Climate change is a global crisis, and we are now at a point where concerted changes must be made to secure a sustainable future. Every nation around the world is already facing repercussions.
Australia is one of those countries seeing drastic changes ecologically and economically because of climate change. In 2019-2020 the Australian bushfire season was one of the most intense and catastrophic fire seasons on record. Up to 19 million hectares were burnt, most of which were forests and woodlands. Entire ecosystems were destroyed and biodiversity put at serious risk. Let alone the economic toll this took on the country.
Since then, serious efforts have been made to reduce carbon footprint and preserve biodiversity, while still bolstering the Australian economy with policies such as the Australian Sustainability Reporting Standards (ASRS).
One of those efforts is the Australian Circular Economy Framework. As Australia looks to the future, sustainability management includes adopting a circular economy.
In this article, we’ll go over what a circular economy is, how it differs from a linear economy, how this benefits Australian businesses and industry, and some unique ways Australian companies are pivoting.
Let’s dive in.
circular economy vs. linear economy: what’s the difference?
You may have heard the term floating around sustainability conversations, particularly with respect to environment, social, and governance (ESG). This is for a good reason. A circular economy framework is one that can help pave the way towards a greener future that is also economically viable and prosperous.
So, what is a circular economy and what makes it different from the economy we already work within, a linear one?
Let’s start with a linear economy.
what is a linear economy?
A linear economy is an economic model that can be explained by using an assembly line metaphor. Materials are resourced at the beginning of the assembly line, and are converted to products, shipped and distributed at the end. All leftover waste is thus discarded, and new materials are procured (mined, logged, drilled, etc.) for each process.
During the linear economy process, there is little to no recycling, upcycling, or resource renewability built into the framework. Economies such as ‘fast fashion’ fit this model, and you can see how it can be detrimental to not just the environment but the economy as a whole.
Ultimately, a linear economy can be summarized as a “take, make, dispose” model. It’s unsustainable and harmful.
what is a circular economy?
A circular economy is an economic model where resources and materials used in the production and distribution process are never wasted but circulated back into the production process. By this, no resources or materials are wasted, allowing for regeneration of natural resources and protecting ecosystems.
In a circular economic framework, climate change is at the heart. This includes protection of biodiversity, regeneration of ecosystems and resources, reduction of pollution and waste (with the goal of complete elimination), and decoupling manufacturing and industry with the consumption of non-renewable resources and biodiversity harm. By this, throwaway economies are completely eliminated.
A circular economy is based on three principles:
- Circulation of materials at their highest value
- Elimination of pollution and waste
- Regeneration of ecosystems and resources
Given the high rate of wildfires and skyrocketing temperatures in Australia, it’s no surprise that both the Australian government and Australian organizations are working towards a circular economic model.
To read more about a circular economy, head over here.
how Australian companies are leading the way with a circular economy
Australia is a great example of the adoption of a circular economy. This makes sense, given Australia’s biodiversity, climate and natural resources.
Following the rollout of Australia’s Circular Economy Framework by Australia’s Department of Climate Change, Energy, and Environment and Water, Australia is committed to doubling the circularity of the economy by 2035 – an ambitious plan but doable. The proposal prioritizes national industry and manufacturing, construction and building, food and agriculture, and of course, the protection of non-renewable resources.
Given this, Australian companies have risen to the challenge. Here are 5 ways Australian companies are leading the way with a circular economy.
shift in business model to PaaS
Traditional business models operate on a purchase/own system. This makes sense and really, what other way of operating is there?
Well, turns out there are many other ways, one of which is a PaaS system.
PaaS (product-as-a-service) is a type of business model that is basically like a share or rental service. Familiar with carshare services? That’s the model. But instead of just cars, many businesses are adopting the rental or share of luxury or event-specific clothing (including accessories), household tools and equipment, furniture, medical equipment, lighting and staging equipment (calling all social media influencers), and farming equipment.
With PaaS, consumers can shift from the traditional product ownership model to a rental or sharing system, which eliminates overhead costs for consumers while also keeping products circulating within the economy, thus removing waste.
choosing supply chain partners with environmentally conscious track records
Supply chain management is always a challenge. Australian companies are putting heavy focus on partnering with suppliers and logistics that are committed to renewable energy and resources, and protection of ecosystems.
Strategies like introducing initiatives and incentivizing reuse, recycling and upcycling have become more commonplace. Some organizations are offering financial aid to help businesses create or expand their recycling programs.
This, of course, all feeds back into Australia’s circular economy, while also encouraging innovation and bolstering financial rewards.
eco-friendly products and designs
A linear economic model encourages products and designs that aren’t sustainable nor have longevity. Fast-fashion is one of those models, which has sparked plenty of controversy not only for the environmental damage it causes (the clothing industry is one of the worst culprits to climate change), but it is also harmful to communities. Workers are often underpaid, overworked, and labor in unsafe conditions.
Australian companies have shifted their focus towards eco-friendly products and designs, moving away from throw-away culture. Designs that are built to last longer with products constructed from renewable and/or recycled materials are entering the market.
These products also help to bolster a PaaS business model, as the products are long-lasting and durable. When owners have no more need for the products, it’s also easy to cycle them back into a circular market.
innovation and technology
Did you know that Australia has pioneered the first plastics recycled road system? Select regions in Australia will get new roads that are mixed with recycled plastics, a viable alternative to traditional asphalt roads and an innovative use of recycled materials.
This is one example of how Australian corporations are embracing the circular economy. Using technological innovations, such as recycled plastic roads, helps significantly reduce waste materials and the need to mine for resources.
As continuous investment in new technologies and R&D happen, more biodegradable materials are also being introduced into the market, such as biodegradable plastics and packaging.
embracing ESG technologies
In addition to PaaS models, Australian companies are also embracing SaaS (software-as-a-service) technologies that are uniquely tailored to their ESG data collection, storage, organization, and reporting.
ESG SaaS software is a unique type of software that focuses exclusively on ESG data gathering, storing, organizing, and reporting. All of this is done within a hosted, secure cloud environment.
SaaS is a type of software that uses secure cloud computing to manage all physical and software resources that an application would normally use. Some of the most common examples of SaaS software include Google Workspace, Microsoft Azure, and Salesforce.
Some of the reasons why companies adopt ESG SaaS include:
- Cloud-based access: Data can be entered, stored, and accessed from any location, and by multiple users.
- On-demand emissions calculations using verified emission factors
- Customizable templates
- Real-time updates and snapshots of an organization's progress
- Modules designed specifically to align with nationally and internationally recognized ESG standards and frameworks
- Integration with Internet-Of-Things (IoT), reducing redundancies
To learn more about ESG SaaS, head over here.
5 unique circular economy initiatives Australian companies are embracing
Australia’s unique climate change challenges have forced organizations and companies to think outside the box when it comes to materials and production. Many of those initiatives are directly correlated to Australia’s circular economy endeavors.
plastic roads
We’ve mentioned this previously, but it bears mentioning again: Australia is pioneering the use of recycled plastics in roadways.
Plastic waste is one of the worst culprits of biodiversity loss. Not only are they harmful to the environment and ecosystems, but they can also take upwards to thousands of years to fully degrade. With recycled plastics roadways, hundreds of thousands of kilograms in plastics are taken out of the landfill cycle and redistributed to other means.
upcycling textiles
We’ve already mentioned how harmful the fashion industry is one of the largest contributors to climate change, production of CO2 being top of the list. Now, many companies and organizations are working to subvert that, and Australia is playing their part.
Clothing and fashion companies are now taking recycled textiles and repurposing them into new clothing and accessories, effectively keeping products and materials into the circular economy.
seaweed packaging
Packaging is always an issue when it comes to carbon footprints. Many companies are now sourcing packaging partners that offer eco-friendly alternatives to traditional plastic, Styrofoam, or non-recycled paper products.
Some Australian companies are turning to the sea to help with their packaging problems. Seaweed, more specifically. As seaweed grows up to 30 times faster than land plants – and often comes in abundance along shores, harvesting seaweed is a much safer alternative to other resources.
coffee cups in construction
Coffee is a hot commodity in Australia which means a lot of disposable coffee cups end up in landfills. Upwards of 1.8 billion single-use coffee cups. That’s a lot of waste and additionally, a lot of natural resources used, and ecosystems harmed.
Australian innovation has now turned to that coffee cup waste and are recycling the materials and using them in construction materials. This includes building materials such as particle board, roadways, and even as sand replacement in concrete.
e-waste alternatives
E-waste or electronic waste is the waste that is produced through disposing of electronic items. This means cell phones, laptops, computers, tablets, household appliances, televisions and monitors, and medical equipment. It’s a lot and it’s also the fastest growing waste problem we are facing; it’s a problem that needs to be solved.
Australian companies are stepping in with e-recycling solutions to address this problem. Materials such as copper, silver, and more hazardous lead and mercury are being recycled through e-waste recycling programs and used as materials in new product production.
how AMCS can help Australian businesses flourish in a circular economy
Working towards a circular economy means shifting focus for many organizations. It takes considerable effort and corporate responsibility. Harnessing the power of your ESG data will set your company on the right path and a sustainability platform partner like AMCS can be the right solution for you.
To learn more about how you can harness the power of your ESG data with the AMCS ESG Solution, speak to an AMCS expert today.