Within the retail industry, there are few topics that feel as pressing and complicated as the generational shift from a consumption-based economy to a circular economy. Customers increasingly expect businesses to take charge of the lifecycle of their products and ensure that they don’t end up in landfill at their end of life. At last week’s Online Retailer 2023 conference in Sydney, industry leaders got together to discuss the massive implications this change has for the industry, and di
discussed how brands can get their supply chains in order before regulation forces their hand.
Bronwyn Voyce, industry taskforce chair at not-for-profit Circular Australia, said there is economic incentive to act sustainably with the circular economy presenting a $2 trillion opportunity over the next two decades. However, taking advantage of this opportunity is going to require quite a bit of work.
Take ownership
The key to making the circular economy work, Voyce said, is in a shift away from putting the onus of recycling and reusing on consumers. Rather, retailers should seek to remove waste out of products, or take more ownership of their product’s materials.
The reality is that Australia’s recycling capabilities are behind many other countries’, and its consumers’ knowledge of how to properly recycle different types of materials isn’t as comprehensive as in parts of Europe.
Ellie Degraeve, founder of sustainable marketplace Go for Zero and the winner of Inside Retail’s 2022 Top 50 People in E-commerce, noted as an example her home country of Belgium, which offers its residents three different bins for different kinds of glass recycling.
“Everyone does it because it’s very normal. When I came to Australia, I couldn’t understand why it wasn’t as easy here,” Degraeve said.
Go for Zero has eliminated plastics from its supply chain, instead ensuring that all of its products are packaged in reusable, compostable or easily recyclable materials, Go for Zero has also designed its products’ end-of-life in a way that makes it as simple as possible for customers to deal with.
The brand also helps its suppliers redesign their products to meet their requirements: switching out a plastic lid for a metal one, for example.
Go for Zero’s approach is to remove its footprint from the product journey and end-of-life process where possible, but that isn’t the only way to be a part of the circular economy.
Appliances Online, for example, has offered a free appliance removal and recycling service since the business’ launch in 2005: effectively taking the problem out of the consumer’s hands and dealing with it in-house. In the last 18 months, that service has expanded to include all packaging that came with the product, such as cardboard, polystyrene and plastic.
“We’re able to do this because we are in control of our logistics, and taking on that responsibility ensures that the appliances don’t end up on the curbside where they can leak toxins into the environment,” Alice Kuepper, Winning’s head of sustainable business and CSR said.
“Instead, we make sure they go back to our distribution centres, and then to scrap metal yards where they can be recycled into their raw materials, which can then be used in the manufacturing of a new product.”
When it comes to the recycling of polystyrene used to keep appliances in transit safe, Kuepper said it is broken down into “ingots” which are then chipped down and reprocessed into other materials, such as skirting boards or picture frames.
Both businesses have taken ownership of their products, and their waste, but have gone about it in different ways that can be applied to their own respective industry.
Avoiding the stick
While Go for Zero and Winning Group represent outliers in the broader retail industry, all businesses are going to have to think this through and come up with their own solutions.
Voyce said that the federal government is already bringing in regulations around climate and environmental disclosures, and is shifting from a “carrot” mentality of incentivisation to a “stick” approach: punishing businesses that fail to comply.
“The writing is on the wall, the legislation is coming,” Voyce said.
The Australian Packaging Covenant Organisation’s head of packaging transformation Ian Hayes agreed, noting that until now most sustainability-focused measures driven by the federal government have been voluntary, but that this is coming to an end.
“It’s a really exciting time. Minister Tanya Plibersek has announced that there are going to be mandates coming for packaging design guidelines,” Hayes said.
“Until now, when we’ve talked to businesses about this, they always come back with ‘we should [use more recycled materials], but it’s a bit expensive’. Once it’s mandated, however, that conversation shifts from ‘we should’ to ‘how do we do it?’, and that’s a big shift in conversation.”