled bins to track waste segregation and provide real-time feedback, as seen in South Korea, where RFID-equipped bins enforce proper disposal through a fee system. Transparency is another key driver, with QR codes on products offering insights into their lifecycle, including repair and recycling options. Brands like H&M integrate digital labels to educate consumers on recycling, encouraging responsible disposal. Additionally, digital communities harness the power of social proof by showcasing collective sustainability efforts. Initiatives like Litterati map global litter cleanup activities, influencing policies and inspiring broader environmental action.
Paving the Way for a Circular Economy in India
India stands at a critical juncture, where the transition to a circular economy is no longer optional but essential for its sustainable future. To realise this vision, businesses must innovate eco-friendly solutions, policymakers need to create enabling frameworks, and communities must actively participate in adopting circular practices. Building awareness in rural and semi-urban areas, addressing affordability and trust issues, and embedding behavioural nudges into everyday choices are essential steps. Small, consistent actions like reusing, recycling, and reducing consumption can spark large-scale transformations. Together, through collaboration and a commitment to change, India can lead the way in creating a future where circularity is not just an aspiration but a way of life.
Author’s Bio: Shreya is a Chartered Accountant with over six years of professional experience. Currently pursuing PGP at the Indian School of Business, she began her career at KPMG, in the statutory audit and indirect tax (GST) verticals, helping corporates transition to the GST regime and optimise their indirect tax costs. Transitioning into the development sector, she joined Atma, an accelerator for education, helping over 15 NGOs across sectors like livelihoods, early childhood care and education (ECCE), and inclusive education to build foundational capacities and strategies to enhance their impact. At ISB, she has pioneered the Passion Projects initiative, driving impact and sustainability-focused projects on campus.