As we start a new year, we see a growing awareness and commitment among business leaders to deal with major global problems through collaboration.
For example, last November, I joined the World Economic Forum’s "Climate CEOs" initiative, calling for concrete action from global business to deal with climate change in support of the goals of the UN’s climate change conference, then about to be held in Paris.
We recognised the role business needs to play to help governments reach their targets to limit carbon emissions and keep global warming below two degrees. And now at Davos, we will continue to meet to discuss concrete ways to achieve this from carbon pricing to technological advancements. This group of CEOs from a wide range of industries demonstrates the new willingness of business leaders to find ways to solve environmental and social problems through concerted action.
In 2014, an article in the Harvard Business Review, ‘The Collaboration Imperative’ commented on how corporate self-interest could get in the way of this kind of collaboration: “Countless efforts by companies to work together to tackle the most complex challenges facing our world today – including climate change, resource depletion, and ecosystem loss – have failed because of competitive self-interest, a lack of a fully shared purpose, and a shortage of trust.”
But attitudes have been changing for the better, as recognised by the HBR authors, who saw a “growing awareness of the critical need for improved collaboration and the emergence of innovative models that create value for companies and drive systemic change.”
The need for this kind of collaboration to foster a more sustainable, circular economic model is becoming clearer every day. The world’s population is increasing at a rate of 750 million people per decade and an estimated 2.5 billion people will have been added to other middle class consumers between 2014 and 2030. The strain this puts on the planet’s finite resources is obvious.
Peter Lacy and Jakob Rutqvist, authors of ‘Waste to Wealth’, wrote: “Estimates for when resources will be depleted are notoriously uncertain. But many experts now believe that key commodities vital for modern economic life – oil, copper, cobalt, lithium, silver, lead, and tin – risk running out within 50 to 100 years.” Making the shift to the circular economy aims to deal with such issues by treating ‘waste’ as value and finding ways to reuse, recycle or remanufacture the material flowing through the system via the technical or biological cycle. According to Cradle to Cradle principles this should be done in such a way that the products are made from materials that are good for the environment and human health and can be safely brought into a closed loop cycle.
For example, as the CEO of a company committed to the goals of the circular economy, our designers have to be very aware of the need to use healthy materials. As such, we have developed a new technology to phase out phthalate plasticizers, which are under debate, in our vinyl flooring and replace them with alternatives. This has been rolled out to all our factories in Europe and North America. And we plan to phase it out completely in all our factories worldwide by 2020. My reason for mentioning this is that we decided to let our main supplier share information about our new non-phthalate plasticizers with our competitors if they wanted to develop something similar, so as to maximise the positive impact across the industry. Keeping the technology proprietary would not have helped to move things forward and we encourage positive development in our industry by the responsible use of PVC.
Businesses can also find new solutions from outside their own sectors. Desso, now part of Tarkett, invested three years of R&D time into developing a process whereby they could upcycle re-engineered calcium carbonate (chalk) from local drinking water companies to be used in the production of Desso’s carpet tiles. The drinking water process leaves a residual of calcium carbonate after it has softened groundwater, a necessary step to make it suitable for drinking.
This kind of collaboration can unlock significant commercial opportunities. In “Waste to Wealth”, Lacy and Rutqvist estimate the potential value of circular economics: “Our research indicates a $4.5 trillion reward for turning current waste into wealth by 2030. That’s not just waste in the traditional sense of rubbish, but the enormous underutilization of natural resources, products and assets. It’s about eliminating the very concept of ‘waste’ and recognizing everything has value.”
Collaboration is a hugely powerful tool in driving us from the linear model to the circular one. It is not an exaggeration to say that the future of the planet is at stake. It is in our grasp to move to a more sustainable model that also creates wealth and raises people’s living standards. But it cannot be done alone.
References: Ram Nidumolu, Jib Ellison, John Whalen, and Erin Billman, The Collaboration Imperative, HBR, April 2014.
Peter Lacy and Jakob Rutqvist, Waste to Wealth: The Circular Economy Advantage (Palgrave Macmillan: 2015).