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Building new business models for the future

In early October 2008 I exchanged views with Frank Boermeester about the new publication of the Fifth Conference which was meant to deal with ‘Clean Technology’. Quite soon we came to the conclusion that ‘Clean’ provides a much stronger anchor for the purpose of this book. Clean elevates itself to the level of values. It embodies the level of ‘yes, we can’. It conjures up a world in which it is good to live. Not in the form of a clinically sterile environment, but a world in which organic growth of the economy and nature combine with a general sense of well-being – or even stronger, happiness – in society. As with many powerful words the strength of ‘Clean’ does not come from the word itself, but from the inarticulate premise that is associated with it. The world, after all, is not like that.

‘Clean’ creates the tension of a drawn bowstring. The arrow departs from the world where we now are and live in to an ‘even better’ world. ‘Even better’, because our world has not deteriorated. Certainly when the focus is on the west. Much more prosperity, just think for a moment how things were 30, 50 or less than 100 years ago. I would also like to say much more well-being too, but a statistic similar to GNP does not exist for this. In the last 40 years, however, people have come to realise that this prosperity has come at a price. An impoverished south, social exploitation, an uncontrolled exhaustion of the natural environment.

These must all be discounted should a GWP (Gross Well-being Product) be calculated. It’s the sudden disasters and scandals that get into the newspapers and remain in everyone’s memory. The explosion of the pesticide factory in Bhopal (1984), the nuclear disaster in Chernobyl (1986), the oil spill of the tanker in Alaska (Exxon Valdez, 1989). Nonetheless there is also a growing awareness of the chronic pollution of our biotope with the greenhouse effect as best-known example. The extent of the impacts is becoming disquieting. The Arctic Climate Impact Assessment  predicts that half of all ice will be gone by the end of this century. In 1965 only 1% of the Amazon forest had been cleared for cultivation, in 2025 a quarter will be gone. If we continue at the same rate and especially in ‘the same way’ we will be able to say with misplaced pride within 100 years that the total destruction of the environment has been achieved. Add to this an exponential population growth  and the challenges are clear. The figures are perhaps not known, but the story is.
 
Fortunately there is a growing awareness. It is not the first time that the bowstring has been drawn for a ‘better’ world. In 1968 with ‘The Limits to Growth’ of the Club of Rome, in 1987 with ‘Our Common Future’ of the Brundtland Commission in which the term sustainable development was coined for the first time, in 1992 with the UN World Summit in Rio where a global sustainability agenda was drawn up. Economic, social and environmental legislation was expanded, enforceable at national and regional levels, permissive at international level. Contributions to sustainable development have come from all sides.
 
International labels such as FSC (sustainable wood) were created to guide the consumer in the choice of products. Financial markets established separate stock market indices (Dow Jones Sustainable World Indexes in 1999, FTSE4GOOD in 2001). Sectors (textile, diamond, soya, palm oil, …) started collaborating with NGOs in order to draw up codes of good conduct. Proactive entrepreneurs and companies joined forces on new platforms (World Business Council on Sustainable Development and CSR Europe, both established in 1995).
 
Are all these concrete contributions sufficient or just a stopgap? Certainly in relation to activities at the environmental level we see a clear improvement in many areas (soil, air, water, …) at the local level (in the west) and a deterioration at the global level (greenhouse effect). The fact that it can be done differently also at the global level is shown by the resolute policy choices to stop acid rain and the growing hole in the ozone layer. Collective action is possible, yet often only when there is a pressing need.
 
The pace at which the world changes remains in stark contrast to the pace at which the awareness of the consequences hereof changes. It has taken more than 30-40 years to see attitudes change from initially defensive (waste cost reduction, compliance with legislation) to collaborative (preventive measures, management approach) to a proactive approach (product accountability, life cycle analysis, eco-efficiency). But even with this eco-efficient approach there is no guarantee of success because of the rebound effect. Reducing the emission of a car by 10, 30 or 50% still produces emission and, with an increase in traffic of 20, 40 or 60%, more than previously despite the eco-efficient approach. Eco-efficiency does not necessarily change the process or the product. A diesel engine with a carbon filter remains a combustion engine with (much less) emission. On all fronts one gradually comes to the conclusion that eco-efficient initiatives are useful but insufficient. Eco-effectiveness goes beyond eco-efficiency.
 
Eco-effectiveness raises the question whether we are optimising the right things. In Japan Toyota engineers dream of a car that will take CO2 from the air. Perhaps impossible, but one day when it’s driving around all earlier technology – for any citizen – will immediately seem outdated and old-fashioned. And the innovator will become the new market leader.
 
Such innovations demand leadership. ‘Clean’ requires vision and leadership to shift entrepreneurship to a new level. A transition from an efficiency economy to a high-quality innovation economy. This not only changes the economy itself, but also the way in which businesses are managed. We get innovation in the management of companies, cities, regions. Ecover incorporated the holistic reflex via a concept manager, Alpro introduced a sustainability balanced scorecard, Ghent and Antwerp incorporated sustainability as a horizontal objective into urban policy, the CSR  Resolution of the European Parliament (2007) launched an appeal to national, regional and local authorities for the introduction of a sustainable procurement policy (1), in Flanders Plan C arose as a network for the sustainable management of materials. International norms broadened their focus and moved from a thematic approach, quality (ISO9000, 1988), environment (ISO14001, 1996), social (SA8000, 1997) to the integrating character of sustainability (ISO26000, expected in 2010). Management will acquire a more integrating character up to and including the reporting stage (according to the Global Reporting Initiative Guidelines, dating from 1997). Different systems, different management, new entrepreneurship, new products and services.
 
A next phase is thus taking shape. A phase in which products and services are contemplated that are not just somewhat but totally better. Here nature sets the example. Nature produces in abundance and diversity and nothing is wasted. Everything has a function for other living organisms. Just as nature forms a closed biological metabolism, the challenge is also to create this for all technological materials. In the first place this forms the basis for a new business model – Cradle to Cradle (2). In this model an enterprise is organised in such a manner that the outcome is
 
beneficial for the enterprise as well as for the environment and society. Designing Cradle to Cradle ranks every substance that features in the product in terms of function and safety. Click systems replace adhesive substances to make products reducible to their basic components ‘as easily as Lego’. Substances which may impact negatively on people or the environment will be replaced. Every trajectory starts with a thorough screening which includes the entire supply chain. How the product is manufactured, how it is marketed, all this is part of the design. Up to and including return after use and meaningful recycling. Just like in nature everything that is produced and used is linked to each other in a cycle. Closing the biological and technological cycles fundamentally changes the logistics. It is no longer just distribution of products to users, but also setting up reverse trajectories called ‘reverse logistics’. After use a product does not necessarily have to return to the initial producer. The product can contain a (bio-)chip with information about its composition whereby present ‘waste collectors’ become future ‘materials managers’.
 
It is easy to deduce that this will ‘spontaneously’ lead to new innovations. Eco-effective products are correctly designed from the outset and create benefits at various levels: reduced (costs of) raw materials, ‘waste becomes food’ for new products, more valuable and sought after products with a stronger position in the environment and the market. It is not difficult to see the future developing like this. The context exists, increasing raw materials and energy prices, pressure on the environment, more awareness among consumers, the examples are present actually and potentially. The challenge of the 21st century is to be far more effective and to design products in such a way that they are safe and reusable from beginning to end, or in other words …. Clean.

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