How changing sustainable production could take us to Mars

First published by World Economic Forum, 4 January, 2017.

In September 2016, SpaceX founder Elon Musk announced that we could have human missions to Mars as soon as 2022. One side effect – apart from pushing the frontiers of space travel – is that it will challenge us to design and perfect various systems of sustainable production. The reason is quite simple: Mars is a barren, hostile planet, where all life support systems – from food and water to air and energy – will need to be artificially made and sustained, mostly using the limited resources the crew take with them.

In essence, what Musk and his space cadets will be trying to do is replicate what nature already does for us here on earth: creating an intelligent biosystem that can endlessly reuse or recycle resources in a way that allows life to survive and, ultimately, to thrive. This is the same idea that underlies the philosophy of sustainable production – albeit that the motivation and applied context is different – and it is by no means a new idea.

1960s and 1970s: recognising limits

In the 1960s and 1970s, a growing cadre of concerned scientists, economists and activists began warning us of the dire impacts of the exponential growth in our consumption of resources and the associated proliferation of toxins, waste and pollution. This included the likes of: Rachel Carson, author of Silent Spring, 1962; Barbara Ward, author of Spaceship Earth, 1965; Buckminster Fuller, author of Operating Manual for Spaceship Earth, 1969; and the Club of Rome, authors of the ground-breaking Limits to Growth study, 1972.

Ironically, “spaceship earth” thinking is exactly what Elon Musk and SpaceX are going to have to apply on Mars. It recognizes the fact that we live with limited resources on one planet that acts as a “metabolic, regenerating system”, as Fuller described it, or a “living, self-regulating organism” in the words of NASA scientist, James Lovelock, who named this the Gaia theory.

Unfortunately, we have been living (and hence producing and consuming), as if we were in a “cowboy economy”, rather than a “spaceman economy”, according to economist Kenneth Boulding. The cowboy, Boulding explained in 1966, is “symbolic of the illimitable plains and also associated with reckless, exploitative, romantic, and violent behaviour”, while the spaceman represents the recognition of the earth as “a single spaceship, without unlimited reservoirs of anything, either for extraction or for pollution.”

The logical conclusion of accepting such a world of limits is, says Boulding, that humanity “must find its place in a cyclical ecological system which is capable of continuous reproduction of material form even though it cannot escape having inputs of energy.” Walter Stahel, an architect and industrial analyst, added meat to the bones of Boulding’s vision by proposing, in a 1976 report to the European Commission, a “closed loop” approach to production processes. He called this “cradle to cradle” and developed it further through the Product Life Institute, which he founded in Geneva.

At the same time that these concerns and philosophical ideas were gaining traction, a more pragmatic solution was also emerging. At the World Energy Conference in 1963, Harold Smith proposed looking at a “cumulative energy concept”, which laid the foundations for life cycle analysis/assessment (LCA). In 1969, Coca-Cola extended this idea by assessing the resource and pollution impacts of different beverage containers. This emergent methodology became known as a Resource and Environmental Profile Analysis (REPA) in the US and as an Ecobalance in Europe.

1980s and 1990s: rethinking production

In the 1980s, while LCA gained momentum, a related concept called industrial ecology emerged. It was popularized in 1989 in a Scientific American article by Robert Frosch and Nicholas E. Gallopoulos, in which they declared: “Why would not our industrial system behave like an ecosystem, where the wastes of a species may be resources to another species? Why would not the outputs of an industry be the inputs of another, thus reducing use of raw materials, pollution, and saving on waste treatment?”

Industrial ecology, therefore, proposes that businesses should not only look at the life cycle impacts of individual products of individual companies, but also look for ways in which to link up with other businesses to minimize their impacts. The Danish industrial park in the city of Kalundborg is a classic example, where a power plant, oil refinery, pharmaceutical plant, plasterboard factory, enzyme manufacturer, waste management company and the city itself, all link together to share and utilize resources, by-products, energy and waste heat.

Meanwhile, life cycle assessment was becoming so popular that, in 1991, eleven state attorney generals in the US expressed concerns that the method was being used to make misleading green claims. This concern, together with pressure from elsewhere in the world, led to the development of two LCA standards as part of the International Standards Organization (ISO) 14000 series: ISO 14041:1998 on Life cycle assessment (goal and scope definition and inventory analysis); and ISO 14043:2000 on Life cycle interpretation.

Another concept that was gaining popularity around the same time was cleaner production, promoted by institutions like the OECD and UNIDO and resulting in the UNEP Declaration on Cleaner Production in 1998, in which they defined cleaner production as “the continuous application of an integrated, preventive strategy applied to processes, products and services in pursuit of economic, social, health, safety and environmental benefits.” To support its application, UNEP and UNIDO collaborated to set up a global network of National Cleaner Production Centres (NCPCs) in the 1990s.

2000s and 2010s: a new industrial revolution

In the new millennium cleaner production continued to spread, receiving further endorsement at the UN’s 2002 World Summit on Sustainable Development in Johannesburg, South Africa. In 2010, UNEP and UNIDO also revived the NCPCs with the launch of a Resource Efficient and Cleaner Production network (RECPnet), with 41 founding members. This reinvigorated the practice of eco-efficiency, which the World Business Council for Sustainable Development had been championing since the 1992 Rio Earth Summit. It also introduced decoupling as a goal, referring to the need to delink economic growth and environmental degradation.

The EU government meanwhile began working with business to create product roadmapping as a way of systematizing the application of LCA in different industries. This culminated in the adoption, in 2003, of the EU’s Integrated Product Policy (IPP) to promote conducting LCAs with a view to potential policy interventions. Two familiar products with diverse impacts were chosen by the EU to demonstrate IPP: one was a mobile phone, put forward by Nokia; the other, a teak garden chair from Europe’s largest retailer, Carrefour.

While these multilateral efforts were going on, sustainable production really began to catch the imagination of business after architect William McDonough and chemist Michael Braungart published their book, Cradle to Cradle: Remaking the Way We Make Things, in 2002. The cradle to cradle concept evolved from Braungart’s earlier work on lifecycle assessment with Germany’s Environmental Protection Encouragement Agency (EPEA), in which he grew disillusioned with the limitations of LCA.

Working with McDonough and applying their intelligent design insights to products and processes, they proposed a circular model of production in which there are continuous flows of biological nutrients (i.e. any renewable materials that can harmlessly go back to nature and be regenerated) and technical nutrients (i.e. any non-renewable, or manufactured materials that are not biodegradable, but remain useful if returned and reused in the production of products).

The future: towards a circular model

Today, “cradle to cradle” has been adapted, promoted and mainstreamed as a circular economy approach, which relies on sustainable production as a key link in the chain. The way I like to describe it is that we are now moving from an old industrial model, in which we take, make, use and waste, to a new “syndustrial” model (designed for industrial and ecological synergies), in which we borrow, create, benefit and return.

In the old linear industrial model, business and consumers take, make, use and waste. We take by depleting non-renewable resources and over-using renewable resources, and by striving for limitless economic growth. We make by producing any products and services that the market demands and persuading customers to buy and consume more. We use by buying more than needed, leading to over-consumption and by individually owning what could be shared. Finally, we waste by turning consumed products into trash and pollution and by creating toxins and impacts that harm people and nature.

By contrast, in the new circular “syndustrial” model, in which we design for industrial synergy, business and consumers borrow, create, benefit and return. We borrow by conserving all natural resources and increasing renewable resource use; and we create by designing and making products with no negative impact and innovating products with positive impact.

For example, Novamont, as an Italian producer of bio-based plastics and biodegradable plastics, has adopted a renew and refine strategy. Among their clients are the global coffee company Lavazza, which now sells compostable coffee capsules that Novamont have produced, which biodegrade within 20-40 days. Similarly, BioGen in the UK has a renew and restore strategy, producing renewable energy (biogas) from food waste and then using the waste slurry as bio-fertilizer, which has been shown to produce higher crop yields when compared with chemical fertilizers.

In the new “syndustrial” model, we benefit by extending a product’s life, by repairing and reusing and by leasing and sharing. We return by using end-of-first-life materials to recreate the same products and to create new products.

For example, Caterpillar, the heavy machinery company, has pursued a reuse strategy through their Remanufacturing Centre in South Africa (the second largest in the world), which is designed to rebuild “as new” CAT components for 20-60% less than the cost of replacing with new parts. Similarly, Dutch aWEARness in the Netherlands is one of the first textile companies to make fully “circular” clothes, thus demonstrating a true recycle strategy. For example, their WearEver suits are made from 100% recyclable polyester, which can be turned back into a suit at least 8 times, giving a total life for the materials of 40-50 years.

Tetrapak in Ecuador is part of a reinvent strategy, whereby beverage packaging waste is being upcycled by an independent company into a range of high quality products, such as corrugated roofing, furniture, tabletops and jewellery. Similarly, REDISA in South Africa is managing the recovery and reprocessing of 70% of waste tyres in South Africa into a variety of rubber and steel products, while creating more than 3,000 jobs.

These examples are all featured cases in a forthcoming documentary called Closing the Loop, due for release in 2017. By adopting and scaling these new business models, we can achieve a transformative sustainable and social responsibility, which focuses its activities on identifying and tackling the root causes of our present unsustainability and irresponsibility.

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Visser, W. (2017) How changing sustainable production could take us to Mars, World Economic Forum, 4 Jan.

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Synergy: The Driver of Integrated Value in the New Nexus Economy

First published by HuffPost, 10 April, 2017.

We are at a unique moment in history, when five economic trends are coming together into a Nexus Economy that is rapidly transforming our world for the better.

Source: Wayne Visser (2017) Nexus Economy Framework

The Resilience Economy includes all the defensive expenditures and investments that lower risks in society, from property insurance and health and safety controls to flood defences and emergency response training. The Stockholm Resilience Centre defines resilience as “the capacity of a system, be it an individual, a forest, a city or an economy, to deal with change and continue to develop. It is about how humans and nature can use shocks and disturbances like a financial crisis or climate change to spur renewal and innovative thinking.” As we enter a period of greater turbulence, we expect the resilience economy to grow as a strategy to survive and thrive.

The Digital Economy includes all the technological expenditures and investments that increase connectivity and intelligence in society, from high-speed internet and The Internet-of-Things to MOOCs (massive open online courses) and artificial intelligence. The increased use of digital technologies could add $1.36 trillion to total global economic output in 2020, according to a recent study by Accenture and Oxford Economics (that’s the same size as the whole South Korean economy). The World Economic Forum calls this the Fourth Industrial Revolution and describes it as a “blurring the lines between the physical, digital, and biological spheres”, which is growing exponentially.

The Access Economy includes all the expenditures and investments on shared services that increase efficient utilisation of assets, resources and capacity, from car-sharing (like Zipcar) and “couch surfing” (Air BnB) to entertainment streaming (Netflix) and crowdfunding (Kickstarter). The access economy (a term promoted by Harvard Business Review to suggest that customers increasingly want utilitarian value from accessing benefits from a product or service, rather than social value from intimate exchanges) is also known as the sharing economy, peer-to-peer marketplace, or collaborative consumption. PwC estimates the access economy may be worth $335 billion by 2025.

The Circular Economy includes all the expenditures and investments that decouple economic growth from environmental impact by ‘closing the loop’ on resource and energy flows, from waste recycling and biodegradable plastics to renewable energy and biomimicry designs. The circular economy draws on an evolution of concepts and practices since the 1960s that include ‘spaceship earth’ thinking, eco-balance, life cycle analysis, industrial ecology, industrial symbiosis, cleaner production, eco-innovation and cradle to cradle. In the book Waste to Wealth, based on analysis by Accenture, the circular economy opportunity is valued at $4.5 trillion by 2030.

The Wellbeing Economy includes all expenditures and investments that increase human health and happiness in society, from stress-relief practices and life coaching to plant-based diets and solutions to social diseases (like crime, inequality, suicide, domestic violence). There are various national indicators that have been created to demonstrate the limitations of economic growth as an indicator of progress in society, by measuring human wellbeing instead, such as the Social Progress Index, the Happy Planet Index and the OECD Better Life Initiative. As we become more conscious of the health impacts of lifestyle, consumerism, diet and pollution, the wellbeing economy is set to grow rapidly.

Each of these economic trends have spawned an aligned business strategy in response to the opportunities that they represent. Each on their own is a strategy for future-fitness.

Source: Wayne Visser (2017) 5-S Synergies for Creating Integrated Value Framework

A Safe Strategy is one in which our organisations, communities, cities and countries do not damage our health and wellbeing; rather, they minimize our exposure to toxins, sickness, disease and danger, allowing us to feel physically and psychologically secure. The test question is: to what extent does your organisation protect and care for us, i.e. your stakeholders? Keywords are: healthy, secure, resilient. Example indicators include: occupational health & safety, toxicity, risk, and emergency preparedness.

A Smart Strategy is one in which our organisations, communities, cities and countries use technology to better connect us to each other and allow us to share what we value most, and facilitate more democratic governance by allowing us (as customers or citizens) to give direct, immediate feedback. The test question is: to what extent does your organisation connect and empower us? Keywords are: educated, connected, responsive. Example indicators include: connectivity, access to knowledge, and R&D investment.

A Shared Strategy is one in which our organisations, communities, cities and countries address issues of equity and access by being transparent about the distribution of value in society and working to ensure that benefits are fairly shared and diversity is respected. The test question is: to what extent does your organisation include and value us? Keywords are: fair, diverse, inclusive. Example indicators include: value distribution, stakeholder participation, and diversity.

A Sustainable Strategy is one in which our organisations, communities, cities and countries operate within the limits of the planet by radically changing resource consumption and ecosystem impacts, with a shift to renewable energy and resources, closing the loop on production and moving to a low carbon society. The test question is: to what extent does your organisation protect and restore our environment? Keywords are: renewable, enduring, evolutionary. Example indicators include: externality pricing, footprint analysis, and renewability.

A Satisfying Strategy is one in which our organisations, communities, cities and countries produce high quality services that satisfy our human needs, as well as enabling a lifestyle and culture that values quality of life, happiness and other indicators of wellbeing. The test question is: to what extent does your organisation fulfil and inspire us? Keywords are: beneficial, beautiful, meaningful. Example indicators include: quality standards, levels of satisfaction, and happiness.

Source: Wayne Visser (2017) Strategic Value Creation Matrix

When an organisation, community, city or country pursues one of the 5-S strategies, they are making themselves future-fit. There are four strategic value-creation options available: singular, focused, diffuse and integrate value.

Singular Value is when an organisation focuses on one of the 5-Ss as its strategic goal, but does so in an incremental way. This means they will have a management system (objectives, targets, programs, KPIs, reporting, audits, etc), but they are content to make a marginal contribution on the issue. The potential for synergy is low, because they are only focused on one S. For example, a chemicals company may decide that a Safe strategy is key for their success.

Diffuse Value is when an organisation focuses on multiple of the 5-Ss as strategic goals, but does so in an incremental way. This means they will have a management system, but they are content to make a marginal contributions on the issues they have prioritised. The potential for synergy is high, because they are looking to leverage more than one S at a time. For example, a mining company may decide that a dual Safe and Sustainable strategy is key for their success.

Focused Value is when an organisation focuses on one of the 5-Ss as its strategic goal, but does so in a transformative way. This means they will have a disruptive innovation approach, and they will only be content with rapid, scalable change on the issue, especially within their industry. The potential for synergy is low, because they are only focused on one S. For example, a food and agricultural company may decide that a Shared strategy is fundamental and they wish to completely transform the lives of farmers in their supply chain.

Integrated Value is when an organisation focuses on multiple of the 5-Ss as strategic goals, but does so in a transformative way. This means they will have a disruptive innovation approach, and they will only be content with rapid, scalable change on the issues, within and beyond their industry. The potential for synergy is high, because they are looking to leverage more than one S at a time. For example, an electric car company may adopt an integrated 5-S strategy that takes Safe, Smart, Shared, Sustainable and Satisfying to a completely new level of performance.

The way in which Integrated Value manifests – when more than one of the 5-S strategies is applied simultaneously in a transformative way – is through synergy, which American professor Russell Ackoff described in his studies of purposeful organisations as “the increase in the value of the parts of a system that derives from their being parts of the system”. We know this more commonly by the catchphrase: the whole is greater than the sum of the parts. Synergy is the driver of the new Nexus Economy and will be the key to competitiveness in the coming decade.

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Visser, W. (2017) Synergy: The Driver of Integrated Value in the New Nexus Economy, HuffPost, 10 April, 2017.

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Mind the Gap: Seven Reasons Why We Pursue Self-Destruction by Failing to Act on Sustainability

Mind the Gap: Seven Reasons Why We Pursue Self-Destruction by Failing to Act on Sustainability

Article by Wayne Visser

First published on Huffington Post

I recently watched two sustainability documentaries – Cowspiracy, about the devastating environmental impacts of the agricultural industry and our meat-and-dairy intensive diets, and Before the Flood, Leonard Di Caprio’s impassioned plea for us to realise the seriousness of climate change and take urgent action.

Both films got me thinking about why we as human beings are so bad at acting on sustainability, when failure to do so threatens our own wellbeing, not to mention the lives of billions of other people and species. We truly are living in ‘The Age of Stupid’ (as another sustainability documentary put it), but why?

We are not stupid. We are incredibly smart and we can be amazingly compassionate. What’s more, we are more knowledgeable, connected and empowered than ever before. So why do we act as if we are dumb? Why are we consciously speeding our own demise and the sixth mass extinction?

Mind the Gap

On reflection, I believe that our inaction in the face of sustainability threats is due to a breakdown between causes and effects. Evolution has hardwired us to understand the impact of our actions –fight or flight in the face of danger is a case in point – but sometimes this survival instinct fails. And as far as I can tell, it fails for one of seven reasons:

1. The Time Gap

Our actions now may only have impacts in the future.

So there is a lag or delay between cause and effect. And we would rather choose certain pleasure now, even if it means possible pain from the impacts later. For example, we may choose to smoke or eat an unhealthy diet of fast foods or processed foods today, even though it will most likely cause cancer, obesity, heart disease, diabetes or a stroke later in life.

2. The Distance Gap

Our local actions may only have impacts somewhere else.

Or our actions may impact someone else who we don’t care about. So there is a physical dislocation or an emotional disconnect between cause and effect. For example, we are quite willing to buy a cheap T-shirt from our favourite discount store, even though it probably means it was manufactured under sweatshop conditions in Asia.

3. The Scale Gap

Our individual actions may be fairly benign but still have collectively destructive impacts.

Or we may not believe that changing our individual actions will result in any significant change to our collective impacts. For example, consuming palm-oil (in one-in-ten of the products we buy) does not seem individually irresponsible, even though it is causing tropical rainforest deforestation at a catastrophic scale in Indonesia and Malaysia.

4. The Cost-Benefit Gap

The perceived benefit of our actions may exceed the perceived cost of our impacts (for ourselves or others).

We may also believe we can avoid or isolate ourselves from the impacts of our actions, or mitigate against their effects. For example, the convenience of driving a petrol (gasoline) car seems to far outweigh the effort of cycling, taking a train or the investment cost of buying an electric car, let alone the nebulous future impact of air pollution or climate change.

5. The Causal Gap

The link between our actions and impacts may be unclear, ambiguous or unconvincing.

So the evidence for causality between cause and effect is weak or confused by contradictory opinions. For example, people may wonder: is my consumption of fossil fuel energy really linked to the increasing frequency and intensity of hurricanes across the world? Maybe that’s just from El Niño or El Niña. Besides, we just had a cold winter. And wasn’t there some manipulation of the climate data anyway?

6. The Incentive Gap

There may be a lack of incentives to be accountable for the impacts of our actions.

Or there may even be perverse incentives, which nudge us in the wrong direction. So we are not being rewarded or punished appropriately. For example, why should I pay more for sustainable products and green electricity, while the government is subsidising the agro-industrial and fossil fuel companies? And how can I be expected to make long-term decisions for the planet when my shareholders are only looking at the next quarter?

7. The Belief Gap

Accepting the impacts of our actions may contradict our ideological beliefs or vested interests.

So there is a paradigm conflict between cause and effect, resulting in an ‘inconvenient truth’. For example, people may reason: why should we welcome refugees if we believe they are a threat to our security, jobs and culture? Or why become vegetarian or vegan when eating meat is so much a part of our lifestyle and cultural identity?

Bridging the Gap

These seven cause-and-effect gaps are the keys to changing humanity’s kamikaze-like death spiral of self-destruction. For it is only by acknowledging each of these psychological drivers – and finding ways to bridge the gaps they represent – that will stand any chance of overcoming our present failure to act decisively on sustainability. So what might bridging strategies look like? Here are a few ideas to get the ball rolling:

  1. The Time Gap – Appeal to intergenerational responsibility, since people do care about whether their actions will harm their children and grandchildren’s future. Also, make likely future impacts as visual and visceral as possible, using multi-media.
  2. The Distance Gap – Encourage educational travel and emphasise our common humanity. Show that someone living in China or South Africa or the United States is really not that different to us; they feel the same emotions and they share similar struggles and aspirations.
  3. The Scale Gap – Focus on individual responsibility (Gandhi’s ‘be the change you want to see in the world’) and explain how tipping points work, namely that large-scale change can happen when a significant minority changes (research on flocking suggests as little as 10%).
  4. The CostBenefit Gap – Work hard to make the full costs and full benefits clear. This means improving not only the business case for sustainability, but also the personal case and the moral case. We need to get better at ‘selling’ the upside of sustainable living.
  5. The Causal Gap – Improve the traceability of products and materials and tell the story of products, including their journey across the full life cycle, as Patagonia did with their Footprint Chronicles. Communicate the evidence of causal links between consumption and sustainability impacts.
  6. The Incentive Gap – Lobby governments to correct perverse incentives, tax unsustainable or irresponsible economic activity and subsidise clean, green and ethical technologies and products. Also, find ways to reward customers for making more sustainable choices.
  7. The Belief Gap – Expose the vested interests of companies, politicians and the media and challenge inconsistencies between the actions of groups and their professed values. Also, give people a positive alternative belief system. We need a compelling mythology (meta-narrative) of sustainability.

Together, we need to figure out the best strategies for bridging each of these seven gaps and so I welcome your thoughts and suggestions. What have you found works best in engaging people to take action on sustainability? And what doesn’t work? If we learn from each other, we can turn the Age of Stupid into the Age of Inspiration!

 

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Visser, W. (2016) Mind the Gap: Seven Reasons Why We Pursue Self-Destruction by Failing to Act on Sustainability, Huffington Post, 8 Nov.

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Closing the Loop: The New Syndustrial Revolution

Closing the Loop: The New Syndustrial Revolution

Article by Wayne Visser

First published on Huffington Post

The Industrial Revolution – a term popularised by English economic historian Arnold Toynbee – signalled the seismic shift from a predominantly agrarian, subsistence-based economy to an increasingly mechanised, market-based economy, following the invention of the steam engine. The Information Revolution of the 20th century marked another fundamental shift, driven by computers and the internet.

Now, once again, our industrial society is transforming though what I call the Syndustrial Revolution (or Integration Revolution), which is the confluence of innovation driven by smart, sharing and renewable technologies. We see this disruptive change occurring along intersecting fault-lines, namely the shifts from an atomised to a networked economy, from a surfeit to a sharing economy and from a linear to a circular economy.

The Syndustrial Revolution – and in particular the shift from a linear to a circular economy – is the subject of a feature-length documentary called Closing the Loop, which I am currently filming together with Emmy Award winning director, Graham Sheldon. For the past 8 months, we have been visiting pioneers and prophets of the Syndustrial Revolution from around the world to record their stories and predictions. In this Closing the Loop article series, I will be sharing the insights we have gained from these practitioners and thought-leaders.

More specifically, I will be unpacking what the Syndustrial Revolution really means, i.e. the business models behind the smart, sharing and circular economies. And I will be showing how companies and governments around the world are already taking steps to tap into this market opportunity, which Accenture analysis in Waste to Wealth by Jakob Rutqvist and Peter Lacy suggests could be worth at least $4.5 trillion by 2030.

Seeding the Next Industrial Revolution

To get us started, it is worth paying tribute to some of the intellectual progenitors of the Syndustrial Revolution. For example, British economist Kenneth Boulding introduced the concept of a ‘spaceship economy’ in 1966:

“… in which the earth has become a single spaceship, without unlimited reservoirs of anything, either for extraction or for pollution, and in which, therefore, man must find his place in a cyclical ecological system which is capable of continuous reproduction of material form even though it cannot escape having inputs of energy.”

Fast-forwarding through the decades, we then saw the practice of life cycle analysis emerging in the 1970s (promoted by the US Environmental Protection Agency), industrial ecology in the 1980s (popularised by Robert Frosch and Nicholas E. Gallopoulos), cleaner production in the 1990s (promoted by the UN Environment Programme), cradle to cradle in the 2000s (conceived by William McDonough and Michael Braungart) and now, the closed-loop, or circular economy (being championed variously by the Ellen MacArthur Foundation, World Economic Forum and UN Global Compact’s Breakthrough Project).

The sharing economy – a term popularised by Harvard law professors Yochai Benkler and Lawrence Lessig around 2004-2008 – also has deep roots, stretching back to concepts of the civil economy, co-operative movement and social economy (all coming into usage in the 1700s), and more recently, ideas around collaborative consumption in the 1970s (introduced by Marcus Felson and Joe L. Spaeth), the love economy (Hazel Henderson) and local exchange trading systems (Michael Linton) in the 1980s and transition towns (Louise Rooney and Catherine Dunne) and wikinomics (Don Tapscott and Anthony D. Williams) in the 2000s.

So what is this Syndustrial Revolution really? Is it smart cities and autonomous networked cars? Is recycling, or upcycling or zero-waste initiatives? Is it ride-sharing services like Uber and Lyft? Is it the shift from buying products to leasing services? Is it moving from a take-make-waste linear economy to a circular economy? In fact, it is all these things and more, which is what makes it so confusing, not to mention jargon-laden.

In Search of a New Industrial Paradigm

So I’d like to propose a simple model, which I will use to frame our discussion in this series. I call it the New Syndustrial Model, because it is really a new economic paradigm and set of business models to create better synergies in our industrial society. A high-synergy society does not build economic capital by destroying natural capital, eroding social capital and exploiting human capital in the way that our current win-lose-lose-lose capitalist system does.

In the Old Industrial Model (see Figure 1), we take, make, use and waste:

  • We Take – by depleting non-renewable resources and over-using renewable resources (Extract) and by striving for limitless economic growth (Expand);
  • We Make – by producing any products and services that the market demands (Produce) and persuading customers to buy and consume more (Promote);
  • We Use – by buying more than needed, leading to overconsumption (Consume) and by individually owning what could be shared (Collect); and
  • We Waste – by turning consumed products into trash and pollution (Dump) and by creating toxins and impacts that harm people and nature (Damage)
Old Linear Industrial Model

In the New Syndustrial Model (see Figure 2), we borrow, create, benefit and return:

  • We Borrow – by conserving all natural resources (Reduce) and increasing renewable resource use (Renew);
  • We Create – by designing and making products with no negative impact (Refine) and innovating products with positive impact (Restore);
  • We Benefit – by extending product life through repairing and reusing (Reuse) and by improving product use through leasing and sharing (Redistribute); and
  • We Return – by using end-of-first-life (EOFL) materials to recreate the same products (Recycle) and to create new products (Reinvent).

Over the coming weeks and months, I will use this model to share what we have discovered during our filming of Closing the Loop. To be sure, many companies and economies are still stuck in the Old Industrial Model and we have a long way to go before we reach the New Syndustrial Model, but our explorations have showed that not only is it possible and preferrable, but that this new industrial revolution is already happening.

 

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Visser, W. (2016) Closing the Loop: The New Syndustrial Revolution, Huffington Post, 17 Oct.

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Cowboys, spaceships and CSR 2.0

Cowboys, spaceships and CSR 2.0

Article by Wayne Visser

Written for GreenBiz.

The following is a synopsis of Sustainable Frontiers by Wayne Visser, from Greenleaf Publishing

When we think of frontiers, two images often come to mind: cowboys and space.

And as it happens, both hold clues to how the world is simultaneously facing the most severe crisis since the threat of nuclear annihilation and being reinvented through business pushing the boundaries of possible solutions.

One of the first to realize that a radical rethink was necessary was U.S. economist Kenneth Boulding.

In 1964, Boulding described how most companies behave as if they are riding on the infinite plains of a “cowboy economy,” where there are no restrictions on growth, resource consumption or waste generation. Their endless appetite for expansion and profits is seen as just reward for being the “quickest draw” in a free market where gunslingers are king.

A few short years later, the 1972 Limits to Growth study aimed its foreboding critique directly at those cowboy executives who thought that the good times could last forever. It is not surprising that space — “the final frontier” — also has captured the public imagination, with Kennedy’s Apollo mission finally succeeding in putting a man on the moon in 1969.

Once again, Boulding had foreseen the power of this metaphor and proposed the “spaceman economy” as an alternative to the reckless “live-fast, die-young” model of the “cowboy economy.” These were some of our first glimpses — along with Barbara Ward and Buckminster Fuller’s “spaceship earth” metaphor — of the sustainability frontier.

Now, over 50 years later, the cowboys are still with us and, if anything, they are bigger and more dangerous, with their multinational reach and multibillion-dollar budgets.

But sustainability also had advanced rapidly and is now pushing the limits. In fact, sustainability is now fundamentally changing the way business functions in society across eight vital frontiers.

In “Sustainable Frontiers,” I explore how we must find ways to let go of an industrial system that has served us well, but is no longer fit for purpose.

Sustainability frontiers

The Transformational Leadership Frontier is where we are starting to understand that all change begins with leaders who are willing to place an inspiring purpose at the heart of their company’s mission.

In research I conducted with Cambridge University, we identified key characteristics of leaders for sustainability. Yet a study by Cranfield University shows there is still a massive generation gap between current and future leaders’ belief that they are adequately delivering a social purpose through business.

The Enterprise Reform Frontier is about the wave of alternative business structures that are challenging the notion that companies must exist exclusively to serve shareholders and make profits.

Whether it is the hundreds of thousands of cooperatives that employ 250 million people worldwide, or the 1,200-plus new brand of B Corps (for benefit corporations), we are learning that we can remake companies to reflect our values and to drive positive change in society.

Online fashion retailer Zappos is a good case in point, with their promotion of “holacracy” as a self-organizing company structure, where they have a hierarchy of purpose rather than a hierarchy of management.

The Technology Innovation Frontier is where breakthroughs in process and product design are making the aspirational goals of zero negative or net positive impact less of a dream and more of a reality.

This is also where we are learning about the power of collaborative, open innovation, whether from X-Prize or Virgin Earth Challenge type initiatives, or from multi-stakeholder partnerships such as the Cassava: Adding Value for Africa (C:AVA) Project.

The Corporate Transparency Frontier is driving reporting down to a full value chain, product lifecycle level, with early runners such as Patagonia’s Footprint Chronicles and Nike’s “Making” App, powered by the Nike Materials Sustainability Index (MSI), a database that was created using publicly available data on the environmental impacts of materials.

Meanwhile, transparency in the supply chain is being championed by sites such as Howstuffismade.org and Things.info.

The Stakeholder Engagement Frontier tracks how social media is changing the game of how companies interact with interested and affected parties.

Crowdsourcing platforms such as Convetit and Wikipositive are providing a new way to consult with experts on social, environmental and ethical issues, while self-organizing activist sites such as Knowmore, Star Communities and Wikirate.org are raising the knowledge and power of customers and communities.

The Social Responsibility Frontier is rapidly shedding old-style defensive, charitable and promotional CSR in favor of more strategic and transformative approaches. Companies around the world are applying the five tests of CSR 2.0 — creativity, scalability, responsiveness, glocality and circularity — with hotels such as Kandalama and garment manufacturers such as Bodyline in Sri Lanka showing that transformative CSR is not just a Western phenomenon.

The Integrated Value Frontier is showing that companies can go beyond integrated reporting to integrating social, environmental and ethical criteria across their whole business — from stakeholder needs assessment and leadership goals alignment, to risk and opportunity analysis, business process redesign and management systems integration. As the name suggests, integrated value creation is also good for business — cutting costs, increasing stakeholder satisfaction and growing new markets.

Finally, the Future Fitness Frontier is where businesses are developing compelling visions for a better world — that is safe, smart, sustainable, shared and satisfying.

Take Elon Musk’s vision, for example, which is to “help expedite the move from a mine-and-burn hydrocarbon economy toward a solar electric economy” through Tesla Motors — and now also Tesla Energy.

Simultaneously, business is developing resilience strategies for coping with a more volatile future.

Let it go

So much of making a successful transition to a more sustainable future depends on letting go.

How we will need to let go of old styles of leadership and outdated models of business, along with high-impact lifestyles and selfish values. How we must learn to let go of cherished ideologies that are causing destruction and beliefs about ways to tackle problems that are failing to resolve crises.

It is no wonder that we are scared to let go. Many of us are comfortable clinging to our consumptive habits and selfish behaviors. Besides, the future is uncertain — and our greatest fear as humans is a fear of the unknown. We would rather trust (and fight to protect) the present we know than gamble on the future we don’t know.

And yet, as academic Jarred Diamond has documented in Collapse, civilizations that fail to change are civilizations that ultimately fall. Similarly, historian Arnold Toynbee points out that the decline of civilizations starts with the failure to open the public and political mind to new possibilities.

People become trapped in a paradigm — literally, a pattern of thinking — and are closed to a different, emergent worldview, despite mounting evidence supporting the new reality.

If we are to reach sustainable frontiers, therefore, it must begin with changing our collective minds — and only then will we change our collective behavior. How we accomplish such a global mind-shift is the subject of this book.

It starts by admitting that those of us at the vanguard of the sustainability revolution also have to change. We will have to let go of cherished beliefs and strategies that are not working — starting with the way we communicate our vital, life-saving mission.

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Visser, W. (2015) Cowboys, spaceships and CSR 2.0, GreenBiz, 23 May 2015.

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Top 10 web trends shaping the future of sustainable business

Top 10 web trends shaping the future of sustainable business

Article by Wayne Visser

Written for The Guardian.

Web 2.0 is not just about sharing photos on Facebook. It is a new mindset focused on collective intelligence and co-creation.

Web 2.0, or the ability to share and manipulate information online through user collaboration, has had a disruptive effect on business. Customers now expect to participate in the corporate world, and place a greater value on transparency in return.

This new environment, termed “wikinomics” by Don Tapscott and Anthony Williams, is based on four principles: openness, peering, sharing and acting globally. Here are the top 10 ways that web 2.0 technologies and digital cultures will impact on business, driving them towards more sustainable behaviour during the next decade.

1. Net value footprinting

Business has evolved over the past two decades from being highly opaque to gradually embracing more transparent practices. This has been a result of regulation, such as the Toxic Release Inventory in the US, which requires thousands of American companies to report their use of more than 650 toxic chemicals, and voluntary efforts including the Global Reporting Initiative’s sustainability guidelines.

But in a web 2.0 world, companies are expected to measure and disclose their impact across the entire lifecycle of their products. This process of quantifying business’s economic, social and environmental costs to society is sometimes called full-cost accounting. I call it “net value footprinting”. Good examples of this approach include Puma’s environmental profit and loss statement and the research carried out by Global Footprint Network.

2. Forensic impact analysis

While progressive companies are steadily improving their transparency, there will also be millions of irresponsible companies trying to fly under the radar of regulation and public scrutiny, running polluting operations that expolot cheap labour and abuse human rights.

These rogue businesses can now be caught and exposed through the emerging practice of forensic impact analysis. This will happen through a combination of traceability technology (which finds the electronic footprints left by all businesses in the supply chain), forensic substance analysis (which can identify the source of fibres, chemicals and other product components) and vigilant activists and consumers who capture malpractices using photographs, videos and audio recordings leaked via social media.

This approach has been pioneered in the food industry, where reputable businesses use barcodes to monitor and qualify every stage of their production process. Tracking techniques were also used to expose Trafigura’s dumping of toxic waste along the Ivory Coast.

3. Crowdsourcing

Companies from the pre-digital age still believe that focus groups, public meetings, stakeholder panels and the occasional online or instore survey are adequate for taking the pulse of their customers and investors. At the same time, they are often distrustful of ideas suggested outside their organisations.

By contrast, web 2.0 savvy companies realise that the world has moved into an era of crowdsourcing. Future businesses will use filtered, or expert, crowds to monitor their reputation, get feedback on sustainable innovations and ask for help in solving difficult dilemmas. For example, Sony’s Open Planet Ideas and FutureScapes campaigns aimed to generate new sustainable technology ideas.

4. Disruptive partnerships

Companies have had a decade to get used to the idea of cross-sector partnerships, which have been heavily promoted through the United Nations and given a boost through inclusion in the Millennium Development Goals. But now business is expected to get into more challenging partnerships that disrupt the status quo. One example is Rio Tinto working with the World Conservation Union to reduce the impact on biodiversity.

These relationships also play out online. Greenpeace used social media very effectively to campaign against Nestle’s Kit Kat brand, after finding an Indonesian supplier was clearing tropical rainforest to grow palm oil. A year later the campaign group praised Nestle for its no deforestation commitment through its challenging partnership with TFT, a sustainable forestry NGO.

5. Open sourcing

One of the biggest changes in the society over the past 10 years has been the explosion of social media. This revolution goes beyond sharing our holiday photos on Facebook or micro-blogging the minutiae of our lives on Twitter. The more fundamental innovation is a shift in thinking and practice towards open sourcing, which at its heart is about the idea of co-creation.

This has influenced good business practices. After a decade under siege – with big pharma being accused of overpricing patented brands and blocking access to cheaper, generic and often life-saving drugs – GlaxoSmithKline committed to put chemical processes that it has intellectual property rights over that are relevant to finding drugs for neglected diseases into a patent pool so they can be explored by other researchers. Similarly, Tesla’s CEO Elon Musk decided last year to open up all its patents “for the advancement of electric vehicle technology.”

6. Wiki-ratings

A common feature of web 2.0 design is that it allows users to express an opinion on content, from the ubiquitous “like” button on Facebook to the fresh-red versus rotten-green tomato movie rating system on rottentomatoes.com. When it comes to business, wiki-based platforms allow the public to rate and comment in detail on the economic, governance, social and environmental performance of companies. One such platform is Wikirate, where I serve on the advisory board, which allows for real-time updating. Any ethical infringement – or a positive sustainability innovation – will be reflected almost immediately in the company’s rating. Other pioneering examples in the ratings space are GoodGuide, WeGreen, and Project Label.

7. Prototyping

In a web 2.0 world prototypes are launched early, as imperfect versions used solicit rapid user feedback in a process known as”beta-testing”. One way to bring about such rapid, open-source prototyping is through competitions.

The X-Prize describes itself as “bringing about radical breakthroughs for the benefit of humanity” by offering multi-million dollar prizes in return for innovative ideas to tackle global problems. Another example is Virgin’s $25 million Earth Challenge to help design a “commercially viable design which results in the net removal of anthropogenic, atmospheric greenhouse gases so as to contribute materially to the stability of the earth’s climate system”.

8. Smart mobbing

Web 2.0 technologies have spawned a new type of protest activity called smart mobbing. This means using real-time media and sharing platforms, such as text messages and social media status updates, to rapidly organise a crowd.

Viral text messaging in the Philippines helped to oust former President Joseph Estrada in 2001 and the use of Twitter proved pivotal during the Arab spring uprisings in 2011. Smart mobs can also co-ordinate virtual activity, such as when the hacktivist group Anonymous encouraged its followers to launch cyber attacks against Visa, MasterCard, PayPal and other companies opposing Wikileaks in 2011.

Mission 4636, meanwhile, created a text-mapping emergency communications system after the 2010 Haiti earthquake. In future, companies and governments will need to anticipate and respond to activist smart mobs as well as seed their own.

9. App farming

The war of the computing giants has turned into the battle of the apps, spawning a new generation of software applications focused on social and environmental solutions. Google Play lists more than 400 sustainability-related apps. The most popular is BlaBlaCar, which connects drivers with empty seats with people looking for a ride, allowing users to search the biggest European car-sharing community.

Common tools in this genre include ethical shopping guides, carbon footprint calculators and educational games. Businesses of the future will be judged on whether they can seed and grow farms of apps that provide solutions to the world’s most serious challenges.

10. Plug and play

Today’s smart technology detects its operating environment, installs whatever software is needed and begins operating without any action by the user. Rather than having to manually unplug or switch off household electrical devices to save energy, plug-and-play technology for the home automatically detects all idle devices and disables them remotely. Similar approaches apply to optimal energy-efficient heating and cooling of buildings, and low-carbon driving, which automatically chooses acceleration and cruise speeds that reduce emissions.

In future automatic product filters will match our preferences for fairtrade, organic, beauty without cruelty, or other ethical products. When shopping online, we will only see those items that match our preferences. In store, we will be alerted to products that meet our standards by automatically scanning barcodes through mobile devices.

The message is clear for business. Web 2.0 is not just about everybody being continuously online. Rather, it is a new business mindset that uses collective intelligence and co-creation to find solutions to our global challenges, and uses technology to achieve speed and scale in spreading innovation to the parts of the world with the most urgent unmet needs.

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[button size=”small” color=”blue” new_window=”false” link=”http://www.waynevisser.com/books/the-quest-for-sustainable-business”]Link[/button] The Quest for Sustainable Business (book)

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[button size=”small” color=”blue” new_window=”false” link=”http://www.csrinternational.org”]Link[/button] CSR International (website)

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Visser, W. (2015) Top 10 web trends shaping the future of sustainable business. The Guardian, 22 January 2015.

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Eco-innovation: going beyond creating technology for technology’s sake

Eco-innovation: going beyond creating technology for technology’s sake

Article by Wayne Visser

Part of the Sustainable Innovation & Technology series for The Guardian.

Sustainable innovations often arise from combining and understanding existing technologies.

Slowly but surely, sustainable technologies are challenging business and transforming our outdated industrial model which is no longer fit for purpose. As examples from the agri-food, chemicals and metals sectors have shown, removing barriers to the sharing of existing technologies is just as important as coming up with new and better tools. So how does this work in practice?

When working with sustainable technologies, companies must decide whether to collaborate or go it alone. This decision should be based on an assessment of a company’s in-house competencies, technical readiness and capacity.

BeniSweif is a small engineering company in Egypt that produces coloured pigments for the metals industry. With the support of the Egyptian National Cleaner Production Centre (NCPC), the company invented a new yellow iron oxide-derived pigment in a process that allowed them to recover hydrochloric acid with a concentration of 25%, which can be used again.

The new product sells for almost five times the production cost. This development has created a new business model, with clear financial and environmental benefits.

Similarly, Jiangsu Redbud Textile Technology entered into a technology transfer agreement with the governments of Benin, Mali and others to promote jute fibre-green technology. The Chinese company developed and tested new varieties of jute, which are 100% recyclable and well adapted to wastelands, saline ground, low-lying wetlands and drought conditions. Now a collaborative platform, SS-GATE, is introducing this technology into Africa. The product was created to fit environmental conditions, and the institution created a collaborative space for innovation.

Another example is the series of XPRIZE awards, which help teams from across the world to compete for funding by solving a specific social, technical or environmental challenge. The $2m Wendy Schmidt Ocean Health XPRIZE promises to improve our understanding of how CO2 emissions are affecting ocean acidification, encouraging teams to design sensors that can help us begin the process of healing our oceans. Similarly, a Carbon XPRIZE has been proposed with the goal to develop radical new technologies and products that make capturing CO2 from power plants a source of profit rather than a liability. This is typical of open innovation for sustainability.

These are the kinds of cases being studied in a European Commission-funded research programme on eco-innovation. The programme is looking at methods for the identification, development, transfer and adaptation of technologies to further sustainable development. The aim is to develop local capacity and resources for eco-innovation in developing and emerging economies, especially through supporting intermediaries such as the National Cleaner Production Centres.

The Unep (United Nations Environment Programme) report on the business case for eco-innovation is an example of the results of the programme. Eco-innovation – as distinct from eco-efficiency – has emerged from the realisation that without innovation we are unlikely to solve many of our global social and environmental challenges, from poverty to climate change.

According to the Philips Meaningful Innovation Index, “There is an appetite for future innovations to go beyond creating technology for technology’s sake, instead aiming to make a difference in people’s everyday lives.” Hence technology is an enabler for eco-innovation, not only in terms of physical equipment and tools but also in the knowledge, techniques and skills that surround its deployment and use.

Technology can enable different aspects of the eco-innovation process, as well as being a marketable product or outcome of eco-innovation itself.

Eco-innovators push the boundaries of their companies. By modifying products, processes and organisational structures, eco-innovation improves sustainability performance and competitiveness.

Eco-innovation is the next evolution beyond eco-efficiency. Whereas eco-efficiency tends to be focused on productivity and the impact of single technologies or individual steps in the business process, eco-innovation looks to strategically transform the whole business model. When it comes to reinventing capitalism, eco-innovation is one of the next waves business will want to surf if it is to survive and thrive.

 

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[button size=”small” color=”blue” new_window=”false” link=”http://www.waynevisser.com/books/the-quest-for-sustainable-business”]Link[/button] The Quest for Sustainable Business (book)

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[button size=”small” color=”blue” new_window=”false” link=”http://www.csrinternational.org”]Link[/button] CSR International (website)

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Visser, W. (2014) Eco-innovation: going beyond creating technology for technology’s sake. The Guardian, 4 December 2014.

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Closing the loop on steel: what we can learn from a manufacturer in Ecuador

Closing the loop on steel: what we can learn from a manufacturer in Ecuador

Article by Wayne Visser

Part of the Sustainable Innovation & Technology series for The Guardian.

Despite a strong business case for recycling scrap steel, uptake has been low. One company in Ecuador is blazing a trail for steel and the circular economy in Latin America.

In the next few decades, as resource scarcity starts to bite, and resource prices steadily climb, mining and metals companies will be forced to shape-shift from primary extractors to secondary recyclers. Necessity, rather than an unexpected attack of conscience, will be the driving force behind this transition to a circular economy. So let’s look at some lessons from the sector most ripe for revolution, namely the steel industry.

In 2013, world crude steel production totalled 1.6bn tonnes and employed 50 million people, either directly or indirectly. The industry is vocal in its support for sustainable development, claiming that – despite massive growth in demand – the amount of energy required to produce a tonne of steel has been reduced by 50% in the past 30 years.

A far stronger virtue in its pursuit of sustainability is that steel is 100% recyclable and backed by an impressive business case: more than 1,400kg of iron ore, 740kg of coal, and 120kg of limestone are saved for every tonne of steel scrap made into new steel (because these products are required if steel is produced as raw material). It is puzzling, therefore, that usage of scrap steel in 2013 was still only around 580m tonnes. Why is closing the loop on steel so difficult?

Lessons can be learned from Adelca, an Ecuadorian steel manufacturer that is trying to blaze a trail for the circular economy in Latin America. Ecuador is still a relatively small player, making up about 1% of the Latin American crude steel market, which is dominated by Brazil at 53% and Mexico at 27% (ranked nine and 13 respectively in the world market).

Adelca supplies Ecuador, Venezuela, Colombia, Peru and Chile with a variety of rolled and stretched steel products. Before 2008, Adelca was importing billets (a narrow, generally square, bar of steel) from China and elsewhere, but after analysing the economic and environmental benefits, the company decided to invest in an electric arc furnace (EAF) and start recycling metal scrap in order to make products for the construction sector.

The first part of Adelca’s sustainable technology solution was to install the EAF, thus allowing it to make its own steel billets from recycled scrap steel. According to Isabel Meza, head of integrated management at Adelca, by importing fewer billets, they are saving $12m (£7.6m) on the 20,000 tonnes of steel they produce every month. Apart from using fewer mineral resources, each tonne of recycled steel uses 40% less water, 75% less energy and generates 1.28 tonnes less solid waste than steel from raw materials. There is also an 86% reduction in air emissions and a 76% reduction in water pollution.

The second part of Adelca’s sustainable technology solution was to help to stimulate and organise the metals recycling sector in Ecuador, since it does not have enough supply of scrap metal to meet its own steel production demand. Today, Adelca’s Recyclers Network generates about 4,000 jobs (direct and indirect), with income exceeding $1m (£637,000) a month. Also, the steelworks, scrap iron preparation process, transportation system and complementary services generate more than 1,500 direct jobs for 50 small companies. Although Adelca still imports $80m (£51m) a year in raw materials, it estimates it contributes $120m (£76.5m) a year to the national economy just from the avoided imports.

The third part of Adelca’s sustainable technology solution was to install a bio-digester that turns the company’s organic waste into methane gas for community use, as well as to generate fertiliser for local crops. Although the financial savings are not big at about $35 (£22) a day in energy savings for the community and $100 (£63) in waste disposal costs for the company, there is a significant payoff in terms of “social license to operate”, ie improved community relations.

Lessons learned

1. Financial returns

The EAF technology was bought from the US and funded by taking a substantial mortgage from the bank. Commercially, the scale of the investment represented a significant risk, but the expected financial returns from the technology allowed the company to take this risk. Environmental benefits alone would not have sufficed.

2. Community education

Adelca lost eight months in delayed production due to community resistance to the EAF. The community feared that the heat, power and radiation from the furnace would endanger the health of the community, and that its heavy electricity demands would negatively affect the community’s own supply. Despite being unfounded, these fears required a substantial and expensive education effort to gain a social license to operate.

3. Supplier relations

Since Adelca’s demand for scrap metals is greater than the supply – and recycled scrap costs less than imported billets – the company has invested in building up its network of recyclers, including donating metal cutting equipment, offering loans, providing and paying for training and promising the best price for the scrap metals provided.

4. Marketing benefits

By investing in sustainable technologies, Adelca has differentiated itself in the market. In its public corporate mission, it is able to claim to be “leaders on recycling for the steel production, with excellence in… environmental protection and social responsibility”. This commitment helped it to become the first Ecuadorian company to achieve the Latin American S2M certification for corporate responsibility and sustainability.

The Adelca case shows us why the resource revolution is worthwhile, yet still so slow in happening. The positive impacts on manufacturing and natural capital are clear, but challenges remain in getting access to financial capital and ensuring the human and social capital benefits are effectively communicated.

 

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Visser, W. (2014) Closing the loop on steel: what we can learn from a manufacturer in Ecuador. The Guardian, 20 November 2014.

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Why metals should be recycled, not mined

Why metals should be recycled, not mined

Article by Wayne Visser

Part of the Sustainable Innovation & Technology series for The Guardian.

Extractive companies need to recast themselves as resource stewards and embrace the circular economy by investing in recycling, not mining.

There is no denying that the sustainability impacts of the extractive sector are serious – sometimes even tragic and catastrophic. But they are not without solutions. Technology, which is the source of so much destruction in the mining and metals industry, can also be its saviour.

The most obvious opportunity for the sector is to embrace the circular economy. Many metals can be recycled – and in some cases, actual recycling rates are already high. For example, 67% of scrap steel, more than 60% of aluminium and 35% of copper (45-50% in the EU) is already recycled. Apart from resource savings, there is often also a net energy benefit. Energy accounts for 30% of primary aluminium production costs, but recycling of aluminium scrap uses only 5% of the energy of primary production.

Recyclability of metals is as important as recycling rates. We need more companies that grow the markets for recycled materials, like Novelis, which announced the commercial availability of the industry’s first independently certified, high-recycled content aluminium (90% minimum) designed specifically for the beverage can market.

The opportunity to increase recycling rates is significant. Today, less than one third of 60 metals analysed have an end-of-life recycling rate above 50% and 34 elements are below 1%. The irony is that recycling is often far more efficient than mining. For example, a post-consumer automotive catalyst has a concentration of platinum group metals (like platinum, palladium and rhodium) more than 100 times higher than in natural ores. Already, special refining plants are achieving recovery rates of more than 90% from this ‘waste’.

This sustainability business case logic has not gone unnoticed. Given the importance of rare earth metals in electronics and renewable technologies, Japan has set aside ¥42bn (£231m) for the development of rare earth recycling, while Veolia Environmental Services says it plans to extract precious metals such as palladium from road dust in London.

Some recycling technologies are hi-tech. For example, the Saturn project in Germany uses sensor-based technologies for sorting and recovery of nonferrous metals. Similarly, Twincletoes is a technology collaboration between the UK, Italy and France that recovers steel fibres from end-of-life tyres and uses them as a reinforcing agent in concrete.

By contrast, E-Parisaraa, which is India’s first government authorised electronic waste recycler, is much more low-tech, using manual dismantling and segregation by hand before shredding and density separation occur. This is a good reminder that the best available sustainable technology is not always the most applicable, especially in developing countries.

Recycling is not the only way for technology to reduce the impact of metals. If we look at energy consumption, each phase of the steel-making process presents opportunities. For example, direct energy use can be reduced by 50% in the manufacture of coke and sinter through plant heat recovery, and the use of waste fuel and coal moisture control. In the rolling process, hot charging, recuperative burners and controlled oxygen levels can reduce the energy by 88% and electricity consumption by 5%.

Other technologies, like using pulverised coal injection, top pressure recovery turbines and blast furnace control systems, can reduce direct energy use by 10% and electricity by 35%. In Electric Arc Furnace steelmaking, improved process control, oxy fuel burners and scrap preheating can cut electricity consumption by 76%. In fact, applying these kinds of energy saving technologies could result in energy efficiency improvements in the steel sector of between 0.7% and 1.4% every year from 2010 to 2030.

Water is another critical issue, but with significant opportunities. For example, BHP-Billiton’s Olympic Dam in South Australia achieved industrial water efficiency improvements of 15%, from 1.27 kilolitres to 1.07 kilolitres per tonne of material milled. That may not sound like a lot, but when scaled across the operations of the world’s fourth largest copper and gold source and the largest uranium source, it makes a huge difference.

Sometimes the technologies are fairly simple. In the metal finishing sector, improving rinsing efficiency represents the greatest water reduction option. For example, C & R Hard Chrome & Electrolysis Nickel Service switched its single-rinse tanks to a system of multiple counter-flow rinse tanks, and installed restrictive flow nozzles on water inlets. As a result, the process line has reduced water consumption by 87%.

We can see, therefore, that technology can help to rescue the high-impact extractives sector from its siege by the forces of sustainability. However, it requires some critical shifts. Extractives companies need to recast themselves as resource stewardship companies – experts at circular production and post-consumer ‘mining’. And customers and governments need to give up their compulsive throw-away habits and embrace the take-back economy.

 

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[button size=”small” color=”blue” new_window=”false” link=”http://www.waynevisser.com/books/the-quest-for-sustainable-business”]Link[/button] The Quest for Sustainable Business (book)

[button size=”small” color=”blue” new_window=”false” link=”http://www.kaleidoscopefutures.com”]Link[/button] Kaleidoscope Futures (website)

[button size=”small” color=”blue” new_window=”false” link=”http://www.csrinternational.org”]Link[/button] CSR International (website)

Cite this article

Visser, W. (2014) Why metals should be recycled, not mined. The Guardian, 5 November 2014.

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Iron ore and rare earth metals mining: an industry under siege?

Iron ore and rare earth metals mining: an industry under siege?

Article by Wayne Visser

Part of the Sustainable Innovation & Technology series for The Guardian.

Resource scarcity and human rights issues surrounding metals extraction, coupled with unrelenting global demand mean the industry is facing some tough realities.

The good news: the number of people living in extreme poverty could drop from 1.2 billion in 2010 to under 100 million by 2050, according to UN projections. The bad news is that the flotilla of hope currently rising on the tide of economic growth in emerging countries is at serious risk of being dragged down under the waves. The reason is growing resource scarcity and the environmental disasters that could ensue.

As always, the poorest will be worst affected. The UNDP projects that, under an environmental disaster scenario, instead of reducing the population living in extreme poverty in south Asia from over half a billion to less than 100m by 2050, it could rise to 1.2bn. In sub-Saharan Africa, the numbers may rise from under 400m to over a billion. For the world as a whole, an environmental disaster scenario could mean 3.1 billion more people living in extreme poverty in 2050, as compared with an accelerated development scenario.

The message is simple: unless these booming economies – and the high-income countries they churn out ‘widgets’ for – can lighten the weighty anchor of resource consumption, we will all, sooner or later, get that sinking feeling. To illustrate the point, demand for steel – driven in no small part by a global car fleet doubling to 1.7bn by 2030 – is expected to increase by about 80% from 1.3bn tonnes in 2010 to 2.3bn tonnes in 2030. These trends raise red flags about material shortages of many metals in the future.

Besides steel, rare earth metals are cause for concern, as they comprise 17 chemical elements that are critical in the automotive, electronics and renewables sectors. Not only is demand for these metals rising, China is responsible for about 97% of global production. The United States, Japan and Germany are making big investments to secure their own supplies, but these new mining projects may take a decade to come on stream. As a result, supply shortages are predicted. Yet rare earth metal recycling rates remain very low – only 1% in Germany, for example.

Add the challenge of ‘conflict minerals’ – and the metals sector starts to look like the Titanic. The metals of most concern right now are tantalum (or coltan), tin, tungsten and gold – collectively known as 3TG – which are used extensively in the electronics industry. The Democratic Republic of Congo (DRC) and adjoining countries have been the hot spots – and the target of legislation like the Frank Dodd Act in the US – but other conflict minerals can (and probably will) arise for other metals in other parts of the world in future.

Besides resource scarcity and human rights issues, the mining and metals industry has significant environmental impacts, especially on land, energy and water. Trucost estimated that the largest metals and mining companies of the world have environmental external costs of around $220bn, 77% of which relate to greenhouse gases.

For iron ore, if carbon prices would rise to a level of $30 per tonne, iron ore costs would increase by 3.3% across the industry. An adequate incorporation of the water costs of iron ore mining would result in a 2.5% cost increase. Combining carbon and water costs, this could mean increased costs of up to 16% for some operators in water-scarce regions. These land, energy and water impacts also appear to be increasing, as about three times as much material needs to be moved for the same ore extraction as a century ago.

The picture that emerges is of a metals sector under siege, an industry that is soon to be the victim of its own success. And yet it is also one of the sectors that has the most potential for innovation and technological solutions. McKinsey and Co estimate that iron and steel energy efficiency and end-use steel efficiency could deliver $278bn in resource savings by 2030 and go some way towards addressing the metals scarcity crisis. The metals sector may still be in danger, but sustainable technologies could make the situation better.

 

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Cite this article

Visser, W. (2014) Iron ore and rare earth metals mining: an industry under siege? The Guardian, 24 October 2014.

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