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.
If there's one thing I hate more than zombie climate myths (eg "the world hasn't warmed since 1998"), it's daft green pronouncements taken as gospel when they're clearly nonsense. I say daft, but some are worse than daft as they close down the routes to sustainability.
Big brands have been dabbling in practices such as “greenwashing”, convincing customers that buying their green products is the way to fight global warming.
Errr - how else are we meant to combat global warming? I buy renewable electricity and biogas from my energy supplier, I buy logs for my wood stove, I bought extra insulation for the attic, I bought a solar hot water system and an efficient boiler, I bought triple-glazed windows, I bought a bicycle from a bicycle shop, I try to buy seasonal veg and other low impact food – it goes on. As I don't actually produce any of my own stuff, bar a few herbs, I rely on companies providing such green products and services to reduce the impact of my lifestyle.
There's even more to it than that. Every time someone buys an electric vehicle, a solar PV system, or even hires a green taxi, it strengthens the supply chain for those options and weakens traditional, carbon-intensive markets, making the low carbon version more cost-effective for others.
Whether at home or at work, let's ignore the half-baked wisdom of people like Mr Morozov, spend the green pound with pride and do our bit to build a sustainable future for all.
I've finally bitten the bullet and bought a new iPhone which I'm picking up tomorrow. This came with a huge chunk of buyer's guilt as there is nothing technically wrong with my current 4-year old model, just a litany of problems with updating apps, the operating system, storing audio files and pics, and, I have to admit it, the lure of the new whizz-bang gizmos. I, dear reader, am a (semi-willing) victim of planned obsolescence.
Planned obsolescence is the backbone of the modern consumer society. Popularised in 1924 when Alfred P Sloan's General Motors embarked on a strategy of annual car design upgrades to make drivers want to ditch their current car in favour of a new model long before it breaks down, it is often held up by anti-capitalists as the epitome of waste and greed.
Up to a point I agree. But the flipside is that obsolescence represents a huge driver for the technical innovation we need to create a better world. Without creative destruction, we'd still have smog-choked cities, people stuck in hardscrabble subsistence farming, and the crudest of medicines. And, importantly, with a few Government incentives, it is capitalism and its attendant innovation which are giving us the current clean energy revolution. I'd rather live now than anytime in history, quite frankly.
I'm always bemused by those who believe that state socialism is the answer to our environmental and social problems. I was inspired to dedicate my life to sustainability by witnessing the colossal environmental destruction left behind by the Soviet-era in Russia in 1997 (the reporting of which was still leading to the harassment of journalists and activists). China is hardly the cleanest, greenest and open of the world's nations. Venezuela's socialism is powered by oil and intolerant of dissent.
Plus, there's nothing more ironic than seeing an anti-capitalist activist enjoying freedom of expression to tweet about the evils of consumerism on their smartphone via a 4G mobile phone network. Right on, comrade!
Don't get me wrong, I'm not an emotionally frozen free-marketeer either. The market can't be trusted to operate on its own, it needs a broad steer in the right direction. On top of basic state services, we need Government interventions: regulation on the most destructive activities, smart incentives for emerging technologies, the internalisation of externalities (aka the polluter pays), the funding of socially useful research, and the breaking up of vested interests locking us into destructive paths. Driving change for the good, in other words, but never smothering it.
It's probably quite healthy that I get a pang of guilt whenever I upgrade my phone. But I'd be lying if I claimed that I'm not looking forward to it too!
I was very struck by the above photo showing the aftermath of the Glastonbury festival. Every year we hear how Glastonbury is more than just a big series of concerts, that it has a spiritual dimension, has a strong environmental message, is the crux of 'the new politics' etc, etc. But the picture suggests if you want a symbol of our consumerist, wasteful, throwaway society, you couldn't go to a better place.
The intention might be there – this is the age group most likely to vote Green – but when it comes to practice, it seems the younger generation isn't quite where they think they are. I wonder if that couple in the picture is saying a fond farewell or shedding a tear for the future.
I loved this picture when I saw it on LinkedIn last week (I don't know who to credit it to, I'm afraid). It sums up for me why many sustainability efforts fail – because they expect every member of the public/employee/consumer to go out of their way for sustainability.
Green Jujitsu understands that people aren't stupid, but most are busy, and they'll always take a shortcut. Our challenge is to make sustainability the shortcut and not the long way around.
This tweet flashed across my feed on Monday – retweeted by the Guardian Environment no less – and it immediately made me bridle.
For a start, it smacks of a straw man argument. Who is 'blaming' individuals solely for climate change? Who isn't 'blaming' companies at all for climate change? I have never heard either view expressed by any sensible commentator.
Secondly, I don't like anybody absolving or blaming anyone else 100% for climate change (or obesity for that matter). Our consumer society is a cycle between production and consumption – you can't have one without the other.
I can choose to cycle to the shops or work rather than drive. I can decide to spend money insulating my loft. I can buy fresh food rather than processed food. I can buy healthy food or fat/sugar/salt infused crap. I can decide where I go on holiday. I can choose when to upgrade my phone. I have choice over a huge chunk of my carbon footprint. I take the idea that I am a hapless cog in a machine built by evil capitalists as a personal insult.
We also need business and Governments to step up and provide sustainable products and services. After all, the scope of my freedoms above are determined by the choice on offer – and my ability to choose is limited by the visibility I have of the cradle-to-grave impacts of those choices. They have a moral obligation to sort out as many of these problems as they can. We need a virtuous cycle of consumer/voter choices and sustainable options to choose from.
Thirdly, the tweet is dangerous as it encourages people to point the finger and do nothing. As Ross Perot put it "The activist is not the person who says the river is dirty. The activist is the guy who cleans up the river."
So let's stop this kind of silliness and get on with the job in hand.
...to align your business growth to sustainability.
Unilever has just announced that half its growth last year came from its Sustainable Living Plan and its sustainable brands are growing twice as fast as others. They join GE, Interface, Johnson Matthey and many others in aligning the future of their business to sustainability.
To me, this blows the idea that sustainability is somehow incompatible with growth out of the water. That meme comes from people who see a win-win as some kind of sell-out. Frankly, that clique would rather lose-lose and keep their sense of self-righteousness.
So don't be put off by the naysayers or feel guilty about success. If we want to make sustainability 'the new normal', then we must do just that. And for a business, that means the business strategy and sustainability strategy converging into one.
Yesterday I went to the North East Recycling Forum (NERF) Annual Conference, which as usual, punched way above its weight when it comes to speakers. We had Steve Lee, CEO of CIWM, David Palmer-Jones, CEO of SITA, Roland Arnison of AEA Ricardo and Mark Shayler of Ape giving a wide range of views from the waste industry through to the whole nature of consumption.
The broad theme of the morning was the circular economy and Steve and David started with the EU circular economy package which was adopted this year. What bothered me though, and I said so, is the provisions in the package revolve predominantly around the waste end of the linear economy - with the headline target of a recycle rate of 70%.
As Dwight D. Eisenhower put it:
Pull the string, and it will follow wherever you wish. Push it, and it will go nowhere at all.
The one factor which will make or break the circular economy is demand or pull. Without demand, you can try and push as much stuff into the recycling pipe as you want, but it'll be like trying to push string - or a shop full of unwanted and unsold toys. And, even indirectly, recycling target based on quantity, not quality, is unlikely to attract much enthusiasm from the manufacturing industry - the cart is being put before the horse.
If the EU changed their focus to setting standards for recycled material in products then it would create demand for high quality secondary materials. This demand, and only this, is essential to create the pull which would bend our linear economy into a circular one, driving up quality and pushing down cost. It's that simple.
Two interesting interventions caught my eye this week:
First of all we had Naomi Klein, of No Logo fame, wading into the climate change debate by declaring that the problem wasn't carbon but capitalism - and that all of us working with big business to facilitate change were as deluded as climate change deniers.
The two viewpoints couldn't be more different. In my view Ms Klein is on the wrong side of this argument for the following reasons:
Finger pointing is easy; facilitating real change is the real challenge;
Big business is not just going to disappear overnight because of the righteous indignation of the activist;
She admits she does not have an alternative practical solution to climate change (so why bother entering the debate?);
I was inspired to embrace sustainability by witnessing the ecological legacy of the Soviet regime in Russia - it doesn't matter whether carbon is emitted under socialism or capitalism, carbon is carbon.
But it still leads us to a fundamental question: is economic growth compatible with sustainability? And the answer from the Global Commission on the Economy and Climate is that it is. They set out a series of practical measures to harness capitalism to tackle climate change rather than trying to destroy it wholesale - for example removing the subsidies propping up the fossil fuel industry (which are estimated in the report as being six times that of the subsidy to the renewable sector).
I would go further. We must MAKE growth compatible with sustainability. A vibrant global economy is the only way we will continue to bring down the costs of, say, renewable energy technology. In conjunction with appropriate Government action on taxation, subsidies and investment, I do believe we can create a prosperous and sustainable society.
Naomi Klein's vision would take us back to mid-90s noisy inaction on the climate while the global juggernaut judders on regardless.
For a newspaper from the Guardian stable that prides itself on its approach to sustainability, I winced when I read this in a Observer article on fashion yesterday:
The ability to recycle favourite dresses is being curtailed by sites such as Facebook and Instagram.
When the journalist said 'recycling', she didn't mean passing it on to a mate, selling it second hand or using the fabric for something else. No, she meant "wearing the same dress twice" - claiming women are afraid to do so as their friends will see this cardinal sin on social media. To a man who still wears dozens of garments over a decade old, this is an alien concept.
But it illustrates a much bigger point. Our modern design and manufacturing supply chains are capable of delivering us very high quality, low price products exceptionally quickly. But it is not quality or design that consigns those products to the bin - it's fashion. And by fashion I don't just mean clothes - Douglas Coupland nailed the phenomenon in his 1991 novel 'Generation X' when he referred to 'semi-disposable Swedish furniture'. Even a ship will be scrapped when the value of its steel is thought to be higher than keeping the ship in use, rather than when it 'wears out'.
Our problem is that the 'make do and mend' concept is unlikely to storm mainstream consumer culture. There are other models which can help:
The service economy: despite the slip on 'recycling', the Observer article did reference services where you can rent high fashion items for one night only, so each dress will be worn dozens of times. You can do this with everything from a luxury yacht to industrial solvents.
The circular economy: designing products to be recycled continuously means short product lives doesn't have to be dependent on extracting more raw materials and creating more waste.
The sharing economy: purchasing a product and then sharing it with others. When my parents moved into their house 40 years ago, they found it came with half a hedge trimmer!
The retro economy: many well designed products have as much value when they are old as when they are brand-spanking new.
In the meantime, I will be recycling - in the true sense of the word - my favourite pair of cords as I have worn them threadbare. Don't think I'll be gracing the fashion pages of the newspapers anytime soon!
Last night I caught the first episode of the BBC documentary "The Men Who Made Us Spend" (if you live in the UK and you're quick, you can catch the who series on iPlayer). It was a fascinating (and balanced) history of the rise of consumerism from the 1924 Phoebus Cartel of lightbulb manufacturers (who agreed to limit the life of their products to 1000 hours when 2500 was the norm) through to those poor deluded souls who camp outside Apple Stores to be the first to get their mitts on the latest slightly better model iPhone.
The most painful moment in the episode was when presenter Jacques Peretti asked Stephen Howard, Global Head of Sustainability at IKEA, how he reconciled the company's claims of sustainability with their continued marketing of throwing away existing furniture from the famous "Chuck Out The Chintz" to the modern day "My Old Sofa is So Going to the Kerb". Poor Mr Howard could only stammer that he would ask the question of the marketing department.
This is a huge issue, not just one for IKEA - for at least 60 years the modern economy has relied on old products going out of fashion and being replaced long before they physically break, a kind of Faustian pact between consumer and producer with planetary limitations being the party pooper.
But while it is easy to deride such consumerism, the problem is that the modern capitalist model has brought fashionable clothes, furniture and vehicles to billions on low incomes - who wants to go back to the model where the moneyed classes can afford comfortable lifestyles while the majority scratch a living in homesteads and city slums? I love my tech as much as the next person, and it would be churlish of me to deny the process which has brought us huge leaps from my first computer, a BBC Model B, to my (not quite) cutting edge iPhone4.
Fortunately there are solutions. The circular economy has the power to keep materials being useful, just in different forms so function and fashion can keep moving forward. The digital economy means that we can consume huge amounts of information - movies, books, music, TV etc etc without consuming as much stuff. eBay has opened a huge market for secondhand goods, Freecycle one for freebies. And the technology which means at 210mph Porsche super car can have emissions less than that of a Prius show that planet friendly technology doesn't have to mean stuff made out of cardboard.
It's a big ask, but I think we can have our lifestyle and sustainability, if we really put our minds to it.
It's the classic supply chain problem - you want to switch to a more sustainable material/component/vehicle but the supply chain for that option is immature - featuring high costs, poor quality and/or low volumes. An example of a chicken and egg situation* if there ever was one - without demand, there is no supply, without supply, there is no demand.
So what do you do? Resign yourself to business as usual?
No, the key to accelerating the adolescence of a green supply chain is to create demand, which you can do in the following ways:
Forward commitment procurement: by saying you will buy a certain amount of that item several years in the future, suppliers will know the demand will be there and gear up the supply in anticipation - particularly if you are announcing you won't be buying any of their old product after that time;
Collaborate with others to create cumulative demand. The European Postal Services did this to accelerate the commercialisation of hydrogen vehicles by announcing a joint forward commitment;
Lateral thinking: find other uses of that item internally to create demand. Marks & Spencer started buying low grade recycled polyester fibre in bulk for uses such as cushion filling - this demand brought down the price of the high-grade recycled fibre they were after for clothing by getting material flowing through the loop in the first place.
A fourth technique is to invest directly in the supply chain to smooth out kinks and improve processes. While this can help speed up the process, the new supply chain will only survive if the demand is there. So at the end of the day, you must create demand.
Remember what smartphones were like before the iPhone? Fiddly keyboards, nests of menus and terrible web navigation. Then along came Steve Job's little shiny slab of cool and the market, and arguably society, were transformed. As every hagiography of Jobs reminds us, it was that constant drive to produce 'insanely great' products that work for the user (rather than the programmer) that delivered this mobile computing transformation.
I can't help but see a parallel with Tesla motors - insanely great products that people love, driven by an outspoken entrepreneur, Elon Musk, and just happen to be the greenest cars on the road. With the original Roadster, the company bucked the trend for dull, utilitarian electric vehicles by launching a sports car whose acceleration terrified petrol head Jeremy Clarkson (before he pretended it broke down). Now with the Model S, they've produced a saloon which has single handedly boosted US EV sales by 447% in a single year, tackling the 'fiddly keyboard' of the electric car world - range anxiety - with 310 miles in the tank battery. Musk's uncompromising vision, like Jobs, has set the bar high enough to finally make this revolution happen.
And the lesson for the rest of us? To succeed, green products and services must be insanely great. Full stop.
If I told you about a country where, last quarter, more than a third of all electricity was generated from low carbon sources, which one do you think I'd be talking about?
Well I'm sat in it, and so are many of you: dear old Blighty.
Household recycling rates are nudging the 45-50% mark, depending on where you are in the country.
All this from what was 'the dirty man of Europe'? The one where renewable sources barely registered on energy statistics just a couple of years ago? The one with the throw-away culture?
As Fat Boy Slim would say, we've come a long way, baby.
What's interesting is that nobody has really noticed. Green is becoming the new normal. So much so that some organic food/drink producers now don't label their product as such in case consumers assume it's a niche product at a premium price. They just want it to be seen as a great product in a normal way.
And that's a good thing.
Some green ideologues may cry foul, saying that that this isn't deep green enough, but asking people to live in tie-dyed yurts, meditating on ley lines and knitting yoghurt, will get you nowhere.
Normal, everyday, mundane even - that's the ultimate green goal.
Ramon Arratia is a Sustainability Director at carpet and floor covering giant InterfaceFLOR, reknowned as true sustainability front-runners. Ramon is a regular speaker on sustainability issues and author of the book Full Product Transparency. In this exclusive no-holds-barred interview, Arratia lays down the law on industrial sustainability in no uncertain terms.
How did you personally get involved in the sustainability agenda?
I wasn’t passionate about sustainability at first. I was a quality manager at Ericsson, when I was offered a job as sustainability manager and I took it. I soon realised that we had to deal with the biggest impacts first, rather than just say ‘oh, we have to do something’ and putting efforts into pet issues or issues that are not strategic. I’m not a hippie or a tree hugger who wants to ‘oh, save the world’, I’m more of a cynical person who wants to focus on the things that will make the biggest difference.
I moved from Ericsson to Vodafone in the UK and from there to InterfaceFLOR five years ago.
What are the main challenges you face?
We’ve come a long way in terms of managing our factories, but our factories only represent 10% of the whole impact of carpet. Most of the impact of carpet is in the raw material. So our main challenge is finding alternative raw materials or recycled raw materials that are cheaper than our current raw materials. That’s a huge challenge.
We have achieved this in a couple of instances, but in others we still have to pay a premium price. Our recycled fishing net yarn is such a premium product – we accept it because we think reputation or margin-wise we recover that cost.
It depends on the customer – the average carpet fitter isn’t going to pay a premium, but if you sell it to, say, PwC in London where their biggest cost by far is employees, they’re willing to pay a premium for having nice offices with a nice story behind its fittings to keep those employees happy.
Yesterday I opened the BigEcoShow at the Stadium of Light in Sunderland. My address was entitled "The Quiet Green Revolution" - reflecting on the scale of the changes happening already on the green agenda, and the need to develop more quality green products and services to bring sustainability to the mainstream. You can listen to my speech here:
I was followed by keynote speaker Paul Taylor of Camira fabrics which is one of those fabulous green companies that no-one has ever heard of. In my favourite case study, the company took a month's worth of jute coffee sacks from Starbucks, made them into a fabric and sold it back to the company so they could use it on seating in four new outlets (this 'product with a story' is a theme which I think will grow in coming years). It is companies like Camira who are making that quiet green revolution happen.
On Monday, I spoke at the inaugural Preferred Supplier event at the Design Centre in Gateshead. My speech was entitled "Whose footprint are you part of?" - about responding to customer demand for improved environmental performance.
I recorded my 13min speech and you can hear it here:
The UK's political conference season was dominated by a debate over the 'cost of living crisis'. Labour leader Ed Miliband blamed this on a lack of competition in energy markets and pledged to freeze prices should he take power in 2015. Right-wing Conservative MPs countered that the rise in energy prices has been due to the green taxes implemented by Miliband when he was energy and climate change Secretary and his Liberal Democrat successors.
Unfortunately neither claim stands up to much scrutiny - the evidence suggests the problem is much more fundamental than that.
First of all competition - the big 6 energy producers do not make excessive profits, at around 5-7% they are comparable to the big 4 supermarket chains which operate in a ferociously competitive market. Secondly, green taxes account for less than 10% of energy bills - and a proportion of that pays for energy efficiency programmes without which average energy bills would be even higher.
Look instead at the MGI commodity index (which includes energy, food and minerals) in the graph above. Having spent the 20th Century falling, commodity prices have soared in the 21st. Some blame this on speculation by investors, but prices have been on the up for over a decade now, a strong trend unlikely to be caused by short term financial manoeuvring in the markets.
I believe, the only explanation left for such an uptick is that supply is simply struggling to keep up with demand - our consumption is rubbing up against ecological limits. So maybe our politicians need to broaden their thinking and their policies - and the rest of us, too.
But more often there is a slow evolution up to a tipping point and, then, BOOM.
This can be in a niche area, such as the almost complete replacement of virgin glycerol by biodiesel byproducts. Or it can be on a massive scale, such as the high street meltdown caused by internet shopping and the associated shift to digital entertainment - MP3s, eBooks, movies on demand etc.
But with the big buyers - the big retailers and the public sector - shifting from low impact suppliers to high impact suppliers, some companies are going to see huge opportunities and others existential threats.
So are you ready to bloom in the new green economy, or are you just going to fade away with the old?