Key points
- The circular economy provides a framework for economic expansion in a future with finite resources.
- By following the nine Rs – refuse, rethink, reuse, repair, refurbish, remanufacture, repurpose, recycle, recover – Australia can move from a ‘take, make, waste’ model to unlock potential savings of $2 trillion, according to experts.
- To be successful, the circular economy requires the combined effort of businesses, consumers, government and regulation.
To reach net-zero carbon emissions, the world is focused on transitioning out of fossil fuels and into renewable energy. But half the emissions we need to cut are embedded in the manufacture of items such as packaging, clothing, cars and products, said Lisa McLean, CEO of not-for-profit Circular Australia. At the same time, the planet is running out of resources.
CommBank recently hosted its second sustainability-focused conference, Momentum, which brought together experts from various industries to share what they’re doing to address climate change. McLean said that to solve these pressing problems, we need to move away from the linear ‘take, make, waste’ approach to production and embrace the circular economy.
In the circular economy, resources are used and reused, rather than used up and discarded. It’s a closed-loop solution that designs out waste and pollution at each stage of a product’s manufacture, use and end of life.
“A circular economy keeps products and materials in the economy at their highest value for as long as possible,” McLean explained.
The nine Rs of the circular economy
The circular economy follows a hierarchy of nine principles (the nine Rs). McLean says Australia currently focuses on the recycle and recover stages, but to extract maximum value, we need to follow the entire nine steps..
- Refuse
- Rethink
- Reuse
- Repair
- Refurbish
- Remanufacture
- Repurpose
- Recycle
- Recover
Embracing a circular economy can help reduce waste, conserve resources and lower carbon emissions. In Australia alone, we could unlock a massive $2 trillion worth of potential savings across two decades, said McLean.
Those potential savings could come, for example, through reusing valuable resources currently going to waste in landfill, such as plastics, glass, masonry and metals. In addition, buildings and equipment could be repaired and adapted rather than replaced.
It’s an approach that makes economic sense, and some Australian companies are already embracing circular economy principles.
The circular economy requires a holistic approach
Pact Group CFO Paul Washer said the company’s foray into the circular economy began by providing reusable plastic crates for food growers to transport produce to Woolworths. They moved into recycling when China stopped accepting recycling waste from Australia in 2018.
Washer said we won’t create the circular economy acting as individuals, but through the combined effort of businesses, consumers, government and regulation. He points to Pact’s collaboration with Cleanaway, Asahi and Coca-Cola creating Australia’s largest PET plant, which recycles the equivalent of one billion 600ml PET bottles each year.
“Cleanaway does the collection and sorting, Pact uses our technical know-how to create the recycled resin and then Pact, Asahi and Coca-Cola take the remanufacture into packaging products through their manufacturing plants, the government supports the recycling effort – and, ultimately, customers provide demand,” he said.
Bega Cheese began running circular economy training programs for its team about two years ago, said Chairman Barry Irvin, but quickly realised that to make a real difference, the entire region had to be involved.
“We had the ambitious program to make Bega Valley the most circular region in the world by 2030,” Irvin told the conference.
“Bega is a fully linked and enclosed, diversified catchment with forestry, beef and dairy farming, horticulture and fisheries. It has a singular council and very active Indigenous land councils. If it can be done anywhere, it can be done here.”
The Bega community created the Regional Circularity Co-operative to invest in infrastructure that integrates the supply chain.
“The NBN is involved, and we want to sensor the waterways, the waste disposal – the entire valley,” said Irvin.
Making the circular economy accessible to consumers
Alice Kuepper is Head of Sustainable Business for Winning Group, whose best-known brands are Winning Appliances and Appliances Online. She said that a survey of Appliances Online's customers found that the majority valued recycling and are interested in information on how to best care for their appliances.
“Now our drivers collect the old appliance and we work with metal recyclers across the country to have it safely recycled,” said Kuepper.
The company also focuses on helping customers extend the life of their appliances, educating customers on looking after an appliance so it lasts longer. Other initiatives include extending
Winning’s collection services to include mattresses and packaging, and investing in machines to compress polystyrene so it can be remanufactured into picture frames and sideboards.
This approach puts valuable finite resources back into the economy, said Kuepper. “We estimate that since about 2004, we’ve helped recycle about 800,000 tonnes of steel, so that’s pretty significant.”
Our circular economy experts
Lisa McLean, CEO, Circular Australia
Lisa is a circular economy and zero-carbon business transformation leader. For the past 20 years she has been successfully advising industry and governments in developing new policy frameworks and regulations that bring about market change to enable the circular zero-carbon economy. This work has covered the supply chains, infrastructure, energy, water, waste and mobility sectors in the UK and Australia.
As CEO of Circular Australia, a national independent not-for-profit, Lisa works to catalyse new circular economy, zero carbon and sustainable markets. This includes initiating and setting up Open Cities Alliance, a peak association for next-gen infrastructure and the circular economy, the Australian Solar Thermal Association (AUSTELA), advising electric mobility providers, and working in the private sector driving circular economy outcomes in water and energy and advocating for policy and regulatory change.
Lisa began her career as a political journalist working in the national press gallery. She then moved to advising ministers and premiers, before heading to the UK to help establish the Clinton Climate Initiative.
Barry Irvin, Executive Chairman, Bega Cheese
Barry Irvin is Executive Chairman of Bega Cheese, one of Australia's largest dairy and food companies with revenues exceeding $3 billion. Bega Cheese supplies both the Australian and international markets with a product portfolio that ranges from dairy ingredients to a number of Australia's most iconic brands including Vegemite, Farmers Union, Dare, Dairy Farmers and Daily Juice.
Bega Cheese began as a co-operative based in a small regional community and largely produced cheese products for the Australian market. Since deregulation of the Australian dairy industry, Bega Cheese has grown to include 20 manufacturing sites across the country, operate Australia's largest chilled distribution network and service customers in Australia and more than 40 countries around the world. Bega Cheese is an ASX-listed company with shareholders ranging from retail investors (including many of the original dairy farming families) to large institutional investors.
Barry grew up on his family dairy farm which his son Andrew now operates, Andrew is the sixth generation of the family to farm in the Bega Valley. The long history with farming has meant that Barry has had a particular interest in sustainable agricultural production and championed a number of environmentally focused projects. Most recently, Barry has led the establishment of a Regional Circularity Co-operative with the ambition of making the Bega Valley the most circular region in the world.
Barry has always believed in giving back to the community and is the long-term chairman of Giant Steps Australia, an organisation that provides services to children and adults with autism.
Paul Washer, CFO, Pact Group
Paul is a senior executive with over 25 years’ experience in strategy and execution in the areas of sales, planning and operations, finance, performance, treasury, IT and tax.
He spent 17 years with Fonterra where he was known for his strategic leadership skills, business performance, work with culturally diverse people and communicating a shared vision and purpose. His last Fonterra role was the chief financial officer of Greater China based in Shanghai, encompassing all financial and commercial activities of Mainland China, Hong Kong and Taiwan across the B2B, B2C and China farming businesses. He was also responsible for legal, procurement and innovation for the China business.
Alice Kuepper, Head of Sustainable Business and Corporate Social Responsibility, Winning Group
Alice is a business leader and strategist who champions the shared value approach and the power of business as a catalyst for positive societal change and sustainable growth.
At Winning Group, Alice is the Head of Sustainable Business and Corporate Social Responsibility (CSR). In this role she works with a multidisciplinary team across the business to identify opportunities for positive impact and provide leadership and direction to deliver a group wide Sustainability and CSR strategy.
To watch this session on-demand or explore other sessions from CommBank Momentum 2022, visit Momentum.
To learn more from leading industry experts about the move to a net-zero economy, head to CommBank Foresight™ – insights for future-facing businesses.
