How circular innovation is creating business opportunities
How circular innovation is creating business opportunities
We Mean Business CEO Nigel Topping spoke with Thijs Maartens, who heads up the Built Environment program at the Cradle to Cradle Products Innovation Institute, to discuss the growing opportunities in the circular economy.
Nigel Topping: The term "cradle to cradle" gets bandied around a lot. So we’re all on the same page, how exactly do you define it?
Thijs Maartens: The vision behind cradle to cradle is all about eliminating the concept of waste by creating healthy products that can be endlessly cycled and produced in ways that respect humans and the environment.
Topping: And how does the Cradle to Cradle Innovation Institute work to advance this?
Maartens: At the Cradle to Cradle Products Innovation Institute, we qualify products and materials according to their cradle to cradle properties. We have our own detailed verification framework that gives companies a score based on five qualitative categories. The emphasis is on continually optimizing the manufacture and design of a product. We require companies to make regular improvements or run the risk of falling out of the program. In that sense, it’s a sort of never-ending process. Until the final stage, that is, when a product is perfect — meaning that it has a qualitatively positive impact on people and the environment.
Topping: What advice would you give a product manufacturer looking to develop a cradle to cradle product?
Maartens: For me, a really important precondition is to have a clear solution for a product at the end of life stage. To do this, you really need to integrate your thinking from the outset. I’m a big believer that the circular economy is really defined by the problems that it poses, rather than by the disciplines it employs.
I think the other key thing to note relates to material health. People often compartmentalize between material reuse and material health. Typically, they say, "Let’s start with material reuse and then talk about material health." In reality, though, it should be the opposite way around. Material health is the most important part of what we do. If you don’t create a product that’s healthy, you cannot upcycle it into another product that is healthy. So material health has to be the starting point, because without it there’s no effective way to think about material reuse.
Topping: Can you give us a real-life example?
Maartens: Sure, take denim jeans. The position that we take is that you need to start at the molecular level. You need to know what’s going into a product in order to know what will come out at the end. Our assessments require product manufacturers to provide details of all materials for which there are traces of 100 parts per million or more. For denim, the critical issue is the dyes that manufacturer use. This is where the worst toxic chemicals are found. We ask not just what the chemical compounds are, but also what happens to them in the production process.
Topping: I guess an inventory like that must become quite complicated quite quickly, no?
Maartens: It can, but it’s perfectly doable. My favorite example is a verification that we did of an elevator system. Just the pulley system alone had 10 material suppliers, with seven materials going into it. When the company made an inventory screening, they realized that some of the steel was bought through an open auction so they couldn’t verify its provenance.
Topping: Really drilling down in that way must open up lots of interesting conversations, I suppose?
Maartens: Yes, it does, certainly. One of the things you see among companies that are really serious about Cradle to Cradle Certified is the strength of the relationships they have with their suppliers. There’s real trust there. Lots of knowledge sharing and so on. That’s not just good for the quality of the end product; it’s also very good for business. When you know each other better, then transaction times improve, communications are enhanced, all sorts of benefits arise.
Topping: And are you seeing the appetite among companies for cradle to cradle models increasing?
Maartens: Most definitely. We’re seeing real growth in the number of certified products now being put out there. Part of this, I think, stems from the greater importance given to sustainability in general nowadays. Five or 10 years ago, it was sort of a "nice to have." Now it’s become a "must have." The reality of the financial advantages are really beginning to hit home.
In the sector I am most familiar with — which is the built environment — much of the progress we’ve made in recent years is thanks to companies looking at their monthly water bills or their month energy bills, say, and then making savings based on this. Companies are increasingly internalizing the external costs of a building. That way, waste is seen as a resource at the end of the life cycle of the building rather than as a cost. This prompts people to start to think differently about the way they construct and design buildings. From the molecules to the metropolis, you could say.
Topping: The Cradle to Cradle Innovation Institute has a strong focus on the built environment; why is that?
Maartens: It’s partly to do with one of our founders, William McDonough. He’s a famous architect, so his thinking is very much framed by his experience in the built environment. In the Institute’s early days, people starting work with him on how to optimize the buildings where they worked. So it evolved from there. But from my personal perspective, it’s a sector with huge potential for improvement. And because the built environment is so material intensive, any changes can bring about major impacts.
Topping: And what changes are you seeing? Is there a particular new material or new formulation that is making buildings more regenerative, for instance?
Maartens: There’s a lot going on at the moment around alternatives to harmful chemicals. Instead of using a polymer with high levels of toxins, for example, we’re seeing companies beginning to work with more biological-based polymers. This doesn’t just reduce the environmental risks associated with products, but it also increases their reusability and their residual value.
An illustrative example would be Accoya, which is regular timber that has been treated with a sort of vinegar coating. This process called acetylation, a cutting-edge patented technology, enables it to resist rot, defy the elements and stay strong for decades. The cool thing is that Accoya guarantees 50 years above ground and 25 years in ground or freshwater, its performance and properties are remarkable. It’s an entirely natural process and the durability is incredible — it is being used a lot for window frames as an alternative to PVC, which is obviously plastic-based.
Topping: Do you feel we’re getting to a point where manufacturers and house-builders and so on are going to be required to make products that are fully regenerative?
Maartens: I think "required" may be a little strong. But we’re definitely seeing a real acceleration in both regulation and voluntary industry schemes at the moment. I mean, just look at the European Commission’s recent proposal to ban some of the most harmful plastics. In policy-making terms, this has all come about extraordinarily quickly. There are also some new rules around toxins in the pipeline in Europe as well. These are all really important drivers.
Even in the United States, where regulators are more hands-off, you’re seeing progressive developments. The city and county of San Francisco, for example, announced just a short while ago that it will be requiring all flooring in government buildings to be sustainably certified. Moves like this help establish a benchmark for others. Obviously, from a company’s perspective, it’s better to think about circularity before regulation comes in rather than afterwards. In this sense, today’s innovators in this field are future-proofing themselves against future regulatory pressures.
Topping: What do you feel is slowing down the pace of change?
Maartens: One main obstacle I see has to do with taxes. It’s quite a traditional argument, I suppose. But, at present, there are currently very high taxes on labour yet rather low taxes on materials. What we’d like to see is this being turned on its head. In particular, I think we should shift high taxes to scarce resources and in this way increase the incentives to re-use them.
Topping: Do you have a final word of encouragement to share?
Maartens: One point I think is really important to make is that companies should approach cradle to cradle thinking not as an expense, but as an investment. In truth, the risks when it comes to investing in healthy, circular products are really quite low. Yet the return on investment that you get is bigger than the sum of the parts. The funny thing about the circular economy is that, because it’s still in its infancy, we don’t know how big that final sum will be. For me, as for many others, that’s a really exciting prospect.