Circular Economy, Features

CHEP advances circular economy ambitions with sustainable business model

With a business model that is inherently sustainable, CHEP helps its customers become part of the circular economy through the company’s principles of share and reuse, while also striving to minimise its own impact on the environment and contributing positively to the communities in which it operates in.

CHEP’s sustainability activities are built around the company’s strategic framework of Better Business, Better Planet, Better Communities. CHEP plays a major role in advancing the Brambles Group’s Sustainability strategy and achieving its 2020 Sustainability Goals, which are tied to the Sustainable Development Goals set out by the United Nations.

“CHEP’s business model is designed to be inherently sustainable right from the beginning, and it has been that way since the 1950s, when CHEP first started leasing pallets in Australia,” said Lachlan Feggans, CHEP’s director of sustainability, Asia-Pacific

“So right from the start the business was circular and over time we were able to transition the entire supply-chain within Australia to a share and reuse pallet system, as opposed to a single-use pallet system.

“Currently, we have over 610 million reusable assets in over 60 countries, which circulates through roughly about 500,000 customer touchpoints per year. We’re trying to create the ‘network effect’, which is really unique to our business and enables us to operate a circular economy at scale.

“The reverse-logistics component to our business is absolutely critical and the network that we have built with customers and participants in the supply-chain allows us to efficiently collect our products. From here, it either gets passed on to the next participant in the supply-chain or gets brought back to our service centre for repair.”

CHEP’s sustainability program operates on three levels, which include:

  • Share and Reuse: Replacing disposable packaging with high-quality, reusable pallets and containers to eliminate waste and make businesses more efficient.
  • Collaboration Projects: A full analysis of the supply chain that identifies areas where specific logistical challenges and cost savings can be addressed.
  • Best Practices & Credentials: Access to CHEP’s world-class supply-chain professionals.

“In the last five to 10 years, we have really capitalised on the circularity of the business and communicating the environmental benefits of the business model to all of our stakeholders,” Feggans said.

“One of the key messages that we use is you can’t recycle your way towards a circular economy – it just is not going to work. Recycling only slows down the linear economy, which is a message that is also used by the global authority on circular economy, the Ellen MacArthur Foundation.

“We at CHEP are all about reuse as opposed to just recycling. A critical part for our operations is that we reuse and share our products to make the business more sustainable. We at CHEP believe that reusing has a much higher environmental benefit than recycling.”

CHEP has also been working closely with the Australia Packaging Covenant Organisation (APCO) and its partners for its recently released Sustainable Packaging Tool.

“We’ve participated with a lot of other brands in actually helping to build that tool and make it a workable resource for customers,” Feggans said.

“We want to help educate customers and stakeholders around the benefits of the circular economy, as well as the benefits of reusable packaging and how it has a much bigger role to play in creating a circular economy than end-of-life recycling. That is something that we are definitely going to continue during the FY19-20 period.

“One of the interesting things we have discovered since China revised what they will take into their country from a recycling perspective, is that we’re starting to see the true economic and environmental picture of single-use packaging.

“Single-use has been the zeitgeist of the past year and has essentially become synonymous with inefficiency. Just recently, the BBC reported that there was a four-fold increase in the use of the phrase single-use and what that tells us is that there’s an understanding in the business world and with the consumers that single-use is becoming a bit of a dirty word.”