Small Business and Sustainability

How Australian SMEs Can Lead the Way Through Upcycling and Waste Reduction

Feb 01, 2025

Sustainability is no longer just an option for businesses—it’s a necessity. While large corporations often take center stage in environmental discussions, small businesses play a crucial role in shaping a greener future. In Australia, where 97% of businesses are small and medium-sized enterprises (SMEs), their collective impact on sustainability is significant.

One of the most pressing sustainability challenges facing Australia today is waste management, particularly textile waste. The country discards 200,000 tonnes of clothing annually, with most ending up in landfill. However, through waste reduction, upcycling, and responsible sourcing, small businesses can take the lead in building a circular economy.

Let’s explore how Australian small businesses can contribute to sustainability, with a strong focus on upcycling, reducing waste, and ethical production, while also drawing insights from global best practices.

Why Sustainability Matters for Small Businesses

Sustainability is about more than just environmental responsibility—it’s also about long-term business success. Companies that integrate sustainable practices benefit in several ways:

Cost Savings – Reducing waste and repurposing materials lowers operational expenses.
Brand Reputation – Australian consumers are increasingly eco-conscious and prefer businesses that embrace sustainability.
Regulatory Compliance – Government policies, including the National Waste Policy Action Plan, are pushing businesses towards waste reduction.
Competitive Advantage – Sustainable brands stand out in the marketplace and attract loyal customers.
Future-Proofing – As consumer preferences shift toward ethical shopping, businesses that adapt early will thrive.

The Role of Small Businesses in Sustainability

Small businesses can drive sustainability efforts in several ways:

1. Reducing Waste at Every Level

SMEs in Australia contribute significantly to landfill waste. They can play a crucial role in reducing their environmental impact by focusing on waste minimisation and material repurposing.

2. Upcycling as a Solution to Textile Waste

Textile ‘waste’ is one of the biggest environmental issues in Australia. Instead of sending old materials, remnants and offcuts to landfills, small businesses can benefit from upcycling by selling to creative reuse enterprises and, at the same time, save on waste disposal costs, and increase brand equity through increased reputation. In turn, creative reuse enterprises can promote, empower and sell these valuable resources to the public.

3. Supporting Local and Sustainable Supply Chains

By sourcing locally, businesses reduce transport emissions and support Australian manufacturers who prioritise ethical and sustainable production. In particular, sourcing textiles locally and promoting repair and upcycling reduces the reliance on imported textiles and fast fashion, thereby reducing the carbon footprint associated with producing and transporting new textiles.

4. Driving Community Engagement

Small businesses have a direct connection with their local communities. By promoting sustainable initiatives, such as repair, reuse and upcycling, they can encourage customers and suppliers to adopt similar eco-friendly practices.

5. Innovating Through Upcycled Products

Many Australian SMEs are leading the way in upcycling—transforming discarded materials into new, high-quality goods. Whether it’s fashion, furniture, or packaging, creative reuse is an emerging trend that businesses can capitalise on.

Practical Ways Small Businesses Can Be More Sustainable

1. Reduce Waste Through Smarter Inventory Management

One of the easiest ways to reduce waste is to prevent excess stock from being discarded. Businesses can:

Use Pre-Orders or Made-to-Order Models – This ensures products are only created when there’s demand, minimising waste.
Offer Seconds or Imperfect Items at a Discount – Instead of discarding products with minor flaws, sell them at a lower price.
Sell ‘waste’ to creative reuse enterprises – Instead of paying to send so-called ‘waste’ to landfill, sell it (or as a last resort donate and save on waste disposal costs) to businesses and other enterprises that can reuse these resources.

2. Upcycle Instead of Discarding

Upcycling is a powerful way to transform ‘waste’ into something valuable. Businesses can collaborate with upcycling specialists to:

Fashion & Textiles For example;
- Turn fabric remnants into tote bags, patchwork garments, or accessories
- Upcycle or redesign preloved clothes into unique items using techniques like the Japanese art of Boro
- Incorporate textile ‘waste’ into art and craft projects.

Backside of an indigo-dyed quilt (Boro) from Japan, with functional and decorative sashiko. Karl Zetterström. CC BY 4.0

Furniture & Home Décor
- Repurpose old furniture, wooden pallets, or discarded materials into new designs
- Reclaim upholstery leather and fabric and turn them into bags, and hats, or use them in bookbinding and other projects.
Packaging
- Reuse packaging or use offcuts from production processes to create unique and eco-friendly packaging solutions.

3. Adopt Sustainable Packaging Alternatives

Excessive packaging contributes significantly to waste. Businesses can:

Use Reusable Packaging – Encourage customers to return packaging for refills or reuse.
Opt for Fabric Packaging – Use shopping bags made from remnant fabric.
Minimize Packaging Waste – Reduce unnecessary wrapping and keep packaging simple yet effective. Or use alternative wrapping such as fabric wrapping (eg. Furoshiki) and add some flair to your customers purchases.

4. Source Responsibly and Choose Upcycled Materials

Sourcing upcycled materials is another way small businesses can make a sustainable impact.

Choose Reclaimed Fabrics – Many suppliers offer deadstock fabric, which is leftover material from big manufacturers that would otherwise go to landfill.
Work with Local Artisans – Support businesses and artisans that specialise in upcycling materials into new products.
Encourage Customers to Choose Upcycled Goods – Educate consumers on why upcycled products are just as high-quality (if not better) than new materials.

5. Encourage a Circular Economy with Repair and Reuse Initiatives

Repairing and reusing products instead of discarding them helps keep materials in circulation for longer. Businesses can:

Offer Repair Services – Clothing brands can provide stitching or alteration services instead of promoting disposable fashion.
Create DIY Repair/Craft Kits – for example, create remnant textile kits that help customers fix/modify their purchases, or provide resources to inspire creativity.
Host Workshops on Upcycling skills – Teach consumers skills to help them to upcycle, repair and create their own items rather than throwing them away.

6. Join Sustainability Certifications and Initiatives

Many organizations in Australia support businesses committed to sustainability. Consider:

Australian Circular Economy Hub – A platform promoting waste reduction and resource efficiency.
APCO Membership – The Australian Packaging Covenant Organisation helps businesses reduce packaging waste.
B Corp Certification – Recognises businesses that meet high environmental and social standards.

How Australia Compares Globally on Upcycling and Waste Reduction

Australia has made progress in sustainability, but how do we compare to other countries in upcycling and waste reduction?

Europe – Countries like Sweden and the Netherlands are global leaders in upcycling, particularly in fashion and furniture.
United States – Small businesses in the US are embracing upcycled materials in everything from home goods to accessories.
Japan – Known for its minimalist culture, Japan excels in reuse and repair industries, especially in textiles and electronics.
New Zealand – Businesses focus heavily on waste minimisation and use of upcycled local materials in production.

While Australia is progressing, there is still much to learn from these international efforts, particularly in making upcycling more mainstream and commercially viable.

Australian small businesses have a unique opportunity to lead the way in sustainability— not just through waste reduction, but by actively embracing upcycling and circular economy principles.

By recognising the potential of discarded materials to be reused, or upcycled into new, valuable products, businesses can help reduce landfill waste, lower costs, and be part of creating innovative, one-of-a-kind items that attract eco-conscious customers.

Sustainability is about protecting the environment - but it’s also about reimagining waste as a valuable creative resource and building a business model that thrives in a circular economy.

The time for action is now. Whether you run a fashion label, café, or creative studio, there are countless ways to embrace upcycling and sustainability in your business.

What upcycling initiatives has your business implemented? Share your experiences in the comments below!