HENRIET COMPANY LIMITED - HCL CONSULTING LONDON

Circular Economy 2.2 by Alexandre Lemille

Doing More with More, not Less!

A Bright Future

The future is bright if we want it to be bright! One needs to be convinced about it and take action towards lowering our negative impact now. We have many recipes to address upcoming challenges while increasing economic returns.

Too often, corporate sustainability messages are not appealing enough. Frequently this is about limiting our investments in that space as we are unsure about the link with future economic potentials. Regrettably corporate sustainability is not yet seen as the core of any company strategy. Being compliant or “less bad” is mainly it. This approach keeps us hostages of the business-as-usual path. Changing the entire strategy and the enterprise performance represents sizeable investments in time, people, and money, indeed. Except that they are now worth it: many benefits can be unfold given the risks of staying in the comfort “usual path” zone.

Investing away from the 'business-as-usual' path is now worth it!

Take the Circular Economy for instance. This is the first time in human history that we have a plan about a brighter tomorrow. With few key circular concepts and principles, governments, non-for-profit organizations and private companies - large and small – could help us replenishing our six capitals (natural capital, manufactured capital, financial capital, human capital, societal & relationship capital, and intellectual capital) endlessly, starting with – the highly precarious - natural capital. The circular economy is an industrial economy that is producing no waste and pollution, thanks to careful design. Within such a framework we see two types of material flows: biological nutrients - food and non-food elements - designed to re-enter the biosphere safely, and technical nutrients - our consumer products - meant to circulate at high quality in the production system without entering the biosphere ever again. This model is in opposition to our current Linear Economy that is our “take, make, dispose” model of production today. We extract metals and minerals off the ground, transform them into products where most of them get discarded within six months of usage. That linear approach has led us to the scarcity of resources we would need daily in the years to come. Accenture estimates that by 2050, we will lack enormous amounts of resources (40 trillion tons at a minimum) to maintain our current consumption patterns.

Based on this evidence, we have been reading that Circular Economy is about doing more with less (resources) so that we prepare ourselves to those days of scarcity. While this is the reality for the next two decades - most probably – we need to communicate on a positive message. The future is not about doing more with less resources, but more with more!

We will thrive

Once again, as sustainability experts, we suggest ways for companies to be more resilient based on the many depressing data we have collected i.e. those of the many challenges that we will face in the coming years. We are the children of the “Limits to Growth” era. We have all been shocked by our delayed wake-up call with regards to the limits of earth capacity that can no longer sustain our industrial activities. Yet, we are still delaying action because we do not dream enough about what can be achieved next.

Instead of looking at issues (while they are critical to keep in mind) only, let us focus at solutions. And there are many solutions out there. We want a future where we will thrive, and we can do it. There is a major difference between sustaining and thriving. For instance, sustainability is about reducing our CO2 emissions. Corporate thrivability is about taking CO2 off the atmosphere and transform it into useful human applications, while obviously emitting none... As we aim to decouple our resource intake from economic growth, it is essential to have in mind that long-term objectives are both: eco-efficient in reducing our dependence on extreme resource needs (circulate endlessly), and eco-effective in replenishing future resource stock (regenerate endlessly). If you convey the Circular Economy message with unappealing terms, you will not attract enough businesses to the concept. Top management wants to hear about sunny outlook where their company will invest-to-thrive, and generate more, in both effective and efficient ways. Remember the famous Bold Hairy Audacious Goal of Jack Welsch?

Circular Economy is about being bold, about looking for the next innovation(s) that will revolutionise the core of the upcoming Fourth Industrial Revolution. Within this new era, the renewable energy mix will keep increasing, energies will be ubiquitous, and accessed universally by people and industries. The sun - for instance - has the capacity to provide us with over 1,400 times what we consume annually today with non-renewables (fossil fuels)! Imagine the potential we have ahead of us to grow our corporate activities once we know how to grasp a share of its energy and once we are able to store it? Imagine how equal our world tomorrow could be with a collective access to energies? Beside, its renewability will give us the guaranteed resilience our enterprises are looking for today. The Fourth Industrial Revolution - launched at the World Economic Forum earlier this year - is about accessing new sources of energies in a new and very positive paradigm where the economy will thrive. Endless sources of energy - if controlled well - can unleash everything.

Just the commencement…

We are only at the beginning of a journey where we comprehend flows of energies, flows of materials and how they interact within natural cycles. Nearly none of the elements on Earth have been lost. Their equilibrium has been jeopardized because of our misunderstanding of systems. We just need to rethink about the best way to re-position them in the right order.

When looking towards the renewable energy side (instead of the fossil fuel one), we start unfolding new possibilities and discover new applications such as the one coming from glow worms. Glowee, a researched company focusing on the natural light of glow worms, has managed to keep urban shops illuminated with their natural light for up to three days so far. This proves that the more you look in the right direction, the more you will unfold new energies that one did not know could be used for our own sake.

Not a month passes without a city, a region or even a country claiming they have been running successfully on renewable. Ten days ago, the city of Santiago (Chile) has announced that its subway will be powered by solar and wind. Who would have thought of this just few years ago?

Companies will only be able to claim to be building a Circular Economy when they will regenerate resources.

Besides energy flows, circular economy is about material flows. How one will design the economy of tomorrow in such a way that we will not disrupt corporate supply chains, even at 9 or 10 billion people on earth. Why is that? Because most of our products will be design to regenerate our supplies. The regenerative economy is about creating abundance: more services will be provided in the future thanks to the regeneration of a lot more resources used efficiently and effectively. We want to keep replenishing the nutrients we depend on to thrive. The amount of biological and technical nutrients that enter our economies will be less that the amount of nutrients that will be exiting it after use(s). A business becomes a regenerative entity when it produces more nutrients that it needs as supplies. A regenerative economy is about producing more resources for upcoming uses with those currently available. Companies will only be able to claim to be building a Circular Economy when they will achieve this milestone. A successful business of the coming decade is one that will grow our capital stock(s), with the exception of the manufactured capital - available as a service - therefore contained. If we want to replenish our world, we can do it. This is a matter of implementing the right vision. This is the new notion of corporate success: regenerate resources to regenerate revenues. One does not go without the other anymore in our planetary economy.

In our Planetary Economy, corporate success is about regenerating resources to regenerate revenues

Abundance, abundance, abundance…

Creating abundance is the core of a regenerative and circular economy.

> Biologically-based goods of tomorrow will fertilize our soils to feed us all in better ways that we currently do;

> Trains of tomorrow will produce wind and accelerate natural pollination processes, rebuilding natural ecosystems;

> Planes of tomorrow will fly like birds, filter CO2 and generate purified rains;

> Factories of tomorrow will absorb CO2 and produce more water than they needed in the first place;

> Buildings of tomorrow will filter urban air and have similar functionalities than those offered by trees;

> Technical nutrient based products of tomorrow will be made in such a way that subsequent uses of their materials will turn into endless possibilities i.e. the materials of one product become the source of invention of many new products and matter.

Think of your building or product as being at the bottom of a tree. This very same building or product is now the source of all forthcoming material declinations: revalued, repurposed, transformed, decoupled, reinvented, expanded, etc.

And these are not dreams. Such planes and buildings already exist today or are in pilot phases.

Thinking this way will spur innovations of tomorrow, because tomorrow will be bright.

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Tuesday 20 September 2016

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Circular Economy 2.2. Doing More with More, not Less. by Alexandre Lemille