What would happen if your business couldn’t access the core materials and products it relies on? Been here before? Well, this time we’re not talking about COVID-19 or supply chain disruption.

As access to non-renewable virgin product reduces, now is the time for businesses to start future proofing their operations while they still can. Forward thinking organisations are already using circular business models to create sustainable products and services, and to find new markets and customers. But this can mean grappling with challenges in financial management - everything from the cost of changing production methods to tax definitions and cash flow.

Produced by Grant Thornton New Zealand and The Sustainable Business Network, this report presents the case for a circular economy in Aotearoa, and explores the barriers New Zealand’s current financial system creates for meaningful progress towards the country’s carbon emissions reduction targets.

While much of the damage done to our environment is irreparable, there are still options; The Circular Revolution identifies four key influences to expedite progress towards circularity.

	1. NZ Government: A key role to play The Government has significant power to affect the pace of change. The business community needs effective incentives and easy access to government funding for circular initiatives. It also needs penalties for linear businesses that send a strong message about the new way forward. The low hanging fruit is lying in plain sight. The Tax Working Group’s recommendations must be implemented to incentivise sustainable business practices, and new taxes should be considered to accelerate change. Beyond that are the levers around depreciation, certification, and governance, along with easier access to new and improved grants.
	2. Banks and lenders: A shifting of mindset and skillset The researchers’ discussions with banks and other lenders revealed there is room for improvement. Lenders report they are inundated with requests for circular funding. But they admit they lack sufficiently trained staff around circularity. This means they revert to traditional commercial metrics to assess value and risk in their approval process, which makes for a difficult financing discussion between both lender and borrower, and it’s a clear disincentive to move away from a linear business model.
	3. Businesses: Start at the very beginning The answer lies in examining the business from beginning to end. Examining how to change from non-renewable virgin materials to sustainable ones, how to modify production methods, how to fund that change and how to maintain customer loyalty. Everything is touched by a circular model. The secret lies in seeing the bigger picture, knowing what grants and funding options are available, and working with advisors who can help you navigate the path ahead.
	4. Customers: Take time to care Fast, cheap and convenient defines the current customer world. However, as landfill increases and pollutants like plastic continue to invade the environment, this way of life is not sustainable. All consumers need to take personal ownership and accountability for the impact their buying decisions make on our environment and our economy. This means taking the time to learn more about the products we buy, re-using before replacing and when we must buy new, we should be seeking out products that are built to last, can be repaired when needed and made with materials that are both recycled and recyclable.