Busi­ness

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It’s the open­ing of the World Eco­nomic Fo­rum in Davos, 2014. Well-dressed men and a hand­ful of women clutch drinks un­der soft lights. Armed guards pa­trol the roof.

Sev­eral NGOs used this year’s high-alti­tude hob­nob­bing ses­sion to make the case that in­equal­ity and en­vi­ron­men­tal con­cerns are not taken se­ri­ously by the world’s pow­er­ful.

Ox­fam re­leased a new re­port to show that the world’s rich­est 85 peo­ple are now as wealthy as the bot­tom half of the world’s pop­u­la­tion. A group of Greenpeace ac­tivists in po­lar bear suits writhed in a pool of dark liq­uid to protest Gazprom’s oil drilling in the Arc­tic.

Ac­tivists are also start­ing to gather in­side the fo­rum it­self. Vir­gin’s founder Sir Richard Bran­son is among the most out­spo­ken, sum­mon­ing high-pow­ered groups The El­ders, The Car­bon War Room and The B Team to work on so­cial and en­vi­ron­men­tal prob­lems.

“The world has got a ma­jor prob­lem,” he ex­plained af­ter­wards. “Ev­ery year, we put more and more car­bon in. We’re cre­at­ing this thicker and thicker blan­ket around the world. And we’re ex­per­i­ment­ing with this very beau­ti­ful world we all live in; we’re tak­ing a big risk with the world.”

In 2009, Bran­son came un­der fire for his en­vi­ron­men­tal phi­lan­thropy, with sev­eral cli­mate change ac­tivists ac­cus­ing him of sup­port­ing the cause for his own busi­ness rea­sons.

Yet this might be pre­cisely the point. Do­ing busi­ness doesn’t have to be bad for the en­vi­ron­ment. In some cases,

do­ing the right thing could be worth mil­lions.

One early ad­vo­cate for this idea is Bel­gian en­trepreneur and for­mer Ecover CEO Gunter Pauli – but he ar­gues that just tweak­ing or “green­ing” ex­ist­ing busi­ness mod­els won’t do the trick.

“Less bad is still bad,” he told stu­dents at the World Stu­dent En­vi­ron­men­tal Net­work Global Sum­mit 2014 in South Africa. “Un­for­tu­nately, the green econ­omy, the way it worked out, is that what­ever is good for you and good for the en­vi­ron­ment is ex­pen­sive. It’s for the rich.”

In­stead, Pauli has spent the last ten years try­ing to fur­ther what he’s dubbed the blue econ­omy – new tech­nol­ogy and busi­ness mod­els, in­spired by na­ture, that can cre­ate jobs while hav­ing a pos­i­tive ef­fect on so­ci­ety and the en­vi­ron­ment. In 2009, he col­lected 100 ex­am­ples of this blue-sky­de­sign think­ing to­gether as The Blue Econ­omy, a re­port to the Club of Rome (re-pub­lished a year later as a book).

The re­port’s guid­ing prin­ci­ples in­clude ‘sub­sti­tute some­thing with noth­ing’ (ques­tion the need for each re­source), ‘work with what is lo­cally avail­able’, ‘use wa­ter as a main sol­vent’, ‘wa­ter, air and soil are the com­mons’ (shared re­sources) and ‘waste does not ex­ist’ (each byprod­uct be­comes the source for a new prod­uct).

“We have one very clear agenda,” he ex­plained. “Use what you have lo­cally. Re­spect bio­di­ver­sity. Gen­er­ate value – and the lo­cal pop­u­la­tion is the pri­mary ben­e­fi­ciary.”

Some of the case stud­ies – such as ra­zor blades made of silk threads – may never reach com­mer­cial re­al­ity. Other picks, though, are go­ing strong. Eco­v­a­tive, founded in Troy, New York in 2007 by two young col­lege grad­u­ates, of­fers a way to use fungi to re­place plas­tic and foam ship­ping pack­ag­ing. The com­pany has raised over US$14 mil­lion in eq­uity fi­nanc­ing, in­clud­ing from US multi­na­tional 3M – and an­nounced plans to open pack­ag­ing fa­cil­i­ties in Europe and Asia.

Ar­chi­tect Wil­liam McDonough – who came up with the cra­dle-to-cra­dle con­cept and cer­ti­fi­ca­tion frame­work – takes a sim­i­lar ap­proach to build­ing and prod­uct de­sign.

“We elim­i­nate the con­cept of waste. We send ma­te­ri­als out with a good sense of where they go next, what is next,” he told El­e­ment in Fe­bru­ary. “If it’s go­ing into an elec­tronic prod­uct, it is go­ing to come back to be used in elec­tron­ics, so it is de­signed for dis­as­sem­bly and re­use.”

Some new com­pa­nies are build­ing en­tire multi-mil­lion dol­lar busi­ness mod­els on what oth­ers con­sider trash. Ter­raCy­cle, some­times called the “Google of Garbage”, teams up with ma­jor cor­po­ra­tions to col­lect and con­vert ma­te­ri­als that would oth­er­wise end up in land­fill.

“Garbage in na­ture doesn’t ex­ist,” Ter­raCy­cle CEO Tom Szaky agreed, speak­ing to El­e­ment from the US. “It’s a com­pletely man-made idea.”

The en­ergy sec­tor is also due for re-invention – and it doesn’t have to in­volve nu­clear power, ac­cord­ing to US sci­en­tist and pol­icy ad­vi­sor Amory Lovins. In 2011, Lovins came up with a strat­egy to run a 158 per cent big­ger US econ­omy with­out coal, oil or nu­clear en­ergy by 2050, again based on prin­ci­ples of biomimicry, re­source ef­fi­ciency and wholesys­tem de­sign.

As re­sources be­come scarce and more ex­pen­sive, it may not be a ques­tion of whether busi­nesses adapt but when. In their new book Re­source Revo­lu­tion, Stan­ford Univer­sity con­sult­ing pro­fes­sor Stefan Heck and San Fran­cis­cobased McKin­sey direc­tor Matt Rogers ar­gue that busi­nesses are fac­ing the “big­gest busi­ness op­por­tu­nity of the cen­tury.”

Those that adopt five key prin­ci­ples, they say – re­source sub­sti­tu­tion, op­ti­mi­sa­tion, vir­tu­al­i­sa­tion, cir­cu­lar­ity and waste elim­i­na­tion – will be more likely to flour­ish.

The mo­ti­va­tion here is profit – in con­trast to the so­cial im­pact pri­ori­tised by Pauli – but the out­comes may be sur­pris­ingly well-aligned. In one ex­am­ple men­tioned by Heck and Rogers, ATMI, a ma­te­ri­als-tech­nol­ogy com­pany, wanted to find a bet­ter way to ex­tract gold from elec­tronic waste. The an­swer: a wa­ter-based so­lu­tion that is safe to drink, cheaper than tra­di­tional smelt­ing and toxic acid baths, and makes it eas­ier to re-use com­puter chips.

Biomimicry gets a nod here, too. The US Air Force has al­ready found it can save up to 20 per cent on fuel by hav­ing some planes copy the flight for­ma­tion of geese.

There are prob­lems in­her­ent with chas­ing new tech­nol­ogy as a fix for so­cial and en­vi­ron­ment ills – and with leav­ing it up to en­trepreneurs and the pri­vate sec­tor. There may never be enough of a com­mer­cial in­cen­tive to solve cer­tain prob­lems.

Ac­cord­ing to Ter­raCy­cle CEO Tom Szaky, con­sumers also have a vi­tal role to play. “Com­pa­nies aren’t there to shove stuff down our throats we don’t want. They’re there to give us more of what we want, eas­ier, bet­ter and cheaper,” he pointed out.

“The real fun­da­men­tal an­swer for this will be con­sumers buy­ing and sup­port­ing com­pa­nies and ideas that fur­ther this goal.”

Sir Richard Bran­son

Gunter Pauli One of Gunter Pauli’s high­lighted ‘100 in­no­va­tions’ true to his Blue Econ­omy phi­los­o­phy, Eco­v­a­tive’s founders Eben Bayer and Gavin McIn­tyre grow pack­ag­ing from mush­rooms – or rather the mycelium struc­ture from which mush­rooms grow. The plan is to re­place the toxic poly­styrene in­dus­try with biodegrad­able al­ter­na­tives.

Wil­liam McDonough

Amory Lovins

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