As businesses globally seek to align profitability with sustainability, the circular economy has emerged as a powerful strategy for resilience, efficiency, and competitive advantage.
In Australia, the transition to circularity presents an opportunity worth A$210 billion to the national GDP while also addressing urgent environmental challenges. Yet, for many business leaders, the shift from a traditional linear model to a circular one remains complex and requires strategic vision. This shift represents the future of circular business, where innovation and sustainability intersect.
This article explores how Australian businesses are leveraging circular principles, the challenges they face, and the significant opportunities available for forward-thinking organisations.
What is the Circular Economy?
The traditional linear economy follows a ‘take-make-waste’ model, extracting finite resources, manufacturing products, and disposing of them after use.
In contrast, the circular economy minimises waste, maximizes resource efficiency, and keeps products and materials in use for as long as possible.
Key strategies of a circular economy include:
- Product Life Extension: Designing for durability, repairability, and recyclability.
- Resource Recovery: Extracting valuable materials from waste.
- Regenerative Systems: Restoring and replenishing natural ecosystems.
- Circular Business Models: Sharing platforms, leasing models, and product-as-a-service approaches.
For Australian companies, embracing circularity is not just an environmental imperative—it’s an economic opportunity that enhances long-term viability, mitigates supply chain risks, and strengthens consumer trust.
Industry Leaders Embracing the Future of Circular Business
Several Australian businesses are already demonstrating the power of circular strategies. Here’s how key industry players are leading the charge:
1. Coles Group: Redefining Food and Packaging Waste Reduction
One of Australia’s largest supermarket chains, Coles Group, has taken proactive steps to reduce waste and embrace circularity. Some of its key initiatives include:
- Food Waste Reduction: Partnering with SecondBite and Foodbank, Coles has donated over 257.8 million meals to reduce food waste.
- Animal Feed and Composting: Redirecting unsold food to farmers or composting facilities instead of landfills.
- Sustainable Packaging: Eliminating single-use plastic produce bags in WA stores, cutting plastic consumption by 36 million bags annually.
- ‘I’m Perfect’ Produce Line: Selling visually imperfect fruits and vegetables to reduce food waste.
Through technology-driven tracking systems and company-wide sustainability engagement, Coles demonstrates that large corporations can integrate circular strategies while maintaining profitability.
2. GoodHuman: First Nations Knowledge Driving Circularity
GoodHuman has developed the Country-Centred Circular Economy (CC-CE) model, rooted in First Nations knowledge systems. Their Indigenous Doughnut Model incorporates:
- Stewardship & Regeneration: Learning from Traditional Owners to embed respect for land and biodiversity.
- Supply Chain Transparency: Using 12 ‘S’ strategies, including sourcing, seasons, social impact, and circular business models.
- Community Engagement: Encouraging partnerships between businesses and Indigenous groups to create sustainable economic opportunities.
By integrating cultural sustainability with circular economy principles, GoodHuman’s model offers a unique approach to sustainable business transformation.
The Business Case for Circularity and the Future of Circular Business
Adopting circular business models presents significant value propositions for companies across industries:
1. Cost Savings & Resource Efficiency
- Reducing reliance on virgin materials lowers production costs.
- Recycling and repurposing extend the lifecycle of products and assets.
- Waste reduction minimizes landfill disposal fees and regulatory fines.
2. Risk Mitigation & Supply Chain Resilience
- Diversifying material sources reduces exposure to raw material shortages and price volatility.
- Circular business models make companies more adaptable to climate risks and regulatory changes.
3. Market Competitiveness & Consumer Preference
- 64% of Australians prefer businesses that embrace circularity.
- Sustainable products attract premium pricing and long-term customer loyalty.
- Green credentials enhance corporate reputation and investor appeal.
4. Compliance with Emerging Regulations
- The Australian Circular Economy Framework aims to double circularity by 2035.
- Victoria’s Waste Reduction and Recycling Act 2021 sets stricter rules on packaging and landfill diversion.
- International reporting frameworks (e.g., EU’s Corporate Sustainability Reporting Directive) are pushing businesses toward mandatory circular disclosures.
Challenges and Risks in Circular Adoption
Despite its benefits, transitioning to a circular economy presents challenges:
1. Infrastructure and Investment Barriers
- Limited recycling and remanufacturing facilities in Australia increase costs.
- Businesses require upfront investment in sustainable product design, logistics, and supply chain innovation.
2. Regulatory Fragmentation
- Different state-level policies create inconsistencies in waste management and stewardship programs.
- Businesses operating across jurisdictions may struggle with compliance alignment.
3. Consumer Behavior and Awareness
- While demand for sustainability is rising, educating consumers on circular economy benefits remains essential.
- Overcoming ‘planned obsolescence’ in industries like electronics and fashion requires legislative action.
4. Measurement and Standardisation Gaps
- Lack of unified metrics for circular performance makes benchmarking difficult.
- Companies need robust data-tracking systems to measure material flows and lifecycle impact.
Recommendations for Business Leaders
For companies looking to integrate circular principles, the following strategies can facilitate a smooth transition:
1. Embed Circular Thinking in Business Strategy
- Conduct value chain assessments to identify circular opportunities.
- Set measurable KPIs for circularity, waste reduction, and carbon impact.
2. Collaborate Across Industries
- Build strategic partnerships with recyclers, suppliers, and industry peers.
- Engage in government and regulatory discussions to shape circular economy policies.
3. Leverage Technology for Circular Innovation
- Invest in AI-driven material tracking, blockchain transparency, and automated remanufacturing.
- Use data analytics to optimize reverse logistics and resource recovery.
4. Educate and Engage Stakeholders
- Train employees and leadership teams on circular business models.
- Develop consumer engagement campaigns that promote sustainable behaviors.
The Future of Circular Business in Australia
The shift to a circular economy is no longer a niche sustainability effort—it is a mainstream business strategy with economic, regulatory, and consumer-driven incentives. Forward-thinking businesses, like Coles and GoodHuman, are already demonstrating that circularity can drive profitability, resilience, and environmental responsibility.
For businesses willing to lead the transition, now is the time to act.
By embedding circular principles, leveraging collaboration, and investing in innovation, Australian companies can position themselves at the forefront of the next economic revolution—one that is not only sustainable but also profitable and future-proof.