“Re-imagining Business”: a discussion at the RSA

Last week saw a discussion at the RSA on “Re-Imagining Business: the transition to the circular economy”. The main presentation was by Stef Kranendijk of carpet-tile manufacturer Desso, who explained how his company had adopted “cradle-to-cradle” manufacturing methods to greatly reduce the resources they use and damage caused to the environment. There is extensive recycling, with new processes developed with suppliers to minimise waste. By incorporating cradle-to-cradle into their standard business model and processes, Desso had become more innovative and business focused – they had to be to make it work. Kranendijk named Ray Anderson as an inspiration. It was an impressive session, and if it sounded like a business working out how to profit from sustainability, that felt fine.

I was really impressed by Dame Ellen MacArthur. I had no idea what her connection to sustainability was, and I had been surprised to see her on the panel; but she made her interest completely clear. When she had been sailing single-handed around the world, she said, she had an epiphany: isolated in the oceans, thousands of miles from port, she realised her resources were distinctly limited: the only energy, water and food she had access to were what she had packed. (Ok, she could have fished…) This made her think about how precious the world’s resources are (presumably she had a lot of time to think) – it is a closed system, after all, like her boat – and on her return, she decided to stop sailing and focus instead on learning about those limited resources – the stuff she wasn’t taught at school. And she set up the Ellen MacArthur Foundation, which aims to “inspire people to re-think, re-design and build a positive future”. It worked for me.

MacArthur realised the need to move from a linear model of consuming resources to a “circular” model: increasing efficiency of the linear model can only buy us a bit more time – we are still going to run out of resources one day. Most products are designed to be disposed of, not recycled. MacArthur described the circular economy as one in which waste is designed out – and the rise of commodity prices (a result of the linear economy and finite resources) makes recycling more economically viable: products can be remanufactured, as Ricoh are now doing for its printers and copiers. By designing recycling into every aspect of a business – its products, services, processes, everything – a business – and the economy – would be re-envisaged: and new, profitable business models would be built. She described an A-level student who said that he now looked at every product he used in a different light – what it would look like if the future had been designed in. we need to rethink everything we use.

The last two speakers focussed on what this might mean for different sectors. Paul King talked about the built environment, and how we needed a revolution in the way we think about buildings. Working with companies that are adapting to the green agenda, he said people often ask him if he doubts the motives of such companies: never, he said – he knows that they are purely driven by profits, and that there is nothing wrong in that if it also drives them to develop green solutions. One of the problems is that even if all new building was designed for low carbon-usage, only 20% of buildings would be so adapted by 2050: most of our structures pre-date new standards, building methods and designs. So ways to retrofit low- and zero-carbon technologies – we need to reimagine our relationship with the built environment, he said.

Penny Shepherd talked about the financial environment; building on MacArthur’s theme, she said finance needed to be redesigned too, with a wholesale systemic change (and given the economic turmoil in the Eurozone, who can doubt her?).

It was a fascinating, enlightening and ultimately positive discussion. I reckon that if the true environmental costs of extracting finite minerals (especially for technological uses – mobile phones, computers and the like are dependent on rare minerals, and are rarely recycled), more companies would be prompted by the profit motive to move to circular models. A role for government, perhaps?

Advertisements

2 thoughts on ““Re-imagining Business”: a discussion at the RSA

  1. Dan Sutton

    People seem very reluctant to be confronted with the true cost (or the true benefit) of the products and services they consume.

    I think often about offshore wind. Currently about 60% more expensive per lifetime megawatthour than gas or onshore wind. What that additional 60% of expenditure (perhaps) buys you is inter alia some more energy security. Whether you think a 60% premium on some energy is worth being able to keep the Grid supplied if you have to shut down all the nuclear power plants or avoid price volatility if the cost of gas doubles is a matter of personal choice but I observe that people are reluctant to think or talk about that sort of choice.

    There seems to be a problem with longer time horizons or in making choices about risks that hampers the transition to an economy which is sustainable in the future

    Reply
    1. patrickhadfield Post author

      Long term issues are difficult to value, financially out emotionally. A small change in the discount rate can switch an investment from positive value to negative – and anything over twenty years is normally ignored. Add in our sense of mortality, and the fact most of us will be dead anyway, and I don’t think it is too surprising how little attention is paid. Just very short-sighted…

      Reply

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s