The Circular Economy Business Innovation Centre and Planet Ark Australian Circular Economy (ACE) Hub hosted the event ‘Smart and Circular’ on Thursday April 29 at Melbourne Knowledge Week 2021.
The event was hosted by circular economy expert Jodie Bricout, who was joined by a panel to explore how data and technology can be used to design out waste and enable circular economy business models.
CHEP is a Brambles company that has pioneered the circular share and reuse business model allowing businesses access to a network of pallets, containers, RPCs and beverage trays. The CHEP model is powered by smart technology that enables the collection of data across the supply chain to improve efficiency and reduce environmental impacts.
View Lachlan's LinkedIn profile and CHEP's company website
The Madaster platform develops material passports for buildings that register the materials and products used. Documenting, registering, and archiving materials in buildings and construction objects makes re-use easier, encourages smart design and eliminates waste. With Madaster, every building can become a material bank.
View Marjon's Linkedin Profile and Madaster's company website.
Mark founded SuperCool over 40 years ago. Supercool offers technology solutions (including sensors and software) to the cold chain that improve data accuracy by calculating the temperature of food in various conditions based on information from the ingredients shown on the manufactures data sheets or food product packaging. This enables companies to better plan and predict the impact of temperature fluctuations and abuse on products to design out food waste.
View Mark's Linkedin Profile and Supercool's company website.
Noreen founded LUP Global to provide a circular solution to address the enormous amount of company assets that are under-utilised, under-maintained and often sent to landfill despite the potential opportunities that exist to extend the life of the asset for reuse/resale. LUP Global supports companies to improve their management of high-value and high-volume assets through improving data collection with the use of the LUP Circular Asset Database. This improved data collection allows companies to better maintain and reallocate under-utilised assets to other industries and countries that can use them to the fullness of their lifecycle.
View Noreen's Linkedin profile and LUP Global's company website.
Key takeaways from the event:
Barriers in driving the adoption of circular economy business solutions
The overall theme of barriers identified by the panel included establishing collaboration and transparency across the supply chain. Key topics discussed:
Solutions to become circular and overcome the barriers
The time to change is now. The panel discussed solutions:
Bring attention to the triple bottom line to highlight social, environmental and economic gains to show the true value that becoming circular provides.
Advice for getting started
The panel also provided advice for a business wanting to use data and technology to start their circular transition. This included:
Watch the full recording of the event below.
[Opening visual of slide with text saying ‘Smart and Circular’, ‘Join at: app.sli.do’, ‘Code: SC29’, ‘Sustainability Victoria’, ‘Victoria State Government’, ‘This event is part of Melbourne Knowledge Week, 26 April to 2 May 2021, proudly presented by the City of Melbourne’]
[The visuals during this webinar are of each speaker presenting via video]
Claire Ferres Miles:
Hello. My name is Claire Ferres Miles, the CEO of Sustainability Victoria, and I’m delighted to welcome you to this fantastic Melbourne Knowledge Week event, Smart and Circular.
I acknowledge and pay my respects to the traditional owners of the lands upon which I am joining you, the Bunurong, Boon Wurrung and Wurundjeri peoples of the eastern Kulin nation, and pay my respects to their Elders past, present and emerging. I acknowledge that we live and work on the lands of the world’s oldest and most sustainable culture, acknowledging the many lands from where each of you are joining this event today. I acknowledge the deep connection to earth over the past 60,000 years of first nation’s people, and their invaluable contributions to our understanding of climate change and the environment.
Today the Circular Economy Business Innovation Centre, in collaboration with Planet Ark’s Australian Circular Economy Hub, have brought together an expert panel to explore how we can use data and technology to design out waste and apply circular business models. It is with great pleasure that I introduce our host who will lead this discussion, Jodie Bricout. Jodie is the cofounder of the ground-breaking not for profit LOOP Circular Economy platform, and a founding member of the Circular Economy Innovation Advisory Committee, that provides advice to support delivery of the Circular Economy Business Innovation Centre, a flagship program of the Victorian Government’s Recycling Victoria policy.
While undertaking a PhD with the University of Adelaide, Jodie is also the circular economy manager at a number of leading consultancy lifecycles, and board member of New South Wales Circular. Over to you Jodie.
Hi. Well what an honour to be part of this important discussion today, and fabulous that CEBIC is holding these kind of discussions and that Melbourne Knowledge Week can host this as well. So before we introduce you to our amazing panellists, we’re going to have a bit of a discussion about the circular economy.
So the circular economy is about keeping things – so we’re talking about assets, infrastructure and products – the components that make up those things, and finally their materials, at their highest value as they make their way through our economy, hopefully several times. What we’re aiming for is to create an economic system that not only does less damage to our environment, but is actually restorative, all while creating economic value and business opportunities. In fact it’s estimated to be a billion dollar opportunity worldwide, and in just a moment, we’ll hear from four Australian based business pioneers that are reaping just some of these benefits.
Adopting circular approaches can help organisations increase revenue, reduce costs, especially medium to long term, increase their competitive advantage, future proof their business, and also reduce environmental impact. It also has wonderful benefits for society and the environment that can drive innovation, improve efficiency, create jobs, reduce carbon emissions, and design out waste and pollution from the beginning.
Now we all know how much data and technology have the power to rapidly change how we do business. We’ve seen it in the past 12 months as we’ve learnt to work with and around the COVID pandemic. Data and technology are also formidable enablers of the circular economy. They can support business to identify opportunities and develop solutions to really become more circular. By using data and tech, we can better understand and leverage opportunities within business around improving visibility to identify the most relevant opportunities for us to work on, and help to track progress and improvement. The more we know about the products, components and materials that we are working with, the more that we can actively manage them to keep them at their highest value.
So today you’re going to be hearing from an amazing panel that are working across a variety of industries across the country and across the world, to learn more about how they’re using data and technology to design out waste and enable their circular economy business models. We’ll explore different approaches to using this data and tech, and discuss how you can get started on this transition no matter what your organisation or personal ambitions.
Speaking of data and tech, we want to introduce you to some of the software that’s going to help make this session as interactive as possible, as we’re all sitting behind our screens in our different cities and homes. So in the Melbourne Digital Knowledge Week Digital Hub, you should see a chat box to the left of your screen. Now this is where you’re encouraged to network and engage with the other audience members. We know that there’s hundreds of people online right now, and many of them are just as clever as your panellists, so please reach out and chat while we are having our discussion, and it can be a really rich session for you in that way as well.
You should also see – we’re going to be flagging questions and answering some polls on a tool called Slido, which should appear in your Melbourne Week Digital Hub just below the screen. So if you scroll down a little on the screen, you should be able to see a little Slido integration. Here you can post questions using the Q&A tab to ask to our panel, and we’re also going to be asking you a couple of questions to answer on this. Now if you’re watching in a group, you’ll need to jump on your mobile phones at slido.com and enter the code #SC29 so that you can all individually participate in this as well.
So let’s give this a go with our first audience poll. So if we head in to the Slido questions now, we’d like you to fill out this questionnaire on which of the following statements best reflects your level of knowledge or experience in the circular economy. So we imagine online that we’re going to have some super-duper experts, we’re going to have some complete newbies, and many people in between the two. It’s always amazing to do these sessions with such a wide array of people, and we would love you to answer this live poll right now so we can get a bit of a feel for who’s in the room. We’re starting to see some results there, so that’s fantastic. And I will keep filling the void while you keep filling in, so please have a go.
We’re going to be doing a really important question later on that will really shape the answers for the panellists, so it’s really great for you to be able to talk to us about this. So some of you will be experts, what you do every day, some might just be familiar with it. Maybe you’ve done a project. Some might have just heard of it and want to learn more. Maybe you’ve seen the CEBIC website already or looked at the Australian Circular Economy Hub and you want to figure out how to apply it. Some might be completely new, and some might have no idea what circular economy means, and hopefully you followed a little bit about what I just said, or I’ve already tuned you out.
So now I think the delays have worked and we can cut back to the poll. Let’s have a look at who we’ve got in the room. So we’ve got two elements neck and neck. So about two at 40% where you’ve heard of it and want to learn more and want to be able to apply it. That’s great, because we really want to talk about how to get started on this journey. And some familiar. So we’ve got a couple of experts, some that don’t know anything, but most of us are a little bit middle of the road and ready to apply information. So that’s a great place to get started.
I’d like to introduce you to our panel who will be joining me in discussion today. We’re going to start with Lachlan Feggans. Now Lachlan’s the Director of Sustainability Corporate and AsiaPacific at CHEP, which is a Brambles company, who’ve pioneered a circular share and re-use business model that allows businesses to access this amazing network of pallets, containers, RPCs and beverage trays that can be re-used again and again and again in the system. The CHEP model is really interesting, because it’s powered by smart technology that enables the collection of data across the supply chain, it improves efficiency and reduces environmental impacts.
You’ll also hear from Noreen Kam. Noreen founded LUP Global, which provides a circular solution to address the enormous amounts of companies’ assets that are under-utilised, undermaintained, and often even sent to landfill, despite the potential opportunities that exist to extend the life of these assets for re-use or resale. LUP Global supports companies to improve their management of high value and high volume assets, through improving data collection within the use of the LUP circular asset database. The improved data collection allows companies to better maintain and reallocate under-utilised assets to other industries, and even countries that can use them to the fullness of their value.
For an international perspective, we have Marjon Wind from the Netherlands based company Madaster. Now Marjon’s the start up partner of Madaster here in Australia, and they’ve created a platform that acts as an amazing register for materials and products in the built environment. Madaster creates a material passport for buildings that register the materials and the products used in the buildings. This process of documenting, registering and archiving materials for building and construction objects makes it easier to re-use, it encourages smart design, and it can eliminate waste. By doing so, every building in effect becomes a material bank.
Finally you’ll be hearing from Mark Mitchell, who founded SuperCool over 40 years ago. SuperCool offers technology solutions that include sensors and software to the cold chain. These improve data accuracy by calculating the temperature of food in various conditions based on the information from the ingredients shown on manufacturer data sheets or food product packaging. This enables companies to better plan and predict the impact of temperature fluctuations and abuse on products, effectively designing out food waste in their part of the food chain.
Now that I’ve given you an overview of how our panel members use data and tech in their businesses, I’d love to kick off this discussion focusing first on the challenges they’ve had on the face to drive forward their circular business models. Let’s start with you Lachlan. What are the challenges you’ve seen in driving the adoption of CHEP circular economy solutions?
Look, we’ve done a lot of work with universities in actually comparing the costs, so just looking at costs and leaving out environmental, and we can actually determine that the cost of re-usable crates is cheaper for that supply chain than a single use alternative like a cardboard box for example, from an individual player’s perspective. When you overlay the environmental benefits on top of that, which is becoming more and more important for all the players in the supply chain, you can actually really start to overcome these barriers and start to actually change the conversation around there’s more to cost here, there’s more value that you as a producer can provide downstream to your food manufacturer or to your retailer in terms of no waste. You’re not passing on any waste down the supply chain. There’s no single use cardboard waste that you’re shifting down and not having to deal with. There’s more efficient packaging systems. Your people on site that have to construct cardboard boxes to put lettuce and fresh produce in, the crates can just pop up and they’re ready to go.
So there’s lots of value that you can actually communicate to different players in the supply chain, but of course you need to have that broad view of okay, this is going to A, B, C, D, E, and address all those different stages. So our teams are really busy, busier now than they ever have been, and that’s – but they’re working, and they’re doing a really good job.
So Lachlan, you’re telling us that your people have to convince not just one decision maker, but multiple decision makers in completely different companies to all hold hands and jump at the same time right?
Pretty much. Pretty much.
Okay. That sounds like me trying to convince my three kids to have the same thing for dinner at the same time. Near on impossible.
Collaboration. Collaboration in the supply chain is far easier than dealing with three kids. Yeah. I can assure you.
Fantastic. But there is an issue with that though, because you might sometimes be able to just show that there’s a benefit overall to the system, but I imagine that those different people and different parties need to pay different amounts to make that system work as well. So ultimately who pays and who shares the benefits of that system, is that an issue as well?
Yeah. Look, and we have to have those conversations. The total cost of ownership of having that platform within their supply chain is an actual critical discussion. But what we’re able to demonstrate is that used properly, using the right platform in the right supply chain, it can be a lot more cost effective for that player. It arrives when they need it. They can use it and shift it on and reduce their costs by just being more efficient in that regard. So it’s a conversation our teams have every day, but more and more supply chains are seeing the benefits here, and seeing that they actually have a responsibility up and down their own supply chains as well to their customers that’s actually of value. So that’s a really important thing.
Fantastic. Noreen, tell us more about some of the challenges that you’ve seen going in to your industry and trying to get people to take up your amazing circular solution.
Sure. Thank you. So fantastic segue actually from Lachlan about the whole collaboration and having a broad view of the supply chain. Because one of our key challenges I guess was enabling that visibility when we’ve got such a diverse pool of assets. So it’s not just like cars, one asset base. It’s quite diverse across laboratory equipment. And I think one of the ways we’ve tried to mitigate this is through the original equipment manufacturer partnerships and collaborations. So where we’re not able to get visibility of the history, the maintenance records or anything of a specific asset, and we’ve got OEM collaboration and partnership, we’re able to work with them to be able to track the IP and the lifecycle against that asset through the manufacturer rather than trying to find the end users, who often there’s turnover of staff or they’ve moved and they’re not doing that sort of testing anymore. So it’s been really helpful in terms of that.
And how have you gone approaching global OEMs to share their data with you? Has it been interesting, and easy or hard?
They’ve been really amazing to work with actually. So we’ve got five OEM partnerships. They’re all kind of in that scientific field. And we’ve got different relationships and we work differently with each one of them, because they’ve got different remanufacturing policies for example. So I’ll give you an example. Agilent Technologies, they’re a big global company, they’ve got remanufacturing centralised in the States. So they might have equipment where they know yes, they can take that equipment back, give a rebate, send it back to the States, remanufacture it and then send it back out. But then there’s a lot of skews that might not fall within that remanufacturing category, so then we actually partner with them and then they let us try to help relocate that, because there’s still so many secondary benefits of them being able to keep their equipment in use out in the market. They still get the preventative maintenance, revenue. They get the service revenue, they get the consumables, and then they’re keeping their competitors out of the market as well. So there’s a lot of secondary tiered benefits to just selling the equipment brand new and getting it out there.
That’s amazing. Because sometimes you hear the argument that why would a company want to sell something second hand. It’s going to cannibalise their new stock. So you’re finding that’s not necessarily a problem in all industries?
Yeah. Completely. So we’ve got another OEM that we partner with, and they’re really focused on sort of the tier one organisations. So they’re Peak Scientific. They do nitrogen gas generators for example, and they can get a good return on investment for selling the new generators, but then some of the secondary markets where the labs aren’t as high end, the return on investment might not be that good an opportunity for those sorts of businesses. So us being able to be their partner of the secondary market as well enables them to break into more markets that they wouldn’t otherwise be able to. And the lifecycle of their generators are 15 plus years easily, but a lot of the tier one organisations might depreciate it over five to seven years. So there’s just a huge secondary market there that wasn’t tapped in to before.
Fantastic. Marjon, I see the building and construction industry as one of the most complex group of decision makers and professionals. They scare the heck out of me. I hate working with them. They’re one of the toughest. I can imagine Madaster would have enormous challenges getting your technology up and in place.
Yeah. I think particularly here in Australia it’s fair to say that all the conversations I’ve been having over the last sort of six months is that people are very much struggling to understand where the value is today. So it’s a little bit like what Lachlan was saying, how do you actually talk about the value. Because they’re all thinking about ten/20 years from now we can see how that would have a value, but how does it have a value to us today? And I think in Europe it’s a little bit different, because there’s much more regulations coming out. The EU green deal is really pushing the concept of material passports. So I’m convinced that the Australian market is changing. Through my work with COREO, we actually do a lot with all the big built environment companies in Australia, and you’re starting to see that they understand okay, we need to do something with this. At the moment there’s still very much a focus on that input side, so looking at using low carbon materials, but more and more they’re starting to understand that if I want to understand how circular my building is, using something like a materials passport actually provides you with that insight. And then if then go okay, I’ve got my plans, I’ve got my built information models. I can upload that. I can see that my building is only 30% circular. How can I go back and design it slightly different so that it’s 40 or 50 percent circular? Or maybe we need to make it even lower to start off with.
But I think it’s, as I said before, that education that’s absolutely critical, that we start that today. So to really work that collaboration in the chain. And that’s also what Lachlan was saying as well. Collaboration in the chain is absolutely key, and that’s obviously something that traditionally doesn’t happen. You sell products and then you move on to the next stage. And that’s kind of slowly starting to change. I think a conversation around product stewardship in Australia is helping that as well, whereby producers are more and more understanding that they need to take some ownership over their products throughout the supply chain, and it doesn’t just end at the moment that they’re selling it off.
Marjon, you mentioned the legislative context that might be more favourable for these kind of solutions in Europe. You also mentioned BIM, and the prevalence of building information management software. Do you think there needs to be a certain bare minimum take up of these kind of digital systems before you can overlay your circular systems? Is there a digital maturity that Australian businesses need to have?
Yes, and I guess obviously that will definitely help, because I think the concept of creating a digital twin, which I think a conversation is happening a lot within the built environment and understanding that having a digital twin of your building is the way forward, will obviously help the Madaster technology, because if you have a BIM model, it’s literally just one push of a button and you can create a materials passport. Now you’ve got to understand that obviously if the information is not in your BIM model, then it’s not going to magically appear in your materials passport. So there is an education process that needs to happen around how do we use BIM more effectively. And I think that conversation is happening more and more. We’re working together with one of the large organisations at the moment on a new project in Sydney where they’re actually very actively focusing on BIM, but also how do we use BIM to our advantage, and the concept of a material passport then fits in with that.
So I think there’s a lot of discussion going on in the market here in Australia, and I’ve seen a big change in the last 12 months in the mindset and the shift and understanding that we need to start somewhere today to get those benefits five/ten years from now.
Yeah. And I think sometimes we lament in Australia that in Europe there’s such a formidable legislative context that sort of pushes everyone. When I’ve brought Europeans out to Australia to talk about their circular economy experiences as well, they’ve been really impressed at how innovative businesses are here, and that they tend to just jump up and get going without the government needing to necessarily hand things out and make it mandatory as well. So it’s useful to think of us as quite a pioneering nation in this, and that there’s companies like you guys that can really move forward, and not necessarily have that environment around.
And I think you’re right. I mean obviously regulations help, but I totally agree with you that in Australia it’s about showing the value. And there is value that - - -
We’re good at getting on and doing it once we can see the value.
Mark, talk to us about some of your challenges that you’ve had to face.
Jodie, the crucial points made by Lachlan, Noreen and Marjon about collaboration and transparency through the supply chain is absolutely key to what I would say about the cold chain. The cold chain very, very much relies on that. But even to another level, because the cold chain is a supply chain. It’s a chilled, refrigerated supply chain, as you all know. And it requires step verification at the different segments for it to be successful. And the changes split into critical control points and control points. And wherever food passes through a critical control point or changes custody or ownership, step verification is required. In other words, there needs to be a quality management system implemented.
So the issue that we have in Australia is that broadly there is a lack of appetite to have a robust quality management system in place between all stakeholders and at the individual control points in the chain. The reason principally for that is that the cost of putting a quality management system in place for cold chain management for a lot of the stakeholders far outweighs the cost of the food loss. So food as an economical item is seen as to be too cheap. So what we need to do is get rid of all the accountants and all the financial controllers that just look at the commercial cost of things. Get rid of them. Start bringing in young, emotional, motivated financial controllers who see the triple bottom line. And I’ve got great faith in the younger generation on this point, because the triple bottom line is the social and moral, the environmental and the economical profit of doing something. And reducing food loss and waste and creating circular economies, as you guys are saying, is absolutely paramount in that.
Broadly speaking, if you put in a quality management system and you don’t do anything, and you just let food loss occur in your supply chain, it’s about the same cost. So the bean counters look at it and say ‘There’s no payback. No payback. We won’t do that. Just throw the food out’. That’s wrong. That’s got to stop. And that’s the single biggest barrier in Australia. And not just Australia by the way. The USA’s the same. Europe is not. So under the EU of course, there’s what they call an ATP directive, which is the agreement for the transportation of perishable products, which all the EU countries are signed up to. So the EU is a shining light in this. So there are lots of other developing countries that are in the same boat as Australia sadly.
I think Australia’s shifting as well in the food waste side we’ve seen since the national government has put into place very clear objectives around reducing our nation’s food waste, and the Victorian Government as well is doing a lot of amazing work – Claire, you might want to comment on this as well – in making it a very clear directive to cut food waste. It’s one of the few areas I think in Australia that we’ve got real leadership and clear guidance in this. Claire, did you want to comment on that side of things?
Yes. There is an ambitious target across Victoria, and the Victorian Government’s endorsed to halve food waste by 2030. So currently in Victoria there is 2.4 million tonnes of food waste that’s generated by Victorians. So we have an ambitious plan to cut that by 1.2 million tonnes. And there is a report that we’ve prepared called Path to Half, which I would recommend – it’s available on the Sustainability Victoria website, which is sustainability.vic.gov.au – which sets a really clear sort of action plan about six sort of food types, of plans and opportunities about how we can address that. I’ll give you the top three, which are dairy, meat and bread. And so there’s some really big opportunities about how we can look at the whole supply chain in terms of food waste across Australia.
Fantastic. So I think it’s time to cut back to the audience questionnaire about what they see as the main barriers to circular economy innovation in their organisations. So perhaps if we could show the results to that. And I’m going to throw out to all panel members to be able to jump in and comment on some of these. So the number one barrier that our audience is seeing is that they can’t easily find, connect or collaborate with other organisations. So I think this is a great example of most of the solutions here have been around connecting and collaborating with that, and creating shared values. I kind of feel like we’ve touched on that topic enough. How about the second biggest topic that came through at 24%, we do not prioritise circular solutions. Do we think this is an issue? As Mark was saying, the bean counters. We don’t want to get all the accountants offside, and all the older accountants offside as well. I don’t think that’s fair either. But in terms of having a very narrow focus, do you guys have any comments about the prioritisation of circular solutions that’s happening now in the marketplace?
I’m happy to jump in here Jodie if you like. Look, one of the things that I think we’ve already talked about is the role of government and regulation, and collaboration in that space as well. And I think we’re a little bit lucky with CHEP, because we’re a packaging item, and packaging waste has been identified as a major issue. It’s a national issue. All the states are dealing with it. We’re dealing with it nationally. And the reinvention if you like of the Australian Packaging Covenant Organisation – so kudos to Brooke Donnelly and her team at APCO – they’ve really, really sort of made a collaborative platform available for all brand owners who produce packaging. And it’s a co-regulatory arrangement. So the states and federal governments collaborate with industry in this particular sense.
So I think that that has actually set a whole series of very, very clear targets for the packaging industry, by 2025 that we want to have 100% of packaging to be reusable, recyclable or compostable. And that signal has been sent to industry, and it means that those circular solutions are just emanating out of all the APCO members right now. There’s exciting stuff happening. So we’re putting stuff out in the market, the brand owners are putting stuff out in the market on a weekly basis, actually developing circular solutions because of this framework and because of this platform and this industry collaboration that’s been developed. And I think that that has accelerated what was already happening, but I also think it’s brought in other players who may not have been participating in a sustainable packaging system or a circular packaging system previously, because essentially, they have to now as part of their state legislation. So I think that that’s a unique aspect in the industries that we’re talking about. The packaging industry has that available to them, and I think that that’s actually opened up the innovation space in circular solutions quite a lot.
Okay. So actually, that is a nice segue to some of the audience questions that are coming through. So, Jasper Bashur has asked how important does the panel believe clear government, state and federal policy is to allow circular economy business models to compete with linear models? We’ve mentioned packaging sector and the food sector as areas where national and state targets have been really supportive in this area. Perhaps Marjon, how do you feel the importance of government prioritisation of circular methods is in terms of helping your business?
Listen, I won’t lie. It would definitely help if there would be stronger regulations around waste, particularly C&D waste in the country. But I think what we see for example here in Queensland, where they introduced the land fill levy about almost two years ago now, that has started to shift the focus and the mindset, and that land fill levy is only going to go up. But I think what we see much more is that, particularly with the larger organisations that I work with through my work with COREO as well, is that there’s a lot of pressure from stakeholders from above. They have to start showing their sustainability, and I think that ultimately will create much more focus on what they need to do than just regulation. So from my perspective, I’m not going to sit around waiting for the regulation to come, because I think then we’ll be waiting for a long time. So I think it’s much more about building the conversation and the understanding about how this can actually benefit your organisation. So it’s not just talking about fines if you don’t do something, but it’s about how can you actually create that value.
And I think one of the reasons why people struggle with it, is that circular economy and circular solutions, it’s such a big systemic change, and a lot of the times it’s like where do I start? And I think if you can unpack it by working with organisations and show them how they can take action – and that can be a very small action initially. Like I said, with Madaster it would be about understanding how a material passport can change and how you can use that as an education within your organisation for example. But how can you take some initial small steps? And I think from there, the benefits and the values will become much more clearer. And I think the moment companies see the value, whether the regulation is there is not, is going to be less relevant. But having said that, a green deal for Australia would be great. So I wouldn’t be against that.
Claire, there’s been mention of I guess the stick side of government policy intervention, the fines and regulation and things. I think Sustainability Victoria’s taking a real leadership position, and DELWP and the Victorian Government in general, around putting in place a clear circular economy policy, but also founding this organisation CEBIC to actually support businesses to do interesting things in this space. So we’re talking more of a carrot supportive approach. But could you comment on that role of government as well in supporting circular business, not just putting out the stick, but doing other ways of supporting?
Yes. I mean I think there’s an incredibly important role for government about certainty of policy direction. And we’re lucky here in Victoria that we do have the Recycling Victoria policy, which does set a ten year horizon to transform the waste and recycling sector. And the best way to do that is actually to look across the whole supply chain. And there is a role for both regulation and incentives, and the great work around CEBIC is that it’s very much around looking at innovative partnerships and how we can start to look at new ways of thinking and new business models. Another example is we are delivering some programs around investing with research and development, around if we can have a better collection system and processing system of recycled materials, how do we create the pull through, what we call the pull through, in terms of end markets so that there will be buyers of the recycled materials to then generate new products and create that circularity of materials and resources.
So there’s definitely a role for government to do both, in terms of – I agree with Marjon about regulation is a very strong lever to flag an intention. It doesn’t have to be regulation straight away. It could even say in five years’ time, this is where we’re going to head. And it sets a clear framework for the private sector to understand sort of what success looks like. But CEBIC is a great example of very much an incentive-based framework for the sector to assist when there isn’t a capability or an understanding of what success looks like.
Fantastic. We are getting a load of questions coming through on the poll. So keep them coming in.
Jodie, can I just add something to what Claire just said there.
Great. I was going to throw to you next.
No. That’s fine. Sorry. Just while my brain remembers it. One of the positions that we’ve taken at the Australian Food Cold Chain Council is to look at the idea of promoting QMS platforms. What we have witnessed time and time again, when there are quality management systems, or QMSs as we call them, in place between economies, stakeholders, businesses, natural transparency and cooperation starts, because it’s a requirement of the management system, because step verification is required. We believe that a good way to approach this would be for government to incentivise companies to put in QMSs. So you incentivise them somehow – and every state leader that I’ve spoken to has a different view on this Claire – but you could incentivise the market or stakeholders to put in QMSs, and let them get on with it almost. We believe that would be a flaming arrow into the wagon we reckon, if we could pull that off in a broad sense.
Great. Before you cut out Mark, we’ve got a question about the role of IOT, internet of things, and what role that can play in end to end supply chain circular solutions. In your business, has internet of things been a real step change for you?
Massive Jodie. Yeah. As I was saying earlier, so temperature measurement. So a compliant cold chain asset, whether it’s a storage facility or a transport asset, these days has a telematics device on that which will beam temperature and behaviour and refrigeration data to the cloud or to a web portal, so that the stakeholders that are involved in the transport or the ownership of the food items in that asset can see it. But once again, that web portal, you’ve got to have nondisclosure agreements in place and commercial in confidence agreements in place, which is still all too cumbersome in this modern era. We’ve got to unload all that stuff and start cooperating more and connect our web portals together more so that we see, particularly in end to end cold chain – because an end to end cold chain, you send something say from here to Vietnam – if I send something here from Brisbane to Vietnam, it’s going to change through probably six hands by the time it gets to Hi Chi Minh City. So you’ve got six different owners, six different custodians, no one cooperating with each other, all hiding the data, mostly. Some of the compliant end to end cold chains don’t have that. They have cooperation. They have a common web portal they might be all sharing, or sharing the internet data. But a major role to play moving forward, internet of things.
Fantastic. So we’ve got a question, and I think this is really relevant for a lot of businesses. A lot of this big data and technology can mean significant investment, upfront investment for businesses. So how can small businesses begin to design out waste and apply circular business models? Anyone want to tackle that one?
I’ll say it one more time and then finish.
So I will also say that we are drowning in data. We are drowning in data. Our critical control points and supply chains are flooded with data, and there’s not enough people looking at enough data. There’s not enough step verification. There’s not enough product quality validation at the other end. The data’s there, but there’s a presumption of innocence around abuse of the product, because the data’s stored. No one’s checking it. So it’s not the data that’s going to put you in business in a circular economy or give you a circular economy or product validation activity. The first thing you’ve got to do is put in a quality management system. Start with a pencil and paper, then buy a telematics device with a SIM card in it.
So Noreen, you’re the most recently started up business here on the panel. How did you get started? Where did you start? You must have known that you wanted to do something vaguely circular. How on earth did you find your niche?
Networks. So through existing relationships. So I think, like we’ve been saying about collaboration the whole time, if you’re a small business, maybe you could aggregate and pool. I know a lot of organisations don’t really want to work with their competitors, but it could be sort of partnering or adjacent sort of industries rather than direct competitors that you could pool sort of resources with to get economies of scale, to look at things as well. But it’s sort of like what Mark was saying. It’s not so much about the technology, but if the technology’s there but you don’t have the right data or information feeding into it, it’s not going to deliver the results anyway. So even if you start off with even an asset register that’s as basic as an Excel spreadsheet that you can start capturing that data so you can disseminate the information that you need and then put the processes and systems around it, it can be just as effective for a small business in terms of process.
So back to basics, good business management is really where we need to start, and having good business concepts is most important. We’ve got Judy Tran who’s asked a question about metrics and measures, which is one of my favourite topics. She’s asked what kind of metrics and measures should we be using to measure the benefits and impacts of circularity that will be useful to all stakeholders, and is there a standard? Now Lachlan, you’ve done loads of work around this. Could you perhaps kick off the discussion on metrics and measures?
Yeah. Absolutely. And it helps answer the previous question as well, about how do small businesses get started. So look, Brambles, who is the listed entity that owns CHEP, has been a member of the Ellen MacArthur Foundation since back in 2015. And we’ve been working with them on circular metrics for a very long time. We had an iteration back them. Now they’ve actually released Circulytics, and we’ve played an integral role in co-developing that with about 30 other major brands around the world, to actually help to measure, or define and measure what a circular system is going to be.
So going back to the previous question, if you’re a start up, you’re going to get the fundamentals – if you go to the Circulytics website and go through the tool – it’s free to use – you’ll start to get the fundamentals of how a circular system should work. So that’s a direction. You could do that today. The other piece, the way the Ellen MacArthur Foundation has approached this, is data is one component, but governance is the other component as well, and how that business is actually run. So the incentives in the business, the structure of how the business actually rewards itself internally if you like. Those qualitative and quantitative measures come together in this Circulytics platform. And look, we’ve been through this measurement process three times now. We publish this in our sustainability report, which is available online. And look, in all areas we keep getting really high scores, simply because our circular share and re-use system is so well managed. We know where everything is. We know the inputs. We know the outputs. And the more times we re-use our platforms, the higher the score goes.
So I would say that the Circulytics platform is probably the leading platform. There’s also another platform from the World Business Council for Sustainable Development, the WBCSD, and they’ve got a CTI tool. We’ve had a role in that as well, and that’s very data focused. And I think you can actually access that free online as well. So they’re the two leading entities, Ellen MacArthur Foundation and the WBCSD CTI tool, in terms of measurement of the circular systems. It is super complex, but it is being done. So encourage you to go out and have a look at those platforms.
Fantastic. Marjon, what kind of metrics and measurements does Madaster push on to help support a system? And it might not necessarily be circular metrics, but other things that help to find success?
Yeah. It’s very much circular. So Madaster is also very closely aligned with the Ellen MacArthur Foundation. Madaster actually has the Madaster Foundation, which is the not for profit that kind of sits over the sort of operational company. And Ken Webster, who’s one of the founders of the Ellen MacArthur Foundation, is on the board of the Madaster Foundation. So it is a very close alignment with the tools that Lachlan was just referring to around circularity. So within Madaster there is a circularity measurement for buildings, and what that really looks at is looking at the percentage of raw materials that are being used versus recycled materials, and then also how long these materials are being used for versus what’s kind of standard. So if you use a material that normally would last for ten years but you would use it for 15 years, you get a higher score.
Okay. We might cut to someone else. I’m really interested in what Marjon was getting at, the part that I was understanding. Marjon, you’re back?
Yes. I’m back. Sorry. Did I cut out just there?
Sorry. It cut out for a second. You were explaining that there was an element about the circularity of materials coming in to the building, and then about how you manage to extend the lifespan in the building. That’s about how far we got.
Yeah. Sorry. So if you want to measure the circularity in a building, I guess there’s different elements that you need to look at, and one of them is of course how many recycled materials you’re using in the first place, but then the second one is that the materials that you have, how much are you really using that material for as long as possible. It’s keeping it in the system for as long as possible. So you would get a higher score if you use a material for longer than average than if you use it for shorter than average. That’s part of the measurements in there. But yeah, as I said before, it’s very much aligned with the Ellen MacArthur Foundation, so very much looking at how Ellen MacArthur measures circularity. Because I think it’s very important that globally we speak a bit of a similar language around this, because otherwise if we’re going to have too many different tools and systems, people are going to get very confused.
Absolutely. And I see a real focus there shifting away from measuring what’s happening at the end of pipe, and the recycling that’s happening after the first lifespan of a thing or a building, and actually integrating what’s coming into the building and also that extension of product lifetime as well is really, really important. Noreen, we’ve got a couple of questions around logistics, and particularly reverse logistics. So Rofdeen’s asked what the role of reverse logistics are in these kind of systems, and also someone else has asked how can we tackle the reverse logistics problem when collecting materials back, and how partnerships with existing delivery services can help? Now with your amazing supply chain and logistics background, I thought you might want to tackle this one first.
Okay. Thank you. I think Lachlan and Mark might have more sort of relevant examples within their organisations, because we focus more sort of upstream in terms of the supply chain. We’re not so much focused on the reverse logistics side or the secondary of what happens to the asset sort of after. So I think probably Lachlan or Mark could probably answer that a bit better than me.
I’m happy to tackle the reverse logistics piece. Yeah. Look, it’s fundamental to any circular system, absolutely. And if you can’t get your assets back, you can’t get your physical assets back, you don’t have a circular system. That’s as simple as that. So we’re a supply chain logistics company, but we don’t run any trucks. It’s all third parties. So we work with basically all the major transporters in a supply chain network, and that relationship that we’ve built over so much time, and all the data that that provides, allows us to actually see where the empty lanes are. What I mean by empty lanes are which trucks are empty and what direction are they going. And that allows CHEP to actually capitalise on those empty lanes to engage that supplier to pick up our assets and bring them back to us. Without that happening, that truck would be running empty. And we get that at a much more competitive price than they otherwise would have running empty. They get paid, we pay a competitive rate, and we get our assets back. And that’s what we want. And it helps us rebalance the asset pool, which is critical to running the network.
And what we’ve done as well is we’ve actually matched up customers to empty lanes as well. So even if we’re not using them, we’re using our data and insight to actually say ‘We know that truck’s running empty. You can capitalise on that truck as well,’ and actually make the whole network much more efficient. So that collaboration within the logistics supply chain in reverse logistics is becoming more and more sophisticated, and we’ve got a really critical role to play in that. But really, really looking forward to hearing what Mark has got to say about reverse logistics too.
Lachlan, I can’t add too much to that. Principles of what you said are absolutely fundamental to it. With food supply, there’s three essential elements to it these days. There’s truck transport, there’s shipping container transport, as you know Lachlan. And so backloading, sending trucks back home empty or part loaded or in a deal with someone like yourself Lachlan, are essential to the survival of really smart food transport systems. Shipping container economics is a world all of its own, and a law all of its own. So in Australia we unfortunately suffer with a bit of penalty to do with good circular activities with shipping containers, having the assets come back to us, because our population is not big enough, there’s not enough volume that occurs in our part of the world. So you often see in Australia penalties paid. In other words, not enough availability of a returning asset when it comes to shipping containers. That’s pre-COVID, and of course exacerbated during COVID.
There is a new technology out there now. It’s called an intermodal container. So that’s a transport asset that will double, and sometimes triple as a trucking asset and then a rail car, and then potentially in certain circumstances, in a shipping container. There needs to be more investigations into those assets becoming more adaptable to different transport systems or returning systems. So very much a dynamic space in food supply, and a changing item at the moment.
Yeah. And there’s a lot of really interesting technologies coming into play in a whole lot of different sectors. For all the audience members joining in, I’m sure different aspects are resonating for the different kind of businesses that you’re in. To help wrap up, some of the key insights. We’ve really seen the importance of attaching data and information to products, materials and components to try to get the most value out of them. We’ve heard a lot about how these different systems can create business value and environmental value at the same time. We’ve heard a lot about the important role for government, but that we shouldn’t sit around and wait for them to help us either. There’s a lot that businesses can do, and there’s a lot of support out there already available from government. The importance of collaboration is really significant.
I wanted to give Marjon and Noreen the chance for one last sentence on key messages or where to start. I’ve got a couple of notes on it. But Marjon and Noreen, if you had one sentence to say to someone that’s saying where on earth do we start on all this, what would you guys urge? Marjon, start with you.
I would just say just go and do it. Don’t expect it to be perfect from the start. Really learn as you go along. It’s a journey. And I think every small action is one, and I think just don’t wait. Just try. Just start. Talk to people. Give it a go. And bring in your supply chain and your stakeholders as much as you can, sit in a room together, a virtual room if you have to, and start the conversation.
Noreen, what would your golden nugget of advice be in the elevator?
I’d say similar to Marjon. Just for us, look at the first asset, one asset at a time. And we always find, I kind of think, the biggest hurdles when we’re talking to big centralised departments, like procurement, that wants to start with the whole thing at once. If we just start small and take that first step and look at one single asset, one single department, one single stakeholder, and then you can build it from there step by step.
And it’s really important. This conversation is important, and we’ve had this amazing conversation facilitated today by Sustainability Victoria, a partnership with Planet Ark, Circular Economy Hub, and hosted by the Melbourne Knowledge Week. But we’d like to really encourage you to have a conversation about this within your organisation, within your network of peers as well, and also remember that there’s a lot of support available. Businesses are not alone on this, whether it be through education funding or networking with groups like CEBIC, the Planet Ark Circular Economy Foundation and Circular Economy Hub. There’s websites up for both of those organisations, so jump on them. There is amazing tools. There’s support. There’s conversation to be had there.
And CEBIC also provides access to funding and other information and resources, and you can most importantly visit the website to book a time to have a chat with a team member and get in touch with everyone. Sustainability Victoria also has an amazing grants page for organisations that are operating in or based in Victoria, so please take advantage of that amazing statebased support.
So I’d like everyone to join me in virtually clapping – I wish that could somehow come through. But having all of our speakers today, Noreen, Marjon, Lachlan, Mark and Claire, it’s been a fantastic panel that have been able to join us today. We’d also like to invite you to – just one last thing. There’s another Slido mini survey that’s now open. It should only take two minutes to give us a little bit of feedback about this session. You can jump on once we cut offline to provide us a bit of feedback and give us support in providing further sessions. So once again, thank you so much to all our amazing speakers and all our partners today. And thank you so much for joining us in Melbourne Knowledge Week. Thanks everyone.
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