Soft plastics are extensively used across Australia in a range of consumer products such as food wrappers, shopping and bread bags, bin liners etc. Difficulties in recycling soft plastic packaging coupled with its low biodegradability have led to its accumulation in landfills and the natural environment, contributing to marine pollution and posing health risks to both human and animals. Compostable soft plastic packaging offers an alternative to conventional plastics, being produced from sources such as starch, cellulose, and polylactic acid. They replicate many of the functional properties of conventional plastics but are designed to decompose under industrial or home composting conditions. FOGO waste management collects food and garden waste from homes and businesses and turns it into compost used in agriculture. It also serves as a key end-of-life pathway for compostable plastics. However, limited research has examined what are the compostable soft plastic practices within the built environment. The aim of this study is to explore the intersection between compostable soft packaging, FOGO waste management strategies, and the built environment, with the goal of identifying critical areas in need of policy alignment and further investigation. This study draws upon a systematic literature review of 87 publications on global practices, as well as a grey literature review covering all Australian states, including council reviews, policy documents, and industry reports. Findings reveal terminological ambiguity between “biodegradable” and “compostable” materials, variations in FOGO implementations, unclear certification standards, all of which undermine stakeholder confidence and compost quality. Multi-unit and high-density residential developments emerge as critical areas for targeted interventions to improve adoption of compostable plastics. The findings suggest consumer education and awareness on responsible soft plastic practices, benefits of using compostable plastics and aligned state and federal policy frameworks are necessary to support effective adoption of compostable packaging in Australia.