A plea to use responsible and regenerative economic models to break the cycle of infinite growth and the misuse of resources deemed "free".
Today, two billion people are members of the global middle class and we are consuming the resources of 1.7 planets. At this rate of consumption, how can we possibly meet the needs of the extra three billion consumers who will join the middle class by 2020? The biosphere will surely not withstand this increase in such a short space of time. According to Matthieu Leroy, until recently IKEA's Sustainability Manager, we have reached the peak of the curve not only for the consumption of oil, but also for sugar, red meat, consumer goods – and furniture. Our carbon emissions are increasing at an exponential rate, but the same applies to toxic emissions jeopardising the water and air and to the earth's deteriorating biosphere. And although the supply of resources is dwindling, only 7% of waste is recycled and injected back into the economy.
Why is this? Because we remain faithful to the linear economic system based on infinite growth, at the expense of the resources of the earth's surface. The consequence of this is that very soon, we will be faced with a considerable risk of shortages of raw materials as well as volatility and increasing prices, for example.
So "extract, produce and discard" should be consigned to history as soon as possible. Scientists say that if we do not drastically alter the factors behind our carbon emissions and use of resources in the next three to five years, climatic phenomena and mass extinctions of species will spiral out of control. To hasten progress towards the new economy, a new EU law is under discussion that would aim to oblige companies to retain ownership of the materials they use to produce their products, selling only the service linked to their use. But our pragmatic neighbours in the Netherlands have pushed ahead: there, 50% of purchases made by state services must be circular by 2030.
Let's switch as soon as we can
Innovation is certainly gaining ground on our old habits: examples include "light as a service" for retailers, whereby you only pay for the light you use and not the actual lights, contracts for the use of tyres on demand, and office photocopiers that are easily disassembled and only available under leasing agreements. Initial experiences of circularity show that the concept produces greater benefits in the medium term than simple sales. But at this stage of designing environmental strategies in the majority of companies, the focus mainly falls on a marginal reduction of negative impacts.
"This won't be enough", declares Matthieu Leroy. "We cannot continue to increase well-being and to grow if we do not firstly consume better, but also consume less." Though Leroy's former employer IKEA is active in recycling, his passion for the circular model led him to go further and establish STRATA.
His company provides furniture for hire rather than sale, catering for the niche market of landlords who offer accommodation to students or expatriates. "When a table has served its purpose or has gone out of fashion, it is typically discarded as a whole. The same applies to an item of child's furniture that in under two years is no longer useful", continues Leroy. He advocates an entirely new approach that involves a fundamental review of the way we create value, and no longer regards customers as consumers of products but as users of services.
Frentlife is another young Belgian firm illustrating the same furniture hire concept. When the furniture is no longer useful it is either collected and replaced or given to charity.
Several years ago, Amsterdam's Schiphol Airport signed a contract with its provider to receive light "as a service": the provider retains ownership of everything up to the bulbs which it is responsible for installing and replacing, so that the airport always has sufficient light. Costs are lower for the airport, and Philips considerably increases its profit margin while also establishing a long-term customer relationship and drastically reducing the effect on the environment. What could be better than that?
The message is circular
The circular economy aspires to be a model that repairs and regenerates, that abolishes the very idea of the lifespan and replaces it with the goal of reusing for the longest possible period, repairing and recycling. It allows action in various domains, some of which are preferred by companies. One example is the use of non-toxic biological materials (such as biomass and wood) that harmlessly re-enter the biosphere, eliminating any type of waste. Technical components could, once optimised, be reintegrated into a new manufacturing process.
It will also be necessary to design and shape our products for the future in order to extend the lifespan of everything we make. Product-service systems, assisted by technology and market places that connect supply and demand, are another phenomenon increasingly breaking the link between the financial growth of companies and the use of resources. The owners of the Uber and Airbnb platforms have no resources of their own since they rely on what their members have to offer. Alas, a philosophy that remains strongly capitalistic means they have not entirely left behind the linear world, and their wider social effects remain significant.
Other forerunners have taken up the idea of turning waste produced by another firm into resources for use. So some of the 9,500 products appearing in the IKEA catalogue are made from cardboard and plastic waste produced by its own stores. For more examples and details of the five circular economy business models, read the article Progress towards the circular economy. In addition to these, Matthieu Leroy's advice is to explore a variety of areas for action.
Gone too: capturing value and keeping it for yourself
This approach is undoubtedly more disruptive and still rarely used. However, companies are beginning to link up to create value jointly, doing so more quickly than they would if working alone. Solar Impulse is among the first incarnations of this quest for common value and its capacity to speed up the transition. Sharing developments in this way promotes faster learning by the engineers of the parties involved. The Solar Impulse Foundation brings together Solvay, the Lausanne Ecole Polytechnique, Google and others, who are creating the solar aeroplane and will then share the benefits – both tangible and intangible. Value can sometimes be purely intangible, for example media exposure given to the project partners. This makes it no less advantageous to the parties involved.
Models which are 100% responsible
For Matthieu Leroy, a genuine transformation requires innovative models, including a complete mapping of the positive and negative effects of the activity in order to take into account all "externalities".
"Externalities – such as the generation of large quantities of waste or the carbon impact of extraction, production, use or premature shortening of product lifespans – are not on the whole considered when a conventional business model is established. They just need to be taken into account when businesses are designed. It's not that difficult to do but it's key", he explains. Since he continues to own his furniture, Leroy has every interest in designing modular pieces that last as long as possible and can be assembled or disassembled quickly and easily.
And this is the only way to reduce costs in a circular system. Operating in this way means the manufacturer optimises their model: revenue is more predictable thanks to regular income throughout the lifespans of their products, which are lengthened considerably for the benefit of everyone. Rental also proves cheaper for users, since the object is reintegrated into the circuit in a way that saves energy, materials and labour and produces positive social and environmental externalities.
As a bonus, users becomes less reliant on commodities and their cost. "For example, by renting a piece of furniture to 10 different customers rather than selling it to just one, you can double your growth more easily while also divorcing it from your resource needs. In this way, you can seriously limit your negative impact. The CEO of Philips says this is very profitable in the medium term and I take his word for it!" Leroy adds.
Our bank's experts help advance energy transition via Solar Impulse Foundation
Two specialists from our bank are among the top experts in this international foundation, which collects profitable solutions for a faster transition to sustainable energy.
Sustainability has been an important pillar for our bank for many years. For example, we have been carbon neutral since 2017, accompany companies in their energy transition and support start-ups and organisations that work with renewable energy. The Solar Impulse Foundation therefore has been benefiting from the sponsorship of the BNP Paribas Group from its inception.
Reconciling ecology and economy
The Solar Impulse Foundation was founded by the Swiss psychiatrist and pioneer, Bertrand Piccard, who makes it his life’s mission to demonstrate the opportunities of sustainable development. In 1999, he was the first to make a non-stop balloon journey around the world and, in 2016, he completed that journey again with a solar-powered aircraft. Since then, Piccard has used his popularity to publicise solutions that can protect the environment profitably. The ultimate goal? Motivate decision-makers and companies to set more ambitious environmental targets and better energy policies in order to achieve carbon neutrality.
1,000 sustainable solutions
Four years ago, Solar Impulse Foundation announced that it was looking for 1,000 sustainable solutions worldwide to accelerate the energy transition. That unique portfolio of solutions should then become an essential part of all environmental decisions, debates and political negotiations. Specifically, these are solutions that companies already have or will introduce to the market and that are economically profitable and technologically feasible, but do not yet have the visibility they deserve.
The targeted 1,000 solutions were reached on 13 April 2021. But because innovation never stops, the Foundation continues to add solutions.
Expertise from our bank
To gather as many innovative solutions as possible, the Foundation receives help from many partners and an extensive pool of more than 300 experts from companies around the world. Since any company may present its product on the Foundation’s website, these experts must assess the registered solutions objectively and in detail in three areas: profitability, environmental impact and technical feasibility. For a few years now, BNP Paribas Fortis employees have also devoted themselves to this task.
One of them is Quentin Nerincx, Senior Advisor Cleantech at our Sustainable Business Competence Centre, who advises companies on becoming more sustainable. “I didn't hesitate to apply," says Quentin enthusiastically. “It’s an exciting project with a wonderful and ambitious goal. Every month, the Foundation sends me a file for analysis. Each solution is studied by two different experts and, if they both make a positive judgement, the solution is labelled by the Solar Impulse Foundation. This quality feature can help to accelerate the implementation of the proposed solution - for example, a new technology or a product.”
Gunter Brems, Sustainability Expert Housing & Sourcing Services, also lends his expertise: “It is an honour to be part of this prestigious project. I have assessed several files in 2020, which was an enriching experience not only to share knowledge but also to acquire new knowledge. It is great to see how innovative some companies are dealing with a changing world, just as our bank does, and how to look for sustainable alternatives together.”
Helping our corporate customers with their energy transition
“This project is also interesting for my job as a sustainability advisor at the bank, because I keep up to speed on new solutions that are being developed worldwide. This allows me to expand my expertise continuously and to contribute broadly to corporate clients looking for solutions for their energy transition", adds Quentin.
At the end of last year, Quentin was informed that he is one of the top 20 experts providing expertise to the Solar Impulse Foundation. Gunter even made it to the top 10. These rankings are mainly based on the number of solutions analysed and the quality of the reports. “We are delighted that our input is appreciated”, the two experts say.
The collection of more than 1,000 approved solutions can be found on the Solar Impulse Foundation website. This summer, the Foundation is also publishing a Solutions Guide that will enable governments, companies and individuals to find and implement concrete solutions on a large scale. With this tool, everyone can find solutions to problems in specific geographical, industrial or financial environments in just three clicks.
The Foundation will also provide various public authorities with a Cleanprint, a kind of report and plan for governments and companies to achieve their climate goals using the solutions collected, in accordance with the Paris Climate Agreement. The report will also indicate where public authorities can modernise their legal frameworks for the ambitious implementation of these solutions. The first Cleanprint will be presented by Bertrand Piccard at COP26 Climate Summit in Glasgow in November 2021.
Jean-Laurent Bonnafé, CEO of BNP Paribas: “There will be no future for society without a successful, long-term energy transition. This transformation can only be undertaken collectively and requires technical and technological service solutions. In taking up the challenge to select 1,000 solutions which encourage environmental protection while also being profitable, the Solar Impulse Foundation is helping us to reach this goal in a very practical way and in line with the aims of the Paris Agreement.”
Seeing that the solutions collected are actually followed up by government leaders and other decision-makers will be the crowning glory of our work", conclude Quentin and Gunter.
Contact our experts at the Sustainable Business Competence Centre
How can the blue economy make a difference?
What if the future of sustainable business is at the bottom of the ocean for once? Marine biodiversity contains resources that can meet the environmental challenges of many sectors. Perhaps yours, too. Find out more during an online event about the promising blue economy on 11 March 2021.
Blue is the new green
71% of our planet consists of water. Seas and oceans play a crucial role in our climate, and coastal areas can capture up to five times more CO2 than tropical forests. The blue economy wants to benefit from all these advantages to improve both the environment and our well-being,
With local being the keyword. And that's where the difference lies with the green economy, which also focuses on the environment and health, but not always in such a sustainable and smart way. Eating organically grown quinoa from Ecuador, for example, is healthy and eco-friendly, but transporting it here is expensive and creates high amounts of pollution.
What does the underwater world have to offer that can be reused, recycled or converted into new sustainable products? A lot, it turns out, as the unique properties of organisms such as algae, starfish, jellyfish or sea cucumbers can be transformed into sustainable products with high added value. This is a process that requires creativity and innovation, and is already with us today.
For your sector, too
The blue economy is expanding rapidly and could bring about a revolution in a wide range of sectors such as healthcare, food, the plastics industry, cosmetics, energy and even aerospace. It is fully capable of helping companies transform their traditional activities into a sustainable model. And in Belgium's ports, the country already has a huge advantage and excellent access to coastal and offshore areas.
Another scoop of microalgae?
Microalgae, for example, offer a lot of promise, as they can renew themselves and thrive both in the desert and in the ocean. They contain many healthy components, such as proteins, that can be used to develop food products.
When discussing the oceans, the plastic problem is never far away. Human beings are producing more and more plastic as the world's population grows, yet the problem with the existing plastic is that it's nigh on impossible to recycle as its components are hard to separate. By making a completely different type of plastic from biomass, its recycling is already considered at the design stage. A large amount of biomass remains unused in the oceans, and using smart, natural polymers could revolutionise plastic production, for example. These polymers are capable of self-renewal and can adapt to their environment.
Who will pay for it?
Great ideas, you think, but who will pay for them? The financial sector certainly wants to play a role in this revolution and is prepared to take risks and invest in new technologies, production systems and R&D.
This commitment was formalised in various ways during the climate week in New York at the end of September 2020. BNP Paribas signed the Principles for Responsible Banking (PRB) and joined the UNEP FI's Collective Commitment to Climate Action, a partnership between the United Nations Environment Programme and the financial sector. In terms of the maritime sector, the Bank committed to working with customers to preserve and sustain the oceans. Read more about this commitment here (only available in French).
Would you like to find out whether the blue economy could make a difference to your sector?
Sign up here for a free online event on this subject on 11 March 2021 (in English only), organised by BNP Paribas Fortis Transport, Logistics and Ports Chair.
What is the future for mobility post-coronavirus?
The health and economic crisis has affected all aspects of every sector. Among them, mobility, for both private individuals and for companies.
Mobility is evolving every day. And it has been driven further as a result of the coronavirus crisis. Many people have been locked down and working from home has been widespread in many parts of the world.
The coronavirus crisis has changed concerns about transport
We are no longer moving around in the same way. And concerns are no longer the same. According to a BCG Consulting report, social distancing and vehicle cleanliness are the most important aspects for 41% and 39% of respondents, respectively, when choosing a mode of transport. There is also pre- and post-Covid mobility, with respondents being more likely to choose walking, their own bicycle or scooter, or their car than before the crisis.
Sustainable and alternative mobility in the years to come
Mobility has not necessarily waited for the coronavirus crisis in order to evolve. And, according to the same report, the share of more environmentally-friendly vehicles will continue to increase. By 2035, more than 35% of new vehicles will be electric cars, becoming the predominant form of motorised transport worldwide. Autonomous cars will also become more common, with 10% of vehicles being level 4 vehicles (able to travel without a driver, for example), and 65% level 2 or higher.
Customised mobility for employees, right now
The future of mobility is also relevant now, especially for businesses and the self-employed. The need for alternative modes of transport does not only concern private individuals, but also employees. There is no longer a single mode of transport for all situations, but a range of means depending on the need at a given moment. Electric cars, hybrid vehicles, electric bicycles, a public transport season ticket, car sharing, leasing, etc. These modes can take different forms and be combined in a mobility card, for example. There are benefits for the employees and managers of a company but also for the company itself through cost reduction, optimisation and fleet management.
Find out more about our tailor-made mobility solutions
The road to alternative mobility
Nowadays, responsible fleet management is built around sustainability. We're here to help you identify and realise your Corporate Social Responsibility ambitions.
Together we can cut your company's carbon footprint, improve employee mobility, and make sure these steps become a central pillar of your company's added value. In short, our aim is to have an alternative mobility policy.
We can help you make the switch to alternative mobility and new technologies to reduce your carbon footprint. Our SMaRT approach ensures your fleet has the best energy mix to match your strategy and driver profiles.
Alternative mobility needs new technologies to go hand in hand with new infrastructure. That's why we offer not only electric cars, but also the right charging solutions, too. As part of our integrated service provision we can determine how many charging points you need, install them, and manage how they are used both at the workplace and at the driver's home.
Modern mobility management is about more than just cars or vans. You need a 360-degree approach. We'll work with you to determine your mobility strategy and needs. Greener cars are just one of the options available. We have a number of mobility management solutions (such as the Mobility Card) and alternative mobility solutions (such as bicycle leasing) to inspire your organisation to offer a more flexible range.
Focus on employees
When you put your employees at the heart of your organisation, you're in a better position to find skilled employees, satisfy them, and retain them. Go a step further than just an alternative mobility solution: focus on their safety and let them play an active role in achieving your sustainability goals. Trust us to improve their safety and integrate new technologies.