The sales culture that’s harming Australian sustainability efforts

Australian businesses are being urged to abandon the damaging consumption culture of events such as Boxing Day sales, and transition to sustainable, circular business models.

The transition to a circular economy is critical to the climate, with Australia generating up to 80 million tonnes of material waste annually. The world generates more than two billion tonnes annually.

Globally, this waste is projected to increase by up to 70% by 2050, and global raw material extraction is projected to double by 2060.

In a report released earlier this year, the CSIRO estimated that Australia’s circularity rate was approximately 4%, half that of the global average.

To address this, the Department of Climate Change, Energy, the Environment and Water (DCCEEW) recently published a national circular economy framework for Australia, supported by the recommendations of the Circular Economy Ministerial Advisory Group (CEMAG).

According to Australia’s new Circular Economy Framework:

“Eighty-five percent of Australians are concerned about the amount of waste and consumption in society, with younger Australians linking this issue directly with climate change. Two-thirds of consumers want businesses to do more to embrace the circular economy.”

Boxing Day sales vividly show that, while some businesses are taking steps to sustainable futures, most are still capitalising on linear models of take-make-waste, and pushing a sales culture that is ultimately harming Australia.

“Despite volume stock sales like Black Friday and Boxing Day continuing to set record sales – for products that often end up in landfill without being sufficiently used – the business model is short-sighted and not sustainable,” says Martin Geissdoerfer, an associate professor of circular economy transitions with the Monash Sustainable Development Institute (MSDI).

“While consumers are buying into these sales, it’s often a response to massive advertising investment and psychological tricks from major brands.

“The increasing global scarcity of virgin materials, and competition with low-cost producer countries such as China, threaten the future livelihoods of these businesses that are entrenched in this linear model.

“For now, they can still outcompete more responsible long-term-oriented entrepreneurs only because of an unlevel playing field, with different regulations and standards across Australia’s states and territories.”

The linear practices of these businesses contribute significantly to overproduction, global waste, and greenhouse gas emissions. A transition to a circular economy could reduce global emissions by 39% by 2050 and provide an additional $210 billion in GDP, unlocking new jobs and increasing Australia’s resilience to global supply chain shocks.

For Australia, this translates to $26 billion additional GDP per year by 2035, greenhouse gas reductions of 14%, and 26 million tonnes less landfill.

Earlier this year, Australia’s Productivity Commission launched an inquiry into opportunities in the circular economy, and is expected to release its report in February 2025.

Monash University put forward key recommendations to the inquiry, which included seeking trade agreements with other nations that prioritise global resilient and responsible supply chains, establishing a circular economy standards board to regulate Australia’s circular economy, implementing circular economy-focused public procurement rules, and establishing funds to support circular start-ups and the transition of existing production and logistics chains.

Business success and sustainability can go hand-in-hand

Globally, we see good examples of how successful circular models can be.

Patagonia, for instance, has pioneered sustainability by offering repair services, durable products, and recycled materials, achieving revenues of US$1.5 billion in 2022.

The size of the prize can be seen in North America, too. Retail giant Walmart's Project Gigaton claims to have reduced emissions across its supply chain by 1GT in seven years – equivalent to eliminating the annual carbon footprint of Japan, the world’s fifth-largest emitter.

This demonstrates what’s possible when large corporations put strategy and resources behind sustainability, improving productivity and long-term performance of their business in the process.

But it remains a challenging landscape. For every business that puts sustainability front and centre, there will still be, for example, fast-fashion giants such as Shein that continue to flood markets with cheap, disposable clothing.

In Australia, for instance, 1.4 billion items of clothing are imported annually for a population of 26.6 million people. This stark contrast highlights the need for systemic change in how businesses produce and market their goods, and how governments set and regulate policy.

Industry can’t transition alone

Governments need to provide the right policy, funding and regulatory settings, including circular economy-focused standards and regulation. Australia’s National Framework, the Productivity Commission inquiry, and the work by the CEMAG, are encouraging recent steps in the right direction.

Governments must level the field for sustainable businesses, and review regulatory barriers and negative incentives, such as the A$540 per Australian fossil fuel subsidies and paltry landfill levies, that undercut innovators.

Clearer rules and incentives, such as minimum durability and repairability standards, or tax credits for closed-loop systems are needed. The National Framework acknowledges the need for the Australian government to implement supportive policies and regulation, and to shape the economic landscape, while the CEMAG has recommended specifics around a new Circular Economy Act allowing for product regulation.

Everyone can contribute to a sustainable future

Monash’s Circular Economy Labs and Monash Business School work closely with policymakers, industry executives, and civil society representatives to accelerate a circular future in which we keep resources in use longer to increase productivity in Australia and make landfills a thing of the past.

As the recent publications by the DEECCW and CEMAG show, this is creating a lot of momentum. Businesses and policymakers now need to take this momentum and translate it into tangible actions.