Companies cannot realize business circularity without systems change.

A Circular Manufacturing Supply Chain

Systems change requires a multitude of transformations that include (but is not exhaustive) reverse logistics capabilities, service models for manufacturers, carbon pricing, producer regulations, new commodity markets for materials as well as the more integral aspects of how organizations operate and supply chains flow. Material is at the heart of most sustainable changes. In order to begin the process of thinking like a sustainable company, organizations have to begin asking the questions that are material to their stakeholders – employees, customers, suppliers, investors; uncover their key areas of concern; build a sustainability plan that incorporates those concerns and works towards mitigating them; and be transparent about impacts to their business models and supply chains both perceived, real and probable – even if transparency requires to state both good and ‘need for better’ progress. Material in corporate sustainability asks organizations to ask questions such as:

Material Ideas in Corporate Sustainability

• What is material to disclose?
• What is of material concern to stakeholders?
• What material is used?
• Where is material sourced?
• How much material is flowing through the system?
• In what way is material in products viewed?
• How is material consumed?
• What kinds of material can be revalorized?
  
  

Below you’ll find the eight ‘Material’ terms listed above mapped to their appropriate definitions.  Do they all make sense? Has your company pursued these corporate sustainability initiatives yet?

Work TripleWin Advisory Performs

TripleWin supports organizational work in several Material areas.  Learn more about what we do and how it applies to your sustainable business needs.  Our work is innovative, compelling and data-driven; just like our corporate clients.

TripleWin Advisory develops sustainable business cases and supports strategic decision-making through value-chain mapping and Scope 3 inventories of companies’ greenhouse gas emissions. In so doing, it unlocks opportunities for greater profitability, relevancy, and longevity for businesses. Learn more.

The post What’s the Deal with Material? appeared first on Triple Win Advisory.

The post An Action Plan for Sustainably-Driven Companies appeared first on Triple Win Advisory.

The goal of carbon accounting is for businesses to adopt target reduction goals for their greenhouse gas (GHG) emissions.  We can only track what we measure.  To get to the point of setting carbon reduction goals, companies need to establish an emissions trend line. Makes sense.  A company needs to know whether its GHG emissions are increasing or declining over time. To develop a trend line, at least two points of data need to be available to plot the progression of corporate emissions.

SETTING A BASELINE

Before any GHG reduction targets can be set, a company must set a carbon baseline.  Specifically, a baseline year represents the initial level of greenhouse gas emissions for a company against which all future carbon inventories are compared.  Think of a company’s baseline as business stasis by which future efforts to pursue energy efficiencies, technology upgrades, process changes, and product design innovations are measured.  Ideally, efforts made by a company to decarbonize and resource optimize will reflect declining carbon totals from a baseline year equating to “progress made”. 

Setting a baseline year is arbitrary.  Some public companies and many nations and trading blocs such as the EU-15, use the year 1990, a baseline emissions year established by the Kyoto Protocol in 1997. Most companies set their baselines to a year when either their first carbon inventory was conducted or when the confidence level in the available data was high and the carbon accounting data, complete. 

“STRUCTURAL CHANGE” RECALCULATIONS

Just as baseline years from company to company are non-standard, they can be also relative. Guidance from the GHG Protocol requires baseline recalculations when “structural changes” occur for a company.  Some of the more typical structural changes include a new company acquisition or business unit divestment.  Years in which companies register unusual drops in carbon inventory totals due to an acute economic contraction, such as during the 2007-2009 Great Recession, can arguably be considered exogenous structural changes that warrant baseline recalculations as well.

With Covid-19 we are experiencing a virtual halt in economic activity worldwide.  This crisis will register as a period of significant reductions in GHG emissions worldwide. Business baseline year recalculations are in order.

THE RELEVANCE OF COVID-19

We should acknowledge that the novel coronavirus poses an incredible health threat to human populations.  And, it will inflict lasting damage on national economies.  The number of small business deaths will be shocking.  Individuals will remain fearful of infection until a vaccine is identified and rolled-out en masse.  Understandably, this apprehension will tamp down consumer demand for non-essential goods for several years to come.  A more relaxed version of social distancing will be the de facto norm over the medium-term as individuals pursue activities such as shopping, recreation, and travel in their everyday lives while seeking to avoid contracting the virus.

SERENDIPITY & THE CORONAVIRUS

By most accounts, the “time of Covid-19” is terrible:  uncertain, scary, prolonged, disruptive and isolating.  And we remain squarely in the middle of it with little ability to maneuver forward or wiggle free of the economic malaise.  As Ram Dass might say, we are living this moment, right here, right now.  Without discounting our concentric circles of pain:  job losses, disappearing cash flows, halted economies, and lack of clarity or uniformity for how to re-open communities, there remain spots of good news and useful learnings to be applied. This author’s ask is for businesses to acknowledge the data and synthesize it into their strategic business planning. 

CLEARER SKIES, CLEANER AIR

One major environmental outcome from the novel coronavirus is clearer skies and better air quality from reduced carbon emissions into the atmosphere.  In Los Angeles where 80% of its air pollution is caused by transportation-related emissions, the air is so clear and smog-free that people are enjoying views of the coastline, long obscured by pollution, anew.  Aclima, a California-based company that studies local air quality, studied greenhouse gas emissions levels in San Francisco for a two week period in March (9^th– 20^th, exempting weekends) as compared to three prior years and noted that total CO₂ levels were down 10% and nitrous oxide (N₂O),emitted from combusting vehicle engines, was down a whopping 56%.  On the other side of the world, NASA reported China’s N₂O levels for March were down 30% from prior years.  More stunningly, a CarbonBrief study concluded that China’s CO₂ levels were cut 25% because of the impact from coronavirus.  The near complete halt on daily commutes and reliance on telecommuting for work has had a dramatic effect on local air particulates that contribute to climate change. 

MAJOR CARBON REDUCTIONS

There is an opportunity to be seized here.  Before the current administration decided to announce the United States’ withdrawal from The Paris Climate Accord (COP21), America had set itself a target to cut emissions at least 26 percent by 2025 and to target 80 percent emissions reductions by 2050.  For China, the largest GHG emitting country in the world contributing 27% of the world’s carbon emissions, having it meet a leveling in its national CO₂ emissions before 2030 would be a welcome achievement.   Significantly, Covid-19 has been a catalyst for measurably impactful climate change mitigation.  Without discounting the individual and economic toll the virus is exacting on thousands of communities nationwide, can we consider adjusting our business sites to a middle-view and incorporate this opportunity to recalibrate our carbon inventory baselines?

As a business community, we can take a proactive stance to set new carbon baselines using early 2020 GHG emissions numbers.  During this economic pause, all kind and manner of scenario planning, business pivots, new product innovations, work process digitalization, and supply chain agility work is occurring.  Businesses are developing strategic plans for how to navigate this quiet time and push the start button when national and state policymakers decide to wave the checkered flag signaling an economic reboot.  None of these plans are a continuation of existing ones, pre-March 2020.  These planning iterations are not to get business back to “normal”, but to set a course forward in consideration of a new normal.

GETTING BACK TO NORMAL

Are we craving for business to “get back to normal”? Yes, we are.  It’s an understandable desire: to fall back on the known, the expected, and to rely on the processes and systems that were in place to guide business decision-making, set strategy, and meet the demands of the marketplace.  There is comfort in talking about ‘business as usual’.  It connotes that the business of business is important, life is productive, and the world as we know it has a relative sense of certainty and order. 

The problem though is that our way of operating, up to this point, has become anachronistic, if not entirely unrealistic. The existence of climate change began the (invisible) march of death for industry’s linear, neo-classical, negative externality-dependent, extractive material throughput, economic production model.  The growing threat of climate change to global supply chains; human-dependent natural resources; and economic and human productivity levels has revealed the mirage we view as success and well-being.   It feels more comfortable to fall back to a known way of operating, than to embrace change, which requires a new way of doing, being, measuring and goal-setting.  And yet, here we are in a moment when the time before now is gone, irrevocably altered. 

A NEW NORMAL

We are operating in unchartered territory.  The acute economic crisis we continue to face with Covid-19 is going to wane in the coming months but not entirely disappear until a vaccine is readily available for human populations.  This is not a “V” curve recovery.  It’s not even a long “U” shaped one, like that of a bathtub where we could expect a drawn-out period of economic silence with a medium-term recovery that is quick and back to pre-coronavirus levels.  No, what the financial analysts at JP Morgan are predicting is more of a “W” shaped curve of recovery.  We should expect iterations of economic productivity alongside retractions that could last a half-decade or more.  The world economies are not going to snap back into action.  The system of global value chains and corporate interdependencies has gone dark.  Similar to a manufacturing facility, rebooting the economy will be a process, often slow, requiring re-calibrations, and process dependent. 

These are not normal times.  In fact, they are extraordinary.  Unprecedented.  For the foreseeable future, the landscape ahead will be new and unchartered. 

This author is asking businesses, in consideration of that reality, to recalibrate their expectations of:

• how they should operate,
• what products and services will be offered,
• how employees will engage, and
• in what ways will consumers be serviced?

A NEW BUSINESS BASELINE

In this new normal can, nay, will businesses set a new baseline for what it means to be market-driven, carbon neutral, purpose-driven, multi-stakeholder serving entities?  Can companies embrace the silver-lining of this acute economic crisis?  That from disruption can rise business transformations that are economically-viable, environmentally-stabilizing, and socially, equity-enhancing?

Here is the opportunity:  to take the “progress” of steep carbon reductions seen across the globe, in Italy, China, the U.S. and other nations, place them in context (that it was simultaneously driven by economic shut-downs (not good) and telecommuting workforces (good)), and map a strategic business plan that uses those GHG totals as a baseline for future carbon emissions reductions for businesses across all industries and sectors.  What business transformations would that new carbon inventory downward trend line require as economies re-open and businesses start producing goods and services for the market?   Applying a rubric to our decision-making may aid our thought-process.

CARBON EMISSIONS REDUCTION RUBRIC

First, identify the carbon benefits (economic, societal, environmental) that have materialized from the continued Covid-19 crisis.  Determine what to keep and to develop further, as business assets or standard processes.  Examples of benefits could be product innovations like digitalized product and service offerings, as well as a predominate telecommuting workforce.

Second, look back to the time before the coronavirus and aggregate the sustainability initiatives that had merit but were deemed hard to implement or for which it was difficult to identify a short-or-medium-run path forward.  One example of this could be sourcing a majority of one’s energy from renewable energy sources.  Think outside the box.  Consider the installation of a solar microgrid or the implementation of a community solar array, where both the investment expense and energy savings are shared across a community.  Another example is to take the leap and conduct a full carbon inventory for your business, to suss out areas of quick energy efficiencies, new technology deployments, and operational process changes that fundamentally make a company smarter and more attractive to investors and consumers alike.       

Third, chart a sustainable path forward, not in parallel to your business goals, but embedded within them.  The embrace of business sustainability imparts competitive advantage.  There are cost savings to be realized, increased access to capital driven by socially- and environmentally-conscious investors, swelling brand ambassadorship by employees, sustained consumer loyalty, and long-lasting product differentiation. 

A TREND LINE OF BUSINESS TRANSFORMATION

Climate change impacts to your business and value chain are material.  Just as 100-year floods are occurring yearly in some parts of the U.S., and wildfires have become year-long “phenomena” in dryer, windier climates; acute economic crises brought on by Covid-19 and extreme weather events driven by global warming, are not one-and-done occurrences.  There lies opportunity in this moment. As we rejigger our businesses to come-out from under coronavirus, simultaneously, we can transform how we operate in support of significant corporate carbon reductions and a sustainable future by:

• driving deep energy efficiencies within our operations,
• sourcing near-100% renewable energy,
• developing processes and standards that reinforce carbon minimization within the value chain,
• dematerializing and revalorizing materials within the supply chain, and
• embracing a circular business model that for product companies means, developing a service-model to manufacturing.

This is a key moment for companies to double-down on their carbon mitigation goals and set a new baseline for business ‘normal’.  This author hopes that’s a trend every business can get behind. 

TripleWin Advisory develops sustainable business cases and supports strategic decision-making through value-chain mapping and Scope 3 inventories of companies’ greenhouse gas emissions. In so doing, it unlocks opportunities for greater profitability, relevancy, and longevity for businesses. Learn more.        

The post Setting a New Baseline for Normal appeared first on Triple Win Advisory.

There’s no consensus yet on whether chemical recycling is the silver bullet for the growing plastic pollution problem. What is clear, however, is that a solution needs to be found — and fast.

Plastic and the use of plastic are not going away anytime soon. This quintessential representation of environmental pollution is readily available and highly valued in product packaging.

Despite consumer calls for bans on single-use plastic and statewide legislation addressing these demands, plastic in all its forms has a large global market. Current demand for PET/PETE plastic and polyester fiber alone is nearly $130 billion with global production expected to grow 3-4% annually through 2022.

For the foreseeable future, companies will remain bound to plastics in their production cycles. This article will look at how industry can reduce the environmental impact of plastic, reuse material already circulating in the economic value stream, and create a circular recycling mechanism is at the heart and promise of chemical recycling.

How Plastics Are Recycled Today

Historically, the U.S. used two mechanisms for managing plastics recycling efforts: shipping plastic waste to China and Southeast Asia to recycle and discard; and mechanically recycling a small portion domestically.

In 2018, China stopped accepting plastic imports and other Southeast Asian countries like Thailand and Vietnam swiftly followed suit. Now, municipalities across the U.S. are collecting the full spectrum of “recyclable” plastics and promptly routing them directly to landfills or incineration sites.

Commonly used PET/PETE (#1) and HDPE (#2) plastics are still mechanically recycled in the U.S. but at varying levels of effectiveness due to the expense and energy required. Batch contamination from mixing incompatible plastic types (e.g., PET/PETE with PVC) remains an ongoing recycling challenge, too.

The most significant limitation to mechanical recycling is its ability to only downcycle plastic or to produce lesser-value plastic items. The result is that less than 10% of all plastic gets recycled in the U.S. today.

What Is Chemical Recycling?

Chemical recycling takes plastic back to the source. Plastics are polymers made by fusing two kinds of oil via chemical reaction. In the chemical recycling process, plastic is decomposed or separated into its essential parts: crude oil and natural gas. After the depolymerization process, contaminants like food or coloring are removed so that the material can be repolymerized and recycled into good-as-new plastic.

Chemical recycling offers several advantages to traditional mechanical recycling. First, plastic batch contamination is not a roadblock. Most low-value and waste plastic can be deconstructed, decontaminated, purified and repolymerized into recycled plastic resin.

Second, chemically recycled plastic can be recycled a near infinite number of times with minimal material loss. Third, it can be upcycled into products of same or increased value from its original use. Fourth, the “gold standard” in chemical recycling does not involve the use of external heat or pressure, which significantly reduces the energy intensity of operations.

Chemical Recycling Is Not a One-Size-Fits-All Cure

Chemical recycling is an umbrella term that conveys the different technologies for deconstructing and repurposing various plastic types to be used as raw material inputs for new products. The more than 60 global technology providers at various levels of commercialization fall into three main technology buckets:

Purification: a process that dissolves plastic in a solvent to separate and purify the plastic mixture and does not break down the polymer into separate monomers.

Decomposition: a depolymerization process that uses thermal, chemical or biological starter components to break plastic polymers into base monomers and purify the plastic waste for reuse.

Conversion: a process similar to decomposition with outputs of liquid or gaseous hydrocarbons to be used in intermediate materials and monomers to make new plastics.

Systemic Hurdles to Scaling Chemical Recycling

For chemical recycling technologies to meet the demands of plastic-use growth and create a circular system of upcycled plastics, several challenges need to be resolved in the coming decade.

1. The cost of recycled materials needs to be on par or less than the cost of virgin plastics. Today, there is little market incentive for companies to pay a premium for plastic material inputs. Crude oil prices hover below $60 per barrel, propping up our dependency on virgin plastics. The break-even cost for recycled plastics is closer to $100 per barrel.

2. Processing capacity for chemically recycled plastics must increase exponentially. Global market demand for polyethylene alone in 2017 was 80 million tons. Only a few chemical recyclers, such as Loop Industries and Carbios, are commercial and actively processing plastics, albeit at low-volume levels — around 10,000-15,000 metric tons of plastic per plant per year. Agilyx, with its Tigard, Oregon, facility, processes less than 4,000 metric tons of polystyrene annually.

3. Production scale is wholly reliant on facilities that exist and are operational. All major chemical recycling companies are planning new facilities or retrofitting existing plants between now and 2025.

4. Proving to the public that chemical recycling is more environmentally friendly than virgin plastics production and mechanical recycling. Doing so would go a long way toward making a value-added sustainability business case for pursuing these technologies.

Steps Industry Can Take to Adopt Chemical Recycling

Coca-Cola, Unilever and Nestle have pledged to source recycled plastic for their food and beverage and consumer product goods. Industry players in textiles, agriculture, construction and consumer electronics must quickly follow suit. Here are three ways companies can pair desire with action:

1. Build an internal business case for executive leadership that emphasizes the medium-to-long-term value of investing in chemical recycling technologies. Quantify how chemically revalorized plastics will optimize and streamline a company’s product design processes, material sourcing strategy, and value chain GHG emissions.

2. Partner with the right chemical recycler for your business needs. Focus on your company’s product waste streams and the regions in which they occur. Research the technology that best supports your company’s needs and engage the innovators that offer the capacity and willingness to partner with you.

3. Plan to co-locate manufacturing facilities close to municipal recycling waste streams and chemical recycling facilities. Without a clear strategy to maximize waste feedstocks into the system and minimize travel for processing, chemical recycling will not be market competitive anytime soon.

Chemical recycling can tackle the three Rs of sustainability: reducing material throughput of virgin plastic resin by creating a system of near-infinite plastic, and reuse within a circular plastic material system that prizes recycled content over virgin. With a focus on overcoming the systemic hurdles the process currently faces, a path to widespread implementation will open.

TripleWin Advisory develops sustainable business cases and supports strategic decision-making through value-chain mapping and Scope 3 inventories of companies’ greenhouse gas emissions. In so doing, it unlocks opportunities for greater profitability, relevancy, and longevity for businesses. Learn more.        

The post Achieving the promise of reduce, reuse, recycle with chemical recycling appeared first on Triple Win Advisory.

WHAT IS CORPORATE SUSTAINABILITY?

In the world of sustainability, as applied to corporate industry, we’re often met with varying approaches to and different definitions of business ‘sustainability’.  Companies can view it as:

• a mindset (i.e., longevity of a business model),
• an approach (i.e., promote human productivity and satisfaction, a signal to the market or key customers),
• an environmental imperative (e.g., prevent chemical pollution to water bodies and land, reverse climate change),
• a social equity issue (i.e., mitigate negative externalities, halt the export of pollutive practices to developing countries),
• a regulatory mandate (e.g., EHS laws, hazardous waste regulations),
• a strategic, competitive endeavor (e.g., eligibility to SRI and ESG financing, capturing valuable cost-savings)

or a combination of multiple above approaches.  Definitions can be tweaked.  Approaches can be multi-faceted.  But the goal for all companies is the same. 

THE BOTTOM LINE OF CORPORATE SUSTAINABILITY

The bottom line of corporate sustainability is to achieve net-zero carbon emissions[1] or as close to it as virtually possible.  Sustainability strategies, projects, works and measures with a ‘sustainability’ label that don’t contribute meaningfully to a net-zero approach to conducting business are just window-dressings:  pretty drapes that substantially add very little to the desirable outcome of managing indoor temperatures to outside solar rays.   

EVOLUTIONS OF CORPORATE SUSTAINABILITY

This leads us to how companies can go about working towards sustainable outcomes.  We call it the Evolution of Corporate Sustainability.  Most existing companies were established without a primacy on sustainable operation.  An evolution means that organizations have identified the need to transform from one state to another through a process of change. The impacts from climate change both direct (e.g., material costs, human productivity, brand reputation) and indirect (e.g., cost of energy, extreme weather disruptions to supply chain and economies) are compelling catalysts for business transformation.  Evolution also implies a process of learning, measuring, analyzing, refining and re-applying a more refined set of metrics within a company’s totality of operations – whether owned or influenced – that reinforce the end goal of net-zero emissions.  Every company starts somewhere.

CSR-FOCUSED SUSTAINABILITY

Often it’s at the Corporate Social Responsibility level where a company knows it should value and support the community in which it resides and make a positive impact on those constituents, often through fund-raising, community give-back and engagement programs, and specifically-aimed investments through corporate foundations.  These activities while positive and impactful, fall outside the scope of a company’s core operations and are not aligned with a business’ strategic long-term goals.  Ecosystem impacts from business operations and that of its most direct key stakeholders – employees – are not fundamentally addressed. In terms of measuring corporate CSR activities, the metrics include the number of volunteer hours dedicated to CSR work, financial dollars invested, and percent of human engagement from the company’s workforce, to name a few.  What is absent are metrics involving carbon emission contributions.  Any company can pursue a CSR strategy.  Reporting the results from it are non-uniform, non-comparable within sectors and across industries, and can be both arbitrary and rose-tinted.

STAKEHOLDER-COMMITTED SUSTAINABILITY

Filing and operating as a benefit corporation or registering as a certified B (“B” for Benefit) Corporation with B Lab are nice-to-haves but not altogether necessary.  A case can be made that the filing and reporting requirements of each create redundant work internally for a corporate sustainability team.  Both designations should be seen as a type of market “warranty”, a status that is pursued voluntarily by a business to signal to both internal and external stakeholders alike, that yes, in fact, it desires to pursue environmental stewardship and social equity alongside profit.  Registering (or re-registering) as a Benefit Corporation cannot be completed in all states.  Thirty-four states (including the District of Columbia) have ratified legislation while six more are reviewing language around the business designation. 

The only “requirement” of becoming a state-registered benefit corporation is that the company commits to self-assess its positive impacts both environmentally and socially.  Companies are suggested to follow third-party standards and guidelines from one of four third-party entities including B Lab, Benefit Corporations for Good, Green America, and The Global Reporting Initiative (GRI).  If a company decides to certify as a B Corporation, then it must submit to the organization’s third-party sustainable verification process – a B Impact Assessment (BIA) which is a standardized form that allows B Lab to rank the quality and level of a company’s commitment to environmental and social issues.  Out of the two stakeholder-committed designations, registering as a Certified B Corporation is the stronger commitment to business sustainability practices.  The verification process is standardized, third-party assessed and is published within the public domain.

STANDARDIZED SUSTAINABILITY REPORTING

Companies that seek to standardize, benchmark, and increasingly commit – strategically, financially and both material and human resources – to the development of their sustainability measures across their business operations, often seek the gold standard in voluntary sustainability reporting.   That standard (or set of industry standards) is The Global Reporting Initiative (GRI), where nearly 70 percent of all sustainability reports uploaded into the GRI database globally, cite GRI or are GRI-standard compliant. Using a global reporting standard is the sine qua non in sustainability.  Eighty-five percent of companies in the S&P 500 Index published sustainability or corporate responsibility reports in 2017, and that number increases a couple percentage points each year.  Businesses that seek to benchmark their sustainability measures to their competitors and across industry use GRI Reporting.  Adopting sustainability standards to quantify and disclose material impacts of a company’s business operations allows for goal-setting, measurement, transparent communication while incenting continuous improvement.  Most importantly, committing to a standard reporting tool that is globally recognized, effectively demonstrates that a company is starting down the process of linking its strategic business objectives to sustainable practices in a forward-thinking, prioritized way. 

COMMITTED & MEASURABLE SUSTAINABILITY

Businesses of all types – large and small; local, regional and multi-national; public or private – must keep the key aim of corporate sustainability in mind:  to reduce their carbon footprint to something as close to net-zero emissions as possible.  This goal applies to both a company’s place of business(es) as well as to the entirety of its value chain, owned or influenced.  As companies gain a sophistication around their sustainability disclosures and continue to renew their focus on identifying, remediating and quantifying their successes, they have an opportunity to formally commit to globally-recognized carbon emission targets set by the Paris Climate Accord of 2015.  The Carbon Disclosure Project (CDP) supports businesses in this deep commitment to corporate sustainability by helping to develop the necessary carbon reduction performance metrics and supporting a standardized system of global disclosures.  This data, voluntarily reported and shared, supports strategic decision-making across a diverse set of ecosystem stakeholders including financial investors, businesses, and state and national policymakers.  Businesses that decide to disclose their carbon emissions to the CDP do so knowing that what is measured, gets met; what is reported, gets shared; and that one actor makes a collective many.  These forward-thinking companies intuitively understand that meeting the Paris Climate Accord Targets globally necessitates individual corporate commitments to actionable climate change mitigation replicated on a grand scale.   

STRATEGICALLY-EMBEDDED SUSTAINABLIITY

Strategically-embedded sustainability means that companies operate always with a sustainability mindset.  Strategic, long-term, prioritized decisions are filtered through a sustainability lens.  It also means that a business is or has transformed itself and operates differently from historical precedent:  always and ever towards a circular mode of designing, sourcing, manufacturing, selling, marketing, post-consumer product collecting, and material revalorizing. 

Strategically-embedded sustainability is the full monty of corporate sustainability:  a company has recognized its contribution to climate change; understands that global warming must be reversed; actions towards its immediate mitigation and reversal are imperative; and targets to reach a global carbon reduction goal are required.  There must be hand-raising leaders in the sustainability endeavor to pull, tug and persuade the laggards in industry of their mutual interest and responsibility.  Open, shared disclosures can have broad-reaching impacts. 

For companies that consistently strive to strategically-embed sustainability into the totality of their business operations (think:  Signify, Unilever), access to sustainably-minded capital and like-minded investors supportive of their business models drive a virtuous cycle of sustainable action and prioritization of climate change mitigation. 

Sustainability is a business imperative.  Full stop; no caveats.

Investors increasingly recognize that self-sustaining business practices that minimize or eliminate impacts to the environment and more broadly support social justice and equity, human wealth and health across global supply chains have long-term viability and are inherently more resilient to the current and future impacts of climate change.  So too, millennials and post-millennials refuse to work for or support businesses that pursue non-sustainable practices or produce environmentally-damaging products.  No doubt, the voices of GenY and Z will be heard and known across the broad social media universe.  Brand risk mitigation among consumer-centric companies should be top-of-mind. 

Sustainability makes smart business sense. 

SASB Reporting

Companies that use Sustainability Accounting Standards Board (SASB) reporting standards are seeking a standardized means of communicating financially-material sustainability information to the market and investors, present or desired.  SASB is fast becoming the U.S. financial reporting standard on material sustainability for U.S. public companies that are required to file with the Security and Exchange Commission (SEC).  The only caveat presently is that the financial markets continue to express frustration that U.S. companies are not disclosing sustainability measures sufficiently.  SASB states in its 2017 report that “by and large, companies continue to take a minimally compliant approach to sustainability disclosure, providing the market with information that is inadequate for making investment decisions”.

DJSI Submission

An effective argument can be made that submitting to the Dow Jones Sustainable Indices (DJSI), a partnership with RobecoSAM, and being selection to the top 10% by sector of companies submitting to its review, is a strong signal to the global capital markets, that 1) DJSI selected companies take their sustainability measures seriously and 2) the companies are good targets for fund investments with a social-environmental impact slant and/or commitment to climate change mitigation.  DJSI requires corporations to disclose their sustainability measures and provable sustainability performance on a detailed level.   The outcomes for a company’s submission to and selection by DJSI are manifold including:

• Greater company visibility to investors
• Better access to the capital markets
• An increased corporate market price
• Expected higher return for investors
• More assured corporate longevity

CIRCLING BACK: CORPORATE SUSTAINABILITY’S BOTTOM LINE

A company’s approach to sustainability must be sincere, methodical, strategic, prioritized, measurable and meet real-world, global targets of climate change mitigation.  That should be (and is) the goal of pursuing sustainability in business:  reaching net-zero carbon emissions.  Having a neutral impact on the environment and a net positive impact on human communities.  Full stop.

And it’s worth stating.  Let’s throw-away the guilt and indecision and just plain get started on the journey of corporate sustainability.  Its time has come.

TripleWin Advisory develops sustainable business cases and supports strategic decision-making for companies. In so doing, it provides businesses with continued profitability, relevancy, and longevity in the market. Learn more.        

[1] Net-zero emissions means reducing carbon dioxide and other greenhouse gas (GHG) emissions into the atmosphere from business operations to zero percent, through efficiency measures, renewable energy use, GHG offset strategies and carbon capture technologies. 

The post The Evolution of Corporate Sustainability appeared first on Triple Win Advisory.

We have all seen or experienced innovations based on the science of blending biology with technology.  Two of the best-known examples of the science of studying nature to make more effective products for man’s use include:

• Speedo’s sharkskin swimwear or full-body LZR suit:  proudly displayed on the svelte bodies of 2008 Olympic swimmers.  Speedo’s designers studied the performance properties of the “dermal denticles” of the outer surface of sharks, that were found to create a low-pressure zone when sharks were in motion, effectively pulling the shark forward while reducing water drag.  And guess what, it worked.  Speedo reported that 98 percent of the medals won in that Olympics were from swimmers wearing their LZR (pronounced Laser) swimsuits.

• Japanese bullet trains designed from Kingfisher birds’ beaks:  engineers faced a problem with their upgraded high-speed bullet trains as they entered tunnels to pick-up passengers on the waiting platforms:  shock waves known as “tunnel boom” were extremely loud but more critically, caused structural damage.  Looking to the Kingfisher bird’s beak, engineers gave the bullet trains a more aerodynamic, streamlined nose that allowed the trains to reach higher speeds, consume less energy, and most importantly, avoid the disruptive sonic splash. 

What is Biomimicry ?

The study of nature to guide the designs of human invention is called Biomimicry.  The idea behind biomimetics has been around for centuries but the term biomimicry was coined and popularized a little over 20 years ago by the scientist and author, Janine Benyus.  She defined biomimicry as a “new science that studies nature’s models and then imitates or takes inspiration from these designs and processes to solve human problems.” 

The Usefulness of Biomimicry

Looking back upon the two examples of biomimicry design above, we can say that the products developed did indeed solve timely problems, one more consequential than the other.  It is arguable whether human invention is needed to catalyze elite swimmers to swim faster.  And in fact, Speedo’s LZR suits were banned from use after the 2008 Olympics. 

The newly engineered bullet trains solved a problem needing a functional fix:  transporting tens of millions of daily commuters to and from work smoothly and without catastrophic disruption.  All good and yet, the question arises:  can the concept and application of biomimicry do more than design high-performing products and machines?  Can it solve industrial problems with sustainable solutions?  And the answer may very well be at the tip of our fingertips, or better said, held between our thumb and pointer-fingers like that of a dandelion flower, waiting for us to give it the proverbial blow so that it’s seeds whisk off in all directions to populate in distant corners and opportune fields. 

Bolt Threads: A BioTechnology Company Using Biomimicry at Scale

Biomimicry has come a long way from its first inception to be a tool to make things more sustainable.  The Biomimicry Institute offers a more refined definition to the one first proffered by Benyus.  The institute defines biomimicry as “an approach to innovation that seeks sustainable solutions to human challenges by emulating nature’s time-tested patterns and strategies.”  Many industries can and have benefitted from this study of nature-as-solution approach including buildings, wind turbine manufacturers, hospitals and healthcare, and agriculture.  One company that is applying learnings from biomimicry in textile manufacturing is Bolt Threads.

Bolt Threads is in its ninth year of making synthetic spider silk in a lab, with the application of the silk to be the raw source material for making textile goods.  Think:  hats, scarves, neckties, and shirts. The company’s co-founder and CEO, Dan Widmaier, who holds his doctorate in Chemistry and Chemical Biology, began secreting spider silk proteins in a university lab in an effort to create synthetic material from the process.  Bolt Threads was born from this initial work.  Bolt Threads “brews” synthetic silk in a lab using DNA sequences (or proteins) from spiders.  Those protein sequences are put into a proprietary yeast brew, that is fed to grow at a fast rate (as yeast is want to do) in steel tanks.  From there, the silk mixture is centrifuged, purified into a powder, mixed with a solvent and made into a gooey liquid of silk similar in texture to glue.  From there it is extruded through a pipe with holes to make strands of synthetic silk that is then woven into a raw fiber, ultimately to be used to make apparel products.  Bolt Threads has named its biomimicry source fiber, MicroSilk, which is a combined reference to both biology and nature.

Bolt Threads has been working hard to refine its technology, stabilize the process of making its lab silk, and commercialize its textile products. Respectable strides have been made over the last year.  The company acquired Best Made Co. in 2017 in a bid to allow it to scale its production and directly reach a consumer audience for outdoor apparel products. That same year, 100 beanies made with 40% Microsilk and 50 limited-edition neckties from 100% silk were sold to the masses. Both products were extremely limited-edition.  Bolt Threads also has a strategic relationship with Stella McCartney, who provides the coolness factor to products made from synthetic silk. McCartney is expected to incorporate Microsilk into her 2019 high-end women’s clothing line, however, the number of product types and quantities have yet to be identified.  The company’s strategic partnership with Patagonia has languished to date, mainly due to the outdoor company’s volume requirements to meet its retail market needs.  Scale is the challenge Bolt Threads has yet to conquer.

Infusing a Market-Driven Industry with Scalable Sustainability

The promise of Bolt Threads is undeniable.  The company’s ability to shift the textile market away from its reliance on man-made petroleum-based fibers is both exciting and desperately needed. Synthetic silk[i], made from proteins and a mix of water, sugar and yeast, can be absorbed back into nature.  It is recyclable by design because its design is based on nature, even though its production takes place in a lab. The same cannot be said about polyester in all its various iterations.  Use of polyester in textiles exceeds that of cotton, making up more than 50 percent of fibers used in textile manufacturing globally.   And that volume is expected to grow another 10% by 2025.  Polyester, a polymer made from coal and petroleum, is incapable of bio-degrading.  It fills our landfills and finds its way into our oceans.  The opportunity Bolt Threads presents is the ability to scale the production and use of synthetic silk:  products made from it do not pollute the environment and more promising, could easily be remanufactured into “new” pieces of clothing and accessories or soft good items for the home. 

Amplifying Innovative Sustainability Solutions Through Open-Source Technology Sharing

Widmaier sees a way forward and away from a manufacturing model where inputs become waste after use.  He expresses the hope “that companies like…Bolt Threads will be seen as making sustainability more mainstream…”  Mainstreaming an idea, an innovation, and a process that solves human challenges with sustainable solutions requires scale, a broad scope, mass adoption, and affordable pricing.  Why are we necessarily relying on one company, Bolt Threads, to struggle tirelessly and somewhat slowly (at least in terms of market penetration) to bring a revolutionary product to market?  Why aren’t stalwart companies that are brand-forward, customer-centric, and richly endowed with untouchable R&D budgets, partnering with Bolt Threads in a strategic effort to help support and build this technology for a more rapid deployment in various sectors of the textile industry.  I am thinking here about the Nike’s, Adidas’ and Under Armour’s of the world who dominate performance athletic apparel worldwide.  How about companies such as The Gap, H&M, and Polo Ralph Lauren who hold sway over the spectrum of clothing from the discount to haute couture.  And think about all the carpeting that’s sold in the U.S. alone.  Wouldn’t a commercialized synthetic silk fiber be seen as a potentially enviable market opportunity for carpet manufacturers such as Shaw Industries, Mohawk Industries and Beaulieu of America?

The big idea here is to change the ‘business as usual’ way of approaching new innovation.  In the well-established, multi-national firms you have a “develop in secret” mentality; keep new technologies hidden behind closed-doors until its perfected and ready to wow the world.  But when we think about leading in a sustainable world, the industry of making products and the manufacturers within, of all sizes and strengths, must embrace the new philosophy of our times.  These we know:  the internet of things, the shared/sharing economy, open sourcing, the Cloud, and Blockchain to name the biggies.  In this new market paradigm, where the old is bumping up and seeking to embrace the new, companies must shed their proprietary methods toward creating innovation, and instead, take the leap of trust into the bath of open knowledge, shared incentives, leap-frogs in understanding, and parallel paths to mainstreaming innovative and sustainably-minded ideas.  This is how we get Bolt Threads and its recycle-by-design synthetic silk commercially-scaled and embedded into diverse sectors of industry that are just begging for its arrival, whether they know it consciously or not.        

TripleWin Advisory develops sustainable business cases and supports strategic decision-making for companies.  In so doing, it provides businesses with continued profitability, relevancy, and longevity in the market.  Learn more.

[i] The hope and goal of synthetic silk production is that it can be imbued with greater qualities than its natural counterpart, such as the ability for it to be easily washed, dyed, and convey UV protection.   

The post Mainstreaming Sustainable Innovation appeared first on Triple Win Advisory.

The apparel industry is massive.  From a supply side, clothing and textiles represent about seven percent of world exports, with China alone accounting for nearly a quarter of the world’s apparel exports.  On the demand side, 2011 consumption levels in the global textile and garment industry reached nearly US$3 trillion.

The Environmental Impact of the Apparel Industry

Apparel production happens to be a dirty business.  Its major environmental impacts need to be addressed – sooner rather than later.  The industry’s reliance on fossil fuels to create synthetic, man-made fibers and to power the production of finished clothing goods produces significant emissions of greenhouse gases (GHGs).  The vast volume of water required and the use of toxic chemicals to pre-treat, dye and print fabric are major contributors to water and land pollution.  Further, the emergence of ‘fast fashion’ or hyper-consumerism is exacerbating environmental issues within the industry, creating exponentially more air, water and land pollution, waste build-up, and fossil fuel and water consumption.

The Application of Industrial Ecology Practices to “Clean-up” the Apparel Industry

That all said, the apparel industry is not going away. It literally clothes the world.  But the industry is ripe for change.  It needs to lead the charge in instituting sustainable practices throughout its value chain from the sourcing of raw material to end-of-life product practices. Clothing manufacturers have in their capacity the ability to decrease their global environmental impact by more than half what it is today by employing four features of industrial ecology into their supply chain on a systemic scale.

The supply chain of clothing manufacturing is long and globalized, fragmented and non-standard.  Throughout the value chain, there are many ‘hands in the pot’ necessary to bring a piece of clothing to market.  These “players” include crop farmers, multinational chemical companies, textile companies, cut and sew factories, packaging companies, global shipping and distribution companies, and retailers that sell product to consumers. These companies are highly distributed throughout the globe, have many different owners and corporate structures, and range from global in size to tiny sweatshops.  Each firm plays an important role in delivering a necessary input into the clothing manufacturing value chain.  However, within this long and murky supply chain there is an incredible amount of pollution, waste, and carbon use to produce an article of clothing for consumer consumption that seems to be increasingly insatiable, fickle and unnecessary.

The Trends in Apparel that Make it Unhealthy for the Environment

There are trends in clothing manufacturing that are placing great pressure on the environment.  These trends include:  a) the growth in use of man-made fibers, b) the ‘fast fashion’ trend and c) the globalized supply chain with its concentration in poorer, developing countries lacking strong environmental controls.  These trends have pushed the industry to the point of unsustainability.

Trend #1:  Man-made fabrics

The volume of clothing being produced for world consumption continues to grow.  The growth is almost entirely fueled by the creation of man-made fabric, specifically, polyester.  To give an example, “approximately two thirds of the imports of fibres, yarns and fabrics to the UK are man-made.” World demand for natural fibers (e.g., cotton, silk, wool and linen) remain relatively constant whereas the demand of man-made fibers (e.g., polyester, acrylic, and nylon) has nearly doubled over a 15-year period between 1990 and 2004.  Man-made fibers account for 70 percent of all fibers (global production was 63.2 million tonnes in 2013) produced worldwide.  Among the many different types of man-made fibers, the demand for polyester is the greatest globally. This trend poses a significant environmental issue.  Man-made fibers such as polyester, nylon, acrylic and spandex (to name a few) are made from petrochemicals.  Fossil fuels are a non-renewable resource and when used in production, highly pollutive to the environment.

Trend #2:  Fast Fashion

The second trend negatively impacting the environment is the emergence of ‘fast fashion’.  This trend has two components.  First, manufacturers have dramatically shortened their apparel production lifecycle times from months to weeks providing new collections of clothing to the market every three to six weeks (10-18 new collections annually versus the more traditional four to six per year).  Second, consumers have demanded cheaper clothing from the industry and the industry has delivered.  A study by Cambridge University reports that in 2006, consumers were buying 33 percent more clothes than they were in 2002, and women own four times more clothes than they did in 1980.  This increase in clothing consumption is costing households less than ever before.  ‘Fast fashion’ demands increase material throughput in the manufacturing production process, which in turn drives increased need for water consumption in the dyeing and finishing (e.g., laundering) processes of apparel, increased waste during the sampling, cutting and sewing phases of production, and increased use of chemicals that contaminate freshwater.  Just as concerning is the end-of-life waste that is exacerbated by ‘fast fashion’.  Currently, 80 percent of consumer goods are not “recovered”, meaning, they end up as trash to be incinerated or dumped as waste in landfills.  In the United States where apparel consumption is high, Americans throw away more than 68 pounds of clothing and textiles per person per year.  This waste stream represents about four percent of the municipal solid waste in the United States.

Trend #3:  Shifting Production to Environmentally-lax countries

The third trend to negatively impact the environment within the apparel industry is the sector’s supply chain shift to the developing world, which is dominated by small and poor Asian countries.  Global employment in the apparel sector is increasingly concentrated in China, Pakistan, Bangladesh, India, Mexico, Romania, Cambodia and Turkey. To emphasize this trend for one country, the apparel industry accounts for almost 20 percent of Bangladesh’s GDP and makes up 80 percent of the country’s export earnings.  These developing countries have much laxer environmental controls and clean production standards than those found in developed countries such as Italy, the United Kingdom and the United States.  Within these countries, pollution is heavy.  Exacerbating the issue is that the polluters are mostly unregulated while remedial mechanisms are lax to null. Global industry standards are just starting to be developed and have yet to be universally adopted by manufacturing brands let alone their extensive upstream supply chains.

Examples of Environmental Impact from the Production of a Cotton T-Shirt and a Pair of Jeans

Below, this author describes how a T-shirt and a pair of jeans, respectively, are made, and details the material flow and energy consumption in the production of both a T-shirt and a pair of jeans from the harvesting of cotton to each item’s sale in a retail store.   In the T-shirt example, the item is made from 100 percent cotton.   It is a good likelihood that the cotton for the T-shirt is harvested, ginned and spun into yarn in the United States.  Next, the yarn is shipped to China to be knit, dyed, cut and sewn before being shipped to a developed country such as the United Kingdom, to be sold, bought and used.  Consumers in the United Kingdom purchase about eight T-shirts per person each year, which equals 460 million T-shirts imported in 2004 or 150,000 tonnes of cotton fibers.  The total material energy consumption to make a T-shirt is approximately 109 million joules.

Now we can compare the material flow and energy consumption in the production of a pair of jeans.  To make one pair of Levi’s 501 jeans, made from 100 percent cotton spun in a primary producing country (United States, India, Pakistan, Brazil, China or Australia) to be sold, bought and used in a developed country (United States, United Kingdom or France) and encompassing the full life cycle of a pair of jeans from cotton harvesting, garment manufacturing, packaging and transportation of the item to its end-of-life, the environmental impact includes the following:

• 4 kg of carbon dioxide and other GHGs released into the atmosphere
• 3,781 liters of water consumed
• 9 g of oxygen depletion (eutrophication) as a result of nitrogen and phosphorous deposited into freshwater or marine environments
• 12 m² per year of land used to support the production of the pair of jeans

If we extend our viewpoint to the production of all cotton produced in the United States (1.4 million tonnes in 2005) annually and we consider that the annual yield of cotton goes into making a single product, more than three billion pairs of jeans or more than 13 billion men’s dress shirts would be produced globally.  Cotton makes up 90 percent of all natural fibers used in the textile industry and is used in 40 percent of all apparel produced globally.  If we look at the growing volume of man-made fibers used in production, synthetic fibers account for 55 percent of the global textile industry. Looked at another way, 65 billion pounds of virgin polyester are created annually across the globe to produce apparel products, derived from crude-oil fossil fuel.

A Macro-Lense of Environmental Impact within the Apparel Industry

As we contemplate the environmental impact of apparel production, we should consider that cotton farming is the single largest water consumption factor in the apparel sector’s supply chain.  Further, some 14.4 percent of an apparel manufacturer’s total water footprint is consumed during the production process with an estimated 17 to 20 percent of industrial water pollution occurring during the dyeing and finishing phases of apparel production, where more than 8,000 synthetic chemicals are released into freshwater sources.

The apparel manufacturing industry is energy intensive, highly pollutive, and promotes material consumption behaviors that negatively impact the environment, including the use of man-made, synthetic fibers that are non-biodegradable, increased material production throughput and end-of-life waste build-up.  The industry is in need of an overhaul.  Sustainability measures are required and urgently.  Industrial ecology methodologies and practices applied to the apparel industry in a systemic and global capacity could yield considerable and sustainable benefits to the environment.  It is estimated that “water consumption in global apparel production could…be lowered by as much as 50 percent, energy consumption by one third or more, and the use of chemicals reduced by up to one fifth.”

What is Industry Ecology?

“Industrial ecology is the study of material and energy flows through an industrial system.” Specifically, its goal is to design a closed-loop manufacturing system where waste serves as an input into the next production cycle.  Realizing a completely closed-loop, zero-waste production process is an impossibility given the law of entropy in thermodynamics.  That said, there are several tenants in industrial ecology that are applicable to the apparel manufacturing industry.  These concepts include:  a) end-of-life design, b) dematerializing production, c) closed-loop manufacturing, and d) extending the life of products.

Concept 1:  End-of-Life Design

End-of-life design is to design a new product with its end in mind.  Most clothing meets one of two fates after it reaches the end of its useful life.  Either it will be thrown in a landfill where it will accumulate and create land waste or it will be incinerated, emitting toxins into the atmosphere.  McDonough and Braungart call for eco-effective design and they argue that during the design phase we must be cognizant in determining between biological and technical nutrients.  Biological nutrients are materials designed to return to the earth.  An example of this is product packaging used to protect products during transport that biodegrades. Technical nutrients are products that are designed to return back into the technical cycle of production. Examples of these materials include such common items such as glass, rubber, aluminum, and cadium (commonly found in batteries). These products are easily recyclable and should be designed for reuse; revalorized to create new products of the same or similar quality.

Concept 2:  Dematerialization

The second concept applicable to apparel manufacturing is dematerializing production.  Dematerializing is to determine where in the production system natural resources are used intensely and /or are being polluted and then to choose “technologies and processes that use renewable or better-performing resources”.  Designing a shoe that requires less fabric and rubber than its predecessor or using less water in the dyeing process of fabric are two examples of dematerialization.

Concept 3: Closed-loop Manufacturing

A closed-loop manufacturing process means that the process of creating a new product for consumer purchase ultimately reincorporates that product at its end-of-life stage to be disassembled into its component parts (biological versus technical), recycled and upcycled (using reused parts to create a new product with the same or greater value than the original) back into the same production system to deliver a new product for sale.  Closed-loop manufacturing necessarily entails developing a sophisticated reverse supply chain into a company’s manufacturing system.  Specifically, this means a company must have mechanisms in place to retrieve end-of-life product, ship products to locations for upcycling, and convert recycled materials to virgin-like input status before these upcycled materials enter the traditional manufacturing process again.

Concept 4:  Revalorization (or Extending the Life of Products Already Made)

Lastly, industrial ecology places an emphasis on extending the life of products.  This idea includes the concepts of remanufacturing, refurbishing and recycling.  This paper particularly focuses on the concept of product service offerings, which have legitimate applicability to the apparel industry.  We are speaking about services of clothing repair, tailoring, alternate washing and new design applications to existing products, for a fee.  In industrial ecology, placing emphasis on servicing existing products versus the creation of new products is an appealing notion in order to decrease material throughput and energy use in industrial production.

Practical Application of Industrial Ecology Practices within the Apparel Industry

Real-life application through individual company case studies within the apparel industry will highlight each of the industrial ecology concepts highlighted above.  Each company’s business practices will be explained and detail provided on how changes to the way products are designed, produced, recycled and/or revalorized have minimized environmental impacts in each company’s manufacturing process.  Eileen Fisher’s decision to use only natural fibers in the production of their women’s apparel will serve as an example of one component of end-of-life design.  Three company examples – Levi Strauss & Co.’s water reuse/recycle endeavors, Nike’s no-water dyeing technology and adidas’ no-dye clothing lines – will serve as premier examples of how to dematerialize industrial production to better serve the environment.  Patagonia serves as an exemplar company that is working diligently to implement a closed-loop production system.  Denham Jeans is a clean and simple example of a company that has internalized the idea that apparel companies can be more than just producers of new goods and profitable providing services alongside product.  Patagonia rounds out the service model concept with the initiatives it promotes to customers to extend product life.

Company 1:  Eileen Fisher & End-of-Life Design

Eileen Fisher is a 30-year old women’s apparel company.  In March 2015, the company announced VISION2020, a comprehensive plan to transform itself into a fully sustainable operated business.  The company is working on many levels to implement a closed-loop manufacturing system.  Of particular note is the company’s decision to design only with sustainable fibers.  A cotton tank top is sold for $108 in Eileen Fisher stores.  Since 2014, that cotton tank top is now made only with organic cotton.  By 2020, all the cotton, linen and wool the company sources to make apparel will come from organic crops, humanely-treated animals and from lands sustainably managed.  They will abolish the use of virgin man-made fibers (e.g., rayon) produced from fossil fuel oil while embracing recycled synthetic fibers to be revalorized into new products.  Eileen Fisher’s end-of-life design commitment to using either biodegradable natural fibers or recycled man-made fibers is just the first part in the development of a closed-loop manufacturing system.  As the company states itself, “we start by designing our clothes to last…and when you’re done with them we take them back to resell. By 2020 we expect that recycling total to hit one million. And the pieces we can’t sell? They’re tomorrow’s raw material, to be reborn as new textiles or refashioned as new clothes.”  It is too early in the process to offer quantitative results from the company’s transition to sustainable-only inputs but it should be noted that more than 50 percent of Eileen Fisher’s input materials have an environmental certification and over 75 percent of energy used in its production comes from renewable sources.

Company 2:  Levi Strauss & Co. & Dematerialization

Three separate companies are making great strides in dematerializing their production cycles to minimize environmental impact.  Levi Strauss & Co. has created water recycle/reuse standards for the apparel industry as well as developed a water innovation program called Water<Less, which it employs in the production of its denim jeans.  Water consumption in making a pair of cotton denim jeans is 3,781 liters (compared to 2650 liters to make one cotton shirt).  Water use is incredibly intensive for the company and industry and is not sustainable.  Levi Strauss’ water reycle/reuse standards are meant to “preserve fresh water supplies for drinking and other necessary uses” for humans and their communities as well as to incent water recycling in a factory’s production cycle.  The company’s Water<Less program facilitates the minimization of water in the process of garment finishing and fabric dyeing.  This Water<Less program was first instituted in the Fall of 2015 and the company realized a 65 percent water savings on garment dyeing, which equates to an average of six liters of water saved per garment dyed.

Company 3 & 4:  Nike Inc. and Adidas & Dematerialization

Nike began a strategic partnership with a Netherlands-based company, DyeCoo Textile Systems B.V., in early 2012, to test and operate a waterless textile dyeing machine.  Nike utilizes this technology on a small portion of their athletic apparel.  The technology utilizes recycled carbon dioxide to dye apparel fabric, thus eliminating the use of water in the dyeing process. Nike believes the CO₂ dyeing technology could “revolutionize textile manufacturing, and we want to…scale this technology and push it throughout the industry.”  The technology provides a multitude of positive environmental benefits.  Some major call-outs include:

• Zero water is used to dye fabric
• Near zero waste water is produced using the dyeing technology
• Zero chemicals used in the dyeing process
• Energy consumption is decreased by 63 percent utilizing the dyeing technology

It is important to note an initiative adidas has implemented for some of their apparel lines called “NoDye”.  “NoDye” is a term used to refer to apparel products that are designed, produced and sold to consumers without the use of dyeing (i.e., produced using “their natural color state”).  Because the dyeing process has been skipped, less water, energy and fewer chemicals are employed in the production process, decreasing manufacturing’s environmental impact.  Adidas introduced “NoDye” apparel in 2014 for their Outdoor, Originals, Running and Training apparel lines and continue to grow the number of lines designed as “NoDye” apparel.

Company 5:  Patagonia & Closed-Loop Manufacturing

The implementation of closed-loop manufacturing processes can be best seen in the efforts of the company:  Patagonia.  Founded in 1973, Patagonia is a manufacturer and retailer of men and women’s outdoor clothing and is a certified B corporation.  Patagonia implements many industrial ecology concepts across the majority of its product line in as comprehensive a way as possible by today’s standards.  The company believes in making high-quality, durable and long-lasting products for its customers so that individuals can commit to buying less and focus on repairing or reusing what they already have.  The company states that its “R&D department is constantly looking to improve and innovate on the materials we use to ensure we are truly making the most durable, long-lasting, best-in-class products.” The company makes a concerted effort to use raw material inputs for their apparel production that cause less environmental harm than “conventional” (non-organic) or non-recycled fibers.  Patagonia uses natural fibers such as hemp, organic cotton, tencel (wood-based fiber) and yulex (non-allergenic latex proteins).  The recycled fibers the company employs in its apparel production include:  recycled nylon, recycled polyester, reclaimed cotton, recycled wool and recycled down.  The company announced at the beginning of 2007 that its goal by 2010 was to ensure that every piece of apparel produced would be made from recycled material and that the company would recycle every piece of clothing sent back to it to be revalorized into new gear again:  a closed loop manufacturing system.  Patagonia did not quite meet that goal but is coming very close to its realization.  For the company’s spring 2010 line, 83 percent of all styles produced were recyclable.  For its fall 2010 line, only 77 percent of the apparel was recyclable because colder-weather gear is more technical and not all components are yet capable of being recycled.  The company’s spring 2011 line included 90 percent of all products fit for recycling.

Additionally, Patagonia was one of the first and largest apparel manufacturers to recycle PET plastic bottles into recycled polyester fabric. The company estimates that between 1993 and 2006, it saved 86 million plastic bottles from entering landfill.  Further, the recycling of cotton T-shirts helps to save 20,000 liters of water per kilogram of cotton grown.

As it relates to its production supply chain, Patagonia works with bluesign® technologies to evaluate and reduce resource consumption and to manage chemicals, dyes and finishes used on its products.  In 2007, Patagonia was the first brand to join the network of bluesign® system partners. The company now works with 45 bluesign® approved suppliers.  From spring 2015, 56 percent of Patagonia’s fabrics used were bluesign® approved.

Patagonia further closes its manufacturing loop by promoting recycling behavior in its customers and taking the responsibility to accept used Patagonia products at its retail locations and through the mail. The company takes on the responsibility of sorting through all clothing dropped off or sent in to be recycled.  The materials that can be upcycled (transformed back into a virgin-like state to make a new product with recycled fiber), are shipped to two main factories in Japan (to recycle polyester) and Italy (to recycle wool and cotton).  Other recycled products are downcycled into lesser-quality products such as filling for pillows and upholstery.  Since Patagonia started its closed-loop manufacturing process in 2004, the company has recycled or upcycled 164,062 pounds of apparel product.

Company 6:  Denham Jeans & Revalorization

The last industrial ecology practice to be discussed is that of manufacturers providing services alongside and in substitution of new material production.  Patagonia markets its environmental “Worn Wear” program throughout all of its retail stores. The program aims to reduce the footprint of Patagonia products over their entire lifecycle from birth to death. It encourages consumers to change their relationship with products and their ideas on material consumption.  “Worn Wear” promotes the repairing of products.  Through the “Worn Wear” program, Patagonia commits to fixing customers’ gear in stores and at the company’s garment repair center as well as teaches customers how to fix broken items themselves.  Lastly, “Worn Wear” promotes the purchase of quality used clothing and gear available at their retail stores instead of new virgin products.

Denham Jeans, on a much smaller scale to Patagonia but prescient in their delivery of services post-sale, has opened several global repair retail shops where customers (or non-customers) can bring used Denham jeans (or other branded jeans) to be repaired – stitched, darned, patched, reinforced – as well as to get updated treatments on jeans such as hem shortening, laundry services, added buttons, and embroidery performed. Both Patagonia’s and Denham’s service models are intended to extend the life of an existing product (promoting a reduction in material throughput and energy usage in new production), affect pattern changes in consumer consumption of material goods, and to make the service model profitable for the company in the long-run.  It has been determined that “if the average life of clothes could be extended by just nine months”, carbon, water and waste footprints could be reduced by 20-30 percent.

It is known that industrial ecology practices are being implemented by apparel manufacturers and that the environmental implications of deploying those methodologies are positive, and in some cases, profound.  Companies are able to realize decreases in water consumption and chemical usage of up to 50 percent.  Production measures to decrease environmental pollution (water, land and air) also seem promising.   And we are seeing a greater awareness, albeit nascent, that material throughput and consumption levels are unsustainable and a systemic overhaul needs to occur both at the industrial- and consumer-level.  However, there still exists significant challenges to the full-scale adoption of industrial ecology practices within the apparel industry.

Who Is Responsible for the Push to Implement?

The current industry stance on the desire to implement more sustainable measures within the sector’s production processes is one of interest but also a swift acknowledgement that customer demand for such products and practices is not sufficiently urgent.  This is the “chicken or the egg” argument of what comes first to drive sustainability in the industry:  customer demand or sector adoption?  This paper argues that companies and the industry as a whole must take the lead themselves to educate their customers through sustainable marketing campaigns so they understand the value of industrial ecology measures that support the environment.  In so doing, customers will be persuaded to change their consumption patterns and accept new pricing structures for apparel made sustainably.  Patagonia is a leader in this area.  It teaches its customers what is the right thing to do and leads them to where the industry needs to be.

The cost of implementing technology innovations such as waterless dyeing is high.  Some industry experts believe that unless consumers are willing to pay more for apparel, the technology needed to mitigate industrial production impacts on the environment will lack support and industry adoption will be minimal.  The other more valid viewpoint is articulated by Brad Poorman, chief marketing sales officer at the Yeh Group.  He says, “the technology is expensive but worth it because in 10 years’ time the savings will have exceeded costs. The use of zero water, reduction in energy and chemicals translates to tremendous savings, fiscally and environmentally.”

The other side of the technology coin is the necessity of companies that adopt environmentally-saving technology to apply pressure and support, equally, on their upstream supplier network.  In fact, this author sees that knowledge creation, codification and sharing among the industry’s suppliers must occur for systemic adoption.  Levi Strauss & Co. has taken a significant lead in this category by developing water reuse/recycle standard procedures for implementation and measurement and open sourcing these standards for the entire sector to add in widespread adoption. A legitimate need may exist in the short- to medium-term for apparel manufacturers to subsidize their suppliers’ adoption of technology in order to catalyze the whole industry into action.

Present Day Realities within the Apparel Industry

Current adoption of sustainable production methodologies is small, sporadic and often is applied to a very small percentage of a company’s total annual apparel production.  Most companies are in the “testing” phase of becoming more sustainable.  Widespread adoption within companies and for the industry as a whole must be sooner, quicker and steadier.

The commitment to a closed-loop manufacturing process is a significant one with many challenges, unknowns and complications.  It entails creating, integrating and managing a comprehensive reverse supply chain.  It can literally double (or more) the decision-making and logistics of a company.  In essence, a reverse supply chain extends the core competencies of a business and mandates that a company owns a product even after its sale to the end consumer, whether it was sold through wholesale retailers, third-party distributors or company-owned retail outlets.  Companies do not like the idea of retaining liability for a product sold…forever.

Challenges That Need to Be Faced and Overcome

Lastly, designing products with the goal of zero waste and/or 100 percent re-absorption by the ecosystem entails more thought, consideration and research than the traditional product decision tree of whether the product is aesthetically pleasing, effectively performs its task and fulfills a need in the market.  Near zero waste and almost total re-absorption of product ‘nutrients’ is possible in intelligent design.  It just requires a lot more effort.  McDonough and Braungart provide five steps to follow to create eco-effective design:

1. Get “free of” known culprits: avoid harmful substances in design
2. Follow informed personal preferences: know what things are made of and how they are made
3. Create a “passive positive” list: develop an inventory of materials for possible use and categorize them into a) toxic, b) problematic but necessary because substitutes are lacking and c) healthy and safe
4. Activate the positive list: design using healthy and safe materials
5. Reinvent: think beyond incremental design “tweaks”.  Aim for transformative.

Two Approaches to Potential Solution-Setting

There are several thoughts on how best to persuade the apparel industry to adopt cleaner, more sustainable production methodologies.  One policy measure that is beginning to be implemented across a broader swath of countries – 40 countries and over 20 cities, states and regions – is a carbon tax.  This ecological tax on resource use and environmental impact is heavily opposed by industry but if implemented in a revenue-neutral capacity, it could incent right behavior and technology adoption faster. Another proposed tax scheme the industry may consider is a carbon footprint tax on fashion supply chains. A carbon footprint tax is an alternative type of environmental protection tax imposed on companies that, if implemented and priced properly, encourages retailers to source apparel products locally by penalizing goods manufactured in a distant market.  From an industry and global supply chain standpoint, to better facilitate the adoption of closed-loop manufacturing, various complementary suppliers within the apparel industry could co-locate and connect their businesses (share facilities) to reduce manufacturing waste and maximize input re-absorption into their production processes.

In Conclusion

This paper set out to argue that through the adoption and implementation of industrial ecology practices, the apparel industry could reduce its environmental impact by more than 50 percent.  Specifically, significant reductions in water use, energy consumption, waste and pollution can be realized through widespread adoption of end-of-life product design, dematerialization efforts in apparel production, implementation of a closed-loop manufacturing system, and greater emphasis on product services to slow material throughput.  Each of the industrial ecology practices were explored through individual company case study with a focus on quantitative and qualitative positive environmental outcomes for each.  The paper addressed the biggest challenges to full industry adoption of industrial ecology methodologies and provided several country-level policies and industry standards that could be applied to incent the apparel sector to seek more impactful production practices as it relates to the environment.  It is clear reductions in environmental impact of more than 50 percent are attainable for the apparel industry.  However, country and global policy incentives need to be tested and refined; systemic infrastructure changes in the industry’s supply chain need to be developed; and a concerted, proactive leadership role needs to be adopted by the largest companies within the industry in order to change consumer price expectations, consumption patterns and perceptions of the role and value of apparel to meet our needs today and for tomorrow.

Kate Gaertner

Contact Kate Gaertner today to see what Triple Win Advisory can do to help your business and industry increase sustainability to result in a “triple win” for company profit and long-term competitive advantage, societal well-being, and successful environmental pollution mitigation.

[print_link]

The post Using Industrial Ecology to Rethink Fashion Consumerism appeared first on Triple Win Advisory.

It is not a pipe-dream to think we can dramatically cut our national and individual (or per capita) greenhouse-gas (GHG) emissions.  “Drastic” reductions of at least 30 percent, 50 percent or more within the next decade is doable and well within our individual capacities to realize.   We need to know where to start.  Let’s first review total emissions of GHGs for the U.S and the rest of the world.

How Are We Fairing Globally?

Globally, GHG emissions have climbed a near continuous upward trajectory since 1900.   For the exception of the Global Great Recession Years (2007-2009) where GHG emissions took a noticeable decline (in large part due to depressed economies and high unemployement rates), global GHG emissions have been starting to flat line.  That’s true for 2016, where GHG emissions grew but at a slower rate.  The technical term for that is declining growth.  In 2017 however, that slowing rise in GHG emissions took a dramatic turn, growing by 1.4 percent and reaching a historic highwater mark for the world at 32.5 gigatonnes (Gt).  This renewed uptick of atmospheric GHGs directly relates to increased demand for fossil fuels last year; by some 2.1 percent, driven in large part by the growth economies of China and India.

Blog on Global_USGHGEmissions_05253018

For the exception of last year, global GHG emissions growth had been recently trending downward mainly due to three parallel factors in play including:

• Households are consuming less coal* than in previous years and total consumption has been on the decline.
• A switch to and greater reliance on Natural Gas** for energy supply, substituting electricity produced from coal.
• The growth of the renewable energy^ industry particularly wind and solar but also geothermal and tidal and its broader commercial availability and use.

The Who’s Who of GHG Culprits

The U.S. had long held the dubious distinction of being the country that produced the most GHG emissions globally.  Fortunately, the U.S. no longer holds that top position.  But, we as a nation, are far from innocent.  The U.S. still ranks^^ second in the world for emitting the largest amount of GHGs into the atmosphere, with China taking over the top emitting position just a short decade ago (2007).  Yes, China is the leader in world emissions with nearly double the amount the U.S. emits as a nation.  But the third largest global emitter of GHGs is India, and their emission levels are less than half of the U.S.  We have much room for improvement.

Talking About the U.S.

Total U.S. GHG emissions for the year 2015 was 6,586 million metric tons of CO2, an overall decline of just over two percent from 2014 emissions.  Of the total U.S. GHG emissions:

• 82 % is CO2 from fossil fuel combustion,
• 10 % is Methane mainly from the breeding of livestock,
•  5 % is Nitrous Oxide (N2O) predominantly from the use of fertilizers and pesticides in agricultural production, and
•  3 % is the release of Fluorinated Gases (i.e., gases released from the use of air-conditioners in vehicles and refrigeration units).

Although all of these GHG types are fueling the growing surface temperature increases of the planet globally, most of what we can affect as individuals is the output of CO2 within our home dwellings, in the ways we use our personal automobiles, and in how we consume products we need and want.

To further understand what we can personally affect to reduce the GHG gases we individually emit into the atmosphere, let’s look at the total U.S. GHG emissions in 2015 broken down by economic sector.

Those emissions’ splits include the following:

• 29% total emissions are from electricity production and supply
• 27% total emissions are from transportation of goods and services
• 21% total emissions are emitted by for-profit manufacturing industr
• 9% total emissions are from crop agricultural production and breeding livestock
• 7% total emissions are from the use and maintenance of commercial buildings
• 6% total emissions are from residential houses and other home dwellings

What’s Our Responsibility?

Clearly, six percent of all U.S. GHG gases emitted falls under our individual purview:  Residential emissions.  Six percent out of 100 percent does not seem like a lot, right?  Ok, but do we have any influence over any of the other economic sectors that play a very large part in GHG emissions into the atmosphere?  Yes, we surely do.

Breaking Down Our Buying Power to Make it Powerful

Within the Electricity Sector (producer of 29% of all GHG emissions), we have significant power to determine its level of annual GHG emissions.  How?  We have the ability to dictate how our power is generated and from what source?  This is the purchasing power we hold over our energy needs and our utility suppliers.  If you are purchasing electricity from a central utility in your area, tell them you want your electricity supply to be generated in part or in whole from renewable energy sources.  With increased demand from electricity consumers for renewable energy generation and power, more utilities will add renewable energy to their power generation mix (e.g., coal, natural gas, solar and wind farms).  Another option for about half of U.S. citizens, is to askew purchasing power from a central utility and to source power directly from a competing electricity market company.  These companies usually specialize in one or more renewable energy sources such as Natural Gas (a non-renewable energy source but a cleaner-burning fossil fuel), Solar, Wind, Geothermal, and Tidal); lawfully compete with a state or region’s entrenched utility provider, and both generate and supply renewable energy to residents in the area.  A third purchasing power is to install your own, distributed (the opposite of centralized) energy source in your community, neighborhood or on your private property such as earlier mentioned options of PV solar panels, geothermal underground loop, and even windmills.  Lastly, if none of these options are available to you, Green Certificates (a.k.a.: “green tags”, “renewable energy certificates” and “tradable renewable certificates”) are available for purchase as a way to support renewable energy generators in their mission to gain power in the energy marketplace.  Think of green certificates as gift certificates bought by you and given to the renewable energy industry for the purpose of realizing two goals:  first:  to support competitive renewable energy pricing to that of  inexpensive fossil fuel options, and second:  to drive demand of renewable energy from both the consumer- and generation-sides of the equation, making renewable energy more abundant, available, and affordable across the whole swath of the U.S.

Consuming is Not So Groovy

We also hold indirect sway over the GHG emissions from the Transportation sector.  Remember, this sector produces a whopping 27 percent of all GHG emissions into the atmosphere within the U.S.  How, you may ask?  If we dive deeper into the make-up of the Transportation sector, there are three categories or types of vehicles that drive the majority (92%) of this sector.  They include:

• 60% are light-duty vehicles
• 23% are medium and heavy-duty vehicles
• 9% are aircraft

Much of the activity of these types of transportation types are utilized for the transport and delivery of products to the end-consumer, either in the last mile to one’s home, or to the various entities that make-up the consumer supply chain including warehouses, distributors, retailers and third-party service providers who help with product builds and installation.  The GHG emissions by the transportation sector can be significantly, indirectly impacted by our relationship to products and what, where, why and how often we purchase goods of all types to consume.  It is a well-articulated argument by the manufacturing industries (e.g., clothing, textiles, technology) that their production life-cycles and how they design products are dictated by the wants and demands of consumers.  When consumers ask for change, they will deliver.  Well, in no-small way, we can kick-start the consumerism conversation by what and how much we purchase from manufacturers and retailers that commit themselves to long-lasting, durable, recyclable product design, sustainable packaging, green transportation means, and have implemented supply chain processes that support and prioritize material revalorization.

Tallying the Totals for Individuals

Now, if we tally the sectors we have direct (residential) and indirect (electricity and transportation) influence over, the number comes to 62%.  It is worth articulating loud and clear:  our personal decisions, actions and deployment of appropriate technology can substantially impact the growth or decline of the global climate change trajectory. The devil is in the details or in this case, the nitty-gritty of our life choices.

*Coal is the most pollutive fossil fuel energy source used today.

**Natural Gas is a cleaner-burning fossil fuel emitting half the CO2 than coal and petroleum.

^Renewable energy sources emit zero carbon into the atmosphere.

^^Ranking based on data from the European Commission, Joint Research Center/Netherlands Environmental Agency, and Emissions Database for Global Atmospheric Research for 2012.

Kate Gaertner

Contact Kate Gaertner today to see what Triple Win Advisory can do to help your business and industry increase sustainability to result in a “triple win” for company profit and long-term competitive advantage, societal well-being, and successful environmental pollution mitigation.

[print_link]

The post Affecting Climate Change Personally appeared first on Triple Win Advisory.

The threats and impacts from climate change today and for the future to communities urban and rural, large and small, and both Republican- and Democratic-leaning are very real.  Being a non-believer does not omit you from climate change’s repercussions.  Negative impacts are happening, intensifying and becoming more frequent, and present intense challenges to people’s health, productivity, and ongoing livelihoods, as well as the stability of an economy as untold and incalculable damage is done to buildings, transportation infrastructure, municipal services and centralized energy grids.

How U.S. States Prepare for Climate Change Impacts

While nations develop their own climate change assessments collecting observed changes in weather, air and ocean temperatures, frequency of weather events and the like by making projections of what is likely to occur in the near, medium and long-term future, these observations are grouped by region so as to provide meaningful and implementable guidance to sub-regions within a country.  But every country as well as every particular region has unique climate conditions that interact with climate change impacts.  As such, sub-regions within a country would benefit from creating custom climate plans that address their particular vulnerabilities based on their particular climate types, unique geological and hydrological attributes, population needs and agricultural requirements, and the availability and type of natural resources available to them.  One main instrument that is being effectively implemented at both the state and local levels in the U.S. is a ‘Climate Change Action Plan’.

‘Climate Change Action Plans’ Are Roadmaps to a More Sustainable Future

A Climate Change Action Plan is a comprehensive strategy that details the key areas and steps a region or community will take to reduce its contribution to climate change.  Namely, the plan focuses on specific areas a community will take action to reduce greenhouse gas (GHG) emissions into the atmosphere, the most significant driver of continued climate change on the planet. These actions are myriad from promoting the use of renewable sources of energy, to incenting public transportation commuting, to decreasing landfill and incineration waste through recycling efforts, to supporting and promoting local agriculture and sustainable farming practices, to reducing carbon emissions from long transports of products, to creating strategic zoning requirements to limit greenfield[1] development, to offering tax incentives for green building development, to promoting new technology development through pollution cap-and-trade schemes.  The plans are actionable, measurable, and forward-looking and usually include declining carbon emission targets based on some baseline year (i.e., 1990 GHG emission levels).

Who is Involved in Creating Climate Action Plans and How Are They Assessed?

Climate Action Plans are usually developed by a diverse committee of community stakeholders that include politicians, citizens, business leaders, activists, and environmentalists to name but a few.  Once a comprehensive climate action plan is developed, it is approved by a state or municipal legislature and becomes an entity governed and enforced by state or city law.  Action plans are often reviewed and assessed yearly, every fifth year and each decade.  Assessment reports detail progress made; goals met, not-met and exceeded; and work remaining to be accomplished.  These regular assessments are also used to inform and build progressively future-forward looking reports.

U.S. States With Operable Climate Change Action Plans

In the U.S., states, cities and towns hold the primary responsibility to develop and implement a climate change action plan. Given the size of the U.S., the natural variability of climate change impacts to various sub-regions, and that governing authority is held most critically at the state and local levels of government within the 50 United States, U.S. States have led the charge in developing Climate Action Plans for their jurisdictions.  Today, just 21 of the 50 U.S. states plus the District of Columbia have developed and/or enacted into law a formal Climate Change Action Plan.  Those states include (with year the Climate Action Plan was formalized):

• California: 2009
• Colorado: 2011
• Connecticut: 2013
• Delaware: (Governor established committee to develop action plan in 2015 but no formal statewide action plan approved)
• Florida: 2008
• Hawai’i (expected to have been completed by end of 2017)
• Maine: 2010
• Maryland: 2008
• Massachusetts: 2011
• Minnesota (inter-state-agency led effort since 2008 but lacking a formal statewide action plan)
• Michigan (Michigan Department of Health released its first Climate Action Plan in 2011)
• New Hampshire: 2009
• New York: 2010
• North Carolina (inter-state-agency led effort since 2012 but lacking a formal statewide action plan)
• Oregon: 2010
• Pennsylvania: 2011
• Rhode Island: 2014
• Vermont: (State-agency led adoption of Climate Action Plan by Governor Executive Order of 2012)
• Virginia: 2008
• Washington: 2012
• Washington, District of Columbia: 2013
• Wisconsin (ad hoc network assessing climate change impacts and developing climate preparedness strategies. No formal state action plan developed)

What Do These Four (Republican-leaning) States Have in Common?

Of the above states, all but four (i.e., Florida, Michigan, North Carolina, and Wisconsin) were Democratically-leaning in the last national election of 2016.

Water-Battering in Florida and North Carolina

It is interesting to dissect why these four Republican-leaning states may be the only ones to date, that have pursued some form of climate policy, even without force of state law to implement.  The state of Florida and its many coastal communities both on the Atlantic and Gulf of Mexico are deeply vulnerable to rises in sea level and flooding from extreme storm events. North Carolina juts out into the Atlantic Ocean and often bears a large brunt of hurricanes and tropical storms that move northward up the eastern coast of the U.S.  North Carolina’s Outer banks –  an island chain – are highly vulnerable to extreme storm events that have become more frequent and intense over the last several decades and are expected to continue. It is safe to assume that for the Republican-leaning states of Florida and North Carolina, sea level rise, extreme storm destruction, and flooding are the main climate change impacts driving thoughtful action plan development.

Water Availability in Wisconsin and Michigan

The climate change issues facing water resources are slightly different for Wisconsin and Michigan.  These two U.S. states are seriously concerned about their Great Lakes.  Wisconsin borders two:  Lake Superior and Lake Michigan.  Michigan is shaped by four of the five great lakes:  Wisconsin’s two along with Lake Huron and Lake Erie.  The great lakes are one of the world’s largest freshwater reserves.  Their aesthetic and recreational appeal are not to be underestimated.  More important is their combined essentialness in supporting municipal water supplies to citizens in both the U.S. and Canada (since the Great Lakes share a border with both countries), industrial production as well as necessary agricultural irrigation.  The Great Lakes Basin spanning more than 1,200 kilometers (750 miles)  supports 25 percent of Canada’s and 7 percent of America’s agricultural production and supplies freshwater to more than 30 million people (10 percent of the U.S.’s total population, 30 percent of Canada’s)[2].  Impacts to the deterioration, degradation, and contamination of these critical freshwater resources from climate change are and should be taken very seriously.  Lives and livelihoods literally depend on these Great Lakes.  It comes as no surprise that Michigan’s ‘Climate and Health Adaptation 2010-2015 Strategic Plan’ focuses on three main priority areas including:

1. Improving emergency planning for heat events,
2. Monitoring air quality,
3. Monitoring health impacts of water quality and quantity[3].

Wisconsin also has three main focus areas of its “Climate Change and Emergency Preparedness Plan” including a) collaborating and coordination emergency strategies with other public partners, b) supporting infrastructure areas of potential impact from climate change such as water management, energy efficiency, and public health safety, and most comprehensively, c) build a ‘resilient’ watershed strategy to prevent further fresh water pollution and contamination through agricultural runoff (i.e., pesticides and fertilizers) and flooding events while restoring ecosystem functions that support high water quality[4].

Climate Change Is Not a Political Story (Sorry to Disappoint)

What’s the take-away?  Climate change is not and should not be political.  Just because one particular political party is more inclined to not accept most or all of scientists’ observations about global climate change and their projections about the likely impacts to water, land, air and ocean, and communities does not mean that because one is politically-inclined towards one direction, deny climate change you must.  The bigger truth is when climate change is recognizable through individuals actually experiencing its impacts within their respective communities, it is necessary and directionally correct to take action to reduce those impacts and to develop a forward-thinking plan to ensure that the impacts do not take more of a negative toll on a community than it otherwise would.  That is called planning for impacts that are likely to come.  In IPCC lingo, climate change impact planning is called ‘adaptation’ and building ‘resiliency’.

What Does an ‘Action Plan’ Look Life for Everyday Decision-Making?

This type of forward-looking planning is utilized by individuals, families and communities for all types of recognizable scenarios and events.  We plan on what we will cook for Thanksgiving day, which necessarily means we must pre-order our Turkey or Ham, pre-buy the food stuffs to make our particular side-dishes, ensure we have the right amount of dishes and that they are washed and ready to be used.  We anticipate the needs we have for Thanksgiving and we make sure they are fulfilled so that Thanksgiving goes off without much of a hitch and meets the needs for all participants.

A similar planning process goes into applying for college. We don’t just select a school to attend by its zip code.  And we don’t begin our studies by sitting in a random class on the first Fall semester day.  No, attending a higher-education institution requires planning, study, a strategy for writing your application, sitting for a required standardized test, as well as seeking out personal or professional recommendations to accompany an application to be reviewed by the school’s administration.  Most individuals are looking to get into the best school they can attain or the school with the best reputation for a particular path of study.  This endeavor requires research, self-awareness of what will be best personally for one’s fulfillment and professional goals, setting a plan in place to complete all the necessary requirements of an institution, application of study and work, to hopefully reach the end goal of being accepted.

The Importance of Developing an Action Plan for Climate Change

New towns and cities that don’t strategically think about and plan for their long-term growth become disadvantaged.  Municipalities must think about their infrastructure needs, housing requirements, employer base, energy requirements, as well as how and where development should go.  Without careful consideration of where a municipality wants to be 10, 25 even 50 years from now, unplanned growth brings congestion, inefficient housing capacity, air pollution, long commutes, and an economy vulnerable to suburban flight.

U.S. States with No Climate Change Action Plan

To date, 34 U.S. States have yet to implement a Climate Change Action Plan that acknowledges climate change impacts will affect their particular State.  Those 34 States have not yet taken individual responsibility to work with other states or countries to be part of the solution toward mitigating the main driver of climate change and to thoughtfully detail a course of action that is practical and measurable to reduce GHG emissions from a diverse set of tools within their grasp.  Those states include:

• Alabama
• Alaska
• Arizona
• Arkansas
• Georgia
• Idaho
• Illinois
• Indiana
• Iowa
• Kansas
• Kentucky
• Louisiana
• Mississippi
• Missouri
• Montana
• Nebraska
• Nevada
• New Jersey
• New Mexico
• North Dakota
• Ohio
• Oklahoma
• South Carolina
• South Dakota
• Tennessee
• Texas
• Utah (although Salt Lake City has developed a 2015 city plan)
• West Virginia
• Wyoming

That the majority of U.S. states has yet to fundamentally acknowledge their individual roles in combating climate change nor taken any concrete action towards mitigating GHG emissions and developing adaptation strategies to protect their citizens from the highly likely impacts of climate change, is at a minimum, reactionary, and at best, reckless.

Action Plans Support Adaptation and Resiliency to Climate Change Impacts

Action plans are maps that lead us toward an ideal future we would like to realize.  Having no plan usually means that forward-momentum towards wanted goals is haphazard, chaotic, and ultimately, lacking the necessary steps to reach a desired state.    It also means that these 34 states are not supporting the rest of the globe in supporting a primary mandate for all inhabitants on this planet earth:  significantly reducing GHG emissions into the atmosphere so as to ultimately arrest climate change by the next century:  2100 and beyond.  The New York Times reported that CO₂ emissions will grow dramatically for the year 2017, roughly two percent over the previous year’s levels, erasing total global emission reductions for the last three years[5].  This is not the direction we need to be heading.  Now, in all fairness, this rise in CO₂ from industrial production is mainly due to the rapidly developing economies of both India and China.  Total GHG emissions for the U.S. has been in decline for nearly five years straight.  The problem, however, is that starting in 2017, that rate of GHG emission decline has begun to de-accelerate, and is expected to continue de-accelerating over the coming years in somewhat direct response to the Trump administration’s roll-backs of domestic climate protections, denial of environmental safeguarding funding measures, and granting of new oil and mining drilling rights on formerly protected lands – decisions that fuel the release of greater GHG emissions.  Every year that goes by that more GHG emissions are introduced into the atmosphere versus less, makes future year impacts from climate change more certain, more extreme, and more detrimental to the human condition.

Contact Kate Gaertner today to see what Triple Win Advisory can do to help your business and industry increase sustainability to result in a “triple win” for company profit and long-term competitive advantage, societal well-being, and successful environmental pollution mitigation.

Kate Gaertner

[1]Greenfields are lands that are currently, untouched by development.  They are land in their natural state and which provides valuable environmental ecosystem services that would otherwise be degraded or destroyed through human development of the land.

[2] EPA. (2017).  Great Lakes Facts and Figures.  U.S. Environmental Protection Agency.

[3] Adaptation Clearinghouse.  Preparing for Climate Change in Michigan.  Georgetown Climate Center.  Retrieved from http://www.georgetownclimate.org/adaptation/state-information/overview-of-michigans-climate-change-preparations/overview.html

[4] Adaptation Clearinghouse.  Dane County, Wisconsin Climate Change and Emergency Preparedness Plan.  Georgetown Climate Center.  Retrieved from http://www.adaptationclearinghouse.org/resources/dane-county-wisconsin-climate-change-and-emergency-preparedness-plan.html

[5] Plumer, Brad and Popovich, Nadja. (2017, November 13).  CO₂ Emissions Were Flat for Three Years.  Now They’re Rising Again.  New York Times.

*Climate Action Plan image is taken from the Portland-Multnomah County 2009 Climate Action Plan.

[print_link]

The post It’s Smart Business to Develop a Climate Change Strategy appeared first on Triple Win Advisory.

Are Renewable Energy Sources Enough?

This article addresses the question of whether wind and solar energies are capable of satisfying the world’s energy consumption demands.  The general scientific consensus (Czisch, 2006; Fthenakis et al., 2009; Trainer, 2012; Jacobson and Delucchi, 2011) suggests that global supply of energy from renewables can be realized but with lower consumption levels by wealthy nations and likely, non-continuous energy flow rates we have come to expect today.  This article will discuss the following:  a) which technologies make-up a renewable energy ‘solution’, b) total global energy consumption demands, c) capacity allocation of renewable energy sources to meet world demand, d) infrastructure requirements, and e) the challenges and realities of supplying the world’s energy demands predominantly by wind and solar.

The Triumvirate Renewables of Wind, Water and Solar

Wind and solar are considered two of the strongest, most prevalent renewable energy sources identified that can realistically supply the world’s energy demands; substituting out energy from fossil fuel sources such as oil, coal, and natural gas. It should be noted this paper includes in its discussion water renewable energy sources as a necessary component for satisfying world energy demands.  Wind/water/solar (WWS) includes the following types of renewable energy sources and technologies:  wind power, concentrated solar, geothermal, tidal, solar photovoltaic, wave, and hydroelectric power.  Jacobson and Delucchi (2011) offer a detailed plan that feasibly argues wind, water and solar sources have the capability to power the world’s energy demands by 2030.  For all these renewable energy sources, the technologies put out minimal to no greenhouse gases (GHGs) into the atmosphere, have relatively low negative impacts on land usage and species biodiversity, have reasonably containable waste-disposal streams, and are by all accounts, “indefinitely renewable or recyclable” resources (Jacobson and Delucchi, 2011).  Water renewable energy sources are added to wind and solar as a balancing mechanism to the known intermittency concerns of wind and solar.

The Concern Over Energy Intermittency

The requirements of supplying the world’s energy demands are not insignificant.  Three main factors must be addressed satisfactorily by wind/water/solar renewable energy sources including:  meeting future global energy demands, accommodating all modes of energy use, and providing reliability and/or consistency of energy supply.  The Energy Information Administration (EIA) states the global energy consumption today is approximately 12.5 trillion watts (TW) and is currently met with energy supplied from oil (35%), coal (27%), natural gas (23%), nuclear (6%) and the remaining nine percent from a combination of biomass, solar, wind and geothermal renewable energy sources (Jacobson and Delucchi, 2011).  By 2030, the EIA estimates worldwide energy demand will near 17 TW in “end-use power” (Jacobson and Delucchi, 2011).  The modes of energy use globally include the adequate ability to power transportation, heating and cooling, lighting, manufacturing, motors, electronics, and telecommunications (Jacobson and Delucchi, 2011).  Lastly, fossil fuel inputs have provided humanity with steady, consistent, and highly reliable forms of energy.  Wind/water/solar renewable energy sources must be assessed in how well their (combined) energy can provide electric power to the world “second-by-second, daily, seasonally, and yearly” – or consistently every single day and (assumed) night (Delucchi and Jacobson, 2011).

Filling the Intermittency Gap

Wind and solar, because of their relative abundance and availability across the globe, are assumed by Jacobson and Delucchi (2011) to comprise 90% of the world’s energy supply by 2030.  However, because wind and solar can be quite variable and intermittent depending on a land masses’ latitude, seasonality, and/or time of day, it is expected that other wind/water/solar renewable energy sources, specifically, geothermal, tidal and hydroelectric, will ‘fill the energy gaps’ to keep wind/water/solar renewable energy supplies stable and constant (Jacobson and Delucchi, 2011).  Specifically, hydroelectric would supply 4% of future world energy supply, geothermal (4%) and wave and tidal turbines would contribute the remaining 2% of global world energy (Jacobson and Delucchi, 2011).

Our Current and Future Reality Realized

In one future scenario suggested by Jacobson and Delucchi (2011), global energy demand by 2030 could be met with the following wind/water/solar renewable energy technology infrastructure in place:

Note well:  this proposed scenario does not rely on any future technology advancements to develop the necessary infrastructure capacity requirements for today.  It also assesses material resource needs and acknowledges that although some rare materials currently used in the production of, for instance, solar photovoltaic technology, may have to be substituted in the future, material demands are viable at this point in time to realize this wind/water/solar renewable energy scenario by 2030. 

Tackling Intermittency Issues and Building Distributed Energy Grids

The crux of this discussion on the viability of wind/water/solar renewable energy sources to realistically supply 100% of the world’s energy demands turns on putting in practice the currently, theoretical application of this argument.  There is no doubt the potential energy supplied by wind and solar is great and could, theoretically, supply future global energy demands multiple times over, if harnessed efficiently.  That said, significant solar, wind and water energy infrastructure would have to be built.  The single greatest concern related to solar and wind renewable energy sources is their variability.  Practically, solar and wind’s variation “does not match the demand pattern [globally, by continent or nation-state] over the same times scales” (Delucchi and Jacobson, 2011).   These same authors (2011) propose several solutions, applied in-conjunction, to mitigate wind and solar intermittency issues.  The six mitigating factors to smooth energy variabilities include:  1) interconnecting wind, solar and wave farms that are geographically disperse, 2) supplementing wind and solar with geothermal and hydroelectric sources, 3) using ‘smart’ demand-response management systems to direct high energy demands with high energy availability and vice versa, 4) storing excess energy for future demand, 5) building wind/water/solar infrastructure to provide the globe with ‘oversized’ capacity, and 6) forecasting weather systems better to more effectively plan energy demands (Delucchi and Jacobson, 2011).

The Necessity of Investment, Infrastructure and Local Micro-Grids to Power Economies

Trainer (2012) points out several flaws in Delucchi and Jacobson’s (2011) argument that 100% of the world’s energy demands can be realistically met with wind/water/solar energy sources.  Trainer (2012) first argues wind and solar intermittency need to be assessed at their minimum occurrences (not average) to provide a more realistic assessment of power plant requirements.  Second, peak (versus average) energy demand levels much be analyzed to correctly build the necessary redundant (two-to-three times) capacity required to smooth energy variability.  Third, Delucchi and Jacobson (2011) fail to take into consideration embodied energy costs, excess capacity costs, and cost of capital to develop, maintain and renew wind/water/solar energy infrastructure every couple of decades (Trainer, 2012).  Lastly, Trainer (2012) believes Delucchi and Jacobson (2011) severely underestimate the total annual global energy investment necessary; even at the estimate $5 trillion per annum, is 11 times greater than actual total global energy investment numbers ($450 billion) in the early 2000s.

Trainer (2012) is in agreement with Jacobson and Delucchi (2011) that global energy demands can satisfactorily be met with renewable energy sources.  He suggests that world energy consumption levels, particularly for the richest nation-states, will have to drop significantly and that a renewable energy-driven world will more likely be localized with steady economies versus inter-connected globally powering growth-driven nation-state policies.

Contact Kate Gaertner today to see what Triple Win Advisory can do to help your business and industry increase sustainability to result in a “triple win” for company profit and long-term competitive advantage, societal well-being, and successful environmental pollution mitigation.

Kate Gaertner

References

Czisch, G., Giebel, G., 2007, Realisable Scenarios for a Future Electricity

Supply based 100% on Renewable Energies, unpublished manuscript, Retrieved from http://www.zonnekrachtcentrales.nl/assets/files/files/Gregor%20Czisch%20Realisable%20Scenario-s%20for%20a%20Furure%20Electricity%20Suppy%20%20based%20on%20Renewable%20Energies%20ris-r-1608_186-195.pdf

Delucchi, M.A., and Jacobson, M.Z., 2011, Providing all global energy with wind, water, and solar power, Part II:  Reliability, system and transmission costs, and policies, Energy Policy, 39, p. 1170-1190.

Fthenakis, V., Mason, J.E., Zweibel, K., 2009, the technical, geographical, and economic feasibility of solar energy to supply the energy needs of the US, Energy Policy, 37, p. 387-399.

Jacobson, M.Z., and Delucchi, M.A., 2011, Providing all global energy with wind, water, and solar power, Part I:  Technologies, energy resources, quantities and areas of infrastructure, and materials, Energy Policy, 39, p. 1154-1169.

Trainer, T., 2012, A critique of Jacobson and Delucchi’s proposals for a world renewable energy supply, Energy Policy, 44, p. 476-481.

 [print_link]

The post Yes, Powering the Globe with 100% Renewable Energy is Possible! appeared first on Triple Win Advisory.