The race to circularity: Can Australia meet the 2030 deadline?
A circular economy policy has been declared, but will Australia make the transformation in the next eight years? An expert panel considers some of the big strides and step changes in the race ahead.
A circular economy policy has been declared, but will Australia make the transformation in the next eight years? An expert panel considers some of the big strides and step changes in the race ahead.
It’s very early days in Australia’s journey to becoming a circular economy, but businesses across the nation are now facing into a highly ambitious goal.
Environment ministers across the country, led by Federal Minister for Environment and Water, Tanya Plibersek, have agreed to work with the private sector to design out waste and pollution, keep materials in use and foster markets to achieve a circular economy by 2030.
It’s the policy signal many have been waiting for, but how achievable is it? And, what needs to change in the transition to making it a reality?
Guests at the Women in Sustainable Finance networking group’s latest event, ‘Getting around a circular economy’, held at Westpac, were given a heads-up as a panel of thought leaders covered some of the big ideas and issues arising on the way to embracing circularity.
The huge task ahead
Decoupling economic activity from the use of finite resources and replacing it with an industrial system, defined by the World Economic Forum as “restorative and regenerative by design”, is now recognised globally as the most effective way to tackle the planet’s urgent sustainability issues.
Australia’s future circular economy will require a transformation of the whole economic system. Big picture changes and some of the smaller step changes needed on the way were outlined by event panellists: Katie Dowling, co-founder and Chief Financial Officer of Circular Australia, Karin Kobelentz, Senior Researcher at the Institute for Sustainable Futures at the University of Technology Sydney, and Blaise Porter, Sustainability and CSR Director at Sims Limited.
The clock is ticking and there’s a multitude of pressing questions and issues to be determined, the panel agreed.
Top of mind for business leaders across the sectors right now are the potential costs, according to Dowling, who also chairs Circularity Australia’s Finance and Investment Taskforce. The independent not-for-profit organisation, formed off the back of NSW Circular, has been meeting with leaders to establish a coalition of willing businesses to be frontrunners in Australia’s new circular economy.
What many are yet to realise, Dowling reports, is how a design-led circular approach will solve one of the biggest issues of our times – carbon emissions – “because 45 per cent of emissions are actually embedded from materials used. It’s not an add-on,” she told attendees. The transition to a circular economy addresses key sustainability risks including climate change and biodiversity loss, as well as waste and pollution, Kobelentz said.
Topping the long list of priorities for immediate progress are putting a clear definition around the circular economy itself – moving beyond the popular misconception that it’s solely about waste and recycling – and measurement, the panel agreed.
While waste certainly remains an important part of the circular transition story, Porter reminded the group that consumer preferences on recycling and waste to date have been in sharp focus, but “it’s about behaviour all the way along the supply chain”. Most waste in this country is generated in the construction and demolition sectors, the industrial sectors and B2B supply chains.
Finance on the front foot
The finance sector will play a critical role in driving Australia’s future circular economy and it’s already stepping up. Engagement is growing quickly among institutional investors as they look to find value in circular endeavours.
Kobelentz points to positive signs from the 2022 Responsible Investment Benchmark Report from the Responsible Investment Association of Australia, which showed investment into the circular economy, waste management and zero waste increasing to number two behind climate change in sustainability-themed investments in 2021.
Banks are also ramping up efforts significantly, with fast-growing sustainable finance portfolios and sustainability-linked loans now starting to include circular economy targets.
Westpac recently acted as Joint Sustainability Coordinator for Pact Group’s $420m Sustainability-Linked Loan, with two of its four sustainability performance targets focussed on driving the circular economy.
Meaghan van der Bergh said “It is great to see circular economy initiatives being captured in sustainability-linked instruments. We hope to see this trend continue to take shape, and to see targets capturing circular economy principles along the whole design process.”
Cues from Europe
Much can be learned from the EU where there are strong circular economy levers within the EU’s sustainable finance taxonomy in support of the EU Green Deal, Kobelentz says.
Several European banks and investors are setting circular economy targets and looking more broadly, beyond waste and recycling, to sectors such as the built environment, transport and bio-based materials. Dowling spots the trend in Europe to metrics for credit analysis, risk and capital modelling for the circular economy that’s proving a very positive indicator of the credit quality of an asset.
All eyes are on the Netherlands as a standout example with its goal to become fully circular by 2050 and a Circular Finance Roadmap for 2030, through a government-led, whole-of-system approach, including the Dutch central bank, with close involvement from investors, banks and industry peak bodies.
While Australia may look to the Netherlands for guidance, it has its own nuances and tensions to consider, says Porter. “It’s a big country and we’re still very much a minerals-based economy, so there can be a real tension when talking about outcomes – a lower-embodied emissions outcome, a circular outcome and a Team Australia outcome.
“It’s really important to acknowledge the tensions and the nuances and that we do trade off different outcomes, and that goes right the way back to design,” Porter advises.
Circular business opportunities
In transitioning to a circular economy, Australia must move from the current “take-make-waste” linear economy, including a focus on circular design business models, where products and materials are designed to retain long term value.
“The design phase is just as important as the end phase,” emphasises Porter who oversees the sustainability strategy at Sims Limited, a 100-year-old Australian business that now operates from 150 sites globally.
Best known for recycling metal (more than 8 million tonnes last year), Sims is now shifting its sights from waste management outcomes to the higher elements of the circular economy through an electronics business focused on refurbishment, parts harvesting and redeployment.
In 2023, the company will open its demonstration resource renewal facility to deal with waste streams from what’s left in products once the metal is recovered.
When the world was in the grip of a semi-conductor microchip shortage, Sims seized on a pandemic-induced opportunity and their Lifecycle Services business became one of the largest suppliers of semiconductor chips for some customers, says Porter. “We were not making them. We were pulling them out of devices that were destined for recycling – extracting, cleaning and repurposing and then injecting them back into the supply chain.
“Customers had to think differently about those microchips, because a microchip that’s coming out of a five-year-old laptop doesn’t necessarily plug straight into a brand-new laptop,” she explains, adding: “It’s entirely possible to do.”
Designing for the future
This opened the door for more strategic discussions on how to manage reverse logistics, “and that builds resilience into the supply chain”, Porter says. “The more you can close the loop, recover and repurpose things at their highest value possible, the more resilient we will collectively become.”
High on the company’s agenda is finding ways to translate what it knows about products at their end of life and leveraging that to make them more circular at the start.
A key aspect of solving in the design phase is avoiding “the RedCycle problem” of not having a destination for that end material, Porter points out, referring to the recent collapse of the soft plastics recycler that supported Australia’s supermarket duopoly.
“It’s much easier to solve ‘waste’ problems in the design phase, but it involves some pretty radical collaboration up and down the supply chain.”
Will Australia achieve a circular economy by 2030?
Consensus on the panel is that the deadline set by the Federal Government is truly ambitious, but Dowling believes regulation will act as a catalyst to help change some of the economics of what’s happening now.
The government and the finance sector have important parts to play, she says, while Kobelentz is keen to see the finance sector be ambitious and really embed circularity into financial decision-making.
For Porter, the recent policy announcement is a vital first step that delivers some certainty around finance and how to de-risk early-stage investment. “It’s going to be a rapid, tough timeframe. Are we going to get all the way there?” she asks. “I don’t know, but let’s have a good hard crack.”
*Women in Sustainable Finance is backed by the Clean Energy Finance Corporation.
Learn how Westpac is helping customers achieve sustainable business models.
Stay informed with Westpac IQ
Get the latest reports straight to your inbox.
Related articles
Q4 2024 Sustainable Finance Market Update
Browse topics
Disclaimer
©2025 Westpac Banking Corporation ABN 33 007 457 141 (including where acting under any of its Westpac, St George, Bank of Melbourne or BankSA brands, collectively, “Westpac”). References to the “Westpac Group” are to Westpac and its subsidiaries and includes the directors, employees and representatives of Westpac and its subsidiaries.
Things you should know
We respect your privacy: You can view our privacy statement at Westpac.com.au. Each time someone visits our site, data is captured so that we can accurately evaluate the quality of our content and make improvements for you. We may at times use technology to capture data about you to help us to better understand you and your needs, including potentially for the purposes of assessing your individual reading habits and interests to allow us to provide suggestions regarding other reading material which may be suitable for you.
This information, unless specifically indicated otherwise, is under copyright of the Westpac Group. None of the material, nor its contents, nor any copy of it, may be altered in any way, transmitted to, copied of distributed to any other party without the prior written permission of the Westpac Group.
Disclaimer
This information has been prepared by the Westpac and is intended for information purposes only. It is not intended to reflect any recommendation or financial advice and investment decisions should not be based on it. This information does not constitute an offer, a solicitation of an offer, or an inducement to subscribe for, purchase or sell any financial instrument or to enter into a legally binding contract. To the extent that this information contains any general advice, it has been prepared without taking into account your objectives, financial situation or needs and before acting on it you should consider the appropriateness of the advice. Certain types of transactions, including those involving futures, options and high yield securities give rise to substantial risk and are not suitable for all investors. We recommend that you seek your own independent legal or financial advice before proceeding with any investment decision. This information may contain material provided by third parties. While such material is published with the necessary permission none of Westpac or its related entities accepts any responsibility for the accuracy or completeness of any such material. Although we have made every effort to ensure this information is free from error, none of Westpac or its related entities warrants the accuracy, adequacy or completeness of this information, or otherwise endorses it in any way. Except where contrary to law, Westpac Group intend by this notice to exclude liability for this information. This information is subject to change without notice and none of Westpac or its related entities is under any obligation to update this information or correct any inaccuracy which may become apparent at a later date. This information may contain or incorporate by reference forward-looking statements. The words “believe”, “anticipate”, “expect”, “intend”, “plan”, “predict”, “continue”, “assume”, “positioned”, “may”, “will”, “should”, “shall”, “risk” and other similar expressions that are predictions of or indicate future events and future trends identify forward-looking statements. These forward-looking statements include all matters that are not historical facts. Past performance is not a reliable indicator of future performance, nor are forecasts of future performance. Whilst every effort has been taken to ensure that the assumptions on which any forecasts are based are reasonable, the forecasts may be affected by incorrect assumptions or by known or unknown risks and uncertainties. The ultimate outcomes may differ substantially from any forecasts.
Conflicts of Interest: In the normal course of offering banking products and services to its clients, the Westpac Group may act in several capacities (including issuer, market maker, underwriter, distributor, swap counterparty and calculation agent) simultaneously with respect to a financial instrument, giving rise to potential conflicts of interest which may impact the performance of a financial instrument. The Westpac Group may at any time transact or hold a position (including hedging and trading positions) for its own account or the account of a client in any financial instrument which may impact the performance of that financial instrument.
Author(s) disclaimer and declaration: The author(s) confirms that (a) no part of his/her compensation was, is, or will be, directly or indirectly, related to any views or (if applicable) recommendations expressed in this material; (b) this material accurately reflects his/her personal views about the financial products, companies or issuers (if applicable) and is based on sources reasonably believed to be reliable and accurate; (c) to the best of the author’s knowledge, they are not in receipt of inside information and this material does not contain inside information; and (d) no other part of the Westpac Group has made any attempt to influence this material.
Further important information regarding sustainability-related content: This material may contain statements relating to environmental, social and governance (ESG) topics. These are subject to known and unknown risks, and there are significant uncertainties, limitations, risks and assumptions in the metrics, modelling, data, scenarios, reporting and analysis on which the statements rely. In particular, these areas are rapidly evolving and maturing, and there are variations in approaches and common standards and practice, as well as uncertainty around future related policy and legislation. Some material may include information derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the information. There is a risk that the analysis, estimates, judgements, assumptions, views, models, scenarios or projections used may turn out to be incorrect. These risks may cause actual outcomes to differ materially from those expressed or implied. The ESG-related statements in this material do not constitute advice, nor are they guarantees or predictions of future performance, and Westpac gives no representation, warranty or assurance (including as to the quality, accuracy or completeness of the statements). You should seek your own independent advice.
Additional country disclosures:
Australia: Westpac holds an Australian Financial Services Licence (No. 233714). You can access Westpac’s Financial Services Guide here or request a copy from your Westpac point of contact. To the extent that this information contains any general advice, it has been prepared without taking into account your objectives, financial situation or needs and before acting on it you should consider the appropriateness of the advice.
New Zealand: In New Zealand, Westpac Institutional Bank refers to the brand under which products and services are provided by either Westpac (NZ division) or Westpac New Zealand Limited (company number 1763882), the New Zealand incorporated subsidiary of Westpac ("WNZL"). Any product or service made available by WNZL does not represent an offer from Westpac or any of its subsidiaries (other than WNZL). Neither Westpac nor its other subsidiaries guarantee or otherwise support the performance of WNZL in respect of any such product. WNZL is not an authorised deposit-taking institution for the purposes of Australian prudential standards. The current disclosure statements for the New Zealand branch of Westpac and WNZL can be obtained at the internet address www.westpac.co.nz .
Singapore: This material has been prepared and issued for distribution in Singapore to institutional investors, accredited investors and expert investors (as defined in the applicable Singapore laws and regulations) only. Recipients of this material in Singapore should contact Westpac Singapore Branch in respect of any matters arising from, or in connection with, this material. Westpac Singapore Branch holds a wholesale banking licence and is subject to supervision by the Monetary Authority of Singapore.
U.S.: Westpac operates in the United States of America as a federally licensed branch, regulated by the Office of the Comptroller of the Currency. Westpac is also registered with the US Commodity Futures Trading Commission (“CFTC”) as a Swap Dealer, but is neither registered as, or affiliated with, a Futures Commission Merchant registered with the US CFTC. The services and products referenced above are not insured by the Federal Deposit Insurance Corporation (“FDIC”). Westpac Capital Markets, LLC (‘WCM’), a wholly-owned subsidiary of Westpac, is a broker-dealer registered under the U.S. Securities Exchange Act of 1934 (‘the Exchange Act’) and member of the Financial Industry Regulatory Authority (‘FINRA’). In accordance with APRA's Prudential Standard 222 'Association with Related Entities', Westpac does not stand behind WCM other than as provided for in certain legal agreements between Westpac and WCM andobligations of WCM do not represent liabilities of Westpac. This communication is provided for distribution to U.S. institutional investors in reliance on the exemption from registration provided by Rule 15a-6 under the Exchange Act and is not subject to all of the independence and disclosure standards applicable to debt research reports prepared for retail investors in the United States. WCM is the U.S. distributor of this communication and accepts responsibility for the contents of this communication. Transactions by U.S. customers of any securities referenced herein should be effected through WCM. All disclaimers set out with respect to Westpac apply equally to WCM. If you would like to speak to someone regarding any security mentioned herein, please contact WCM on +1 212 389 1269. Investing in any non-U.S. securities or related financial instruments mentioned in this communication may present certain risks. The securities of non-U.S. issuers may not be registered with, or be subject to the regulations of, the SEC in the United States. Information on such non-U.S. securities or related financial instruments may be limited. Non-U.S. companies may not be subject to audit and reporting standards and regulatory requirements comparable to those in effect in the United States. The value of any investment or income from any securities or related derivative instruments denominated in a currency other than U.S. dollars is subject to exchange rate fluctuations that may have a positive or adverse effect on the value of or income from such securities or related derivative instruments.
The author of this communication is employed by Westpac and is not registered or qualified as a research analyst, representative, or associated person of WCM or any other U.S. broker-dealer under the rules of FINRA, any other U.S. self-regulatory organisation, or the laws, rules or regulations of any State. Unless otherwise specifically stated, the views expressed herein are solely those of the author and may differ from the information, views or analysis expressed by Westpac and/or its affiliates.
UK and EU: The London branch of Westpac is authorised in the United Kingdom by the Prudential Regulation Authority (PRA) and is subject to regulation by the Financial Conduct Authority (FCA) and limited regulation by the PRA (Financial Services Register number: 124586). The London branch of Westpac is registered at Companies House as a branch established in the United Kingdom (Branch No. BR000106). Details about the extent of the regulation of Westpac’s London branch by the PRA are available from us on request.
Westpac Europe GmbH (“WEG”) is authorised in Germany by the Federal Financial Supervision Authority (‘BaFin’) and subject to its regulation. WEG’s supervisory authorities are BaFin and the German Federal Bank (‘Deutsche Bundesbank’). WEG is registered with the commercial register (‘Handelsregister’) of the local court of Frankfurt am Main under registration number HRB 118483. In accordance with APRA’s Prudential Standard 222 ‘Association with Related Entities’, Westpac does not stand behind WEG other than as provided for in certain legal agreements (a risk transfer, sub-participation and collateral agreement) between Westpac and WEG and obligations of WEG do not represent liabilities of Westpac.
This communication is not intended for distribution to, or use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. This communication is not being made to or distributed to, and must not be passed on to, the general public in the United Kingdom. Rather, this communication is being made only to and is directed at (a) those persons falling within the definition of Investment Professionals (set out in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”)); (b) those persons falling within the definition of high net worth companies, unincorporated associations etc. (set out in Article 49(2)of the Order; (c) other persons to whom it may lawfully be communicated in accordance with the Order or (d) any persons to whom it may otherwise lawfully be made (all such persons together being referred to as “relevant persons”). Any person who is not a relevant person should not act or rely on this communication or any of its contents. In the same way, the information contained in this communication is intended for “eligible counterparties” and “professional clients” as defined by the rules of the Financial Conduct Authority and is not intended for “retail clients”. Westpac expressly prohibits you from passing on the information in this communication to any third party.
This communication contains general commentary, research, and market colour. The communication does not constitute investment advice. The material may contain an ‘investment recommendation’ and/or ‘information recommending or suggesting an investment’, both as defined in Regulation (EU) No 596/2014 (including as applicable in the United Kingdom) (“MAR”). In accordance with the relevant provisions of MAR, reasonable care has been taken to ensure that the material has been objectively presented and that interests or conflicts of interest of the sender concerning the financial instruments to which that information relates have been disclosed.
Investment recommendations must be read alongside the specific disclosure which accompanies them and the general disclosure which can be found here. Such disclosure fulfils certain additional information requirements of MAR and associated delegated legislation and by accepting this communication you acknowledge that you are aware of the existence of such additional disclosure and its contents.
To the extent this communication comprises an investment recommendation it is classified as non-independent research. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and therefore constitutes a marketing communication. Further, this communication is not subject to any prohibition on dealing ahead of the dissemination of investment research.