How Unconventional Partnerships Can Spur Sustainable Innovation
Global resources are dwindling. While a sobering reality, mankind is gradually beginning to solve the complex problems associated with the depletion of essential resources—fresh water, clean air, arable land, fossil fuels and many others. The cause for hope is that innovation is abundant in some unusual forms and surprising places.
There is very little to suggest that regulation alone, or companies or governments acting in isolation, can do much to improve or significantly alter the long term outlook of our global supply chain.
Solutions must lie with innovation and the creative efforts of businesses committed to societal and environmental improvement—and it will most likely be driven by economic opportunity rather than corporate conscience or regulatory fiat.
Around the globe, most corporations have already consumed the “low hanging fruit” within their practices and processes. Yet, expectations continue to increase, making new and innovative solutions a prerequisite to compete in today’s marketplace.
Not only are companies exploring partnerships with non-profits and social entrepreneurs to achieve their sustainability goals, but they are also looking at unconventional partnerships and strategic alliances to affect change.
Entrepreneurs like Tom Szaky are challenging corporations daily with the fundamental question, “Why waste anything?” Szaky and his company Terracycle facilitate the corporate sponsorship of waste reclamation programs around the world. Consumer product companies such as Kraft Foods’ Capri Sun brand, Clif Bar, Stoneyfield Farms, Kellogg and Coca Cola are engaged in the collection and processing of billions of food and drink wrappers into creative products.
While Terracycle’s efforts channel multi-composite waste into beneficial reuse applications; another emerging opportunity exists in the cultivation of beneficial reuse synergies among corporations.
The concept of by-product synergy (BPS)—the conversion of waste from an industrial or manufacturing process into a new, more valuable product—is gaining attention from the business community. At its full potential, BPS can lead to the development of newer, greener and better products, derived from by-product waste and delivered through the same production process.
The ecology of industrial processes is moving from a “linear” economic model in which products are produced, consumed and then discarded to a “circular,” regenerative model in which the full lifecycle of a good is managed and engineered to endless beneficial reuse—a concept now known as “upcycling.”
Corporations across the globe are being challenged to recognize the inherent value of all materials, and are beginning to alter processes to reduce environmental impact while maximizing the beneficial reuse of product or by-product waste beyond a products end of life.
A few companies around the globe are “upcycling.” In Japan, Panasonic’s PETEC facility outside Osaka recycles not only Panasonic washing machines, refrigerators and HVAC units but the waste of other manufacturers as well. Last year, HP processed over a half a billion PET bottles into HP printer cartridges. Chaparral Steel uses by-product synergies to find new uses for furnace slag and automobile shredder residue. In Denmark, the village of Kalonborg outside Copenhagen developed an entire industrial zone based upon a web of waste material and energy exchanges.
In nature, the waste of one system is food for another. In agriculture, processes were designed to constantly reintroduce waste into the supply chain. Introduce humans and the complex materials they create and you have a much more complex problem.
To build a circular economy for industrial and post-consumer waste requires the fundamental restructuring of global value chains and taming materials complexity—but the opportunities are tangible. A recent report prepared for the World Economic Forum in Davos claimed that a shift toward a circular economy can generate over $500 million in material cost savings 100, 000 new jobs and divert 100 million tons of waste globally within the next five years.
Pioneers in the establishment of a circular economy must take enormous risk often without the promise of foreseeable return. Among the most notable pioneers is Nike, Inc., who inaugurated a closed loop recycling process called “Reuse a Shoe” in the mid-1990’s with the goal of repurposing hundreds of thousands of pairs of used sports shoes into the highest quality sports surfaces available using the most innovative methods and advanced recycling technologies.
We at ECORE International are lucky to have been partners with Nike from the start. We take granulated whole shoe materials from their facilities to produce a range of interlocking rubber tiles, performance flooring and underlayment.
Recognizing the inherent attributes of one product and identifying the additional end of life applications provides unique opportunities for partnerships across industries and verticals—and corporations are beginning to take heed.
Renault has adopted circular principles across their business. Reanult’s remanufacturing plant outside of Paris employs 325 people and reengineers recycled subassemblies from water pumps to engines that are sold at 50%-70% of their original price including a one year warranty. Caterpillar and Canon operate similar partial supply loops. Ricoh expects to capture an a circular opportunity by shipping used plastic residue from their materials recovery sites back to component manufacturing sites in Asia for use in the manufacture of new components. H&M collects end-of-life jeans and sends them to a supplier in Pakistan to be processed, re-spun and made into new jeans.
Identifying these types of partnerships will help us spur ongoing innovation while achieving new standards in the sustainable supply chain—and offer tremendous potential to move beyond niche markets to the heart of commerce itself. Innovation must come from all of us as we harness the power of unconventional partnerships to dramatically redefine the way we prosper in the future.
Art Dodge is CEO of ECORE International.
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