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May 2016 - Terra Infirma

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27 May 2016

Pedant's Corner: Circular Economy vs Servicisation

Circular economy vs servicisation

Twice in the last week or so, I've heard people conflate two quite distinct concepts – the circular economy and servicisation/product-service system. This has riled my inner pedant no end, so I feel obliged to set out the difference between the two:

  • Circular economy – all materials flow in closed loops just like the closed loops in nature.
  • Servicisation – provide your customers with the service they desire (eg the ability to copy documents) rather than the standard product (eg a photocopier).

The confusion arises as there is some overlap between the two concepts (see my nifty Venn diagram). Eg in chemical management systems (CMS), solvent services typically recover and recycle those solvents. However in other CMSs, materials are not recovered, eg when companies provide a coating service, the coating stays with the product and is not necessarily recovered. This is why I've placed the double headed arrow above – whether a service is also part of the circular economy depends on the design of the service.

But my main point is that if you artificially narrow the two concepts down to the overlap in our Venn diagram, you're missing out on the majority of both. Schoolboy error.


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25 May 2016

Think Different, Think Sustainability


Back in 1999,a group called the Energy Technology Support Unit (ETSU) calculated for the Government that the 'practicable' amount of solar power which could be generated in the UK by 2025 was 0.5 terawatt hours. Fast forward to 2015 and solar power generated over 7.5 terawatt hours – 15 times as much as predicted, a decade earlier than predicted.

I can't find the ETSU report online (wonder why?), but reading the huge amount of material that quotes it, it appears to be based on the amount of south facing roof area (whether this includes industrial sites, I don't know) and doesn't appear to take into consideration, say, solar farms or solar facades. I would guess that the plummeting cost of solar with rising demand wasn't factored in either. The point is not to rub the authors'  noses in it, but rather that this report was often quoted in early 21st Century diatribes about the 'madness' of trying to rely on renewable energy in general – and solar in particular. And they were dead wrong.

And now we have companies like Solaroad producing significant amount of solar energy from somewhere most of us wouldn't have looked for it – a cycle path (see photo). Just 70m of path generated enough energy for 3 houses. Multiply that up by potential cycle path coverage (plus pavements and roads?) and you're starting to see another potentially chunky, but unexpected, contributor.

How many other SolaRoad-type ideas are there out there? Nobody knows. But we shouldn't fall into the trap of putting artificial constraints on our sustainability ambitions on the basis of what we know now. Because the one thing we do know for sure is that we don't know very much!


Photo: SolaRoad

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23 May 2016

Britain Greener in Europe

Flags of the United Kingdom and the European Union. UK Flag and EU Flag. British Union Jack flag.

About 15 years ago, I was at an international eco-design conference. As I wandered around the poster displays during a coffee break, I came across a young US researcher presenting a study on the then forthcoming EU Waste Electrical and Electronic Equipment (WEEE) Directive.

"Why are Americans so interested in European legislation?" I asked her.

"It's a massive market and if our brands want to sell there, we've got to comply with the legislation." she replied.

"Ahhhh..." I said as the penny dropped.

Fast forward to today and we in the UK are a month away from a referendum on whether to remain in the EU or leave. I have commented in the past that climate denial and Euroscepticism go hand in hand, and I'm sure that 'freeing' the UK of environmental legislation is one of the desires of the 'Brexit' crowd.

Except, as we have seen above, we wouldn't be free at all. If we want to export to Europe, we'll have to comply with all existing and future legislation, only we would have zero influence over the content of that legislation.

The environmental angle is probably the main reason that I'll be voting to stay in the EU. The history of the EU has been one of raising the bar on environmental issues, whether on water quality or climate change, rather than the 'race to the bottom' we see in other parts of the world. And that combined economic heft means that if the EU decides to ban a toxic substance or insist on recyclability built into products, then the whole world has to sit up and take note. On this at least, the EU is a powerful force for good.

I'm IN.


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18 May 2016

The best path to Sustainability?

bashoThe 17th Century poet Matsuo Basho (right) said:

"Do not seek to follow in the footsteps of the men of old; seek what they sought."

While there is much to be said for learning from the experiences of others (my Corporate Sustainability Mastermind Group is based on that very principle), I still find that the majority of sustainability practitioners blindly set off in the same direction as others, without thinking through where that path might lead – if it ends in a swamp, you'll sink just like them.

The second part of Basho's quote is the interesting one – focus on the destination and then the path will become apparent. In practice, I use 'backcasting' to develop sustainability strategies with my clients – we start at the end and work backwards to the start. You'd be surprised at just how much that simple change in approach can deliver.


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16 May 2016

Will the Oil Industry collapse?

Oseberg_ship_head_postI'm reading 'Collapse' by Jared Diamond at the minute – the tale of how many civilisations just suddenly disappeared off the map. While the most famous of these was the Easter Islanders, the story of the Greenland Vikings is the one which is most baffling. Surrounded by seas brimful of fish, they persevered with trying to grow enough hay in short summers on fragile meadows to maintain their cattle in barns over the long and increasingly severe winters, until their luck ran out and they simply starved to death, their last meals consisting of garden birds and their pet dogs in a vain attempt to make it through.

I got a real resonance between the blind obstinance of the Vikings and the recent warning from Chatham House Prof Paul Stevens that the International Oil Companies (IOCs) face a stark choice:  a managed decline or sudden death. While his paper stretches my grasp of economics to the limit, Prof Stevens' argument is that the IOCs are clinging to the business models that saw them thrive in the past, but the assumptions that underpin those models are looking incredibly shaky.

The fish in this case are the renewable energies. At the turn of the millennium, BP and Shell invested in renewables and then gradually let them go again, losing lots of talent in the process. Today we get news that Shell is investing in green energy once more, although the amounts are modest.

The Vikings would have survived in Greenland if they had adapted their lifestyle to fishing for their dinner, but they refused. Will the oil companies adapt to the new reality? Or will they cling to what they know, dooming themselves?


Photo: Copyright: Museum of Cultural History, University of Oslo, Norway


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13 May 2016

Is the world now ready for the product-as-service model?

The launch of the Riversimple's Rasa electric two seater car is remarkable for two reasons. First, it could bring hydrogen vehicles onto the market at the scale of their electric cousins, and secondly Riversimple is planning to provide the vehicles as a service rather than an outright purchase.

The Product-Service System (PSS) concept has been around for a long time, but it is generally successful in business to business (B2B) niche markets such as fleet vehicles, photocopiers (buy the copies not the copier) and chemical management systems. Some high profile attempts at B2B servitisation have failed: Interface tried to sell a floor-covering service, but customers couldn't get out of the 'carpet as capital purchase' mindset, and compressed air services have struggled in the UK when popular in France. More recently Rolls-Royce have made a success of a jet engine service, bringing PSS back to the top of the agenda.

From a sustainability point of view PSS makes a lot of sense – you break the link between the needs of the customer and the amount of stuff they are given to meet those needs. So if I buy a photocopy service from Xerox, they are incentivised to not try and sell me a new copier every year, but maintain and upgrade the one I have.

Where the Rasa will be interesting is whether it can break into the consumer (B2C) market. To date, only digital consumer services have usurped their physical counterparts (eg Netflix replacing DVDs), but with personal car leasing starting to rise in popularity, maybe Riversimple are on to something. I'll be keeping a close eye!


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11 May 2016

Reasons to be cheerful (pt 396)

old oil pump

Here's a selection of headlines from the last few days:

We're getting to the stage where headlines like these hardly make a ripple. The revelation last month that the UK produced a full 25% of its electricity from renewable sources last year, with an additional 20% or so coming from low carbon nuclear, hardly raised an eyebrow. When I got started in Sustainability in 1998, the former figure was at a mere 2% with 90% of that being Scottish hydropower.

I believe there's only one way the world is moving now and it's towards a low carbon economy. We've got a long way to go, and some rocks to navigate, but we've almost certainly pointed the ship in the right direction. Full steam ahead!


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9 May 2016

Have we run out of Sustainability ideas? Probably a good thing.

world brainAbout five years ago, there seemed to be a new sustainability concept coming over the horizon every 5 minutes: the circular economy, creating shared value, mindful sustainability, my own green jujitsu and the doomed-by-its-own-name endosymbiotic thrivability – everytime you clicked on a green business website, another idea leapt out at you. These neologisms were on top of already bulging toolbox of existing ideas including natural capitalism, cradle-to-cradle, bethinking the natural step, one planet living, factor 4/10/100 etc, etc.

Suddenly all of this blue-sky thinking seems to have died away, replaced by practical efforts to take Sustainability forward at scale. I'd argue this is a sign of maturity with the Sustainability baton being handed over from the thinkers to the doers.

We now know what we have to do, the challenge is doing it.


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6 May 2016

Sustainability: follow the signal, ignore the noise


In complex systems such as the global temperatures, we see long term trends (climate in this case), overlaid with short term fluctuations (weather). Those who seek to play down the dangers of climate change like to find short term patterns in the weather that appear to back their hunches, while ignoring the inconvenient truth of the big picture.

The importance of following the signal of long terms trends and ignoring the short term noise applies to the politics of sustainability. The need to fill sustainability blogs, news websites, podcasts and the rest can lead to an obsession about stuff outside our control: what will Brexit mean for sustainability? A Trump presidency? A corporate buy-out? I've seen such thinking paralysing organisations, bogging down progress on Sustainability in what-ifs.

The sports psychologist Steve Peters trains his clients to separate worries into two piles: stuff you can't control and stuff you can. If you can control it, deal with it, if you can't, accept it and move on. Great advice for all of us!




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3 May 2016

There's always an excuse not to do Sustainability. What's yours?

what can I do

Here are some of the excuses I've heard over the last couple of years not to move forward on a Sustainability project or strategy:

  • We're selling part/all of the business
  • We're buying a new business
  • We're in financial difficulty
  • The boss has been sacked
  • I've got a new boss, don't know what his position on this is
  • We're writing our annual sustainability report
  • It's not a good time to ask the boss
  • I'm too busy

Now, I'm not knocking any of these reasons – they're all pressures we all feel at different times. But given the overwhelming evidence to link strong Sustainability performance with strong business performance (eg here), why wouldn't you prioritise Sustainability?

The problem is the annoyingly persistent old mindset of "Sustainability costs you more" when we should be thinking "Sustainability is an engine of growth." Change the mindset and the problem becomes a solution.


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