A creative entrepreneur knows how important it is to challenge every assumption. Here's one we need to challenge: waste is something un-useful and must be gotten rid of. What if we tried to think of all waste as material for something else? Plenty of business models are based on recycled materials. But what if we stretched our thinking to the point where everything has a possible reuse?
One of the many challenges of transitioning to a global population of 9 billion is that the resources for our products are not infinite. Despite getting used to a recycling culture, we are still happy to throw out pretty much anything that breaks or gets old, while design engineers tend to think about using raw materials when they make new things, not secondary or mixed or used materials. And they don't necessarily design products to last, or with recycling or reuse in mind.
But the problem of resource scarcity is already alarming companies and policy makers. According to the June, 2015 G7 Leaders' Declaration, "Data indicate that global raw material use rose during the 20th century at about twice the rate of population growth. For every 1% increase in GDP, raw material use has risen by 0.4%." The Organization for Economic Cooperation and Development predicts that global demand for materials will increase by more than 35% over the next 15 years, reaching 100 billion metric tons per year. Hence the need to transition from a linear, throwaway economy to a circular one based on reuse.
Large multinationals are worried about supply disruption, and employ squadrons of micro-managers to work through their supply chains to make sure they know what is coming from where and when. If they can figure out how to reuse a waste material, they have solved several problems at once. More and more, companies are looking at waste as an opportunity and getting creative about diversifying materials. Cars and trucks are made with recycled aluminum. Recycled paper and plastics are everywhere.
There are new materials marketplaces such as the United States Materials Marketplace, co-created by the US Business Council for Sustainable Development, as well as some regional ones, where companies' waste, even industrial sludge, is matched with other companies' materials needs. And there are research centers, such as the Innovative Research Center for Sustainability, a non-profit R&D center in Charleston, South Carolina, which analyze manufacturers' waste streams and convert waste chemicals into sustainable new products.
On the policy side, the EU Commission has funded an ambitious "Circular Economy Package" designed to help extend product lifecycles through greater recycling and re-use. And the G7 is creating an "Alliance on Resource Efficiency" which "aims to promote an exchange of concepts on how to address the challenges of resource efficiency, to share best practices and experience, and to create information networks."
Recently the G7 Alliance held a workshop in the US, hosted by the Environmental Protection Agency, where about 80 companies and G7 representatives shared best practice ideas and discussed how to institutionalize such information sharing and brainstorming. The workshop discussed transparency in supply chains, data collection, public-private partnerships, and training on resource efficiency.
"Currently half to three quarters of annual resource inputs to global industrial economies are returned to the environment as waste within just one year," says Mathy Stanislaus, EPA Assistant Administrator for the Office of Land and Emergency Management, who is leading the US participation in the G7 Alliance . "The annual cost of ecosystem depletion and pollution for U.S. companies alone is $1 trillion dollars. At the same time, for many large scale manufacturers, these environmental, social, and economic costs of their business are largely unknown - hidden in the vast web of suppliers and subcontractors."
Cutting these costs should be seen as an opportunity, says Stanislaus, "like the proverbial iceberg - largely unseen but substantial in size. If a company does not address the impacts of its supply chain, it is missing the bulk of these opportunities." He says that increasing material reuse can be achieved by practical steps like aligning purchasing and engineering departments within the same company. The purchasing department, wanting to save money, might be eager to look at a recycled material, while the engineer might be focusing only on "new" raw materials. Stanislaus also thinks if companies simply share stories, ideas will spark other ideas.
Among the proposals that were identified at the workshop:
· Pre-competitive sharing of information (without triggering anti-trust or proprietary issues)
· Labeling/disclosure to drive markets
· Institutional mechanisms for sharing best practices, and technical assistance to small and medium sized businesses in the supply chain
· Technology transfer
· Innovation and policy alignment to advance secondary materials markets for end of life products.
Stanislaus noted that the participants agreed on the significant opportunity in the supply chain and the need for ongoing collaboration to establish mechanisms and actions to scale up best practices.
Here's an idea that popped up at my company's factory in Alexandria, Egypt: the workers were divided into 6 teams from 3 villages and given the task of reutilizing factory waste such as wooden pallets and scrap tires. The teams later presented their projects to a jury, which rewarded the best one and celebrated them all. The projects included building a bus shelter and refurbishing a nursery school.
The World Economic Forum, which has joined forces with the Ellen MacArthur Foundation to promote a transition to a circular economy, has also emphasized the advantages of switching to a model based on selling results, not units of product. If manufacturing companies were to sell things like contracts to supply lightbulbs emitting a certain total number of kilowatts of lighting for a given period of time, or contracts covering the annual supply of tires for a car fleet based on miles travelled, those companies would have an added incentive to design and manufacture products that last.
The recycling mantra used to be "reduce, reuse, recycle." Now there's a new emphasis on finding ways to repurpose.