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.
Ils ont pris l'Innovation Plane jusqu'à Berlin
Forts du succès de l’Innovation Train parisien en juin dernier, Co.Station, BECI et Brussels Creative ont organisé – avec le soutien de BNP Paribas Fortis - un vol de 100 places pour Berlin le 23 novembre dernier. Dans l'avion, pas moins de 54 clients, collaborateurs et experts invités par la banque se préparaient à plonger au cœur de l'économie circulaire berlinoise durant deux jours.
L'économie circulaire, 'Scaling-up' et 'Intelligence artificielle et support pour réinventer la ville' étaient les trois trajets prévus lors de ce séjour à Berlin. Au programme: visites d'entreprises, workshops et networking. La banque a résolument opté pour le premier trajet; c'est celui qu'elle a proposé à tous ses invités.
"L'économie circulaire est en effet l'un grands thèmes* de développement stratégique de Corporate Banking", explique Aymeric Olibet, responsable du groupe de travail mis sur pied sur le sujet depuis juillet dernier.
"Nous sommes convaincus que, compte tenu des immenses enjeux environnementaux, en particulier le réchauffement climatique et la raréfaction des ressources, la plupart des entreprises devront tôt ou tard changer de business model. Nous voulons les sensibiliser à cette nécessité, et ce voyage à Berlin est l'une de nos premières initiatives à cet égard. Les entreprises, mais aussi leurs chargés de relation, doivent savoir que la banque veut et peut les accompagner dans cette transition."
La surprise des clients
Frédéric Tourné, Head of Environmental Management chez Befimmo, était du voyage. "J'ai été tout autant surpris qu'enchanté par cette invitation. A priori, ce n'est pas là qu'on attend son banquier. J'ai pu découvrir des projets inspirants, comme 'Block-6', qui récupère et traite les eaux usées d'un ensemble de logements pour les réinjecter dans ces habitations mais aussi dans la culture de légumes (hydroponie) et l'élevage de poissons (aquaponie). La rencontre avec un des fondateurs d'Ecosia, le moteur de recherche qui plante des arbres, a également été très intéressante."
"Mais ce qui m'a surtout frappé, c'est l'attention et la disponibilité que nous ont témoignées les gens de la banque; ils voulaient vraiment comprendre nos attentes et nos besoins, savoir où nous en sommes dans notre réflexion pour un monde plus durable. Réaliser que sa banque partage cette préoccupation donne envie de développer de nouveaux projets. La durabilité est certes une valeur importante chez Befimmo, mais nous pouvons encore aller plus loin, j'en suis plus que jamais convaincu. C'est aussi très précieux de rencontrer d'autres entreprises, de sortir du quotidien où nous avons tous le nez dans le guidon. Bref, je suis revenu avec plein de cartes de visites et une très très grande envie de faire bouger les choses dans mon entreprise. "
S'inspirer de la nature
L'économie circulaire s’inspire des principes du vivant, lesquels reposent sur les cycles (et le recyclage), l'interdépendance, la coopération, l'optimisation (plutôt que la maximisation).
Aymeric Olibet: "Cette économie vise à limiter les externalités négatives, comme la consommation de matières premières et d’énergie, au profit d’externalités positives, telles que la régénérescence de la biosphère ou la création d’emplois locaux. Notre ambition est de soutenir les projets visant à passer de processus de production industriels linéaires à des processus circulaires. Soutenir, c'est non seulement offrir des solutions financières adaptées, mais aussi et surtout aider le client à se remettre en question et à franchir le pas. Ce voyage à Berlin n'est, je l'espère, que le premier événement d'une longue série."
Plus d'infos sur ce voyage ici.
*Les autres thèmes de développement stratégique de Corporate Banking sont: la décarbornisation, la capital humain et les smart cities.
Green IT Barometer: best practices from 2017
The 2017 barometer with tips for an ecologically responsible IT policy is back. This deals you a whole fistful of winning cards for greener IT in your company. We summarise the highlights for you.
The barometer is published by Alliance Green IT (AGIT), a French organisation that actively brings together IT actors in the area of Green IT. AGIT wants to reduce the ecological footprint of information and communication technology, develop "green" IT competencies in organisations and provide training and assistance in the battle against greenwashing (companies who pretend to be more environmentally conscious than they actually are).
For the 2017 edition, the scope of the survey was expanded. For instance, it now also covers the ecodesign of software packages, processing of electronic waste, and energy savings in data and print centres.
Plenty of work still to be done
On reading the study, the main thing we learn is that there is still plenty of work to be done. The figures speak for themselves. A total of 550 companies or organisations took part in the survey, representing their sector of activity or turnover. Forty per cent of them make use of waste collection centres that are actually intended for private individuals. In addition, more than half the companies and organisations are unaware whether or not they use equipment with an ecolabel.
Despite the fact that a company's social responsibility is now an important aspect of its economic activity, the criterion of sustainability is not yet truly taken into account, for example, during IT procurement. The profession of buyer therefore needs to undergo a sea change, making them more likely to be responsible for a company project that is unique to the company.
IT: a new paradigm
One of the best practices that is mentioned in the study is the re-use of computers. Instead of just recycling the basic materials, they are given an upgrade so that they can continue to be used. In this way, hundreds of jobs are created, that also can very well stay in the home country and don't have to be exported. Other direct consequences are lower emissions of greenhouse gases (810,000 tonnes) and less water consumption (6 billion litres), the equivalent of the annual ecological footprint of 100,000 people. This is just in France (the main area studied by the organisation).
Talking about the end of the useful life of IT equipment... Around eight out of ten companies do not know what happens to electronic waste, also known as e-waste. This is despite the fact that putting it to good use has been mandatory since the implementation of a European directive in 2005, and it has grown since then into an extremely lucrative business. E-waste is now regarded as a source of secondary raw materials.
The benefits of reusing waste water should be crystal clear
Yet while easy to say, the practice is still not a matter of course. Because our blue planet is not as blue as it seems, and recycling waste water is an ethical way of treating a resource that is scarcer than we realise. We went to Block 6 in Berlin's Kreuzberg district to find out more.
Did you know that fresh water accounts for less than 4% of the planet's water resources, and that most of this is unusable, buried deep below ground or packed away as ice? Contrary to appearances, fresh water is not a boundless resource that simply needs to be directed through our taps. Whether intended for domestic or industrial purposes, water must be collected, treated, distributed and decontaminated after use. It generates a considerable financial cost, and its price will continue to rise into the future.
Armed with these facts, a pilot project is under way in the Kreuzberg district of Berlin at the heart of a complex of buildings called "Block 6", as well as on some neighbouring sites. It is here that 30 years ago, a waste water treatment plant was created and has continued to be perfected over the years. The system functions effectively and supplies water that is clean and less expensive than mains water. It is making people think, which is precisely the objective.
A model to emulate
Block 6 contains around 180 flats housed in a quadrangle of properties positioned around a green space that combines areas for recreation and water treatment. Strong environmental concerns were part of the original concept for the block, which was built in 1987. One of these is the treatment of waste water known as "grey water" (water from baths, showers, sinks and washing machines, which is not heavily contaminated). This is why the block was constructed to include a dual network of pipes, enabling water to be collected according to its source and then reused in different ways.
They say practice makes perfect, and this also applies to water systems: over time, the facility has been significantly improved. The technology is now mature, and the results obtained are more than convincing. In short, “grey water” is directed into a series of tanks where it undergoes a gradual biological treatment process involving the addition of selected bacteria. At the end of its journey, the water is restored to a quality close to that of mains water, and can be reused without the slightest risk. Since current legislation does not allow treated water to be regarded as drinking water, it is only used to supply toilets and gardens. However, this is a legal restriction that has no relation to the water's inherent quality, and the law could be amended to allow reasonable use of this new resource.
Waste water or a raw material?
Over time, the experiment was widened to include so-called "black water" – the dirtiest water flowing from kitchens and toilets. This water, which is full of nutrients and different chemical compounds, is collected via a separate network of pipes and must be treated in a specific manner. Treating “black water” locally is advantageous for two reasons: Firstly, it allows pollutants to be captured "at source" and much more effectively than when they are diluted in the large quantities of water that make their way to more remote treatment plants. With this system, harmful compounds are prevented from being released into the oceans, where they can no longer be removed. Secondly, nutrients such as nitrogen and potassium present in waste water can be salvaged and reconverted into fertilisers which are no different to those sold on a commercial basis. Considering that more than one litre of oil is used for the industrial production of one kilogram of fertiliser, it is not difficult to see how beneficial it would be to envisage waste water as a new raw material. However, this is experimental research yet to evolve into a commercially available product. But it certainly works!
Source of energy
Reusing water collected nearby offers further benefits still, not least the robustness of the process: this is tightly controlled, and the risk of service interruptions is very low. Should problems arise, a temporary service interruption can be resolved by simply switching to the public mains supply. And since the price of reused water is lower than that of mains water, this becomes a supplement to locally-produced water and the cost to the final user can be reduced.
Another significant aspect of supplying water is the energy required. The urban water cycle uses a huge amount of electricity. For example, supplying water to Berlin and it 3.5 million inhabitants uses the same amount of electricity as the entire consumption of a town with 280,000 people. Recycling water in the same place allows energy to be saved. It is entirely possible to convert the residual heat from grey water (for the most part produced in bathrooms) to electricity, which is then in turn used to pre-heat the water directed to these same bathrooms. Proximity is the key to success since the greater the distance, the more heat is lost. And by maximising the energy recovered on site, the additional energy used to supply water can be minimised: a gain on two counts.
A technique of the future
This model works – the results are there to prove it. Since 2013, the site has also served to demonstrate the efficiency of local recycling techniques. Studies are under way here with a view to improving methods further still, and to take them in new directions. We have already touched on the production of liquid nutrients for agriculture, but we can add to this plant cultivation (hydroponics), fish farming (aquaponics) and the production of liquid fertiliser extracted from so-called "black water". Not to forget the original objective of the plant, which is to convert waste water into clean water that can be reintroduced into consumption channels. Drinking recycled water is certainly not yet on current menus, but the idea will gain ground because a time will quickly come when there will simply be no other alternative. Is this not already the case on space stations?
To find out more, go to: www.roofwaterfarm.com/en/block-6
An expert in green transition on the sustainable challenge
In nature, everything is linked. No activity is environmentally neutral. Marc Lemaire (EcoRes, Groupe One) talks to us about regulation, the circular economy, 'spruce-style' companies and the laws of nature
The fates of humankind, the earth and the economy are closely linked. Nothing we do is without impact on our planet. "However, we have built our world upon the paradigm of separation, which has led to our current environmental situation: an abused planet, biodiversity under threat, excessive carbon emissions and toxic conventional agriculture" deplores Marc Lemaire, commercial engineer and agro-economist and social entrepreneur.
He refers to the limits of planetary resources within which humankind can successfully work and live: "This is a historic moment, but three have already passed, and we are heading for the cliff edge. We have never lost so many species, nor emitted so much CO2 as we do now! Nevertheless, it is not too late to act, as long as we do so with the right attitude. Marc Lemaire: "We either remain indecisive, or we take responsibility for the state in which we leave the earth for our children, taking into account events such as forest fires in Portugal. Today's climate-related catastrophes are the product of our CO2 emission rates in 1968!"
According to this logic of separation, it's as if we decided that it was OK for our activities to harm 'the other' with impunity, in this case the environment, resources, fauna, flora, and the earth that is our home.
Collective, rapid change expected
For William De Vijlder, head economist at the BNP Paribas Group, it is clear that policy can reinstate unity and a connection to the market. The aim should be to encourage economic stakeholders to increase positive externalities through fiscal incentives such as subsidies, taxation or emissions trading, but also to impose standards and sanctions to reduce negative externalities.
Marc Lemaire, a pioneer of the green transition, would like things to move faster: "The Paris Agreement requires every stakeholder to make substantial efforts, but these are hard to monitor." That is only possible for big manufacturers, through agreements at sectoral level which require them to compensate for excess carbon emissions by purchasing green certificates intended to finance renewable energy development projects in the southern hemisphere."
Awareness is growing
Twenty years ago, were many of us truly aware of the consequences of our actions on the planet we will leave to our children? Many were still sceptical about the causes and extent of the damage. Today we have become more clear-sighted. This is an important breakthrough. The link to health is also becoming more and more significant. For example, endocrine disruptors (some can be found in bottles, plastics and inside cans) have been declared a health risk by the WHO. In addition, we have seen an increase in the number of patients suffering from asthma and cases of early puberty. Studies have been published on this topic for the past 15 to 20 years. Today, we have a better understanding of what is at stake.
What is expected of businesses?
These self-same opinionated citizens are also employees who are becoming ever more sensitive to the approach their companies are taking to the fight against climate change; an approach that should be long-term and to the benefit of all, from employees to shareholders and customers. Organisations are now expected to include CO2 emissions, fine particles and social impact in their accounting and their financial balance sheet. A company's positive contribution to society is becoming a piece of data as significant as its figures and revenue.
Values such as those promoted by pioneers such as Exki have become a model for inspiration. However, according to Marc Lemaire, a law would ensure that the collective interest takes priority: "We need to take a sector-based approach. Coca Cola won't measure itself against an IT company on this issue, and a bank won't compare itself to Unilever. The leaders in each sector should be identified to determine the criteria they work to. Bionade is a lemonade that is manufactured in a fully organic manner, using 100% organic raw materials, and which contains no alcohol. Can their criteria be applied to the whole sector? If so, wouldn't it be a good idea to impose their best practices as the standard for all fizzy drink brands?" proposes Marc Lemaire.
Rubbish is transformed into a new product
Green transition shouldn't be a catch-all that encompasses CSR, a bit of green development and social responsibility. A growing number of company executives understand the importance of taking a sustainable approach, but the steps taken are still insufficient and unconnected. We now need to move onto the next stage and ensure a company's approach is structured around the core of its activities. The concept of a circular economy is gaining traction, and it's not just hype. Marc Lemaire: "We have successfully integrated the need to recycle. It's a nice step, but we are still on a linear path; an economic model that extracts minerals from the earth to meet its needs and then simply throws them away. We do the same with consumables."
We should therefore look to nature and draw inspiration from the laws dictated by common sense. Nothing is wasted in nature. Everything is recreated to be transformed. A living organism that dies will be recovered as nutrients to give life to something else. The cycles of life and death are closely entwined. Only humankind has created the idea of waste.
The circular economy, which is the opposite to a linear one, creates loops and strives to use industrial waste as part of another economic cycle. An example of this is the oil used for deep frying chips, which is no longer thrown away, but used for biodiesel production instead.
The separate management of biological and technical cycles is another basic principle of the circular economy. The inert components, such as the screws and bolts, can be extracted from a wooden chair and then separated from the living parts. The wood can be reintroduced to the biological circuit and live for another cycle. The aim is to give it as many lives as possible. The same can be envisaged for the bolts. Their life span can be extended by recovering them and multiplying their uses in order, in short, to produce less.
How can their lives and use spans be managed? By becoming the owner of the material and ensuring it is traceable as Unicore does. The company buys cobalt from the mines in Katanga and retains responsibility for it.
The service economy also has a role to play in this desire to share resources in a smart way. "I am not going to buy a car that my family and I only use occasionally, instead I am going to use a car rental service. Rental services are expanding into a growing number of sectors, but this has hardly been studied yet," adds Marc Lemaire.
What is the role of a bank?
A bank has an impact on everything, and its effects are mainly indirect as it supports all of its clients' activities. This confers upon it another responsibility. How does Marc Lemaire envisage the role of the bank in the future? "A financial operator has the capacity to make an enormous difference. Like a tree, a bank must be sustainable and a have a desire to live. But if it transcends this role and assumes responsibility as a guardian of the forest, it can promote biodiversity by favouring the birth of new species.
What if, in my forest, there were trees working to deplete the soil, which is degrading significantly? Marc Lemaire: "Imagine if, as a good manager, I decided to sort them by providing less financing to spruce-style companies that deplete the soil and by providing easier access to money for young shoots that want to grow. They are tomorrow's sustainable champions. This isn't something that can be achieved overnight, but in time it should optimise the structure of the bank's portfolio." In other words, banks also have a responsibility to choose how they distribute their energy, either to companies that power the sustainable economy or to spruces that harm the ecosystem.