Davos meets the circular economy
This conversation took place in two parts — the first just before last month’s World Economic Forum conference in Davos, Switzerland, and a second conversation from Davos during the conference.
Joel Makower: Tell me what you're expecting to happen for you in Davos.
Bill McDonough: Last year, I was able to do a workshop for 100 leaders on "Cradle to Cradle" and "The Upcycle." And the CEOs and NGO heads that were there could work over the fundamental ideas of material qualities and products that had new business models — reverse logistics and products as services — as well as new design for reuse instead of "end of life."
So we got rid of the idea of a product’s end of life, because most things aren't alive. Now, it’s about the idea of next use for products and materials. One way we like to express this is to call it “endless resourcefulness.”
Instead of just “less is more,” we can now say: "endless is more." And we don’t design to throw things away. “Away has gone away,” like I remember thinking when I saw the first pictures of Earth from outer space.
Makower: So how does this relate to Davos?
McDonough: The World Economic Forum has 88 global agenda councils on various topics and interests around the world. And they decided to create six meta-councils to focus on overarching considerations. They decided to have a Meta-Council on the Circular Economy, which is really exciting. WEF asked me to be its chair.
Our council has members from 15 other councils and we have also reached out to a Nobel laureate in economics, the head of a major business consultancy and President Grímsson from Iceland. Ellen MacArthur from the Ellen MacArthur Foundation is our vice chair. It's really a good mix.
Makower: Has there been any activity by the Meta-Council since last year?
McDonough: We first met in Dubai this fall — all the global agenda councils were there. We were organizing around which issues we can take on together and what we see going on in the world of commerce and policy.
Makower: What is the output of all this? I think there's a perception that Davos is a talk shop, that nothing really tangible comes of it.
McDonough: That's an important question, because it is time for going well beyond discussion and getting to practice. That's why I'm happy, as a designer and maker, to be helping with this initiative, because we build things, we make things, and so that's what we'll be discussing: How do we go about the future of making things?
Davos has the potential to do things that are quite potent, especially when we articulate them in practical business terms and in ways that can positively influence public policies. Our ability to focus on these issues from an economic and business perspective can start to articulate the ways that we can design things that — and this is fundamental, Joel — do not require regulation because they provide multiple term compounding benefits with nothing for society to fear. Waging peace through commerce.
It's not only about people talking about economics and policy. It's how to use commerce as the engine of change. It becomes very creative.
Makower: Great. So, let’s talk again while you’re in Davos to see how it’s all going.
McDonough: I look forward to that.
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Makower: When we talked a couple weeks ago, you gave me a preview of what was going to happen in Davos. How did it go?
McDonough: From a personal and professional perspective, I was delighted to see how many programs related to Cradle to Cradle and the circular economy. It was quite astonishing, really, after 20 years of talking about these things. The thing that struck me was the number of sessions in the main program that were part of this, though they weren't necessarily articulated as such.
Makower: Can you give me some examples?
McDonough: One was called “Wasteless Supply Chains.” It was quite amazing. You had Peter Bakker, head of the World Business Council for Sustainable Development, moderating a conversation with the person focused on circular economy policy at the EU, discussing why they took out circular economy a couple months ago from the EU legislation and hope to introduce an even more robust version.
And David Cheesewright, the president and CEO of Walmart International, talking about Walmart's goals for 100 percent zero waste. So, there it is again. And the head of Carlsberg, who has been working with Michael Braungart creating a circular economy community using Cradle to Cradle principles for packaging, holding up the very first sample of a biopolymer beer bottle made from wood.
So that was my marvelous delight, to see the issues we've all held so urgently curious for so many years actually becoming mainstream. They're just business as usual now. That’s the cool part.
Makower: Well, they’re not really business as usual yet. I mean, they’re still novel. That’s why you’re talking about them.
McDonough: Well, then, it's business as unusual. But it's not considered eccentric.
Makower: What do you think it will take for these to ramp up quickly so that they’re not just isolated activities? How does all this get to scale in the next few years, not the next few decades?
McDonough: I think change is inherently slow at the level of developing new memes. It takes time to develop the evidence and the examples. One of the most powerful reminders of this was when I was talking to a Nobel economist who was new to these things, and he was saying, "Well, let's see. In order for something like this to happen, one would need examples." He didn’t know that we had examples: Fabrics with chemistry so they make clean water; furniture designed for disassembly; cost-effective, renewably powered buildings designed as future commodities.
Next was, "Well, you might want to focus on a certain industry first, so that it can be a large enough and coherent enough that it starts to become part of a meme." As an architect, I started with the building industry in 1984, looking at carpets, glues and paints that were off-gassing, and then furniture and then the buildings themselves. And guess what? Steelcase and Herman Miller, two of the world’s largest quality office furniture companies, now make all their furniture Cradle to Cradle Certified. Cradle to Cradle is now part of building certification programs.
Is that slow? Sure. Is it hard? Yes. Is it taking time? Of course. But there's an industrial sector, buildings and furniture, that has adopted it. So there's an example and there's a focus and there's detail.
Makower: The examples that you're talking about are on the design and manufacturing side, which is not necessarily where the real impacts happen. Companies’ biggest impacts are upstream — feedstocks and forestry and agriculture. How does all that become part of the circular economy?
McDonough: What we're looking at with circularity is true reuse and recycling — even upcycling. And one of the ways to think about it is the language that we use for this. One way to look at the circular economy is simple, almost like a tagline: “Putting the re back into resources.”
The idea is that you use these materials again, the way we use carpet at Shaw. We're storing our raw material on the customer's floor, so that we re-source it, and we don’t go back upstream for mining new sources of materials.
Now that is a design question, of course. It is also a manufacturing question. But it is also a business relationship question, where you're in a coalition with your materials as they go out there. All of these are optics on opportunity and innovation. These changes are going to take time, but it is refreshing.
One of the most profound remarks I heard in Davos was from Ernesto Occhiello, a chemist and EVP for Technology and Innovation from SABIC, the Saudi chemical company. He had a very elegant way of talking about the issues of concentration and dispersion in terms of the ability to work in this context. One of the reasons logistics are so important is we need to be able to concentrate, including things like take-back systems and recovery systems. We clearly need to design business models that re-concentrate many materials, rather than just let them disperse.
An obvious example, plastic pollution in the oceans, is a dispersion — the contamination is being created as the value is being lost. This notion of how companies in Davos are now talking about keeping things in repetitive concentrated flows — and looking at it from a commercial perspective — it was really quite a powerful and potent prospect.
Hear much more about how multibillion-dollar businesses such as PepsiCo. are seizing opportunities related to the circular economy at GreenBiz Forum 15.