Against the backdrop of rising costs, supply chain issues and extreme weather events, more consumers are re-examining their consumption and waste habits. Moreover, they are calling on businesses to play a more active role in exchange for their support.
CommBank’s latest Consumer Insights Report – Circular Economy: The impact of business-led action on future consumers, highlights the shared value consumer businesses can create by providing avenues for customers to reduce waste. It reveals a window for businesses to lead, educate, and align with consumers to drive the transition from a linear to a circular economy.
The move to a circular economy enables a more sustainable framework for production and consumption that keeps materials, goods, and services in circulation for as long as possible. Today, Australia’s circular economy remains nascent compared to more advanced global peers. At the highest level, our research found that consumers believe waste and consumption to be a pervasive issue in society. More than eight in ten are worried, and many are highly concerned. Younger consumers, in particular, link the issue directly with climate change.
While many consumers also actively reduce waste, mostly where it’s convenient and part of their daily lives, more accessible programs delivered by businesses can significantly affect participation levels.
It can also help businesses tap into the many consumers who now expect it, want to know about business-led circular initiatives and are even willing to jointly contribute to the cost.
Advancing circularity
Currently, Australia is the largest material user per capita in Asia-Pacific and the third largest in OECD after Chile. According to our report, the 38 per cent of consumers with more than 10 items of unused clothing collectively have at least 146 million items sitting in their closets. That provides just a glimpse of the unused items gathering dust in Australian households.
Potentially, there are big rewards for consumer-facing businesses aiding the circular transition. It’s estimated as a $2 trillion economic opportunity for Australia[1]. However, consumers can only do so much by themselves.
A lack of awareness of the circular economy, its principles and benefits may be why it is still emerging in Australia. But while only around one in four Australians know of the term, 66 per cent embraced circular principles once it was explained. There’s also a healthy appetite to learn more.
Consumer education and guidance required
Businesses have a leadership role to play in collaborating with consumers and positively influencing behaviours. Today, fewer consumers are participating in waste reduction activities that require effort and planning, leaving potential environmental, social, and commercial benefits on the table.
Almost two in three consumers are also asking businesses to increase their support for the circular economy and make participation easier. Up to 80 per cent of consumers say they’ll join in business-led programs that facilitate donating items, buy-back, resale, recycling, and repair programs. With only a fraction of the population currently using these services, consumer businesses can close the gap by engaging with customers about their circular practices and launching programs and initiatives to meet customer expectations and make participation easier.
Harnessing the opportunities
Consumer businesses have a significant opportunity to tap into consumers’ willingness to do more to support the circular economy and the businesses that enable it. They want business-led programs that allow the donation of used items, resale and buy-back programs, and recycling initiatives above all.
The question posed by Lisa McLean, the CEO of Circular Australia, is important. How do we grow our local and global economies in a resource and carbon-constrained future? Her answer is the circular economy, and businesses can move confidently to advance it with their customers behind them.
Commonwealth Bank’s Executive Manager, Consumer and Diversified Industries, Jerry Macey, said proactive initiatives are a powerful way to create engagement and loyalty with consumers who expect circularity and prefer to shop with businesses that support it.
To read the full report, visit www.commbank.com.au/consumer-insights
[1] https://www.pwc.com.au/media/2021/circular-economy-to-grow-australian-GDP.html
About CommBank Consumer Insights
CommBank Consumer Insights is an exclusive, wide-ranging analysis of the Australian consumer with this edition focused on understanding consumer attitudes and expectations of their experiences in relation to the circular economy. This edition is based on an online quantitative survey conducted by ACA Research on behalf of the Commonwealth Bank. The survey was conducted in July and August 2022 and was completed by 5,633 consumers of goods and services.
Each respondent answered questions from one category within each of the following two questionnaire sections:
- One of the following categories in which they own one item they don’t use, including: recreational sporting and outdoor goods (n=763), printed books, games, music and media (n=767), motor vehicle parts and accessories (n=750), consumer electronics (n=761), DIY building and garden tools and equipment (n=762), homewares and household appliances (n=764), fashion items (n=769). There were also 297 respondents that didn’t have any unused items in these categories.
- One of the following categories which they use at least once a year, including: food and beverage services (n=1,395), fast food and quick service restaurants (n=1,395), accommodation (n=1,394) and personal care services (n=1,397). There were also 52 respondents that didn’t use these services.
The sample was selected to ensure the results are nationally representative. All statistics and references to consumers in this report are based on the responses to the survey unless otherwise stated.
Things you should know:
The report has been published for general information purposes only. As this information has been prepared without considering your objectives, financial situation or needs, you should, before acting on this information, consider its appropriateness to your circumstances, if necessary, seek professional advice. The Bank believes that the information in the report is correct and any opinions, conclusions or recommendations are reasonably held or made, based on the information available at the time of its compilation, but no representation or warranty, either expressed or implied, is made or provided as to accuracy, reliability or completeness of any statement made in the report. Any projections and forecasts are based on a number of assumptions and estimates and are subject to contingencies and uncertainties. Different assumptions and estimates could result in materially different results. All analysis and views of future market conditions are solely those of the Commonwealth Bank.
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