Grow. Promote. Protect. Forum 2026. Panel: Going around in circles

Hosted by the Australian Furnishing Industry Stewardship Council, Australian Furniture Association and RMIT University, and running over February 24 and 25, Grow. Promote. Protect. Forum 2026 built on the momentum of recent Commonwealth and State-funded research projects that have identified key recommendations for industry growth.

This episode is from a day one panel session, including guests Esther Bailey, Chief Operating Officer at Rebuilt; Damien Crough, Executive Chairman at prefabAUS; Rosanna Iacono, CEO, The Growth Activist; Lisa McLean, Managing Director & CEO, Circular Australia; Kylie Roberts-Frost, CEO, Australian Bedding Stewardship Council.

The moderator is Michelle Thomas, Chief Operating Officer, AFISC.

Episode guide 

0:02 – Introduction to the session. 

1:52 – Introduction to the panellists. 

4:52 – Why procurement is important to lifting circularity outcomes. 

5:45 – Australia's “ridiculously low” current circularity rate. 

8:22 – Prefabrication/modern methods of construction as an enabler of profitability in the building sector.  

9:00 – Design for manufacture, assembly and disassembly in construction. 

10:05 – You take waste out by working with your supply chain. 

11:20 – The smart building value chain and the seven links within that, led by design and planning. 

14:20 A project between prefabAUS and RMIT University for architects developing a tool for architects to make better purchasing decisions.  

14:45 – The issue of mattress waste and voluntary vs mandated stewardship. 

16:55 – Where the burden of waste stewardship sits. 

17:50 – What mandates mean for commercial sustainability.  

19:40 – An explanation of EPR. If you’re responsible for what happens at a product’s end of life, then you’ll design it accordingly. 

21:05 – Embodied carbon and reporting and how it’s changing expectations. 

22:40 – The importance of peak bodies in the circularity/decarbonisation discussions. 

27:10 – Using sustainability credentials strategically to differentiate from fast furniture.  

30:05 – Starting with the big picture before narrowing down to practical implementation. Plus four pillars to stewardship. 

32:02 – The importance of a maturity audit. 

33:20 – Getting into “pilot scale and repeat” mode. 

34:25 – “If it’s not in your design guidelines and not in your procurement guidelines, it’s just a wish.” 

35:40 – The importance of ESG in talent engagement, attraction and retention. 

37:02 – A question from the floor on latex mattresses, recyclability and EPR. 

40:40 – A question from the floor on mattresses and a servitisation business model. 

42:39 – Circular businesses, products-as-a-service and financial measures. 

44:12 – The sources of embedded carbon in products. 

45:20 – Why servitisation is the future. 

47:50 – “The end of ownership” and attitude shifts among young people. 

48:50 – Taking back products and closing the loop, and some of the difficulties around this. 

51:10 – The challenges around logistics and costs have seen steel amounting to “over 3,000 tonnes in Queensland in the last 12 months” landfilled rather than recycled by Infrabuild, Bluescope or others. “A national disgrace.” 

52:50 – “Recycling is the hero of the linear economy”. 

53:10 – A question from the floor on recycling claims versus what is actually recycled. 

54:30 – “One of the biggest examples of greenwashing we have in the retail space...” 

56:55 – Remanufacturing is inexplicably tied to local recycling. An example of this in the fashion industry, plus the importance of a precinct strategy in this. 

Transcript

SPEAKER_04 0:00

And I have the super unenviable task of hosting the session before your lunch. Apologies if I keep you too long, but I also have a very uh good counteract to that because I have an amazing group of panellists. I have a really interesting subject to talk about, and I'm really glad to be able to bring them all together with you here today. So, my topic, as Patricia said, my name is Michelle Thomas. So, for those of you I haven't had a chance yet to meet in person, I am the CEO for AFISC, which is the Australian Furnishing Industry Stewardship Council. From here on forth, AFISC, I am no longer using that long word because it just takes up most of the conversation. So, going around in circles, we had a wonderful preempt to this session this morning with the circular activator session. And we want to really talk about today how circular economy is becoming a practicality. We mentioned a lot that there is a lot of noise around sustainability and circular economy. And how do we really translate that into action? Australia has a national circular economy framework that has been launched, procurement policies are tightening, mandatory reporting is cascading through your supply chains, but still, for many business, circularity seems a bit abstract. So, how do we really provide clarity to industry on that? What are the actual changes? Where do we invest? How do we remain profitable? So, this session today is about moving circularity from theory to commercial reality. We know that the landscape is shifting and procurement is shifting, regulation is shifting. Are we shifting? Is leadership in place? Have we got processes in place? And are we ready for what's coming on board next? I'd like to introduce the panel to you. I'm going to start off with the wonderful Lisa, who most of you will have seen this morning from the Circular Activator session. So Lisa has spent more than two decades leading circular economy transformation across government and industry. As the CEO of Circular Australia, she works with government and major sectors to translate circular economy strategy into procurement settings, investment frameworks, and the practical market implementation. Welcome, Lisa. Next we have Damien, Damien Crow. Damien is the founding director and executive chair of Prefab Oz, which is the peak industry body for prefabricated and off-site construction in Australia. He works with universities, industry, and government to advance Australia's prefabricated building sector and is championing low-waste, high-quality, sustainable design. Welcome, Damien. I'd like to invite Kylie Roberts Frost next to the stage. Kylie is the CEO for the Australian Bedding Stewardship Council. She's leading the development of a national stewardship model for mattresses, drawing on experience in global logistics, sustainability, and social enterprise. She's focused on proving that circular systems can deliver environmental and social impact while remaining commercially sound. Welcome. Esther Bailey, the Chief Operating Officer for Rebuilt, she's an experienced sustainability leader, innovator and change maker with extensive experience across public and private sectors. She works with businesses, technology leaders, peak industry bodies, state and federal government to strengthen the climate action in the built environment, delivering carbon assessment verifications and someone I've known for many years. And welcome to the stage. And last but definitely not least, we have Rosanna Ayakona. She is the CEO for the Growth Activists, and she was also the founding chair for Seamless, which is Australia's first national clothing product stewardship scheme. She has a global executive experience across major retail and consumer brands. She works with organizations to embed sustainability into the core strategy, translating ambition into measurable commercial performance. Thank you. Told you I've got a good panel, didn't I? Today's session, it is very much a chat amongst this group. I've got a few questions that will I'll introduce you to each one. But if you do have any questions throughout this session at all, pop your hand up, we can stop and we can chat. And I hope that's all right with all of you as well. I'm sure you're all great at winging it. And apologies, Damien, for the female sort of uh rose. There you go. I'm gonna start with you, Lisa, from a government sort of and procurement sort of angle. The national direction towards circular procurement and policy reform is now firmly on the agenda. How significant is this shift? And what role has Circular Australia played in shaping and embedding it into policy and market settings that industries like the furniture industry might procurement's really important to start with, very important.

SPEAKER_03 4:53

And Australia's been on a journey. And for those that attended the Activator this morning, accelerator this morning, we talked about how five years ago no one really knew what circular economy was. It was really about recycling. What is it? Now we're in a situation where more than 75% of our trading partners have circuitoconomy strategies and policies, and it's a systems transition, so it's gritty and messy. And that's why this event and this this sector getting together and understanding what's coming and how they can work together is absolutely critical. That's what other sectors are doing. And importantly, this sector as they flow through other sectors. So there's a lot we can learn, a lot we can share with other industry sectors as well as they make the transition, because otherwise it seems incredibly overwhelming. So Australia now has some targets. We've got the target to double our circularity rate by 2035, and we sit at around 4% circularity rate, which is ridiculously low. That means 96% of materials are lost, wasted, burnt, out of our reach. And the world circularity rate is around 6.9%. So we've got a bit of a way to go, and procurement is the answer. So that is as one of the things that government can do, and they move quickly to do it. I was on the ministerial advisory group that the minister set up, the federal government set up, and we had 14 recommendations. The first was the framework with the targets, so we've seen that set. And then other levers included procurement, and so government announced its sustainable procurement policy in 2024. And using its purchasing power, it's a bit limited there. It's like projects over 7.5 million for the built environment, 1 million for ICT and furnishings. But and we actually want to see that expanded so that government can really help to activate the market. One of the biggest challenges, as you would all know, in changing business models, whether it be recycling or refurbishing, is that you need to build the infrastructure, you need the resources on one side, and you need the markets on the other. And it's a big feat to be doing that on your own. So having governments procure and lean in on that procurement is going to be very important. And there's also other ways in which purchasing alliances can be built. We need government and we need regulatory reform, but government can't do everything and they're not going to solve all the problems. So, what can industry do to amplify its purchasing power to build that market for this sector?

SPEAKER_04 7:23

Thanks, Lisa. Yeah, I think government is definitely a key driver for us in the furniture sector. And we spoke about it sort of earlier on and in your session. It's not just about providing those policies, it is also about making sure that they're followed up on. And if it's not the government's follow following up, it's at least the procurers that are making sure that what is being asked for is what's actually being received. Thanks, Lisa. Damien, I'm going to jump to you very quickly. For those in the room less familiar with prefab Oz and the off-site construction sector, can you give a little bit of an explanation about prefabrication? What's the role that it plays? How you aim to reduce waste, improve sustainability outcomes, and if there are, what are the structural barriers still preventing that model from scaling?

SPEAKER_06 8:16

Yeah, it's a good question. Lots of bits to that. I try and remember it all. We see the prefab industry, or you know, there's a lot of different terms off-site, modern methods of construction, prefab, modular. Modern methods of construction seems to be the one that the government have grasped onto. It's quite popular in the UK and Singapore and other places like that. But we really see our industry as an enabler for productivity and profitability in the construction sector, because as you probably are aware, there is a big issue with productivity. It's probably one of the last industries where productivity goes down and cost goes up. And so we've been working on a lot of different things, but fundamentally there's what we call DFMAD design for manufacture, assembly, and disassembly. And so what that means is we're leveraging technology like building information modeling and the 3D drawing programs, like the suite of things that you can get out of Autodesk and other suppliers to encourage architects and engineers to design things to be manufactured, assembled, and disassembled. Because if you look around the built environment around us right now, most of this is going into big because it was never designed to be reused or recycled. And that's a big challenge. Fundamentally, what the prefan industry can do, the off-site, the MMC industry, is we can create the built environment which can be disassembled and reused. And I think if you go past any greenfield development site around the country and you see new homes being built, and there's a massive pile of bricks and plaster board and timber out the front, 40% of all waste landfill comes from construction waste. It is very inefficient. What we find with our members is that they're at about 9%, and most of them are working to get down to about 4%. And the way that we do that is working with the supply chain. So our providers like CSR and James Hardy and others are now working with our manufacturers to say how can we optimize the sheet sizes that you can use to create less waste? And the other thing with the DFMA part of it is we can design things to be nested into those sheets when they're water jet cut or CNC machine cut or whatever it is to optimize the use of that sheet so there is less waste. So these are all the sorts of things that we're really pushing through the industry to create less waste and also the opportunity for buildings to be reused or recycled. I mean, the other thing is we've got members who some of their buildings get used 20 times over their life. So they'll do uh hospitality uh projects like the Formula One Grand Prix, and they'll put in something there, it'll be used, then it comes back, it's disassembled, goes on the shelf, those parts are pulled out and assembled into another solution for another event. So these things are being used over and over again, but they can only be done that way because they're designed that way. So the design and planning, we've released a uh what we call the building the future we want, which is a roadmap we released in 2023. It's a decadal strategy. And the point of that is that we identified what we call the smart building value chain. And within that smart building value chain are seven links. And the first link is design and planning. Manufacturing and procurement sit down at link three and four. So it's really fundamental to get the design and planning bit right to make sure that the procurement and manufacturing bit gets done correctly, and then the end of life through life support also works for a circular economy. So it's funny that we're in this building. I think I was in this room in December. We ran a workshop with RMIT, and we're doing a project on decarbonize. Oh, you were there, Pritzichet.

SPEAKER_08 11:58

That's why you're here.

SPEAKER_06 11:58

That's right. So we're we're running a project on decarbonising prefab housing, and we're working with many different industry partners. And I won't go into the full detail of it, but basically what we're saying is there's a value chain, the supply chain feeds into that. We want to be able to grab digital data and technology, use that all the way through that value chain. We want to be able to embed contracts into that, digitised contracts, that trigger payments to suppliers, payments to manufacturers. And because when you talk about waste and circularity, it's not just material. What we've realized is we can do projects like one of our members is a bathroom pod manufacturer out in Laverton, and they produce 5,000 bathrooms a year. By doing a bathroom in a factory where you've got 11 trades in five square meters, rather than doing it on site, they save 90% on phone calls, emails, site visits. So waste is not just physical, it's a whole lot of other things. And so we realise that we can also be much better in reducing waste across the whole value chain. So I think I might have answered most of the bits of that question.

SPEAKER_04 13:03

You did, and I'm sure we'll get back to you again. Thanks. And I think you know, we all know that design is absolutely key when it comes to circularity. Uh, you have to start at the beginning, you have to put the first piece in before you finish your puzzle.

SPEAKER_06 13:16

But also you've got to engage with the supply chain.

SPEAKER_04 13:19

Yeah.

SPEAKER_06 13:19

That's the point. Yes, you someone could be off designing something with no idea what the supply chain can provide or deliver. Yeah. And it's just a waste as well. Yeah. Because it things have to be redesigned.

SPEAKER_03 13:30

So we're trying to the hierarchy. Yeah.

SPEAKER_06 13:33

So that's why we're trying to encourage, and there's so much knowledge and expertise in the supply chain that could be fed into the design at the front end, which is, I think, being missed currently. Yeah.

SPEAKER_04 13:43

And then influence back as well, because we talk about it needs to be designed properly, and the those that are creating the property to think about it first. But what about if that specifier, the architect's going, I want this? And you know, we were talking, I was talking with Belinda earlier. You get your architects and your specifiers saying you want something that's imported from overseas, that's made of laminate, it's not circular. How do we then influence the decisions that they make? So it's the design, but almost a step before that is to influence what you're being asked for.

SPEAKER_06 14:18

And that's part of the project with RMIT, yeah, is that we've got a group that have developed a tool for architects that highlights to them the best materials to design with, which have all of the environmental type disclosure information attached to them. So we're really trying to encourage the designers and the architects to actually make the material choice first and then decide what to design.

SPEAKER_04 14:40

Great. We will be back to you, don't you worry. Thanks, Damon. Kylie, over to you very quickly. So with mattresses waste representing a significant landfill challenge and taking up my curbside so very often, um, and your scheme driving national industry participation in recovery and reuse, how do you define what good stewardship looks like in practice? And how do you ensure that those environmental benefits are financially and commercially sustainable for yourself and your industry partners? That's a very loaded question.

SPEAKER_00 15:13

Um, so what stewardship, good stewardship look like is quite different depending on whether it's voluntary or mandated. So, what I'm going to talk about at the moment is voluntary because that's where most stewardship schemes in Australia exist at the moment. So, for us, we're really clear that stewardship is a system that works from design to disposal. Often stewardship schemes are prompted by the government because of challenges at end of life. That tends to be the first driver from a policy perspective on we've got a problem with this waste stream. We've got a problem waste product. But that is, as these guys have said, when you look at the end of life, you then need to figure out what you can do at design to improve that. So, for when we look at mattresses, part of our stewardship discussion is guys, members, we can't recycle our way out of this. And recycling is a really easy answer for stewardship because then we don't have to have any of the awkward conversations around consumption, around designing for longevity. I want you to sell less and make it last longer. My board loves it when I sit in front of them and have those discussions. But they are the discussions that we have to have, and there's a lot of different ways you can do that. For mattresses specifically at the moment, one of the key things we look at is for the end-of-life piece. Is there somewhere for them to go? Is it a valid recovery pathway? Do we have coordination of effort across local councils? You can have all the federal policy in the world, but it does not change the fact that the burden on waste and resource recovery in this country doesn't sit with in Canberra, it doesn't sit with the state government, it sits with your local council. So when we talk about product stewardship, collection is probably one of the least important things I need to look at. I know mattresses get collected and I know where they end up. They end up at the local council transfer station and landfill. What I have to do is figure out how to get them from there. How do we help councils separate it? How do we give them pathways? How do we get them from the council to our recyclers? So for us, that's a big part of what we do. But in the interests of transparency and some of the challenges around voluntary EPRs, if I took my member fees and levies and I split it across the amount of mattresses that are sold in Australia by ABSC members and participants of the scheme, it equates to about a dollar and eight cents a mattress. So I can promise you I'm not recycling or collecting anything for a dollar and eight cents a mattress. But what we are funding is the enabling layer. So design, looking at data and research programs, helping authorize recyclers so that we can support recyclers and advocate for them both to our members and to and to government. It's about procurement engagement, making sure that one of the biggest procurers in this country, which is the government, are practicing what they preach in terms of what good procurement looks like. Who's offering how do we help our members set up take back schemes? Again, we're not funding those at the moment, but what we are doing is providing the tools and the system and the framework for the industry to do it themselves until we get to a point where the government pulls those levers that they have available and mandates participation in these programs. As soon as that happens, then we have commercial sustainability of an APR scheme. When you broaden those policy settings, I won't be charging a dollar and eight cents a mattress then. Then, because everybody is in and the playing field is even, then we'll be able to start taking some of those costs that are sitting direct on consumers, direct on councils and recyclers and retailers who are taking those products back, and we'll be able to move it up the value chain and it will be covered by the manufacturers. And that's what really good EPR looks like. You made it, you were responsible for it from hopefully cradle to cradle, and if not cradle to cradle, certainly cradle to grave. Thanks.

SPEAKER_04 19:30

And for those that don't know, can you explain EPR? Oh, sorry. We're so good with acronyms or bad.

SPEAKER_00 19:38

So EPR is extended producer responsibility. And it's really the belief that if you made it, and whether you're talking about PFAS, furniture, tires, e-waste, whatever the widget is, if you made it as a producer, your responsibility doesn't end when it's sold. It ends when it gets to the end of its life.

unknown 20:00

Yeah.

SPEAKER_00 20:00

Whether useful or otherwise.

SPEAKER_04 20:02

And when it gets to the end of its life and you're responsible for it and you have to take it back in whatever form it is, you're going to try and design it better, aren't you? If you've got all those materials.

SPEAKER_00 20:12

Absolutely. There's there's carrot and stick, right? Carrot will only take you so far. You have manufacturers, many of whom are my members and your members and Rosanna's members, who are trying to do the absolute best, but it's got to be commercially viable. As soon as you make everyone play by those rules, then you will start seeing if I'm responsible for dealing with this at Mudgy Landfill, I'm going to make bloody sure that I'm putting the least amount of stuff into Mudgy Landfill that I possibly can.

unknown 20:42

Thanks.

SPEAKER_04 20:43

A bit of a shift now. When we talk about going around in circles and circular economy, there are sort of many factors that we need to consider. So over to you, Esther, procurement and reporting requirements are increasingly focusing more on embodied carbon and building products. How is greater visibility of product level carbon data changing the expectations placed on manufacturers? And what does that really mean in practice for businesses? Yeah, thanks.

SPEAKER_01 21:13

I think it is at first plus maybe a bit of an adjacency, but these issues, as we know, are all so very closely linked. And I think from a concept point of view, you know, I've spent a fair bit of time working in government on these policies and programmes, and it's you know, hard yakko, right? And all hail and all props to the advocates who sit at the table and push that agenda, and it's a continual frustration, the reticence to mandate the things when leaders in industry are saying, please regulate me. You know, we still have this regulation last kind of approach. And I you hear it come up in forums all the time. In my experience on the other side, well, for all of us, right? Action needs to be driven by data. So your policymaker or a manufacturer, whoever you are. Are you got to gather the insights so that you've got an evidence-based approach so you know which way to go. And that's particularly so if you're a policymaker, because and that's what that's kind of what we see right now in circularity: that lots of intentional statements and directionally kind of, you know, we should do more and we should do better and we should reduce, but without an ability to put good numbers, good baseline, good metrics, good economics behind it, that prevents the public sector from placing a hard requirement because it means that the squeaky wheel says the sky will fall, the economics aren't right. And so we have to move forward incrementally and put data on the table that enables the policy to become more bold and to ratchet and to have more consequences from it. And that for me, that's where the role of peak bodies is so very important because this is a shared challenge. It's a we statement. No one person in this room wants to be regulated, but collectively we see the benefit of it because we can move forward together. So I guess that was why I was really excited at the opportunity to partner with AFA and AFISC, because that's what we need is more specific data for this sector to really empower and enable that change. So I come at this from an embodied carbon perspective. There's a set of regulations that Lisa and other people on the panel are working on around circular, but we're actually a little bit further ahead with embodied carbon. So it's quite a good Trojan horse in some ways because there are very close sort of associations and affiliations between them. If we want to measure product carbon, we do that by looking at our materials and where did they come from, and we look at the energy consumption of the facilities and we look at our transport. So they're kind of closely affiliated with this kind of supply chain tracking for other purposes. And then there are some really strong, amazing positive alignments where if you use componentry again, whether it's recycled or refurbished or reused, you get a carbon benefit because the cutoff method says that that is allocated to its previous life. And so we start to be able to create an encouragement and an incentive by reducing and also supporting the circular economy. And I think, and that speaks to a live requirement for large businesses right now. So you made a reference to mandatory disclosure. That started last year for very big businesses. This year it drops down to every business with a turnover over 200 million, and it means that when they submit their annual report, they also have to submit their carbon accounts, including the things that they bought. So this is scope three. I don't know how deep down this grab the whole you want to go. There's a few different scope threes, but the things that you buy take up a really large proportion of that. Now, what's awesome and hard for the sector at the same time is it means that people actually have to go to their supply chain and ask them for hard numbers and not vibes and not feelings. And they also need to be able to assure that data in a sufficient level of confidence, is the word I'm looking for, that will hit the auditor and the C-suite. And that means that that requirement and that visibility is coming up, and that's a great opportunity for us to put harder requirements onto the supply chain and to ask for the board's attention when we then are able to put up a business case that says, you know, I can jot this down by 30-40 percent if you sign off on my circular strategy. And that's where this I think becomes kind of magical. So historically, the way that you do that is with environmental product disclosure statements. We use a different method, which is another ISO LCA method, it's just the carbon and not the other pieces. And we've automated some of it and simplified some of it, and that means that we can do it for three grand, not 30 or 60 or 90 grand. And that's really important because it means that that kind of capacity to compete and submit to these government tenders is available to all of our medium-sized enterprises as well, and it enables us to actually ask harder questions of our own supply chain. And I think it'd be good to come and unpack that a bit more about how are those signals being sent up and down complex supply chains. There's work to be done there for sure. It's a Chinese whispers game of asking the next person down and the next person down, hence my question before. But we've got good fundamentals, we do have mandates, they're not direct, consequential, but we've got the levers we've been looking for, and it's time to turn them on and pull them as hard as we can.

SPEAKER_04 26:39

Yeah. And I think a big concern around sustainability and circularity is that we end up pricing businesses out of that.

SPEAKER_01 26:46

The infinite cost, the infinite certifications and measurement. And it's hard, it's hard. You guys want to make beautiful, functional, fit-for-purpose uh things that bring people tremendous amount of joy and don't kill them on the way through or get them sent to prison. So all of this other stuff is because either you passionately care about it and you know that it's the right thing to do, but turning that into competitive advantage is absolutely what this is about, and it does provide a point of difference to some of that fast furniture import. So we can use this strategically and domestically as a weapon of defence and to lift the standards for domestic production.

SPEAKER_04 27:27

I mean, you really can't manage what you don't monitor, and if we don't know what the the negative impacts are of importing stuff, how are we going to be able to combat it? You know, we've got to show where the issues are, I suppose. And that is through better data, better reporting.

SPEAKER_01 27:44

Yeah, and part of the project that we're running with AFA, for those of you not aware, is we've invited members who wanted to participate to come forward and do uh a first kind of carbon assessment with us, because there isn't very good benchmark data for this country. If you you see European brands, the very top luxurious ones, then there's essentially not much underneath because your product lines are complex. There's lots of component trees, they move around, and that doesn't really work in a consulting model, yeah. But because we've got a platform that lets you actually see what the differences are and whether that fabric makes a difference, and you can actually drill down into hotspots so you can educate yourself and learn the way through. And I think that also kind of shifts capacity to demonstrate evidence pre-sales, you know, have those conversations with customers and then provide evidence afterwards and compare to international benchmarks because that's what we'll do as we'll wrap it up and we'll say, well, what does this look like when the supply line is twice as long or when the host sort of manufacturing company has a higher emissions profile, for example. So we start to be able to work together to put some data around that.

SPEAKER_04 28:49

And it really is important to get that data because if you are doing something that you think is very circular or very sustainable, but then you actually look at it and it's burden shifting, you know, is it making is it making more of a problem for the for the environment? Thanks, Esther. Rosanna. So as the founding chair of Seamless and the CEO of the Growth Activist, you have a strong understanding of what needs to happen to transform Australia towards this more circular sort of situation. Can you tell us how you bridge that gap between vision and pragmatic implementation?

SPEAKER_05 29:24

Yeah, I might start by saying yes, I do wear two hats on the board of a product stewardship scheme and running an ESG transformation consultancy.

SPEAKER_04 29:34

I'm sure many more than two hats.

SPEAKER_05 29:39

So I'll answer it through the lens of sustainability transformation and the work we do at the Growth Activists, because I actually lead our retail and consumer goods practice, which means I am working with retailers and manufacturers on that transformation journey. So when it comes to circularity in particular, and I just want to walk you through the steps and what the journey looks like to go from big picture down to pragmatic implementation. We always start with big picture, and it's really important to understand what circularity means. And I do think Seamless has done an excellent job of actually dividing it into the four pillars of circular design, closing the loop, which is all about the infrastructure that is required to achieve circularity, including manufacturing, remanufacturing, collection, sortation, all of those activities. The third pillar is circular business models, so alternative revenue streams like resale, rental, and whatever else you might have there. And then finally, citizen behavior change. So we ask our clients to really understand that big picture thinking as a starting point. We also recommend they join Seamless or a product stewardship scheme that is relevant to their category, because those schemes are going to help them connect with the value chain players that they're going to need. They need to understand that bigger, interconnected ecosystem. And, you know, whatever they might end up prioritizing and trialing from a circularity standpoint, they are going to need partners, whether it is a commercial waste collection partner or a textile to textile recycling partner. They need to understand who all of those ecosystem players are. And I think circularity is definitely a team sport. So, you know, understanding that upfront. The other thing that is really important for them to understand is how circularity is very deeply interconnected with other sustainability pillars. Whether it is waste, energy, carbon, biodiversity, impacts, you know, it is not, you can't look at it in isolation. And it is really important to look across all of those different streams to find those economies of scale. So that's the big picture part. Okay, now we need to get into the nitty-gritty. And, you know, we go micro, and the first thing that really needs to happen is a bit of a maturity audit and understanding within the organization what capability actually exists to address some of those opportunities, not only the opportunities, but also facing into the risks they face with regulation on their doorstep and have a go from those business models to remain vital and current and also to maintain enterprise value. So that's a really, really important component. And that gets overlaid with strategic vision. So it's really important to have that conversation with businesses around where are they heading? Where are they going in the next three to five years in terms of category expansion, geographic expansion, channel expansion? What does their business look like? How are they building long-term enterprise value? What does their exit plan look like? Is it generational succession planning? Is it an IPO? Is it a trade exit? That is really, really critical because whatever you do needs to be able to ladder up to those in circularity, needs to be compatible with those strategic objectives. And bringing those together is really key. And then you know, we're ready to hopefully go into what we call pilot scale and repeat mode. Start with something small, don't try and bite off more than what you can chew. It might be one initiative like introducing resale into your revenue streams. And this is really about testing small wins, building capability within the organization, and really importantly, measuring your impact, making sure that you're implementing a metrics framework for setting targets and then measuring your impact, and then building that advocacy internally and with any other stakeholders you might have, that this works, let's go bigger or let's add. So I think that's really key. And then finally, operational integration. It cannot be a silo. It has to be deeply integrated into your operating model. That means KPIs for leaders, it might mean salary at risk for leaders, you know, and really deeply embedding some of those goals into the C-suite. It certainly means, you know, being part of operating models. And the way that I put it, if it's not in a design brief and it's not in your procurement guidelines, it's just a wish. It's not really come to life. So they're probably sort of high-level, you know, the key things we work on with our clients.

SPEAKER_04 34:34

With your growth activist hat on, I think we've spoken a lot about, I mean, we're talking about sustainability and circular economy, but I don't think you can truly talk about sustainability without talking about the people within your supply chain. So what work do you do sort of in that area? And how do you make sure that not just the environment, not just the planet, but the people are being considered in the production of anything?

SPEAKER_05 34:57

Yeah, I think that's that's a huge piece. And again, that goes back to interconnectivity in the bigger ESG picture, right? So, you know, there is definitely a social impact component, and you can't pull one lever without, you know, looking at the other. And I think that there, I think what we're helping our clients understand is that there are a lot of economies of scale in the initiatives they're undertaking. So doing deep supply chain mapping and going all the way down your tiers, right down to raw material, is highly beneficial for both your modern slavery reporting and your traceability objectives and the data that needs to be carried in digital product passports, right? So there's an operational economy of scale, but the things are deeply, deeply connected. If you're going into a new remanufacturing facility or you're procuring, I mean, you need to do that, you know, human rights due diligence work at the same time. I think the other really big people component, and we're seeing this a lot, is particularly talent, attraction, retention, and engagement, is like ESG and Gen Z and Millennials, it's huge, right? They want to work for organizations they believe in that are seen to be doing the right thing, and they want to work for businesses that are force for good. So if you really want that talent advantage, that's a really key people component as well.

SPEAKER_04 36:21

It is really it's an employment choice when you're when you're going for jobs, you'll look for something that you feel aligned with. I know that was definitely a choice that I made, not that I'm quite a millennial or anything like that. Close, but not quite.

SPEAKER_05 36:34

Even gen X is like, you know, have a purpose of lithium at some point. Yeah, exactly. Yeah.

SPEAKER_04 36:41

I I suppose I'll just before I I've got I've got loads of questions, I could keep going, but I just want to hand over to the floor if anyone has any sort of burning questions that they'd like to ask this fantastically educated group. Yeah, Eddie. Thanks.

SPEAKER_07 36:55

I have a practical question. Kylie, you're gonna have to forgive me. I have a mattress at home.

SPEAKER_04 37:03

Very practical.

SPEAKER_07 37:04

I'm asking for a sales pitch here, but just one guidance. So I bought it 10 years ago. It was a latex mattress. My brother insisted that I get a latex mattress, not one with the strings and stuff. It's starting to sag a bit. My wife has told me it's got to go. What do I do? So I bought the mattress from IKEA because it was cheap. They won't take it back if I if I go back to try and fog it off to them. What would you guide me to do? Because you know, latex versus the sort of traditional model. I'm intrigued by your EPR statements, and I can see some resonance a bit with Damien, the leasing model coming out of that. And I start thinking about well, what does that mean in terms of the business model? Well, it means that the producer has a lot more assets on their balance sheet, which means they're going to ask for much higher profitability to offset that. So, as a consumer, sort of looking in this hodgepodge of decisions to be made at the moment, where would you guide me and what would you be asking me to look out for as I make my decisions?

SPEAKER_00 38:05

The first thing I would say is natural isn't always good. So in Australia at the moment, you actually can't recycle a latex mattress. So, what is gonna happen to your mattress is that it is gonna go into landfill. But that's not the worst thing that can happen here. We do encourage, so when you buy your new mattress, what I would say to you is ask the retailer that you buy it from do you do a take back scheme? All of our members will. For some mattresses, they're gonna make sure those mattresses are disposed of properly in a landfill. Others they're gonna make sure get to recyclers. And some of our others, again, are gonna make sure that those mattresses, if they're in a position to be reused, can be reused. And that's a really important piece. Everyone has this ick factor around reusing mattresses. But yet, who slept in a hotel last? Yeah, you reckon they UV treated that mattress before you got in there? I promise you they did not. As a consumer, your best bet for getting your mattress safely disposed of and recycled is many of your local councils are actually the interface between mattress recyclers and consumers. In metro areas, you can ring one of our recyclers directly, but quite often the easiest way is your local council will take your mattress as part of their bulky waste collection and then they'll get it to a recycler. So that is probably the easiest, simplest way. The other option is a take back. If you're going to Harvey Norman, if you're going to Amart, IKEA are a member of ours and they do lots of wonderful things. I think they may, in some stores in Sydney, they may be able to do takebacks and get them to recyclers. So that's definitely your first and easiest option. In terms of what a good mattress looks like, I think what's really important is things that are technically recyclable, particularly technically recyclable globally, it doesn't mean that they are commercially viable to recycle in Australia. So we're really conscious of end markets. So for me, if I was going to go and buy a mattress because I spent five years recycling them and now my life is spent trying to figure out what to do with them, I would honestly, I love just a clean Benell Spring mattress. You don't need 48 different types of foam. You can take your cooling gel right out the window because nobody needs that. What are you gonna sleep on for 10 years? I don't want you throwing it out after two years. I don't want it going back as part of a comfort return in 90 days to the retailer. It's got to be something that is gonna fit your purpose and that you are gonna get the most use out of for as long as you possibly can.

SPEAKER_07 40:45

And what about business models? I mean, where do you see us going as far as leasing is concerned? Because obviously it's a big part of this discussion.

SPEAKER_00 40:53

Like software as a service, but mattresses as a service. Look, it depends on the capability we have to do things locally. If I look at mattresses at the end of their life, it's not the springs that fail, it's the quilted layers of the materials on top. So can you look at things in trace? We have these discussions with hotels. Hotels turn their mattresses over quite frequently. If they've looked after those properly, if they have mattress toppers, if they are inspected every six months by someone, if they're flipped every three weeks, then you potentially get to the end of the four or seven-year life in a hotel, and it's got a whole other life ahead of it in uh assisted housing, charities, domestic violence, remote communities. So I can certainly see that that makes sense as a market, but it does rely on a change in consumer behaviour around what needs to be true for you to be able to get the most out of that for as long as possible.

SPEAKER_03 41:47

Can I jump in too? Because I think this discussion about new business models is exactly where we need to be. We need to be thinking, not what can I do with my waste, but how can we avoid it altogether? And how can businesses like your own be designing things that are going to last, can be repaired, et cetera? And the product as a service, PAAS model is incredibly successful. It increases a revenue model for the business because they get to sell that asset over and over again. And we've seen it in lighting as a service, energy as a service, mobility as a service, fashion as a service, etc. Lots of opportunities there. And then for the consumer, it can lower the price point of entry as well. So it's a win-win in that sense. And also, we recently, Circular Australia is a member-based organization, and we have recently done with our finance investment partners a circular investor and lender guide and evidence around well, how good are circular businesses? And in fact, they are uh have very low credit default risk, they're highly profitable businesses. They're ticking all these boxes of the things that Estra and we've all rose and we've all been talking about today around sustainability, profitability, design uh efficiency. And so, therefore, circular business models is where we should all be thinking. And product as a service is incredibly successful. It can also generate new revenues. And I give the example I gave it this morning in our activator of Caterpillar, which makes big tractors of so forth. They've been going since the 70s, they have zero waste pretty much because they've always had that product as a service model. And they take it back, they break it down like Lego, they own the residual value of the asset so they can sell off the bits that are good for secondary market, they can repurpose the infrastructure and get it back. They encourage their customers to refurbish it and service it, and they encourage them, in fact, to give it back to them at around five years because they know that's a point where it's going to need improvement. So, product as a service is an incredibly interesting and successful approach to really give people what they need. Because at the end of the day, people can't handle the waste in their house. And it it is very overwhelming. And I and I have a lot of sympathy for people at the end of and it like we're all that as well, aren't we? We're producing, but we're also consumers.

SPEAKER_01 44:12

Yeah, just layer on to that when you look at the emissions sources in product. Clearly, the originating materials are a substantial part of it, maybe like two-thirds of it. The factory energy is normally number two. The materials, you've got some capacity to influence, right? So we already talked about you can increase your recycle content, you can look at your sourcing, but you need the physical materials to make the thing. In terms of locus of control, the way the facility is powered is very highly within your control. So you can, if you're moving more, proportionately more of the effort into your own control facility and you can zero that with alternate fuels or with PV, plus the productivity, which I think you were talking about, which we also see in a bunch of our manufacturers, then you've got again this very virtuous circle. And the thing that triggered for me when you were talking before is in a changing climate as well, having people work indoors in safe spaces, in controlled environments doing these things rather than out on site and all over the place has got benefits for all sorts of benefits for workers.

SPEAKER_06 45:19

And just add to that a little bit, we call the servitization model product as a service, but you know, that is the future, in my opinion. And what we've seen starting to happen, and you know, prefaboz for me is a I call it a charity, but it's not my only thing because we're a non-fibre transferation. But outside of that, some of the work we've been doing is working with local government authorities, in particular one in Queensland, where they said we need accommodation solutions for for older Australians. We have all of these land councils have heaps of land all around the place that they have these longer term development plans for. In the interim, in the 10 to 15 years until they are developed, it's sitting there vacant. So we said, well, what about if we came up with a prefab housing solution? And so it comes down to the financial model. So we were able to go and design something, go to the bank and say, Here's a five-year pre-commitment on all of this accommodation. Will you fund it? Which meant that we could basically the land was free. So the company said, We'll give you the land for 10 years on a peppercorn lease. Great, that takes a huge cost out. Will manufacturer install, maintain, and manage that asset for 10 years on a guaranteed return? And that was linked to the pension that was received by the occupants, and the rent could only be 30% of their pension. So there was a very, very much a financial model that made that work. But we made it work on a 12% return. For us, manufacturing at our cost, installing, maintaining, and then in 10 years taking it back, or if they want to keep it, there's a bubble payment or balloon payment or whatever it is. But servitization is a product as a service, is the future, in my opinion. It's where there's a lot of opportunities. But then if you think about it, what it links back to is you know, some of our member companies are already providing a buyback guarantee on their housing on their products. They're already doing it. They don't have the servitization model, but they're saying we know how we put together this product. Yeah, we know that we didn't use any glue, right? We know that this is all screwed together or bolted together, and we can unbolt it and we can recover those materials or we can bring it back, we can clean it out, we can upgrade some of the internal fit out, and we can send it back out for another life. Yeah.

SPEAKER_04 47:38

So I think value in the materials.

SPEAKER_06 47:40

Yeah. So I think that is really the future model, and that's something we're really focused on. Yeah.

SPEAKER_05 47:45

Yeah, I also just wanted to chime in, and I think if you look at the macroeconomics and with the wealth polarization that we have, you know, there is a generation that will be unable to buy many categories. And already behaviourally, we're seeing the end of ownership as a concept in young people. I mean, the stats are phenomenal. Across Australia, 18-year-olds getting their license is down 20% on five years ago. That's because they don't need to own a car when they've got the Uber app in their pocket. The same thing is happening with clothing. I need to go to a wedding or a party. I'm not going to pay $1,000 for a Zimbabwean dress. I'm going to rent one for $200. It is an inevitability. You know, it is going to expand to more and more product categories. So yeah, I think, you know, we're seeing macroeconomics and behavioural science pointing towards it.

SPEAKER_04 48:38

Yeah. And I think it's very feasible in furniture as well. You know, furniture, you can really fix up a piece of furniture to make it fantastic again and reuse and reuse and reuse. You know, I don't know how many dresses I've got that I've only ever worn once. But you know, furniture does get used a little bit more, but it's very easy to bring it back to an almost new state. Sorry, Esther.

SPEAKER_01 48:59

No, I was just gonna build. I think in the stewardship space, nearly everybody in this room would take back their own product for exactly the reasons you described. I know I did a good job, I know where the components are, I know the fiddly little quirks that other people just aren't gonna know. Yeah, nobody, or it's very difficult to pick up something out of a landfill off the side of the road and extract value from it. Super, super hard. And so that I think for me is again where the digital passport things steps in because obviously we aspire for closed loop. A lot of leading brands have had take back schemes to your point for a long time, struggle to get the material back because 20 years have gone past, no one in that office knows where that carpet came from, they're under time pressure, da da da. But if we can actually foreshorten that data loop with the QR code or with the scannable, then the capacity to actually switch that on in a meaningful way. And even if it's not a closed loop second use, there's enough information about what it's comprised of and what the risks are or where the Allen key goes or whatever, whatever the critical piece of information is to actually make that a viable second business rather than having to take a big risk off a big horrible pile of MDF on the side of the road that may or may not be full of formaldehydes and PFAS and da-da-da-da-da, and trying to turn that into something of a high-value product. It's not a reasonable ask. And that's why what we see right now is the recycling sector's really struggling because we give them garbage, we ask them to spin it into gold, that costs money and effort, and then we're surprised it's not as cheap as virgin, and then we keep buying virgin. We can't recycle our way out of waste.

SPEAKER_03 50:38

Imagine 96% of waste coming at these recyclers. It's impossible. No, we have to turn the tap off, and we also need the resources. Critical minerals list increases, resources will become more difficult to obtain and more costly. So, how do we actually keep the economy going, keep those matures in the economy for longer?

SPEAKER_00 50:58

Yeah. I think a really key point on that, and just to give an ex a real-world example of a huge challenge in Australia around those resources. So, because of the challenges around logistics and costs in North Queensland, South Australia, and a few other parts of Australia, some of our recyclers and local councils are land filling steel. We are land-filling steel over 3,000 tons in Queensland in the last 12 months.

SPEAKER_04 51:26

Which is supposed to be got a good value sector, you know.

SPEAKER_00 51:29

Yeah, we're high-value material who are importing recycled steel from China because they cannot hit their decarb goals by using virgin material. So these kind of webs and connectors are where we need product stewardship, where we need government action, because to be landfilling a commodity because it's too hard to get it back to Blue Scope or Infrabuild is honestly a national disgrace.

SPEAKER_05 51:59

I was just going to add, I think there's also a limited window for first mover advantage in terms of who is going to own the IP on products versus componentry. So we're already hearing the mining industry saying they're looking at product as a service as well, with IP and royalties to be earned every time it's used by someone else in the value chain. So who should own it? Should it be the mobile phone manufacturer that's got the zinc in the phone, or is it the mining firm that mined the zinc? So I think it's going to be a really, really interesting, interesting dynamics that are going to play out. And I think retailers and manufacturers need to think about where do they fit into all of this and how quickly are they going to move?

SPEAKER_04 52:43

So agreed. And going back to the recycling point, sorry, very quickly, we've got to remember we can't recycle our way out of this. You know, talking of your hierarchy, recycling is right down here. And my favorite statement is recycling is your hero of a linear economy. It's way down there when we're talking about circular economy. Sorry, did you say there was one more question?

SPEAKER_02 53:06

From a party. I think there's a bit more to one pick here, and uh something that uh did a moment ago. And that is the issue of is it recyclable? Yes, and is it recyclable in Australia? Because there's a big difference. There's the products that actually can be taken back and recycled and broken down, and then there's the issue of the products that can be taken back and then they become landfill. Obviously, are take back schemes that uh companies have, but what happens to that when it's taken back? Is it just part of the contractual arrangement to keep the both parties or at least the customer happy, and it ends up going into landfill rather than actually being physically recycled? I think that's a that's an issue that I think is still still unresolved. And the other issue is I think the geography of Australia is a much big is a big issue as well compared, say, to Europe. And there was an article I think I read not long ago about glass recycling in Europe. Germany's got so many companies that can recycle the glass, and we have very few. But part of it is the geography.

SPEAKER_00 54:13

Look, absolutely. So I think there's sort of two parts to what you were talking about. Yes, what is actually recycled once a recycler collects it is a huge part of it. And that's a big part of what we as a product stewardship scheme monitor. So all our recyclers report their data and what was recycled, what had to be sent to landfill. But I think one of the biggest examples of greenwashing we have in the retail space is companies claiming that because they've had a recycler pick up their widget that it has been recycled. And that is categorically not true. We have a non-member who uses our amazing AVSC recyclers, and I see on their website they report all their mattresses getting recycled. Their mattresses are made of memory foam, which is not recyclable in this country. So, what my recycler is doing is picking up their mattress, cutting it in half, and then sending it to the landfill. Now we're reporting that. We collect all that data, we know exactly what's happening, but it is a gap, and it needs to be really, really clear and it needs to be managed really well. I know Ainsley at Seamless, she struggles with exactly the same thing. There are materials you can vary and fibers you can recycle and others that you can't. The logistics is also the biggest cost element and challenge. So prior to my life in the world of mattresses, recycling, and product stewardship, I actually worked in global logistics for 20 years for Mersk and MSc and some of those cartels that um um Bowen was mentioning earlier. So when we look at Australia, and I think one of the biggest things producers need to do, and what hopefully EPR can eventually do is build in the cost, not only for that transport there, but when your thing, your widget at the end of its life, and it might be in Kananara or it might be in Kuji, you have to have a cost built in to get that back. We are not going to have recycling centres in every community in Australia. It's not going to be feasible. What we do have to have is a hub and spoke model. So, how do we get those? You know, if I look at remote communities, some of the biggest logistics hubs near rural and remote communities in Australia is mine sites and defence bases. So, how do we work as a collective to say, okay, I know that every mine site in this country has loads of my members' trucks and planes going into it on a monthly basis. So, how can we use them as a base to get those things back? And that logistics piece is vital. And if we don't account for it, this is how things end up in landfills in regional areas. You have the least resources to deal with it.

SPEAKER_05 56:52

Can I just add to that really quickly? I think you know, you can't look at remanufacturing, which is kind of your, I guess, your holy grail and highest on the hierarchy or higher in the high, you know, in the waste hierarchy, without looking at local manufacturing. And if I give the apparel industry, clothing industry example, only 4% of the clothing sold in Australia is made in Australia. So realistically, all of that sort of full recycling will have to happen offshore, closest to where the remanufacturing can happen. There is definitely an opportunity to grow the 4% to 8%, 10% in Australia. But what that requires is precinct strategy and really thinking about how you co-locate the different value chain players, not only in urban locations, but possibly in regional, looking at you know other models that are done quite successfully in regional locations. But that co-location and that precinct thinking, I mean, this is kind of the bigger longer-term thinking that needs to happen to really shift us to towards this kind of productivity agenda.

SPEAKER_03 58:00

And I really agree with that carbon spoke model because if you look at our comparative advantage to recycle solar panels or whatever, batteries at lithium, we're never going to compete with China or other countries. But it doesn't mean we can't solve our problems and still have innovation hubs that can focus on next-gen technologies too, that can actually treat and deal with these waste streams or resource streams in a different way. So the precinct piece is absolutely essential. And one other comment, which sort of comes back to the very first question around procurement, is if we do see government and defence in their purchasing requirements and procurement requirements getting more detailed in what they actually want out of circular economy, not just recycle content, but as a service model, take back schemes, etc., this will also complement the EPR schemes and really use that muscle purchasing power to drive change and in your businesses as well.

SPEAKER_04 58:54

Yeah. I could talk forever. Come on, we could unpack this for at least another two hours, but I can hear lots of rumbling bellies going on out there and uh know it's lunchtime. I think, you know, really key points to take from that. It's about collaboration when we're talking circular economy. It can't be just one person, it needs to be all of us. Circular economy isn't optional anymore, it's something that we have to move towards. We have to protect our planet, we have to protect the negative impacts that we're doing. And we really need to start considering that triple bottom line. Kylie, Lisa, Damien, Esther, Rosanna, thank you so much. It was a wonderful conversation, and I would love to talk more.