The basic platform

The basic platform was pretty straightforward: take – make – waste, and replicated in every part of the chain from raw materials to use and final disposal.  Much of what we know about ancient human habitations and ways of life we’ve learnt from their waste – where it is, what it’s made up of (e.g. bones, weapons, broken tools, pottery, etc.). As we manufactured we took the basic platform, and replicated it in each of multiple processes:  let’s take the example of a pretty simple sandal. Rubber sole, leather straps, and thread.  The rubber was tapped from trees, purified and dried, then formed or trimmed to make the soles.  Trim scrap was – well – scrapped.  Same with the leather.

The platform goes tippy…

But what worked well for a small population using basic materials, started to fail us as we developed more sophisticated materials more resistant to nature. And that brings risks to companies – risks that there are insufficient resources to “take”, that the processes for “making” are too costly or just threatened, and that “waste” is becoming unfeasibly expensive.  Read on to read the three steps that will ensure you are a winner in this new world.

So what happened to the waste?

The pretty neat thing was that the waste was more often than not immediately used as food by insects and molds, or dogs or pigs or… No matter what ended up consuming it, the scrap became part of another process, and so waste wasn’t effectively waste.  It was, as William McDonough is fond of saying, food.

We shall did overcome!

So the same things that made our products eco-groovy, waste = food, made them degrade fast.  After all, the same insects/molds/dogs that were getting rid of the waste, were just as interested in the product.  Our stuff was all food to them.

So we invented lye and vulcanisation and other processes that transformed humble ingredients into high tech, almost impervious-to-nature, materials.  And still our systems were based on take-make-waste.  But now, when we wasted, nature was having trouble digesting the by-products.  And instead of becoming food, they accumulated like litter, and we developed industries to “dispose” of them.  Which has largely meant sweeping them up and taking them “away”.

What’s wrong with dispose and away?

The Online Etymology Dictionary defines the origins of dispose as order:

mid-14c., from O.Fr. disposer (infl. by poser “to place”), from O.Fr. despondre, from L. disponere “put in order, arrange,” from dis- “apart” + ponere “to put, place”

And here’s a picture of a disposal site: 

In fairness, this is clearly a disposal site in a poorly regulated (or poorly enforced) area (in this case Haiti).  So let me insert a picture of a sanitary landfill in the United States (Pennsylvania) from this year:

In either case, while there may be some form of order established – there is indeed a concentration of rubbish, distinct from the non-rubbish areas – the materials and dirt are so mingled that materials are hardly salvageable.  As a consequence we have actually condemned them to being unuseful and therefore pure waste.

Is pollution just good stuff in the wrong place?

Physicists and chemists would say so.  Value comes from order.  So pure tends to have higher value than impure, and much more than contaminated.  Gold is an obvious example.  But purity can come from “designed-for-purpose” – for example metal alloys, or chemicals, or plastics.  What happens when the fine distinctions that enable a material to be used in a particularly efficient way are contaminated – is tat more of the material needs to be used, and the properties it had been chosen for are sullied.  Think of colour as a property, and consider the outcome when a black sock makes it’s way into a load of white laundry…

The shortages of “away”?

The fees for collecting and disposing of waste have been increasing at such a rate that in London, for example, they now account for 1/2 the city’s budget.  These trends are due to accelerate due to public unwillingness to support new disposal sites (including waste-to-energy plants); competition for scarce space; and increasing waste.  Population and demographics have a large role to play in this – in the past 50 years the population of the globe has more than doubled (from 3 to 6.8 billion); wealth and consumption have increased substantially, and the increase in smaller households and out-of-home consumption has further increased waste.

A different form of cost is imposed by extended producer responsibility requirements (EPR) – currently covering items as diverse as packaging materials, tires, white goods, hazardous and special wastes, and appliances in (among other countries) the EU, much of Canada, Turkey, Japan and parts of the US.  The cost of recovering and disposal is placed usually on the brand owner who in turn seeks to distribute it among suppliers until eventually it makes its way into the cost of a good.  Ultimately EPR regulation is seeking to ensure that products with least waste-impact (through highest and most economic levels of recovery and recycling) are rewarded by the market.

The even greater shortages of “take”

At the same time, we are facing pressures and even shortages of materials: not just the usual suspects (oil, water, fish…) but also many rare ones on which the industries considered particularly forward facing, are pinning their hopes: neodymium, terbium and dysprosium (key components in generators for wind turbines or electric cars); lanthanum – key to electric car batteries.  Not only are these materials in short supply, but China which has a very long term view, has secured many of the supplies, thus making it the future monopolist for materials.

Worldwide demand for rare earths, covering 15 entries on the periodic table of elements, is expected to exceed supply by some 40,000 tonnes annually in several years unless major new production sources are developed. — Reuters, 31/8/09

A worsening ratio of people to arable land will bring about greater dependence on chemical fertilizers and other agricultural chemicals and on plant breeding for higher yields. In regard to dependence on chemical pesticides, the study looks for an increase in pesticide-resistant insects, based on California’s experience where, of 25 species each causing crop losses in excess of $1 million per year, 17 are now resistant to one or more types of pesticides. — Global 2000 report

And of course localised energy shortages and associated cost increases.

3 key steps to being able to continue “make”

So the competitive products – and companies – are going to be those who:

1. Produce most efficiently:  lowest energy, mostly renewable, and locally determined.  For example, Dean dairies invested in a methane digester thus avoiding the cost of waste disposal and energy purchases, while creating enough energy that they can feed it to the utility and make money.  Dean now has income where their competitors have costs – which means they can play with pricing, invest in greater modernisation/efficiencies, market themselves as green, …  They’ve bought freedom, choice and a halo.
2. Those that can reclaim and reuse their products at the disposal stage.  For example, a battery manufacturer (or mobile phone, or iPod or…) depends on materials that are in limited supply, hazardous in their manufacture and hazardous in disposal.  Risk, risk risk.  Were they to lease, rather than sell, their electronics, they could recycle more efficiently, reclaim their precious metals, and – get the halo.  In fact, as first mover, they could not only be reducing the toxicity of their products – they could be detoxing the operation – a powerful first mover advantage.
3. Use renewable and renewed materials:  either renewed by nature (e.g. trees), or by humans (recycled content).  Coke has invested over a hundred million dollars in recycling plants that guarantee it a supply of recycled PET – PET whose life cycle impacts are as good as those of nature-based materials such as paper cartons.  And, they are launching a plant-based polymer that can be recycled along with PET – so that their product is fundamentally green:  renewable, renewed, recycled and reused by them.

Securing a profitable platform

Interface, the largest floor covering company in the world, dedicated themselves to becoming fully sustainable 15 years ago.  Today they have changed their operations dramatically – zero waste facilities, high levels of renewable energy, much greater energy efficiency.  Most interestingly, they have taken different approaches to desing and manufacturing, based on their observations of how nature works, and launched three bestselling lines of products as a consequence – products that are better for the environment, easier to lay and replace, more readily recycled, and cheaper to produce.  “We were operating on the wrong platform” says their founder and Chairman Ray Anderson.  They’ve changed that – and grown dramatically in the process.

Related posts:

1. Does Climate Change affect your business?
2. Can goats help your green initiatives succeed like this?
3. Women’s International Input for COP15 Meeting in Copenhagen

Those of you passionate about pond scum – or addicted to interest rates, or afflicted with pernicious diseases – understand that progress is described in DTs or doubling times: the time it takes the scum/money/disease to double in population. When it comes to pond scum we are largely indifferent; when it comes to money we want DT to be as short as possible, and when it comes to disease we would like to delay the day of reckoning by extending the DT as much as possible. But very few of us associate climate change with pond scum.

That, dear reader, is a mistake.

The first global experiment
We are currently embarked on a huge experiment on earth – the experiment of “how to manage a super-successful species with an impossibly short doubling rate on a quite small planet”. By which I mean, that we have quite a short doubling rate historically speaking and earth has no doubling capacity at all. So we are filling up every aspect of our planet with our presence, our waste, our demands, and the like. And the rest of the planet (meaning other mammals and fish and mushrooms and insects not to mention the water and the air and … you see where I’m going…) has no say about this at all.

So at first gradually, and now pretty quickly, we are pushing other species out of our way, which means out of existence. You may be feeling triumphant about this: A sign of superior intelligence! A sign of greater strength! A demonstration of power! …and a sign that God is on our side!

Perhaps.

Or perhaps, this is a test we need to look straight in the face, and address.

Hardwired to behave like pond scum?
When I was born, the population of the earth was 3 billion people. You can thus assess to the year when I was born, or assume that I am wise beyond my years, or just an old crank. Each is, within measure, true. But it should be noted that fewer than 50 years later, the earth is ~6.8 billion people. That is to say that we are increasing at a very rapid rate. In fact, the rate of increase when I was born was roughly 2.2% year – a doubling rate of 31 years. We met that handily I’m afraid to say.

And when we double, we more than double our appetites. When I was born (let me come clean – we’re talking 1960 here, not the dark ages…) there were no mobile phones (replaced every 2-3 years); laptops (replaced every 3-4 years); fax machines (come and largely gone), or most of the other absolutely essentials most of us live with today with hardly a thought (though plenty of complaints… and even more waste).

Thus we have increased our per capita consumption of calories, meat, processed foods, packaging, fuel, electricity, batteries, furniture… pretty much everything. Which means that the rate at which we consume our planetary resources is even more rapid. So it is no wonder that WWF tells us that we have exceeded the earth’s capacity: that rather than live off the interest, we are living of earth’s capital.

We have now affected the global climate to a point that scientists consider detrimental to our prospects for survival as a species. And, like junkies hooked on drugs, we are so hooked on oil that even though we know that oil only makes things worse, we are exploring new sources that will take only slightly less energy extract than they will provide: oil sands.

Even though we are smart enough to see that we are heading in the wrong direction, we are hard-wired by millennia of evolution, to deal very well with immediate threats like a lion about to eat us, and very poorly with incremental threats – like climate change – even if they have equally detrimental consequences.

Pond scum, and . . . scum
Which brings us back to pond scum. If the doubling rate of pond scum is one day it can take weeks and months – even years – for the scum to cover half the pond. But the day the pond is utterly covered with pond scum – and undrinkable, unswimmable and ultimately unlivable, is just one day after that. Yet when the pond is half full, everybody thinks, “well, it’s not that full, we still have some time, it’s growing bit by bit…”.

And this is where scum come in. We are already hardwired not to really feel slow incremental change, even if our brains can see what is really happening. And some companies are playing on that: sowing doubt (where scientists have basically none). And others (who find it easier to do what they are doing today than change for the better) jump on the bandwagon, and suggest that any changes will bring down the system and create havoc… They are creating the urgent monster that inspire our brains to fight or flee: in this case, fighting people who attack the status quo in the name of climate change.

Here’s why that (scummy) strategy works:
Dan Gilbert, Harvard professor of behavioural biology has studied the human brain for decades, and determined that we are brilliantly designed to respond to evil predators who suddenly threaten our immediate well being. Long term climate change doesn’t meet our brain’s warning and fear needs. But the alarmists who threaten we’ll lose our way of life due to climate change – well they are the problem. Blame the messenger!

Beyond scumminess:
What you want to do is implement small changes, that can grow incrementally until, like pond scum, they are everywhere – without breeding resistance.

• At Yahoo they ran a competition to cut CO2 for each employee by 20% for one month. They provided power-saving-tips, carpooling, meatless lunches, etc. The prize if the company made it: see the CEO & COO fight wearing sumo-suits. Not only did this work, it so invigorated that organisation, that many other changes came to the fore, and while not all the initiatives lasted continuously, many did, and new ones had a chance to be evaluated and adopted.

• At IBM they said – “we want to make a business out of being green – so anything you think you can sell, we have to do internally. That will give us credibility in the market place.” Not only did that excite people who wanted to sell ideas; it excited people who were back-office and could invent a product that company could then sell.

• At Wal-Mart they said to employees and suppliers: Here are our super-ambitious goals. We want to improve year-on-year – but we won’t micro-manage – you tell us what’s best. We’ll work with you to get there, and we need you to work with us to get there.” And while they had areas of focus (such as packaging) the benefits came from new products (such as concentrated detergents and compact fluorescents); and new processes (such as cooler lighting in freezers that reduced airconditioning).

We will survive…
With strong intentions we can rise above pond scum, use the brains we’ve built over millions of years of evolution, and grapple with the environmental problems we have actually created for ourselves.

Because the alternative is to grow like pond scum, choke our own home, and possibly choke our means for existence…

Image by Swampman on Flickr.

Related posts:

1. Lobbying: a proven way to lose money?
2. What McDonald’s did wrong, and Wal-Mart does better
3. How to change behaviours

(image from Summitpackgoat.com)

Goats are buttheads. Driven by nature eternally to establish and defend their position in the hierarchy, they continuously butt eachother (and me!) into line. But once they’re comfortably in line they not only follow you – they carry your load. Here’s how this can practically apply to launching an initiative:

The pitfalls of launching your initiative

Its pretty common to want to start your environmental initiatives with activities your colleagues will see and feel and even participate in. Something like recycled paper in the copy room. That can be a success – people get inspired, they notice they can make a difference, and they start having ideas about how to contribute more.

More often it’s a disaster. You get complaints: “the paper gets stuck in the copier”; “the colour is off and my documents don’t look good”; Or snippy questions about the labelling (“what is Mixed Sources anyway? I thought we were going – like – recycled…”). Or questions about whether its worthwhile “I’ve heard that recycled isn’t better for the environment anyway”. Or more philosophical questions: “Shouldn’t we be sticking to reading on our computers and not print out so much? You’re just making people feel good about wasting…”.

And really personal ones: “Oooh recycle folks, here comes the GreenQueen…”

Since you probably thought you were doing an unarguably good thing, you’re surprised at this negative stuff. And you get aggravated and think it would be a lot easier to go back to the way things were done before.

Why so much energy around something like paper?
There are always – or at least usually – some tensions in an office. Things around work or relationships or even the coffee machine. You get a lot around whether people tidied up the conference room after a meeting, or talk too loudly on the phone, or cut somebody off during a discussion… And often the conversation to clear that is difficult.

So instead, people find a safe outlet. For example, attacking an imposed initiative – and even attacking it in a way that makes them feel they are supporting the company: We shouldn’t use recycled paper – it costs more; recycled makes us look like eco-groovy hippy types – it’s not professional! The paper jams are reducing our productivity!

This can feel pretty hostile. After all, it was an environmentally sound idea and you had had the permissions and you had to go out of your way to make this work.

Your colleagues may be goats.
So it can be just a safe outlet, a release. Or it can have a more butt-heady side to it too – establishing where they and you are in the company pecking order. And, to mix my metaphors, your sticking your head above the parapet makes you an easy target.

Lessons from ButtHeads

Goats can be good
Like people, goats are herd animals, and once they’ve established their order, will plod along in relative peace for hours. The trick is, get the order established early, and don’t try to shake it up. When you start something, anything, you are shaking up the established order by sending out little ripples of change. Some will see this as an invitation and some as a provocation, things will change, and suddenly you’ve got jostling all around.

So get the buttheads in line, reward them for staying there, and they’ll carry your load to the goal.

Related posts:

1. This company made their customers raving (green) fans
2. Is your company about to lose the platform it’s built on?
3. When the Kat has your tongue

McDonald’s could be doing smart, community-building work that builds brand value. But they’re not. Here’s what they’re doing – and what Wal-Mart’s doing better.

The story:
Nigel Haskel, a minimum wage, 21 year old employee, sees a man start beating a woman in the McDonald’s he works in. He intercedes on the woman’s behalf, gets the attacker to leave, and then blocks him from re-entering the restaurant. For his pains, the attacker shoots him multiple times, and Nigel has to have several abdominal operations to repair the damage and extract the bullets. He still has a bullet inside.

Six months and $300’000 later he is denied workers compensation benefits: McDonald’s refuses his claim as they say he should just have called the police.

What’s wrong with this position?
From a business point of view it is wrong because it tells customers that they may not be safe in a McDonald’s because McDonald’s will not protect them. That seems wrong-headed at a time when trust in business is at a low.

Secondly, it ignores fundamental human notions of protection, ‘doing the right thing’, standing up for decency and justice. This threatens their community standing.

Compromising your welcome in the community
When corporations forget the spirit of laws, and live for short term benefits based on the rule of law, they compromise their welcome in communities. That compromised welcome is what has driven Wal-Mart to embrace the environment and sustainability so powerfully and visibly: they needed to re-establish credibility with communities so that they could continue to expand. And in doing so, they have expanded among consumer classes who did not readily or happily shop at Wal-Mart before.

Wal-Mart seems to be learning that doing the right thing by community can build business [see next week's column on transparency]. McDonald’s, who made themselves the butt of 15 years of jokes and bad press when they pursued two activists through the UK and European courts in a case dubbed McLibel, seems to be struggling with learning.

Better to Do the Right Thing
Two thirds of McDonald’s revenue growth comes from upscale, healthy food*. This is exactly the kind of market that is most likely to be put off by insensitive behaviour and everything it implies. The public in general hasn’t taken kindly to the arrogance of bankers and car companies. Perhaps this is a time for McDonald’s to cede their “right” to do the wrong thing, and instead do the right thing- so that they continue to build brand value and affection.

*Dean Ornish, TED conference 2006

Related posts:

1. Why is Wal-Mart Offering Environmental Audits to Government?
2. Is Wal-Mart saving the planet?
3. Retailers & Fortune’s Accountable 100

A few years ago the UN assessed the value of the stuff nature gives us for free (clean air, humidity, water, resources, fertile soil, etc.), and it dwarfed all the economic activity at the time (and that was before the economy lost tens of trillions of dollars of value…). In the assessment was the notion that as we deplete resources, and degrade air, water and land, we will have to develop systems that clean up the environment, or that replicate its services. So the value of what nature gives us is described in terms of the cost of generating it (either by restoring nature or by replacing the function).

Nature does it cheaper
It was quickly clear that nature does it more cheaply. Much more cheaply. So much so that enlightened planners in companies and cities have figured out who to pay how much in order to get the service from nature rather than industry.

A case:
New York City’s water had historically come from the Catskill mountains to the North. Due to suburbanisation, changes in forestry and farming practices, and other generalised environmental impacts, the water quality was degrading. The City looked into the cost of building a filtration plant: roughly $6 billion to build the plant plus another $250 million per year for maintenance. (in 2003 dollars). Instead, the City worked out an arrangement with farmers whereby the farmers were paid to farm in such a way that their land served as a filter for water, and the water that arrived in New York was clean (dubbed the “champagne” of water). This cost the city $167 million/year – a fraction of the maintenance and depreciation costs of a filtration plant.

Now governments are wondering how to ensure you pay for your impact on the ecosystem and its servises.
The example above is of a stakeholder (the City of New York) seeking to conserve the quality of a particular ‘product’ (clean water). Similar programmes have been established by bottled water companies to guarantee the quality of the water they bottle. However now, governments are seeking to find ways to get a range of services/depletions to be paid for, including the following:

• Taxes and user fees for externalities – such as overfertilising leading to nutrients leaching into lakes and rivers, and fostering so much growth that effectively there is no oxygen and most animals and many plants die off.

• Creating markets like the EU cap & trade system For example, limit the amount of nutrients that can be “released” through fertilization to encourage more judicious use of fertilisers and cleverer means of application that did not result in run-off.

• Payment for ecosystem services A government could set a price for each service – and you pay according to the degree of your impact.

• Certification schemes: Today current certification schemes for sustainable fisheries (e.g. Marine Stewardship Council) and forest practices (e.g. Forest Stewardship Council) provide people, retailers amd branded goods companies, with the opportunity to promote sustainability through their consumption choices.

A working system is already in place in Costa Rica and, for cap & trade and offsets, in the EU.
In 1996 Costa Rica established a nationwide system of conservation payments as inducement to landowners to provide ecosystem services. Costa Rica brokers contracts between buyers and sellers of sequestered carbon, biodiversity, watershed services, and scenic beauty. There is also talk of “biodiversity offsets,” whereby developers would pay for conservation activities as compensation for the harm that their projects cause to biodiversity.

With a new President, a new attitude and even greater pressures, the likelihood that some of these elements will be put into practice is increased. The question for you is, how can you estimate today the extent of your impacts, and how to reduce them so that those kinds of fees just wouldn’t apply to you? After all, it will be cheaper for you to drive your agenda on your own scale today, then wait for the rules to fall and herd with your competitors to the payment lines.

ren-new can help you determine the scale of your impacts, and work through scenarios on the implications to your business. We can also take a look at how you could use those resources to your advantage instead – meeting future requirements in a way that brings benefits today.

Resources of interest:

• http://ecosystemmarketplace.com
• http://speciesbanking.com/

Related posts:

1. Lobbying: a proven way to lose money?
2. Is your company about to lose the platform it’s built on?
3. Women’s International Input for COP15 Meeting in Copenhagen