Article

10.04.2018

Circular economy: a must to save the planet

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.

The young Belgian Cohabs renovates town houses and turns them into well-equipped, comfortable and stylish cohousing projects. The social and environmental aspects are also important in their story.

"The real estate market has been very tight for a few years. Finding a house or flat in the city is not easy. The economic situation is not ideal for new housing projects, but demand for housing remains high”, explains Youri Dauber, CEO of Cohabs. “The challenge? To curb parcellation and concreting by densifying cities. We also need to make buildings more energy efficient and, last but not least, find solutions to loneliness, which many people suffer from across generations.”

Cohabs has 2.500 rooms, spread adcross 150 buildings in Brussels, Paris, New York, Madrid and Luxembourg. The rent includes all costs such as internet and a Netflix subscription, as well as a cleaning service and the use of the gym, a cinema room, the garden and a coworking space. To make living together easier and avoid any frustrations, Cohabs supplies a number of basic products in all houses, such as toilet paper, washing-up liquid, olive oil and salt and pepper. The Cohabs residents of a city keep in touch through an app and can meet each other at a party held every month.

Not just young professionals

"When we started out in 2016, we had a target group of 25-35-year-olds in mind. But we immediately received a lot of applications from people over 50,” says Dauber. "My own parents, who are 75, pushed me to open up the concept to their generation too. We realised that cohousing is not just for young professionals. There are also people in very different stages of life who are going through a kind of transitional period. This is often accompanied by loneliness, as in the case of a divorce or someone who has lost their partner. We also think about what we can offer families. They need larger communal spaces and well-defined conditions. Like any young and innovative company, we’re evolving as we go along. We learn by trial and error.”

Solidarity and social coexistence

The young managing director is regularly amazed by the social adventure that coliving can be. "We had a 45-year-old Syrian refugee who saw something in cohousing. We thought living with a group of twenty-somethings would never work out. But we were wrong. The relationships built there proved so rich that we’re now working with the French NGO Singa. In the meantime, we offer solidarity rooms in some forty of our houses.”

Design, upcycling and an app

The young company is firmly committed to design. To that end, it works with Lionel Jadot, the Belgian pioneer in upcycling. His approach fits perfectly with Cohabs’ environmental philosophy, which itself also uses recycled materials for renovations. Solar panels and rainwater recovery are also part of this story. "Achieving an EPC score of B or C is our goal. This is exceptionally good for old buildings,” Dauber adds. "We are carbon neutral and a member of 1% for the Planet.”

Ready to push boundaries together

Cohabs was able to count on the support of BNP Paribas Fortis for investments and the purchase of new buildings. “They’ve been part of our story since our third property. Back then, we were just a small company, but we were asking for significant sums of several tens of millions of euros. But they supported us and granted us loans, which allowed us to grow abroad as well. It’s really a collaboration. They put their trust in us and believe in the potential of our concept."

Cohabs is ready to change the world. Discover even more inspiring entrepreneurial stories.

Quotes

“In forty of our cohousing houses, we offer solidarity rooms for people who want to reintegrate into society.”

“My 75-year-old parents pushed me to open up the concept to their generation as well.”

The Brussels-based scale-up Optimy brings together corporate volunteering, donations, patronage and sponsorship activities all on one platform. On it, their impact on society is concretely measurable.

"Originally, I didn't think of myself as a social entrepreneur, even though I was involved in sponsorship. At the request of our customers, my partners and I have developed an entire provision of services that has become the most comprehensive platform on the market," says Kenneth Bérard, CEO of Optimy.

One of these customers was the BNP Paribas Fortis Foundation, which wanted to make a greater social difference and also give these actions more visibility. "It's a must for companies to contribute to society. This generates added value for the company and fuels a positive spiral. But that social impact has to be measurable. How many children have been helped? How many trees have been planted? What effect does this have on employee satisfaction, image and turnover? Our model offers all of this. This means that companies don't have to purchase new modules every time they want to add additional activities. I think that’s our great success factor. We are the market leader in Europe in our sector and the only company operating in both Europe and North America."

Personal support

"Many companies are full of good intentions. They want to have a positive impact on society, but they often lack a good method to do this efficiently," the entrepreneur notes. "They tend to see all their efforts in isolation. The Optimy platform offers a solution for this. It's easy to put together and it's service-oriented. We adapt to the processes of each business unit and company. It doesn't work the other way around," assures Bérard. "Our customers are not looking for technology; they're looking for guidance. We invest in personalisation, and it's paying off, as a customer satisfaction survey shows."

Structuring actions

The first piece of advice that Optimy always gives companies is: don't shred your efforts, they should form a whole. "We recommend that companies structure their actions using our tool. The corporate social responsibility policy must be in line with the company’s values, DNA and broader strategy. And of course, the actions must be transparent and well executed."

The right partner

From the beginning, the connection Optimy had with BNP Paribas Fortis was decisive for the company’s growth. "The fact that the bank follows us has increased our credibility with our partners, investors, customers and also internally. Now it's setting up a factoring service for us to further support our growth."

Optimy's growth was initially supported by cash flow, which is unusual for a technology company. Financing came into play beginning in 2019. That's when a Canadian fund specialising in software as a service (SaaS) companies and affiliated with the prestigious Massachusetts Institute of Technology (MIT) became a shareholder.

Multicultural enrichment

As with increasingly more companies, one of Optimy’s biggest challenges is recruiting new talent. “We've been able to convert that challenge into an asset,” concludes Bérard. "We attract talent from abroad. Sixty people from twenty nationalities work in our Brussels branch. This multiculturalism is a huge enrichment and has helped us break through internationally."

“The corporate social responsibility policy must be in line with your company’s values, DNA and broader strategy”.

Article

06.09.2023

New mobility: driven by technology

Can technology drive the transition towards more sustainable mobility for businesses? See what Philippe Kahn, Mobility Solutions Expert, has to say on the matter.

Now more than ever, businesses need to rethink mobility so that it forms part of the sustainable transition that needs to take place in our societies. Since 1 July 2023, the regulation meaning that company vehicles with combustion engines will no longer be longer tax-deductible by 2026 has started to have an impact. At the same time, Belgium’s Federal Mobility Budget and its recent developments are making this (r)evolution much more concrete and practical. And one thing is for sure: technology – and especially apps – have a key role to play. Philippe Kahn, Mobility Solutions Expert at Arval BNP Paribas Group, explains why.

1 July 2023: a key date

“In the few weeks that have passed since the pivotal date of 1 July 2023, we have already seen a change in the needs expressed by our corporate customers,” says Kahn. "Some of them had already taken practical steps towards sustainable transition. But nowadays, more and more of them also have to address the specific questions and concerns of their employees. How will I be able to use an electric car when I live in a city and have no charging stations available? Do I want to search for a reliable place to charge every day? And am I ready to fundamentally rethink how I get around? Providing a satisfactory answer to these questions is inevitably a priority for employers. As well as the end-to-end management of company electric vehicles – including the question of charging them – more and more companies are starting to rethink their overall mobility policy, analysing all existing alternatives, particularly multimodal solutions. And that’s great news, because it’s essential for their future. So I think the demand for such solutions is only going to grow. Technology, and apps in particular, are key tools for a smooth transition".

Anticipating change to serve companies better

Whereas this issue is only just emerging for many companies, it has been a priority for Arval BNP Paribas Fortis and Philippe Kahn for years. "For more than five years now, we have been anticipating the changes that are now taking place, ensuring that our vision of mobility and expertise go far beyond leasing. We now have an entire department that deals with these matters exclusively. This enables us to meet and even anticipate the needs of companies that have no experience of these issues, and who sometimes feel a little lost when it comes to this revolution in travel.”

A simpler, smoother experience thanks to technology

But why and how is technology playing an important role in this transition to more sustainable business travel? "It’s making the experience of new mobility easier and smoother for its users. And that's where the latest developments in the market are heading," says Kahn. "In fact, that's also what our new Mobility Arval App now offers our corporate customers. It makes it easier for employers to manage the mobility budget established by the federal authorities. This budget, its three pillars and recent developments are crucial factors when a company is rethinking its mobility. But at the same time, it involves some regulatory complexity. That’s why, five years ago, we started developing a whole range of technological tools to help companies deal with these matters. For example, we  make it simple for our customers to manage the combination of an electric car and bicycle within this mobility budget. In this spirit of innovation, and aiming to improve the user experience, our app integrates all facets of new business mobility, which are all accessible from a smartphone. Use of public transport, shared mobility, taxis, and even parking – even though this is not one of the pillars of the mobility budget – everything is in one place. The app also makes it easier to manage transactions: low-value mobility transactions, such as buying a bus ticket, are automatically captured and validated, so manual checks are no longer needed. Similarly, there is no longer any need to advance money to employees or reimburse them for anything, and no need for them to keep and present tickets or any other proof of purchase. In short, our app translates the entire mobility budget, which can be pretty complex, into a user-friendly tool where all the important components are taken into account: car, bicycle, scooter, multimodal solutions, public transport, shared mobility, etc."

Technology as a strategy accelerator

Arval Belgium’s innovations perfectly illustrate why technology is an important accelerator when implementing new mobility strategies. And it goes without saying that what exists today will evolve very quickly, leading to an ever-richer user experience. As Philippe Kahn says, "there are a lot of innovative tools out there already. But one of the challenges, linked to the complexity of the situation in Belgium, is to bring together all the players involved under the same umbrella, so that the result of this collaborative work can be found in a single 'magic' app. The solutions that exist today in Belgium are often local in scope. This is a limitation that doesn’t exist in the Netherlands, for example, thanks to their OV card.  Belgium’s urban planning realities are also a challenge:  outside the major urban centres, it’s less easy to set up mobility hubs in which all modes of travel are accessible."

One thing is certain: for companies, the transition to new forms of mobility is well underway. And the new Arval Belgium app is a valuable tool for those companies. “This technological innovation now makes it possible to mitigate the regulatory complexity for employers, and to make multimodal transport a very fluid experience for employees,” concludes Kahn.

Arval Belgium SA, Ikaroslaan 99, 1930 Zaventem – Registered with the Brussels trade register – Belgian VAT number 0436.781.102.  Company with an ancillary insurance brokage business, registered with the Belgian Financial Services and Markets Authority (FSMA) under number 047238 A. Subject to acceptance of your request.

Arval Belgium SA is a subsidiary of BNP Paribas Fortis S.A.

Article

22.06.2023

Shipping: focus on the impact of decarbonisation and energy transition

At the end of May, BNP Paribas Fortis and the University of Antwerp brought together a number of experts to discuss the many challenges involved in decarbonising the shipping sector. What are the key points to remember?

Established 12 years ago, the BNP Paribas Fortis Chair in Transport, Logistics and Ports - linked to the University of Antwerp - conducts in-depth research to find concrete and innovative ways of creating an increasingly resilient – and sustainable – maritime ecosystem.

Building on the success of its first two major events in 2017 and 2019, the Chair has decided to do it again this year. On 25 May 2023, a number of experts and stakeholders from the port and maritime transport sector gathered at the BNP Paribas Fortis premises in Antwerp to discuss the impact of decarbonisation on the maritime ecosystem.

Here are their main findings...

1 – We need to move up a gear

Shipping is currently the most carbon-efficient form of commercial transport in terms of CO₂ emissions per tonne and kilometre. But it can do better.

So far, industry players have favoured quick wins, such as modifying ship propellers and adjusting speeds. But on 25 May, the experts agreed that now is the time to experiment with new fuels and technologies, and move towards (near) zero emissions. The pace of change is accelerating, but there's no silver bullet yet. The costs (and risks) are huge.

2 – International regulation, please (and only one)!

The regulatory framework is complex and constantly evolving.

The International Maritime Organisation (IMO), which reports to the UN, is committed to reducing the carbon emissions from all ships by 40% by 2030 and by 70% by 2050 compared to 2008.

The European Union has committed to reducing greenhouse gas emissions from shipping by at least 55% by 2030, compared to 1990 levels. By 2024, an Emissions Trading Scheme (ETS) will apply to all ships of more than 5,000 gross tonnes sailing to or from EU ports.

In short: things are moving, and in the right direction. The problem, according to industry players, is that numerous regional and supra-regional programmes continue to coexist. This leads to administrative and financial overload.

On 25 May, all those involved agreed on two points: firstly, that a single international policy is essential, as this is a global sector; and secondly, that players who do not comply with the rules must be sanctioned.

3 – The transition to carbon neutrality will be costly 

The investments required to build new greener ships is estimated at $5 trillion by 2050. The cost of modernising the existing fleet is not yet known, but it will not be zero. In addition, the investment required to renew port infrastructures promises to be huge.

4 – Fuel and/or preferred technology: uncertainty reigns

What will be the fuel or technology of the future? Opinions are divided.

Many types of low-emission fuels are likely to coexist for some time. Electricity will only be used on coastal vessels, ferries and some tugs. Large ships will use liquefied natural gas (LNG) or liquefied petroleum gas (LPG), methanol, ammonia and possibly even biofuels.

Long-distance shipping will initially depend on heavy fuel oil, possibly with carbon capture and storage. Hydrogen has potential, but its density, storage and handling raise questions. Wind, solar and nuclear power are also in the mix.

But the real problem at the moment is that while the number of ships that can run on cleaner fuels is increasing, these fuels are not yet sufficiently available internationally. In other words, supply is much lower than demand.

5 – Banks play a key role

Banks have a key role to play in financing the energy transition. In 2019, eleven financial institutions – mostly European, including the BNP Paribas Group – launched the Poseidon Principles to support the transition to low-carbon shipping. This global framework makes it possible to measure and disclose the carbon intensity of bank loans in the maritime sector. There are now 24 signatories, including Japanese financial institutions. And that’s good news.

Want to know more?

Presentations, videos and photos from the 25 May event are available on this page.

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