The world is starting to recognise the problems caused by the way we produce and consume things. We are heading toward a climate catastrophe, something that is certainly being felt here in Australia. We know it’s unsustainable to use resources once and discard them, yet only 8.6% of materials extracted from the earth end up returning to the economy for a second act.

That’s because most businesses are built on linear models: take, make, waste. Giving businesses and consumers the tools to adopt more “circular” practices—reducing, repairing, recycling is no small task. But throughout the economy, forward-thinking creators and executives are doing exactly that. 

One person’s trash is another’s treasure

The drive for sustainable business practices is creating surprising connections between industries as the waste from one becomes an input for another. In today’s more technologically advanced economies, we are beginning to see a focus on greater utilisation of resources, cutting costs and waste, in one powerful evolution. 

Stripe user Biasol saw a hidden avenue in the craft beer boom over the last ten years. Instead of importing chia seeds, they saw an opportunity in the brewers’ spent grain, upcycling what was traditionally a discarded by-product, to create nutritious food. Another great example, also a Stripe user is RÆBURN, best known for turning military parachutes into garments. 

That said, the evolution of circular marketplaces needs to spur a more comprehensive approach to recycled and regenerative materials and modernising the way we view, and interact with existing waste streams. Australian businesses are in a great position to grow our global footing, tapping into waste streams to localise, globally. 

Recycling waste materials and building sustainable supply chains at scale will require new financial and technological infrastructure. Where supply and demand are mismatched, online marketplaces will likely play a vital role in connecting buyers and sellers, allowing sustainable sourcing models to emerge. 

Likewise, shipping plays a critical role in facilitating the shift to a circular economy. To become the true lifeblood of the circular economy, delivery networks must work towards zero-carbon operations through offsetting measures, greener shipping methods and environmentally friendly packaging. Companies such as Stripe user Sendle are working to make delivery more sustainable.

From owning to renting

As industry patterns change, consumer behaviour is evolving toward more sustainable consumption models. Sharing and renting are two thriving consumption models. Globally, Stripe saw a 550% increase in the money spent on renting clothing, equipment and tools in the first three quarters of 2022 compared with the same period in 2019. Australia is the third largest clothing rental market (second to the US and UK) and locally, this market grew 5,000%. Thousands of clothing rental businesses are running on Stripe in these markets, up from just a handful three years ago. 

With economic conditions in Australia becoming increasingly difficult and economists warning the worst is yet to come, renting and sharing are set to become even more attractive.

Reasons for optimism

Circular practices are good for the economy as well as the planet—and businesses and consumers are taking note. The World Economic Forum calculates that the transition to more sustainable models could generate $4.5 trillion of additional economic output by 2030. But realising that potential will require wholesale changes to the way we produce and consume.

Australians, like the rest of the world, are feeling the pinch. With increasing costs across many aspects of our daily lives, customers and businesses alike are turning to a new era of circularity. Alongside increasing environmental costs, the new era of second-hand buying and selling highlights a positive future for Australian businesses to expand their revenue streams during a trying time. 

Some of the most successful tech companies were born during times of slow economies, partly because of the strategic decisions they made that positioned them for success far beyond the economic cycle. The opportunities ahead for Australian businesses to follow suit are ready for the taking. 

Karl Durrance is managing director for Australia & New Zealand at Stripe.